Joseph Jimenez
2015 Business Leader of the Year

Progress in a Bold Quest

Novartis CEO Joseph Jimenez, MBA 84, has set his firm in a battle against various forms of cancer. And the outlook is promising.

By Kate Madden Yee

In the spring of 2014, Novartis CEO Joseph Jimenez, MBA 84, appeared on the cover of Forbes with a bold question: “Will this man cure cancer?”

The disease, Jimenez said in the article, would be a top priority for the global pharmaceutical company’s nearly $10 billion research and development budget—though expediency was most important. “I’ve told the team that resources are not an issue,” he’s quoted as saying. “Speed is the issue.”

Advancements in cell-based and gene therapy have accelerated novel treatments in recent years, and Novartis has seen triumphs against cancer. Its top seller, Gleevec, which won FDA approval in 2001, has helped nearly every patient with the rare blood cancer chronic myelogenous leukemia.

Committing billions to curing cancer is an ambitious bet for anyone to make, especially Jimenez, 55, whose expertise was corporate marketing and consumer goods before he joined Novartis in 2007, first as head of the consumer health division, then (six months later) head of pharmaceuticals, and finally CEO in 2010. His leadership and this vision to solve one of the world’s most formidable challenges have earned him Berkeley-Haas’ 2015 Business Leader of the Year award.

“Though not a scientist, Joe was an inspired choice to run a pharmaceutical giant,” says Rich Lyons, dean of Berkeley-Haas. “It’s his analytical skill at balancing short- and long-term goals, his quiet drive, and his outstanding ability to nurture the right talent that have allowed him to Question the Status Quo and re-envision the industry. He has the confidence and expertise to lead Novartis to deliver where society needs it most and is an example for us all of our Defining Principles.”

In 2013, one of Novartis’ immunotherapy treatments put into complete remission 27 of 30 patients with acute lymphoblastic leukemia at the University of Pennsylvania. Novartis is continuing this work with UPenn, and since the Forbes article, the FDA has granted the treatment—which uses a patient’s own immune system to destroy cancer cells—breakthrough therapy status, meaning it will expedite the treatment’s development and review. The first cells are being processed at a commercial-scale facility for clinical trials. In a recent study of this same technology in those with non-Hodgkin’s lymphoma, 11 out of 19 patients had a complete response to treatment. Today, Novartis has over 25,000 patients enrolled in 340 active global trials for promising cancer therapies.

A stronger focus

“There’s often a lot of noise in a business situation, and you have to pick out what’s really important,” Jimenez says. “One of the things I learned at Berkeley-Haas is how to take something that’s complex, simplify it down to its basic elements, and then address those.”

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Jimenez at a Berkeley-Haas Dean’s Speaker Series event in 2013 talking about leadership and the pharmaceutical industry. Jimenez has made a name for himself since taking over Novartis. In 2015, Barron’s named him one of the world’s best CEOs.

Simplifying is exactly what Jimenez has done at Novartis by dismantling half of the company left to him by his predecessor. Last year, Novartis, based in Basel, Switzerland, saw net sales of $58 billion USD. Since then it has sold its Animal Health Division to Eli Lilly for $5.4 billion, its flu vaccine business to Australian biopharmaceutical enterprise CSL for $275 million, and its non-influenza global vaccines business to GlaxoSmithKline (GSK) for $5.3 billion—while also buying that firm’s oncology business for $16 billion. “This has allowed us to strengthen our position in hematology, breast cancer, and renal cell carcinoma and opened up new opportunities in melanoma,” Jimenez says. In July, for example, the FDA granted priority review for a melanoma treatment that combines a Novartis and a GSK drug, a combination that was approved for patients in the European Union in September.

Streamlining, Jimenez says, is crucial for the long-term success of the company—as is preparing to address future healthcare trends. “In the next 10 years, the world will add one billion people to the population, and more than half will be over the age of 50,” he says. “To win in this new environment, a business will need innovation power and global scale.” Jimenez has shifted attention to pharmaceuticals, eye care, and generics and has established three priorities for Novartis: creating breakthrough medicines, expanding into cutting-edge markets, and establishing a healthcare reimbursement model that emphasizes patient outcomes rather than product sales. Finding ways to improve healthcare helped Novartis place ninth in Fortune’s recent “Change the World” ranking of companies doing good as part of their profit-making strategy.

Novartis is refocusing its drug development process as well, moving toward personalized cancer therapies instead of working with general populations of patients. Through its Signature program, patients are pre-identified for clinical trials using genetic testing. “We just launched a new lung cancer drug that specifically works in the 3 percent of patients who have a particular genetic mutation,” Jimenez says. “Because we can identify the right patients for this treatment, our ability to achieve better patient outcomes is significantly enhanced.”

Jimenez is also betting on digital-based medicine to drive breakthroughs. In January, Novartis partnered with Qualcomm Ventures to create a joint investment company that will use $100 million to support early-stage companies improving patient care via digital technology. A collaboration with Google aims to create a smart contact lens that monitors blood glucose levels in diabetic patients.

Flirting with failure

Selling off half of a company’s divisions might seem like a dangerous move, but throughout his career, Jimenez has grown to welcome risk and failure.

As president and CEO of H.J. Heinz’s North American and European businesses, the position he held prior to joining Novartis, Jimenez’s team in London kept missing its financial forecasts. But his initial assessment—that it was a forecast problem—didn’t correct the situation. A psychologist finally pinpointed the real issue: employee behavior and company culture. “People knew they weren’t going to come through, but missing the forecast wasn’t as bad as telling their boss the truth,” Jimenez says.

To rectify the issue, Jimenez completely changed his management style. “I started thanking my employees when they brought me bad news,” he says. “It was a balance between not beating them over the head for missing the goal but also not letting them off the hook. But once we identified this underlying dynamic, our forecast accuracy went through the roof.”

"We’re working hard to shift the culture at Novartis so that people know it’s okay to try and fail. With each failure, we come closer to medical breakthroughs."

—Joe Jimenez, MBA 84

He’s seen this type of situation play out at Novartis as well. The company’s Gilenya drug was initially developed to suppress patients’ immune systems after kidney transplants, but this application didn’t prove effective.

“So instead our scientists took the drug through another clinical trial, which showed that its mechanism was such that it helps mitigate relapses of multiple sclerosis,” Jimenez says. “What started out as a failure has now become a $2 billion success, both for patients and for Novartis.”

It may be that American business culture—especially in the entrepreneurial sphere—more readily accepts failure as part of the road to success than European business culture, Jimenez says. “We’re working hard to shift the culture at Novartis so that people know it’s okay to try and fail,” he says. “With each failure, we come closer to medical breakthroughs.”

Crossing cultures

Jimenez’s leadership style has evolved since leaving the U.S. for Europe. “People who grow up in Europe get an appreciation for diversity of cultures across countries and geographies different from those of us raised in the U.S.,” he says. Jimenez was reared and educated in California, growing up in Walnut Creek and in 1982 receiving his bachelor’s degree in economics at Stanford, where he was also ranked among the top five 100-meter breaststroke swimmers nationwide. After earning his Berkeley MBA in 1984, he worked at Clorox and then at ConAgra Foods before the Heinz position that took him across the Atlantic.

“Even though the U.S. is quite large, culturally it’s more homogeneous compared to Europe,” he says. “Novartis is very much a European firm—performance driven but also collaborative. I’ve learned to adjust the way that I manage to maintain an aggressive position in terms of performance but also to support my employees and associates.”

Jimenez has also had to cross business cultures in another way: from consumer-based companies to a science-based one, but the transition has proven useful. “Coming from industries that are very close to consumers, I’ve been able to intensify Novartis’ focus on patients and how we can help improve their lives,” he says.

The Berkeley connection

Since graduating, Jimenez has hosted Dean Lyons at the company’s offices in Basel, delivered the keynote speech at the Berkeley-Haas Asia Business Center conference in Shanghai in 2011, and spoken at the Dean’s Speaker Series in 2013. This fall, one of Jimenez’s sons started his first year at Cal.

“I feel a strong emotional tie to the school,” Jimenez says. “I learned a lot at Haas, and not just content but also how to work with people from different backgrounds.”

And Jimenez’s leadership style exemplifies Haas’ Defining Principles, says one of his mentors, Professor Emeritus of Marketing and Public Policy David Aaker.

“Joe personifies our values of Question the Status Quo and Confidence Without Attitude,” Aaker says. “And he’s good at developing sound strategy in swiftly changing situations.”

Jeff George, head of Novartis’ eye care division, says that these qualities, combined with Jimenez’s ability to pinpoint the crux of any matter, make him a powerful leader. “He’s razor-focused when he digs into an issue, and he’s able to discern which questions are most important,” George says. “Joe also knows how to read people and situations well, and that’s important for the leader of a complex organization. He has to deal with everyone from patients, physicians, and insurers to governments and his own staff.”

It’s a complicated job, but one formula Jimenez is betting on as Novartis digs in to vanquish cancer is simply staying on task. “There are so many things that can trip you up when you’re trying to move forward,” Jimenez says. “You’ll accomplish a lot more if you’re single-minded.”

To that end, Novartis’ oncology pipeline, he says, includes more than 25 new molecular entities targeting 19 key oncogenic pathways. By the end of 2017, Novartis anticipates launching 10 novel products.

“This is an exciting time in oncology, but much work remains to be done,” Jimenez says. “We’re working hard to accelerate our innovation efforts and bring these new therapies to patients who desperately need them.”

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