In experience by Pharma companies to discoverIn experience by Pharma companies to discover

In March 2015, the Joint venture (JV) deal that was announced a
year ago between Novartis Consumer Health and GSK Consumer health was finally
completed. The entire objective of this $20bn asset swap between the two giant
consumer health companies became a model for other large drug making companies
as it was considered a break through and a new way of deal-making in the
M&A world. The main reason behind all the focus and importance behind this
particular transaction was because of the difficulty being experience by Pharma
companies to discover new drugs and find further innovations and returns from
their R&D investments. The main result of this massive deal was to
strengthen both companies’ portfolios by swapping GSK’s oncology portfolio with
Novartis’s profitable Vaccines business as well as selling off Novartis’s
consumer health business to GSK. This would further help create more focus and
strengthen both companies’ value propositions in their respective markets.

For the purpose of this assignment, I would like to focus on
Values that helped guide the formation of this newly formed joint venture – GSK
consumer health which I was a successful part of, as well as the current
changes to GSK’s culture and processes post the start of the new CEO Emma
Walmsley in April 2017 (ex GSK consumer health CEO).

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At the time, I had recently joined Novartis Consumer health and
was seeing a shift in the cultural paradigms for both Novartis and GSK. Both
companies had similar values and commitments that were well integrated into the
company’s processes and culture:

Novartis Values:
Innovation
Quality
Collaboration
Performance
Courage
Integrity

GSK Values:
Patient
focus
Respect
for People
Transparency
Integrity

 

Post the recent bribery scandals in China (July 2013) which had
cost GSK not only the dismissal of a 100 employees and a hefty $490m fine but
also resulted in badly tarnishing their reputation which was a far greater
damage against their values of transparency and integrity. GSK had to re-focus
their efforts in building back their values and the trust that they had lost in
the eyes of their consumers as well as shareholders. This resulted in GSK
investing and reinforcing their compliance and ethics policies all across the
world as well as incorporating mandatory Anti Bribery trainings and Code of
conduct trainings for all GSK employees and senior management.

As a new GSK employee, we were all required to move into GSK’s
offices and were quickly immersed into a number of rigorous trainings, videos
and tests that imbedded into all of us the importance of being completely
aligned with GSK’s values and culture. We were further asked to adapt our PDP’s
to GSK’s performance metrics, which mainly revolved around the GSK values and
expectations. The 1st year of JV was an extremely difficult and testing
time for everyone as we were all asked to go through a rigorous selection and
assessment process which would eventually decide our fate in the new company.
Morale was extremely low and there was high turn over as some people decided to
leave and pursue other opportunities outside GSK. It took the newly formed
company a good 2 years to recover from the impact of the re-structuring as well
as converge the two different processes.

Further with the appointment of Emma Walmsley in April last year,
GSK had to go through a second wave of changes to their commitments and
culture. Her immediate focus has now moved towards accountability and
performance. She is also trying to focus on bringing more competitiveness into
GSK’s R&D practices given the recent news that their research spend as a
percentage of sales is at the bottom as compared to the industry standards. Her
recent changes to GSK’s strategy and expectations as shown in the below table, as
well as replacing 50% of her top management with fresh blood outside GSK has only
further re-enforced the message that she is trying to imbibe fresh perspectives,
high performance as well as full leadership accountability.

GSK’s Previous Strategy:
Grow
Deliver
Simplify
Responsible
business

GSK’s new Strategy:
Innovation
Performance
Trust

 

Emma Walmsley’s focus on changing and internalizing GSK’s values
is an important element that has helped her create a better frame, commitment
and processes for GSK.