Own the Role You Have: Novartis CEO Vas Narasimhan

12:30Steve Sedgwick:And you have to be able to communicate. And I learned that.

12:33Vas Narasimhan:But that decision speaks volumes to me. You didn't go to one of the big hospitals. You didn't go to a big teaching hospital to carry on that side of your career. You went to McKinsey instead because you knew you wanted to make a bigger impact in health and health services. It wasn't going to be medicine.

12:45Steve Sedgwick:It was going to be scientific.

12:47Vas Narasimhan:I wasn't exactly sure.

12:49Steve Sedgwick:And that's the point. And young people shouldn't be sure. Shouldn't be sure. I mean, I think people watching should know, these were all just experiments. I was in my kind of late 20s. I was like, let's give it a shot, right? Maybe McKinsey will lead to something or maybe I'll just go back to medicine. And I had no idea where it would go. And I had no idea that McKinsey would lead to Novartis, right? So when that happened, and then suddenly I was sitting in Basel, Switzerland, working for a pharmaceutical company. Certainly my mother was asking me, what exactly is the plan right now? So I thought you were going to be working at a hospital.

13:18Steve Sedgwick:You're a Harvard Medical School grad. I'm with your mom. This is where I was going with your history. And it wasn't a carefully thought through plan at all. It was kind of just trying to see where I could learn, where I could have an impact and just kind of follow. So I love this. Huge decision.

13:32Vas Narasimhan:You've had this unbelievably expensive education. I'm sure you got a loan the size of a – well, maybe you didn't. I did, I did. And you've made the decision to go to McKinsey to learn more. And then you've ended up at Novartis, 2005? 2005. Tell me how that process worked and the decision-making. Did you make that more of a decision or were you just winging it still?

13:49Steve Sedgwick:I kind of always thought to follow people I respected. And there were some great leaders there that I respected. We got a gentleman named Amit Malik, who's actually now still a biopharmaceutical CEO. He told me, look, you should come. And I think you can learn a lot and have a huge impact. And so I trusted him. Right. And I think a lot of these look in life. You also trust the people that you who believe in you. And that can open up a lot of doors. And that actually ended up being quite a decision to take. Though at the time, again, seemed like a very strange decision to take.

14:20Vas Narasimhan:A whole series of roles between 2005 and late 2017, early 2018, when you became the CEO. Tell me about some of the great decisions you made in that period. And tell me some about some of the howlers, where I presume you learned also a lot.

14:35Steve Sedgwick:So the big one was at 2006, after two years at Novartis Pharmaceuticals in the main ship, Basel, Switzerland, I went to the newly acquired vaccines division, which was losing money, had a very small piece of Novartis, 2 % of Novartis' sales. And at the time, it seemed like a very strange decision. Again, so I have a series of strange decisions, always following, trying to follow mission, learning, purpose. That ended up being one of the great decisions. Because what happened is when you go to a small unit and you get huge responsibility, your learning curve goes up through the roof. So I was suddenly overseeing clinical programs and development programs in our world, important things to know.

15:15Steve Sedgwick:all the way through to marketing launch programs. I had to solve all kinds of issues. And it was fully immersive. You know, I ended up being seven years, I was there eight years, I was in that division. And it was actually incredible. Before I knew it, I was running a unit. And I was testifying in front of Congress about the H1N1 pandemic. And I wasn't even 32 years old at that point in time. So I think, I think that was one of those decisions where at the time, to most people seemed like a really bad decision that in retrospect, I mean, for my growth, it was incredible. Really, really. And that's incredible for me.

15:50Vas Narasimhan:I've just learned something again from this and the fact that I've had so many conversations with you about and the rest of the industry about biotech. Why do you need them when you've got the big pharma? And you just answered the question. It's the autonomy and the speed of action and what you can do and what you can learn and the responsibility that you as an individual in a smaller group get.

16:09Steve Sedgwick:Absolutely. And you can make some big wins because you can take the risks because the downside is not as – look, Novartis has to manage a huge risk profile. I mean we're a 270 billion market cap company. When you're a small unit just trying to experiment, you just have to figure it out. Sometimes you'll win. Sometimes you won't. And that's okay. So I think that was a really, really interesting decision. The other one I'll tell is – I don't know. It's always hard in Buddhism to say who is to say what is good or not good. because often things that seem good at the time end up being bad. Sometimes the thing bad at the time end up being good, but it's all just the cycle of how these things work.

16:45Steve Sedgwick:I remember in 2014, Novartis actually sold the vaccines division to GlaxoSmithKline. And at the time, I wasn't exactly sure. If you can imagine that less than four years from there, I would become CEO of the company. I did not have a next role at Novartis. And I wasn't exactly sure would I go with the acquisition to GSK or would I find a role. And then I got a call from our CEO at the time and said, we're going to send you to the generics division, Sandoz, in Germany. And immersed myself in it. And then five months later, I got another call and I was the head of drug development at Novartis Pharmaceuticals.

17:21Steve Sedgwick:And three years later, I'm the CEO of the company. So these are really hard to predict how these things unfold.

17:26Vas Narasimhan:I would imagine as part of you may have thought, I really like this autonomy. I like the scale of the company. I'm going to stay with either this vaccine company with Glaxo or actually go elsewhere and become a vaccines CEO or a biotech CEO.

17:39Steve Sedgwick:I think it's easy to get too fixed kind of in your career as well. And I think to be open to possibilities that a decision in one direction could open three other decision doors in another direction.

17:50Vas Narasimhan:Tell me about something you got really badly wrong early in your career. Everyone I know has. And everyone I've interviewed pretty much. I thought this was going to be the moment where I'm booted out the door kind of thing. Did you have one or two moments where obviously you learned from it, but you had a really hard time at the time?

18:05Steve Sedgwick:Well, I think certainly when I coming back, I mean, there are many of these moments, as you can imagine. But, you know, I think one that comes to mind in that early part of the career is, you know, as a very ambitious leader of Novartis Vaccines North America, I convinced the U.S. government to actually have us become the number one supplier during the swine flu pandemic. And we were the number one supplier. We won the contracts. And then that summer, we weren't able to deliver initially. And I still remember the meetings with our then CEOs and chairmen and that I had put the whole company's reputation at risk by ambitiously signing up for these deals and then not being able to deliver and then being hauled in front of Congress as well to testify about it and being called by the chief of staff of the White House.

18:52Steve Sedgwick:And, oh, that was a tough summer. own but here's the interesting thing i mean what i also learned in that experience is to go to manufacturing sites and really try to talk to people in town halls and say we can do this i know we're behind we can get there we can get there and we did get there we did deliver it so you motivated people to learn how to motivate people when with a gun to your head of course and and we figured it out how was it mentally for you at the time i i these failures these failures these setbacks.

19:22Vas Narasimhan:At the time, I had one CEO saying, I was in a fetal position, I was so upset. I had another one saying, I was making really bad decisions. I had high levels of cortisol. My mind was, I couldn't sleep. I hear a lot. What about you?

19:37Steve Sedgwick:I think earlier, I mean, now I'm more zen about these things, having gone through the ringer many times. But then? But then, yeah, tough to sleep. It's completely normal. I can tell you as a physician, I mean, these are the fight and flight responses used to be we were chased by animals when we were evolving as an ape species now it's the email you get saying what the hell did you just do right and and uh welcome to my life at cnbc more like what did you just say and yeah and then of course you have the cortisol going you don't sleep you you you're under huge stress and of course the hardest part is how do you insulate your organization from that so i found over the years it was so important that you absorb it and then that's very heavy light on you.

20:17Steve Sedgwick:But if you let it pass through you into the organization, then the organization just simply cannot perform. You have to be an absorptive buffer. And that's hard. And that's really hard on all leaders. So I think that's something we all have to contend with.

20:31Vas Narasimhan:Let's spin forward to the succession process from Joe Jimenez. 2017, tell me how it worked and about the decision you made to accept that role, because you've already said on this podcast as well,

20:44Steve Sedgwick:you never expected to be the CEO. I think that was the moment when I actually just sat down and I said, I'm going to write down what I believe this company should become on a single sheet of paper. And I think I still keep that sheet of paper. And it was very much around the cultural transformation, inspired, curious, non-bossed, not quite those words yet, but that Dan Pink concepts I wanted to bring in that I truly believe that we should be a pure play, innovative medicine company and that we should bet on technology, innovation. I called it data and digital. I didn't know about AI. So I wrote, go big on data and digital.

21:17Steve Sedgwick:That became kind of the manifesto. Now it took like much longer than I ever expected to do all of those things. But yeah, that was it. And then I went through the process. And I remember still, it was a board meeting. I got called in by the chairman. He told me I'm going to become the next CEO. And I was really incredibly excited. I ran upstairs to call my wife, Shristi. And she said, look, I'm in a meeting. Could I call you back later? And she just quickly hung up. So I was like, okay, I'm not allowed to tell anybody. And then the funniest thing, I was actually had to go to fly to another meeting.

21:51Steve Sedgwick:And I was actually on a Ryanair flight. We were in Dublin where this board meeting is. And then I was like delayed in the Ryanair and Dublin airport for like 12 hours. I was like, here it is. I've been named CEO of this giant company. And the reason I keep coming back to that is how do you stay humble and grounded throughout the whole thing, right? and I think it's so important. Well, I think you stay humble and grounded by traveling on Ryanair.

22:16Vas Narasimhan:All due respect to the great Michael O 'Leary. That's as humbling as it gets.

22:20Steve Sedgwick:Yeah, yeah, a good reminder.

22:21Vas Narasimhan:That's hero to zero stuff as well.

22:28Vas Narasimhan:The first year of CEO was rough. You walked straight into a crisis. For our viewers and listeners, three months into the post, you had to apologize to employees and indeed you were hauled over the cold, publicly with a lot of truths and a lot of untruths as well about the fact that your company had hired Michael Cohen's consulting company in February 2017, which is way before you became CEO, a 1.2 million year long contract as well. That was perhaps in retrospect, I think very clearly, not the right thing for Novartis to do, but you had to bear the brunt straight away.

23:03Steve Sedgwick:Yeah, I think that first six months, we had the Michael Cohen situation. We also had a very large Greece investigation from the SEC DOJ. We had another investigation into practices in Asia and talk about getting thrown into the maelstrom. And, you know, I think it's easy to coach new CEOs about these things. But when you go through it, it's the first time it's your name. And seeing all of that, it's jarring, right?

23:28Vas Narasimhan:I remember talking to you about it. And I'll put my hands up here. You stood up, you took the questions, you know, this wasn't your message, but you'd inherited it as a senior member of the team that had hired Michael Cohen and now the CEO as well. Yeah. Unbelievably tough.

23:43Steve Sedgwick:Very, very tough. I also say, I mean, I made some missteps throughout that whole process. What mistakes did you make? Look, I think I should have owned it on behalf of the company. My first response is, I think I even said on maybe it was on CNBC, look, this didn't happen under my watch. That doesn't matter. Right now, I'm the steward of the company. I need to own it. And I think in retrospect, I should have just said, doesn't matter. our company shouldn't have done this, you know, and we need to own it, and then step forward. So I think I learned a lot in that whole process that first six months, because then it came straight to the Greece, the Alcon investigation in Asia.

24:17Steve Sedgwick:And then 2019, the FDA investigation

24:20Vas Narasimhan:to manipulated data on a gene therapy as well. I mean, you are you are firefighting from day one for a good 18 months.

24:28Steve Sedgwick:Yeah, it was it was 18 months of trial by fire. It builds a thick skin, that's for sure you need that in this job but it's hard to build a thick skin without taking some of the did you question then at any moment your decision to become cea no i think i was i was at that point i'm kind of the you know another thing my parents instilled in me is you stay in the ring and because the in the end just staying in the ring is hard enough right yeah and if you can stay in the ring stay resilient that you can overcome if you just keep getting back up you're

24:59Vas Narasimhan:getting a lot of brickbats thrown at you from people who have never been in the ring. Absolutely. And if they haven't been in the ring, and I feel like this on CNBC, I don't want to, I didn't care what they say. If they've never been in the position, they don't understand what it's like.

25:10Steve Sedgwick:They don't understand what it's like. But you know, I think in, I have a much more mature perspective then. But I mean, back then I was very angry at the journalist community. I was like, why are they bashing me? And it was tough.

25:21Vas Narasimhan:You didn't show it to me, which I'll take on board. Look, another really, really, really tough decision amidst the pandemic, eliminating 10 ,000 jobs. That is without doubt the toughest decision of your career, isn't it?

25:33Steve Sedgwick:For sure. I mean, and these are all things I kind of always knew that we needed to do and that I struggled with, I think, because it was the pandemic. There was always a reason not to do it. A company I had grown up at, a company where I knew so many people around the world. and then to take out over 10 % of our workforce, many people I knew was really, I think, a tough decision.

25:55Vas Narasimhan:Funnily enough, again, I spoke to the CEO about a very similar decision that he had to make when he became CEO, same kind of numbers, huge, 10 ,000 plus people as well. He said, as long as you do it with respect and you're respectful to the employees which you're letting go of and the employees are still there and you explain to them exactly why you're doing this, then then you it's a much easier process i think to a person that i would interact with they all

26:21Steve Sedgwick:understood because we really took the time to explain why like why strategically this makes sense why we need to focus as a pure play why we need to simplify why we need to stream down line down the pipeline and spending that extra time saying why i think people understood no there's still the personal impact of individuals leaving and you know basel is a small place so everybody knows everybody. So you know, a lot of people, my kids, friends, parents, and so it was a tough time. It turned out, as you've seen the performance, it was the right move. But that's not a given. And I think, yeah, it was a tough couple of years.

26:56Vas Narasimhan:I would imagine in your position, there is nothing more exciting, nothing that validates the decisions you've made. When you get drugs through, drugs that change people's lives. I want to know about that feeling when you've backed a drug, it works. It's got past stage three and you know this is going to make a big difference.

27:15Steve Sedgwick:I cry every time we have a phase three win. It doesn't surprise me. Because I mean, many of these projects I've been with since 2013, 2014, or I started them or I know the teams and most of them sadly don't work, right? And when you have one that really changes in the case of Kiskali, the whole shape of breast cancer therapy or Pluvicta, prostate cancer, Assemblix, You know, again, cancer, chronic myelogenous leukemia. I mean, it's an extraordinary moment. And it's not just those. I mean, one of my favorite ones happened last November. We discovered and successfully developed the first new malaria drug coming back to my time in Africa in 25 years.

27:53Steve Sedgwick:And so for me, flashing back to sitting in a hospital in Tanzania and watching children die of malaria, knowing my company has provided Coartem to 1.2 billion people, and then making that next discovery, of course you cry. because you put your whole heart and soul into this work. That's the only way you can do it.

28:08Vas Narasimhan:We've covered a lot of ground about your personal ethos in making decisions. Just tell me how you want to put into words your ethos and your values when you make decisions.

28:16Steve Sedgwick:There's so many things we can be doing with our energy and our time. But one thing I've learned through this transformation process is we have to stay focused on what we're great at, discovering, developing the most cutting edge medicines. Just to give you an example, people always say, why don't you get into devices? Why don't you get into diagnostics? Why don't you buy an AI company? And, you know, I think we have to stay on mission. That's the first step. Second, is it consistent with our responsibility to the stakeholders that we have? So people often ask me, why do you still guys do malaria and leprosy and neglected tropical diseases?

28:47Steve Sedgwick:Well, that's aligned with our mission. And we've made a commitment to global health for 100 years as a company. We've been the leader in global health and engaging in medicine in Africa. So we have to keep our commitments to those stakeholders. And then, of course, can you execute? I mean, in the end, there are sometimes things that are both of the first two things, but we're not the right company to do it. And those are tough decisions, right? You can find, I'll give you an example, a rare cancer medicine that aligned with our mission, consistent with our goal to deliver medicines to cancer patients, but too small to move the needle for a$60 billion revenue company.

29:25Steve Sedgwick:And then we have to say no. And that's hard to tell those scientists. Look, there's a biotech who's better served to do this. but those are also the tough choices we have to make i want to talk about you personally and

29:34Vas Narasimhan:decisions you make in your life i look at myself and i'm actually going to compare myself to you now i'm like a poor man's vasnera semen i i monitor my blood sugar i try and sort my sleep out i concern about my mental health my physical health i work on all of these and i work on my sleep i've got a sneaky feeling you work on all of those a little bit better than i do because i know that they're actually part of how you try and conduct your personal life as well well so first

29:58Steve Sedgwick:I'm not, don't believe that's true, Steve, you're looking great. But, but I would just cut that. But look, I would say, you know, I am, I do believe and it's been consistent. And I had, you know, a great friend and coach Scott Pelton, who's helped me with this now for 15 years, mindset, movement, nutrition and recovery. Mindset, can you put yourself in the right mindset every day to have high impact? Think about your high impact moments, realize you're not your thoughts and emotions, and you have to be able to observe your thoughts and emotions to be able to navigate the craziness of what we have to deal with.

30:29Steve Sedgwick:Movement, I think any form of movement, but being more consistent, whatever it is, and I'm a big exerciser, but being consistent has huge, huge benefit. Nutrition, I always say, why do you eat? So sometimes I eat for performance, sometimes I eat for pleasure, but I don't just eat to eat. And that's very easy in today's world, where you're surrounded by food everywhere. So purposeful eating, and then of course, recovery. And now my biggest obsession now is sleep with all kinds of approaches to try to figure out how to sleep better because I think sleep is the ultimate medicine in the end. But I think the biggest thing on all four of those is whatever you choose to do, just pick things and do them consistently.

31:09Steve Sedgwick:The hardest thing is to do these things consistently because the benefits just accrue and compound. And people ask me, like, how do you put up with the travel? It's because I do those things every single day in some form. And then over years, is the benefits compound.

31:23Vas Narasimhan:I'll bear that in mind. It's my consistency. And I will go for that run again tomorrow. Final, final question. What are the big decisions for you personally going forward?

31:33Steve Sedgwick:First and foremost is helping my sons navigate their transition into college. And really, with my wife taking on her leadership role, I've had to learn how to become more of a lead parent. So that's really on my mind. I mean, I want to make sure they have the next step sorted out. And then of course, at some point, what's next for me? And I think one of the hardest things as a CEOs, you can only go into this 200%, 300%. I have no idea when the moment will come. But when the moment comes, like, yeah, now what? I mean, I've had the greatest job I could have ever imagined in my life, had unbelievable impact on the world, on Africa, on the planet, on medicine.

32:07Steve Sedgwick:So that's kind of a daunting challenge, I have to say. And I don't have any insight. Maybe I'll come back to you, Steve, for some advice. Since you seem to know me really well, you can counsel me on whatever that is.

32:17Vas Narasimhan:I don't know if I know you really well, but I've learned a lot about you for this podcast. And I've Love the journey as well. So thank you so much indeed for your time, Baz Narasim.

32:24Steve Sedgwick:Appreciate it.

32:25Vas Narasimhan:That was a great conversation with Baz Narasim, both personally and professionally. He's just so interesting. He's always wanted to make an impact. He's got such great role models from his education, but especially from his family. His hardworking immigrant parents really instilled the desire to make an impact, but strong ethics within him as well. 20-year-plus career at Novartis. He's always wanted to progress humanity, to get these drug breakthroughs, which he said himself, they make him cry when he has them because he knows they're going to make a positive impact in people's lives. Personally, I want to be Vas Narasim and he concentrates on his sleep, his health, his mental health, his physical well-being, his nutrition.

33:10Vas Narasimhan:He's kind of a role model for a lot of us as well. A really fascinating guy. Thank you very much indeed for joining me on executive decisions. I would love to hear your feedback. Drop your thoughts in the comments or a review and please hit that follow or subscribe button.