Board Member – Time Warner Inc. and Valeant Pharmaceuticals, Former Chairman – Bausch & Lomb and author of Reinvent: A Leader’s Playbook for Serial Success talks to Synergyzer about his illustrious career
Synergyzer: How would you define Fred Hassan?
Fred Hassan: A hard working, down to earth, family man. Farid Hassan is one of those executives who believe that our biggest purpose on Earth is to help others fulfill their dreams.
Synergyzer: What sector companies have you worked on overhauling? How many companies have you reinvented in your career?
Fred: As mentioned in “Reinvent,” at least six have benefited from turnaround and transformations led by me. Besides the pharmaceutical industry, these include chemicals, consumer, agriculture, electronic devices, foods, diagnostics and services.
Synergyzer: Are there any specific traits that are there sector-wise that contribute to a company’s disaster situation or success?
Fred: Each sector has key factors that lead to the success or failure for companies that compete in those particular sectors.
In pharmaceuticals, for example, and as mentioned in “Reinvent” about 70% of the sales from marketed products needed to be replaced by new products every ten years, in order to offset exclusivity expiries. In this sector, therefore, an innovative and effective research and development engine is critical for companies to thrive and prosper.
Yet it is common for once strong companies in R&D, such as Merck, to lose their R&D superiority and then be forced into cost-cutting and layoffs.
Synergyzer: What are the factors that commonly contribute to management disasters?
Fred: The most common factor is past success that lulls the company into complacency or even arrogance. By not reinventing themselves and keeping the edge sharpened, companies lose their competitive edge and allow existing competitors or new upstarts to hijack their franchise whether its customer, innovation or low cost franchise. This often leads to market share losses, cost cutting, further losses and the downward spiral continues.
Synergyzer: What are the major traits in an organization’s culture that are vital in turning it around? Or is the case different with every organization?
Fred: The starting point of every turnaround is different. But there are commonalities when describing a culture change that leads to a turnaround.
The important commonalities’ in turnaround cultures are:
Senior Management, who are excellent in their own functional areas, are inspiring leaders to the people they lead and root for the success of their other teammates in senior management.
Role modeling attitudes and behaviors that promote passion, courage and tenacity among the various levels in the organization – all the way to the frontlines.
Executing relentlessly by applying the “Winning Team Formula”- Clear goals, faith in themselves and their leaders, training, and most importantly, the will to win.
Always staying humble, staying grounded, being adaptable, and being flexible – even as one sees success after success.
Synergyzer: In all your years of experience, how have you been able to inculcate a sense of ownership amongst employees? What are some of the most vital reasons that employees start lacking ownership of their place of work?
Fred: One reason employees lack a sense of ownership is because they start to believe that senior management looks at their organization as a machine rather than groups of people who want to have a sense of purpose, take ownership, and win together.
I have always believed that if people buy into the mission, feel valued, are committed to constant self-improvement, feel that what they do makes a difference and care for their colleagues, then one gets much more productivity than senior management treating organizations in a mechanical way.
Synergyzer: You have reinvented a huge number of companies in your career. Can you tell us about interesting experiences with some of them?
Fred: I have been successful in reinventing many companies. There are many interesting stories in “Reinvent” including the dramatic turnaround of Sandoz Pakistan in the early ‘80s.
Perhaps the most profound reinvention was as Chairman and CEO of Schering-Plough from April 2003 to November 2009. During this time the company changed dramatically in its culture, its sense of direction and its collective sense of executional excellence. The financial metrics changed dramatically. One operating metric was cash flow which went from an alarming burn rate of $1 billion per year to a positive $2 billion per year.
Additionally, Schering-Plough’s R&D engine was transformational in its performance, increasing the value of the R&D pipeline by several billion dollars. The most gratifying part here is the benefit to millions of patients around the world who benefitted from new medicines.
Finally, the people of Schering-Plough greatly benefitted from the learning laboratory that was created to show how a changed culture can lead to turnarounds and transformation. Many have gone on to better professional and personal lives for themselves.
Synergyzer: Based on your experiences, what shapes any society’s human capital’s desire to excel and where do you see the potential for Pakistan as one nation or culture?
Fred: The best way societies seek to better themselves is through a broad based long-term social consensus within the country that is durable, even when governments change. This focuses on securing and then improving beyond the basics such as food, sanitation, public health, education, human rights, rule of law, safety, security, property rights and the opportunity for adequate rewards for hard work, team work and innovation.
I remember while growing up in Lahore in the early ‘50s, how we felt economically at par with South Korea. Today, South Korea has achieved a European standard of living with an aspiring population that values education. South Korea got there via a 60-year journey of focus, resolve and hard work. Pakistan has a population that seeks education and enlightenment and is ready to work hard. Pakistan too has the potential to go on its own 60 year journey towards progress and prosperity.
Synergyzer: What do you feel is required to change the outlook of Pakistan in the world even in the current circumstances? What are the basics required?
Fred: In my opinion the most immediate basic step would be to enhance accessibility and understanding. For example, Pakistan needs to get off the “do not travel there” lists. It is hard to build international understanding if people do not travel to Pakistan in the numbers that they do to other countries.
Synergyzer: What measures can Pakistanis studying and living abroad should undertake to help convert the country’s image into a positive one?
Fred: Pakistanis working and studying abroad have a good image. Yet, their ability to improve their country’s image is limited as they have limited influence on mitigating the political, social and economic challenges that develop in their country. Each overseas Pakistani can positively influence their countrymen by showing the power of critical thinking, tolerance for diversity, a bias for learning and research and building team spirit in getting things done.