LUKE VISCONTI: What led you to be a supporter of diversity and inclusion? How has it impacted the success of your business units?

DAVID EPSTEIN: There are two drivers for me. One is that I grew up in an atmosphere my parents created where people are people, regardless of whether they’re male, female, from any given country, religious background or sexual orientation. I’m interested in what a person can contribute, what their unique experiences are.

The second driver is that, back in 2000, Dr. Daniel Vasella [Chairman and former CEO of Novartis AG] gave me the opportunity to run Novartis Oncology, a global business unit. For the first time in my career I ran discovery, development and commercialization. We operated in more than 70 countries. I had the opportunity to build that team from scratch. I picked people based on their experiences and how I felt they treated other people. My philosophy is that you treat others in the way you expect to be treated.

I ended up with a team that came from all over the world. We had phenomenally productive discussions. At the beginning, it was very difficult because we had different cultural backgrounds and the norms within which we communicated were different, but after a while I saw the power of people with different backgrounds and what they could contribute to business ideas. Once we got that group working as a high-performing team, we were able to accomplish feats that nobody thought were possible.

The business more or less didn’t exist when I was asked to create Novartis Oncology in 2000. We pulled together what oncology products and pipeline we had within Novartis, which represented about $1.5 billion in sales. We had three products, two of which were not robust: one was going generic, and the other was a licensed product but the license was coming to an end. The business was about to disappear.

We built, over 10 years, a $10-billion business, the No. 2 oncology business in the industry. More importantly, people who work in that business say there is a unique focus on creating the environment and the atmosphere, which drives people to do what’s right for customers and patients. An environment that brings people together in a way that’s unique: People can be open, be themselves, and passion fuels what they do together.

Now, I’m trying to create that here in the bigger Pharma business. We’re making progress: You see a much more open, a much more inclusive atmosphere. You see that we’re increasingly hiring people of varied backgrounds. You’re seeing more women in management, more people from emerging markets sitting on the leadership team. It’s starting, but it’s a long road. It takes years and commitment.

Authentic Leadership

VISCONTI: When I interviewed Dr. Vasella, he said, “I love other cultures.” Do you think it was his influence, his leadership that was an inspiration? 

EPSTEIN: Daniel influenced me in a lot of ways; I found him to be a very authentic leader. I take great pride in my authenticity. When I speak, there is no hidden agenda. People around me know what I think. They know that I will listen, that I will debate. I might be the guy who makes the decision, but they’ll know where I’m coming from. It engenders a lot of trust.

If you have weaknesses as a leader, you should be willing to discuss those with your team. If you make a mistake, you should admit it, whether it was a business decision you made, the wrong person you hired, or how you treated someone.

The second thing I owe to Daniel is that he believed in me. He gave me some unique opportunities, such as running the Oncology business or being chosen as head of Pharma. If he hadn’t made that choice, I never would have had the opportunity to grow and become more worldly, more diverse, more inclusive.

VISCONTI: How do you translate the Novartis values across different cultures while respecting local traditions? 

EPSTEIN: It’s not about everybody being in the same place at the same time or having to do everything exactly the same everywhere. For me, it’s a journey. Everybody is moving along that journey to become more inclusive, to put together the best possible team, to get their teams to operate in a high-performing way. Yes, you may have to do it uniquely in China versus Japan versus somewhere else. I think that’s OK.

Sitting still is not acceptable. Having a team that all looks and sounds and thinks the same is not acceptable. How you do it will vary and, being a global company, we’re fairly adept at making those changes. Sometimes there’s friction and you have to have a discussion.

VISCONTI: I’ve heard it put that this work is fatiguing at times—a good fatigue—but that it’s also very invigorating.

EPSTEIN: For me, it’s not fatiguing. I get great satisfaction from developing people and seeing teams do great things that no one thought was possible.

You can have lots of people that look and sound like you and your organization will work fine, but you will never be great and you will never capture the upside. Or you can decide to go for a more diverse and inclusive atmosphere. If you don’t do the work, don’t have the right leadership skills and those people don’t work together, it may actually be worse than having a homogenous team. You just don’t get anything done.

On the other hand, when you lead a very diverse group of talented people and have created the right atmosphere, you’re unbeatable. So it’s worth it. As a leader, you have to have your sights on that far-off horizon.

For the person who comes into a job and thinks they’re only going to be there two or three years, it might not seem worth it. In every job I’ve taken, I have adopted the mind-set that I will be here forever. I want to leave a legacy of an extremely well-functioning organization that is delivering unique value to patients. That’s ultimately what drives me. I take personal pride in seeing people be successful.

VISCONTI: How has Novartis made efforts to address diversity in drug trials? Has this approach changed over time?

EPSTEIN: If you look back 10 years, we were a very U.S.– and Euro-centric company. That’s where the business was. That’s what we knew how to do.

Over time, we began to realize a couple of things. One is that one size does not fit all. A drug for every patient with a given disease doesn’t exist anymore. Medicine is more personalized, which forces you down the road of understanding differences in people—these differences can be genetic, dietary, about lifestyles, or many others.

Second, the world has shifted. Much of the growth opportunity in healthcare comes from emerging markets. Patients in these markets need to be included in trials to make sure we are developing the right medicine for them. About six years ago, for example, we started a project in Japan. We typically launched in the United States and Europe, and five to seven years later, we’d launch in Japan. We wanted to get to the point where that gap was down to one or two years. This year, we have a drug that was approved first in Japan, the U.S. and Europe a bit later.

In the U.S., we are trying to better adapt to the needs of various ethnic groups, and we’re increasingly doing clinical work that includes them. We need to see the data for an African-American patient or a Latino or a Japanese person living in America. We look at women versus men, we look at different age groups, so all these things are being incorporated into our business. Companies that do this work have an advantage in the marketplace. They can talk with the customer and make a different kind of connection.

VISCONTI: Do you see ultimately being able to give people pharmaceuticals customized to their genetic type?

EPSTEIN: If you look at what’s in our portfolio right now, I would say close to 90 percent of the medicines moving from discovery into the clinical-trial phase are targeted based upon a person’s genetic makeup.

Our new medicines will come along with an assay, which will become a diagnostic in the marketplace. If we have three patients in the room that have a given disease—whether it be breast cancer or rheumatoid arthritis—we will be able to tell in advance, thanks to a genetic test, which patient is likely to respond. Then all the clinical trials are done with those responding patients. You can imagine how it changes the health-economics benefit. There’s no more waste. There are no longer expensive, long trials with groups of patients who simply will not benefit from a certain drug.

In our company, we’re investing in R&D and we’re driving innovation and it becomes a competitive advantage. Some companies have chosen to be more focused on short-term commercial opportunity and have not continued to evolve their innovation capability. This creates a bigger gap between us and them.

VISCONTI: Can you connect the company’s focus on diversity and inclusion, cultural awareness and cultural competency with your philosophy on research and development?

EPSTEIN: There are a couple of connections. One is we can recruit people, the best people, from anywhere in the world, which is a major advantage. And when you start to recruit these people, they bring in even more people from those regions or those backgrounds.

Working with diverse cultures and backgrounds, you’re also more likely to design your clinical trials in a way that looks for subgroups or different patient characteristics

It’s largely about talent. It’s about getting the very best people in the door and then making the investment to get them to work together in a high-performing team. That means training your leaders to be inclusive—and we do have inclusive leadership training. We just rolled out a program called Leaders as Coaches. It teaches people specific coaching skills as leaders—for example, how to have a conversation with your team members so challenges and options can be addressed openly and in a reflective manner. We also do high-performing team training where the leader and their direct team work together on a multitude of things.

When you first explain to people that we are going to do this, you get the classic reaction: “I have to take two or three days out of my schedule to do this? I have to think differently?” After they’ve been through it, something interesting happens: They say, “This has made me a better leader and it’s had an immediate impact on how we all work together and what we can achieve.

Our strategy is to win in primary care, specialty care and oncology. We want to become the best pharmaceutical company by 2016. There are four major pillars: growth, innovation, productivity and people. The people pillar is very clearly spelled out as becoming more diverse and inclusive, to invest heavily in high-performing team workshops and education so that we can bring out the best in people. We’re very explicit about it.

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Novartis reports that the strategy led to more than $2 million in savings on market research and helped it reach more than 30 million consumers last year. Employee participation in the resource groups has also increased substantially. Novartis Pharmaceuticals Corporation is No. 13 in the 2012 DiversityInc Top 50.

Watch the presentation by Steve Millerman, director of cross cultural marketing for Novartis Pharmaceuticals Corporation, below to learn more about these resource groups. Presentation slides are available on DiversityIncBestPractices.com.

View the other Innovation Fest! presentations from our event at www.diversityinc.com/innovationfest.

For more best practices on resource groups, view our Diversity Web Seminar on Resource Groups: Connect With Customers for Top Sales Results.

The post How Resource Groups Saved This Pharma $2 Million appeared first on DiversityInc.

This family passion for diversity wasn’t deliberate, Johnson says. “It’s interesting because none of us started out thinking we’d be involved in diversity in any form,” reflects the MasterCard chief diversity officer. (MasterCard Worldwide is No. 15 in The 2012 DiversityInc Top 50 Companies for Diversity.) The inspiration for all of them, she notes, is their father, Doug Alligood. He has a long history as a corporate diversity leader and currently is senior vice president on the diversity council at a leading marketing firm in New York.

Johnson recalls how her father would talk about what he did at work and how understanding consumers and their different attitudes could drive the bottom line.

“Because of his work in advertising, my dad also served as a mentor to people coming into the business and helped new employees to better integrate into the business culture,” explains Johnson.

“He embedded in me how to drive business by changing the culture,” she says. “It certainly made me aware of the important role a diversity officer plays within an organization.”

Resource Groups: The Value of Collaboration

That lesson paid off for Johnson in 2008, when she was approached by the chief diversity officer at the time to help start the company’s first resource group—Lifting Employees of African Descent (LEAD)—and serve as its co-chair. “It was a great learning experience. I was able to take an idea about building a new organization within the company and aligning it with business objectives,” she says.

The response throughout the company was overwhelmingly positive. Other groups were soon launched. MasterCard now has seven resource groups that are among the strongest in DiversityInc’s rankings and were featured in our web seminar on resource groups. These include Pride (LGBT), East (Asian), Latin, young professionals and, Johnson’s favorite, Workers with Accumulated Value Experience (a generational group for baby boomers).

Johnson is a member of all seven and actively participates in all their events. She is also a member of the MasterCard Global Diversity and Inclusion Council, the Executive Women’s Steering Committee, and the Multicultural Steering Committee.

The need for the groups is directly tied to the company’s business goals. MasterCard recognized that there were specific segments that would drive the business forward.

“If you want to build a culture more collaborative and efficient and want employees to feel more appreciated and connected, you need to identify groups by community and bring those people together to work collaboratively,” she explains. “You also need to bring in people that have the experience, background and mental agility to work in that kind of environment.”

Marketing to Diversity Management

Like her father, Johnson started her career in marketing. After receiving her degree in social psychology, which she says helped her develop an understanding and value for people, Johnson worked as an account manager at an ad agency for a variety of packaged-goods and service clients for several years before transitioning into a marketing-management role at a large bank.

“This bank was the first issuer of frequent shopper cards to produce point-of-sale info. It ignited my passion for information services,” says Johnson. Her move to work in financial services at MasterCard in 1995 was a natural progression.

Not having an HR background has never been a hindrance, she says. After discussing the issue with her peers, she’s decided that it is in fact “beneficial to being a chief diversity officer. You have an understanding for what business-unit managers are looking for when it comes to employees.” Other benefits include knowing what skill sets are required, what training managers will need and what tools employees need to be successful in their jobs.

The latest addition to her leadership repertoire is a master’s degree in marketing and strategic leadership. “I’m always interested in learning,” she says. “It’s needed to be successful in your career.”

For more on resource groups and marketing, watch the video on Novartis Pharmaceuticals Corporation’s Ethnic Resource Groups and Marketing:

The post ‘How I Got MasterCard’s First Resource Group Off the Ground’ appeared first on DiversityInc.

Success, according to McDonald, is dependent on being a proactive catalyst of positive change. For him, that includes running a profitable global business that improves people’s lives. In this exclusive interview, he reveals how a firm commitment to empathy and foundational values helps the company bridge cultural gaps, promote corporate diversity and innovate products that directly satisfy customer needs.

LUKE VISCONTI: Tell me about Procter & Gamble’s emphasis on values, what they mean to the organization and how you conduct business globally.

BOB MCDONALD: Procter & Gamble was founded with a purpose: improving people’s lives. During the Civil War, people shipped short-weighted products or clothing that didn’t last very long. This company said, “We’re not going to do that. We’re going to be known as the company that prides in high-quality products.”

It wasn’t until the mid-1980s when John Smale, our CEO, asked John Pepper, our president at that time, to lead a group of leaders to write down the values that we were trying to lead. It was serendipitous and necessary—at that time we were globalizing very quickly. As you move in to another culture, the difficulty is bringing your values with you.

We ascribe to keep the purpose and the values of the company consistent globally, but you have to be willing to change to stay relevant to your consumer and grow. We formulated the purpose about touching and improving lives and giving back to the communities in which we live and work.

Five values—leadership, integrity, ownership, passion for winning and trust—are critical to the success of the company. Leaders can personalize those values by bringing the experiences they had in life that cause them to form different beliefs. We teach people how to do that so that they can share that with their organizations and be introspective as leaders.

Creating Experience & Empathy Through Corporate Diversity

We’ve discovered that people join this company because their personal purpose is about improving lives. It gives them a way to execute that purpose on a bigger stage with more resources. This purpose is what provides meaning to their lives. That means if I as a leader can tie every behavior the person has back to that purpose, their life would be fulfilled.

You don’t compartmentalize that. The more pervasive we make our purpose of improving lives, the more fulfilled the people are and the better the business results. What we’re really trying to show is the virtuous cycle, where companies do well financially and do good at the same time.

What you should do as a company is provide opportunities for employees to do community service—through that, they become more fulfilled. They improve lives but they also have an experience.

We sent a team of people to Mexico to build homes for Habitat for Humanity. We sponsored the trip. People came back totally fulfilled—a life-changing experience. They learned about low-income consumers in Mexico. When we go to hire people around the world, we need to give them opportunities to learn how the majority of the world lives.

LUKE VISCONTI: You’re leading the diversity council personally. Why is this important to you and your corporate-diversity goals?

BOB MCDONALD: It’s so fundamental with everything that we do. If your purpose is to improve lives, you’ve got to have the leadership, the strategies, the system and the cultures to do that. You can’t ignore diversity.

Diversity for us is a strategy. If I’m trying to improve someone’s life, wouldn’t I be better off having somebody in the organization who is of that representation so they can help the company be empathetic to the consumer? Consumers can never tell us exactly what they need. We’re trying to find the unarticulated need. That’s where we develop our best products.

We believe that we have five strengths: consumer knowledge, innovation, branding, go-to-market and global scale. That innovation strength is the primary way we improve lives. The more diverse your organization, the better your innovation. We try to be very deliberate about setting up diverse teams of people in order to accelerate the innovation that comes from them.

I’m a big believer in the work of a fellow named James Burke, who wrote a book called “American Connections” and a TV show called “Connections.” He says the greatest innovations in the history of the world have never happened in a linear way. Alexander Graham Bell invented the telephone to help hearing-impaired people; [Guglielmo] Marconi invented the radio for two ships to communicate at sea; Tom Watson said someday the United States might only need two or three computers.

How do we create conditions that allow people to bring their diversity to work and have their diversity become the modes that provide the potential for these innovative connections? That’s what we’re really trying to do.

Trust: A Synergistic Effect

LUKE VISCONTI: What do you expect out of your diversity council? 

BOB MCDONALD: A much more deliberate goal, objectives, strategies. We’ve done that. We’ve put together a scorecard. The other thing that comes out is insights.

Procter & Gamble always cared about diversity. But why haven’t we achieved the results? We did a deep dive on the advancement of women as an example. Everybody was well intended but we weren’t happy with the results.

We promote from within, and in any company, leaders tend to attract individuals that they know to work for them. We’d always insist that you get a diversity candidate. Unsurprisingly, the diversity candidate wasn’t selected enough because people didn’t know the candidate. We had to put in place a much more deliberate system of making sure the diversity candidates get exposure.

Secondly, we had to join hands as a leadership team, saying, “I trust you. I’m going to take a risk on this person because you know them and I don’t.” The way to do that is to bring people together and create that trust.

LUKE VISCONTI: A synergistic effect by having everybody in the room? Do you think that it adds to not only awareness but accountability for corporate diversity?

BOB MCDONALD: There’s nothing stronger than accountability. In a combat situation, people perform heroically; they don’t think they’re heroes. They say, “I did this because I didn’t want to let my buddies down.” The same thing happens in a corporation.

I’ve seen attitudes totally shift. I’ve seen individuals who were skeptical of diversity become the biggest advocates. I don’t think it’s simply because of a feeling of hierarchy and me being in the room. I do think it’s the group dynamic. Everybody has good intentions, but it takes more than that.

Connecting With Consumers

LUKE VISCONTI: How have you seen this connection manifest between this diversity council, more disciplined corporate-diversity efforts and your successes around the world?

BOB MCDONALD: We are in the fast-moving consumer goods of business. We have no alternative but being empathetic to consumers; no alternative but to have a diverse workforce that represents those consumers.

We talk a lot about the importance of knowing the culture, knowing the language. In my own experience, it gives you an empathy that you couldn’t otherwise get.

LUKE VISCONTI: How are you leveraging this empathy? What are you structurally doing to make sure that you’re not making mistakes when you go into a place?

BOB MCDONALD: The challenge for us is we have to innovate for everybody on the economic pyramid. We don’t just innovate for the people on the top and dilute that product for the people on the bottom.

For example, in the Philippines, people really want clean clothes. They wash by hand and use soap suds as a surrogate for cleanliness. It takes the average Filipino five buckets of water to rinse their clothes.

Water in the Philippines is very expensive. Water runs by your house generally 30 minutes a day. You have a high horse-powered pump on the street; you pump the water into your water tank. If you miss that 30 minutes, you don’t have water.

We developed a product called Downy Single Rinse. It sequesters the suds and allows you to rinse with one bucket of water, an innovation particularly designed for people at the bottom of the economic pyramid.

Finding Purpose, Improving Lives

LUKE VISCONTI: What do you expect to flow through at the end of the day—the tangibles to the bottom line of the business?

BOB MCDONALD: It’s developing and delivering sustainable, outstanding business results, being in the top third of our peer group and total shareholder return sustainability, and doing that through a workforce that represents the consumers we’re trying to serve, the lives we’re trying to improve. Importantly, people are performing at their peak.

For people to perform at their peak, we’ve got to be empathetic to their needs and improving employees’ lives while we’re working to improve the lives of the world’s people.

If you ask me what success is, every person in the world uses a Procter & Gamble product. It’s every employee reporting to us, that they’re working at their full potential and that we’re helping provide meaning in their lives.

I love Viktor Frankl’s “Man’s Search for Meaning.” He wrote the book right after World War II. He was in the Auschwitz concentration camp and what he discovered was a new school of psychology.

Freud was all about looking in the past and basing your future behavior on what happened in the past. Frankl was about developing a vision of the future, recognizing the control you have over that vision. He would convince people in Auschwitz that how they reacted to those guards was in their control, that they could have a positive vision of the future that would determine the positive nature of their future.

I believe what we do in this company in improving lives is giving people meaning in their lives. I went to West Point because I wanted to free the people who were living in un-free societies. I joined P&G because I wanted to make a difference in the world.

When I go to college campuses today, the students tell us they want to work for a company where they can have meaning, where they can make a difference. I think that’s the opportunity we provide.

LUKE VISCONTI: In your bio, there’s a long list of organizations that you serve. Can you talk about how important that is to you?

BOB MCDONALD: I’m trying to help people understand what their individual purpose is in life. I have a set of 10 leadership beliefs: No. 1 is living a life driven by a purpose, compared with simply meandering through life without direction. With technology the way it is today, everyone is time starved. It’s possible to go through life reacting to external forces.

I’ve given this speech maybe 300 different times, maybe every college campus almost in the world. For me, it’s a calling. If I can help students understand how to make a difference in the lives of others and if that is a higher purpose, then they should set that purpose now rather than simply reacting to what affects them.

The point is people like to do what they’re good at, and they’re good at what they like to do. We naturally gravitate to certain things, and that may lift the veil a bit on what your purpose is.

It’s the No. 1 thing, in my opinion, that differentiates those who succeed at Procter & Gamble versus those who don’t, or those who succeed in life versus those who don’t. It’s maintaining the ability to learn.

I often tell people, “When you graduate, you’re not done learning. That’s the beginning of the learning journey.” No one can predict the future with certainty, particularly in today’s world which we at P&G call a VUCA world (volatile, uncertain, complex and ambiguous). How do we prepare ourselves for that future to make the right decisions in real time? The way to do that is to continue the ability to learn.

The leadership challenge today is so different with so many generations that are so diverse. The people complain about not text messaging and other things like that, which is all true.

What is going to be the analogy for the young person today? Twenty or 30 years from now, they’re going to face the same challenge. The older you get, the harder it is to learn new things. Reverse mentoring becomes a very powerful concept: forcing yourself to learn things that are new or very difficult is a powerful concept. If we don’t do that, we won’t get the most out of life.

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