Two major pharmaceutical companies, Roche and GlaxoSmithKline (GSK), have announced their new CEO designates, who are both in their early forties. Andrew Witty, of GSK, is 43 years old, while Severin Schwan, of Roche, is a mere 40 years old. Have these pharmaceutical giants made the right decision in investing in these relatively young executives? And what makes a good CEO?
There is no doubt that experience is valuable when one is making decisions. CEOs are key decision makers within organisations, and being able to draw on their experience can help enormously. However, CEOs are not just decision makers, they are leaders, they need to rally their Boards, their senior management and their staff behind them. To do this, they need to be good communicators, and they should be able to win over and bring people behind them. Furthermore, they need to be somewhat naive. In fact, naivety is a necessary ingredient, because knowing too much can be a bad thing. It can bring too cautious an approach to decision making. What is more, our industry is changing rapidly, and so the environment in which we are operating has, in some senses, changed: we are in uncharted waters.
“Roche and GlaxoSmithKline (GSK) have announced their new CEO designates, who are both in their early forties. Andrew Witty, of GSK, is 43 years old, while Severin Schwan, of Roche, is a mere 40 years old. Have these pharmaceutical giants made the right decision in investing in these relatively young executives?”
England’s Henry V was only 28 when he led his army to defeat the French at the Battle of Agincourt. He had some military experience from when he fought the rebellious Welsh, and this was enough to give him confidence to take on the French, but it was his leadership skills that enabled him to win the battle.
Today’s CEOs have to make bold decisions around strategy and how to survive in a changing world. Yes, they need experience, but, even in a specialist industry, they cannot have a sufficiently broad experience. They are, however, able to draw on the experience of those around them. How they use all this experience is essential to their success. And what sort of risk takers they are can also influence their successes or failures.
Great leaders know how to surround themselves with talent, and those that share their vision. They have great communication skills and a canny insight into the world, both today and in the future. In other words, such leaders have a strong vision for their companies. They also have to have energy and mental agility, factors that are normally attributable to youth. That said, Jack Welch of General Electric - where he was Chairman and CEO from 1981 to 2001 - was a very energetic CEO at the age of 65, thus demonstrating that youth can help, but is not essential.
I believe that Roche and GSK have made the right decision from an age perspective. The remaining qualities of these two CEO designates will be tested as they lead their respective companies over the next five years. We will be watching with interest.
Fintan Walton Chief Executive Officer PharmaVentures Ltd