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Jeff Kindler beckons from the far side of the boardroom table and gestures towards the empty seat next to him. "Come and sit over here," he says, glancing mischievously at his head of communications. "Ray won't like it because he can't kick me under the table."
- By Andrew Jack/Financial Times
- Published: 23:58 January 6, 2009
Jeff Kindler beckons from the far side of the boardroom table and gestures towards the empty seat next to him. "Come and sit over here," he says, glancing mischievously at his head of communications. "Ray won't like it because he can't kick me under the table."
The chief executive of Pfizer, the world's largest pharmaceutical company in terms of sales, relaxes as he slips off the jacket he was advised to put on for photographs, looking more at ease once restored to his shirtsleeves: informal, engaging and ready for business.
Our meeting has been switched at the last minute from the company's Manhattan headquarters to its office in the heart of Washington, DC, where Kindler has just attended a morning panel on healthcare reform.
Before that, the 53-year-old, who says his hectic schedule has forced him to give up golf, flew in from a short tour of his French subsidiary.
Kindler says he relishes the peripatetic management style. He picked up the habit of spot visits to local offices at the start of the decade when running restaurant chains for McDonald's, including Chipotle Mexican Grill and Pret A Manger.
"I got to know people on the frontline, dealing with customers, and gaining a clear appreciation that you get a lot more value being in the stores than in your office," he says.
His background is unusual for the head of a drug manufacturer, an industry more used to promoting scientists and other medical specialists from within than hiring an outsider.
A lawyer turned corporate executive, his only link to the sector in his earlier life was to have been raised in New Jersey, home to several powerful rival pharmaceuticals groups.
"I think I'm somebody who's learnt the business pretty well," he says.
"By virtue of not growing up in the industry, I raise ideas that provoke and think differently. In every job I have had, I have learnt many things about leadership."
Born in Florida, he studied at Tufts University and Harvard Law School before clerking for US Supreme Court Justice William Brennan.
"He was very well known for his belief that the best decisions are made from very open, robust debate," he recalls. Practising as a partner with Williams & Connolly, the law firm, he says he "learnt a lot about the value of understanding the facts you need to make a decision - that's a pretty important skill".
At General Electric, where he was vice-president of litigation and legal policy, he says that under Jack Welch, the former chief executive, "I saw the idea of a very large company with scale and resources, driving decisions down to more focused business units".
After McDonald's, he joined Pfizer as general counsel in 2002, rising by 2005 to join the four-person top executive committee. Then in summer 2006 he beat two veteran managers in the race to take over from Hank McKinnell, the sometimes abrasive chief executive.
The company, which has annual sales of nearly $50 billion, may have needed a fresh perspective, but any breathing space to celebrate his success was brief. His predecessor left swiftly, soon followed by his two rivals and many other senior executives.
By early December that year, he faced a still more troubling departure: Torcetrapib, the experimental medicine that Pfizer had bet on to defer the pain of its expiring patents on Lipitor, its cholesterol-lowering blockbuster, fell by the wayside.
Safety concerns identified during clinical trials meant that he had to abandon the drug, reducing the solutions to the company's most pressing challenge: the $13 billion in annual sales threatened when Lipitor's exclusivity vanishes - and prices plummet - in 2011.
"It will be a meaningful event," he says with considerable under-statement. "We will advance strategies to generate new and diverse sources of revenue growth and cost structures to position us to be strong after Lipitor.
The cost-cutting is already under way. Pfizer has slashed 10 per cent of its workforce of 100,000 since the start of 2007, reducing annual costs by more than $2 billion. It has closed and consolidated dozens of factories and research and development centres, as part of a broader process of restructuring.
Kindler argues the result has been greater effectiveness. "We've become much faster and more agile, and eliminated so much bureaucracy. I wanted seven to eight layers from me to the bench scientist or the sales rep. In some areas, we had as many as 14 or 15. Hundreds of committees have been eliminated, and people empowered."
Research for each medical therapy area is now concentrated on a single site, within entrepreneurial teams of fewer than 150 people, each led by scientists. "One of the things we've learnt is that the entire organisation ought to be able to meet for lunch in the cafe, and know each other," he says.
He has closed some therapy areas entirely and broken with tradition by spinning out research units and products no longer pursued in-house, such as Esperion, a company developing cardiovascular treatments.
He has introduced development projects where the risk is shared with others, including a joint project with Bristol Myers Squibb on Apixaban to prevent blood clots.
But he stresses that Pfizer has also invested, expanding into vaccines and biological medicines, for instance, and in the fast-growing emerging economies such as India and China where it has been present for decades. He does not rule out future acquisitions of any size, as long as they provide "strategic value".
The company is now run in a more decentralised way around a series of business units, each run by executives with authority to innovate. "I want leaders to be empowered," he says. "My job is to select the right people to lead, decide capital allocation. It's their job to deliver."
He cites how within 36 hours, the head of Pfizer's generic drugs arm was able to make good on shortfalls in US supplies from an Indian rival when the Food & Drug Administration banned its products after concerns over quality.
"In the old days, meaning two years ago, Pfizer would not have been able to do that. No one would have had the authority," he says.
"One of the most important things we are doing is recognising that one size doesn't fit all," he says. "How we do chronic care in China is very different from our work with oncologists in the US. There's been a really fundamental change in the last two years that positions us for success in a very uncertain world."
There is little doubt that he has brought about considerable change at Pfizer in little more than two years. But much more will yet be required if he is to stave off an absolute drop in sales when Lipitor's patent expires.
Asked whether he manages by consensus, a little ice glistens in his eyes. "I believe in holding people accountable, making it very clear as to what they are accountable for, and giving them the resources to deliver on the commitments that they make," he says.
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