TITLE: Values-Driven Leadership: A Conversation with Alex Gorsky
David: Welcome to the 'What's the Deal?' Podcast. I'm David Rawlings. I'm the CEO for JP Morgan Chase in Canada. I am joined today by Alex Gorsky. Alex is the Former Chairman and CEO of Johnson & Johnson. Alex also sits on the boards of JP Morgan Chase, Apple, IBM, the New York Presbyterian Hospital, and other foundations.
In today’s episode, we’ll be discussing Alex’s time at West Point and how the military prepared him for his career at J&J:
Alex: You learn a lot about life, about leadership, yourself. I'll never forget showing up in that unit and suddenly you're in a position of authority and responsibility.
David: We’ll hear from Alex how Johnson & Johnson responded to the COVID 19 pandemic and the company’s incredible journey to develop a vaccine:
Alex: If you would've asked me "Gosh, would you be in one of the world's largest healthcare companies as a CEO and chairman and during a time of one of the greatest pandemics to ever hit the world, and oh, by the way, be in the hunt and a race for a vaccine to help make a difference for the world?" I would've said, "Are you crazy?"
David: Alex also will share his thoughts on what’s next for Johnson & Johnson:
Alex: As you see technology trends, industry trends happen real time, it's very important to continue to adjust, adapt, and modify your strategy to make sure ultimately that you're having the biggest difference for all of your stakeholders.
David: And of course, we discuss the JPMorgan Healthcare Conference and its impact on the industry:
Alex: I always looked at it as a real kickoff for the new year, because you always went there knowing that it was probably the most unique opportunity to meet partners from around the healthcare industry that you could find in the world.
We looked at The JPMorgan Healthcare Conference to help us set the agenda for how we were going to think about partnering externally with new companies to really help accelerate our impact and expand our business around the world.
David: So, lets jump right into our conversation with Alex Gorsky. Alex, thanks so much for being with us today.
Alex: Well, David, it's awesome to be with you.
David: You obviously have had a remarkable corporate career. But Let's go back to the beginning, where'd you grow up?
Alex: I was born in Kansas City, Kansas, and we moved to Michigan, when my father was relocated with his job when I was about 12 years old. I'm incredibly fortunate to have had an opportunity to live the American dream. I mean, if I reflect on it, my grandparents were immigrants who came to this country with a dream to do better than their parents had done. They worked in meatpacking factories, they opened grocery stores. And I think the values that they instilled in all of us even back then around hard work, about education about setting a goal for yourself and not holding back really were very influential throughout my life. I was incredibly fortunate to have a mom and a father who set an example every day. My mother is a teacher in the special education department. My father who is a Korean War veteran and stayed in the Army reserves for his entire career, but also had a successful civilian career, expected a lot of all six of their children.
David: Incredible. And if you were to sort of reflect on that time, what were those one or two things that really stood out growing up?
Alex: I was fortunate that when we were in Michigan it was only a town of about 3500 people, the relationships that I was able to build with my teachers and my coaches and my counselors were really deep. And, frankly, there's no way I would be doing what I'm doing today were it not for their support, their challenge, their nurturing. Being part of a small community like Fremont, everybody looked out after one another. The other great thing about growing up in a small town, frankly, were the values around hard work. I got to work on a farm, and the lessons about responsibility, about accountability, and frankly just grit and working hard, those are really critical lifelong lessons.
David: I totally agree. So, my grandfather actually had a farm south of Montreal, and I spent a couple of weeks every summer working on the farm, and you show up every morning, seven days a week, there's no break, you do the work with grit I think is so important.
David: So Alex, What inspired you to go to West Point?
Alex: I was inspired probably by the time I was about the fourth or fifth grade. I can remember going to a friend's house and seeing a West Point yearbook on the shelf, and if I combined that with seeing my father put his uniform on one weekend a month when he would go to do his reserve duty and seeing the ethos of duty, honor, country, that was really inspirational to me. And so I really knew from the time that I was in middle school that West Point is where I wanted to go. I was fortunate enough to be nominated and selected for the Academy. It was a bigger than life experience for me, and that really kind of paved the way, obviously for me to be able to serve my country for six years before I started my career at Johnson & Johnson.
David: So let's just shift. You have a successful university career at West Point. You serve in the military. What did that mean for you? How'd you spend your time? You studied engineering in school, but what'd you do in the field?
Alex: After I graduated from West Point, I had officially a five-year commitment, to serve my country, and my first assignment was in Greece. I got a chance to go to a very remote detachment in the northern mountains in Greece. You learn a lot about life, about leadership, yourself. I'll never forget showing up in that unit and suddenly you're in a position of authority and responsibility, yet in many ways I was younger than a lot of the non-commissioned officers that I was serving with. And so while I was in charge, I clearly had a lot to learn as a leader as well. I was lonely. This was the first time I had been away for a really extended period of time without friends. So it was a seminal experience for me. But I was learning the language, the different culture, having to work and how to motivate not only the American soldiers that I had responsibility for, but the Greek soldiers as well. It was, again, a really special experience as a 23/24 year old.
David: And then how did you spend the next couple of years in the military?
Alex: I then had an opportunity to come back, and I was in the 7th Infantry Division, which was at Ford Ord, California, a very different kind of unit. We were a rapid deployment force unit so we got to do things like move artillery pieces with a helicopter in the middle of the night. And, again, learning how to manage an even larger group of soldiers, more than 100 soldiers that I had responsibility for as a battery commander. Being able to have that level of responsibility, for their development, their training, it was a great experience.
David: You know, it's one of the things we spend time on at J.P. Morgan, the value of this military experience. You spent a lot of time on that at J&J. What were those important considerations when corporations look to hire veterans?
Alex: I think the great news about a veteran is discipline, training, education, leadership of small teams, larger teams, of having to overcome a lot of obstacles, frequently be put into situations where there's a lot of ambiguity, having to make decisions, and doing all that really with a strong values-based, leadership approach, where ultimately they're responsible for people who were serving with them.
David: Well, you talked about leading with values as an individual, and obviously J&J is so focused on this value leadership concept, so let's fast forward. You have a long and remarkably successful career at J&J, the last 10 years as CEO. Walk us through a couple of the highlights of that journey.
Alex: Well, I think one of the most formidable roles I had is where I started as a sales representative at Johnson & Johnson. I've got to tell you, that experience is one that you just can't do vicariously. Going out, listening, learning from customers, learning how decisions get made in a very complex healthcare environment, learning how to engage. Making sure you understand the products the scenarios where the products are being used, those were really grounding experiences for me, and I still carry those forward in the way I think and make decisions in the company today. I had a chance to be a manager early on. So immediately I had to transition my leadership skills and how do you, recruit and select people? How do you train? How do you develop? How do you provide feedback to people along the way who may actually have more expertise than you do in certain particular areas? I had chances later to to lead teams in marketing and management roles. Another seminal experience for me was actually going to Europe to run a pharmaceutical business in Europe, the Middle East, Africa, and Russia. And how to adapt your leadership skills across those different countries and regions, learning the healthcare systems and the product lines.
David: To honor you and your time at J&J, one of the themes that just kept coming up was you as a human, and the humanity that you brought to work every day. So just talk about culture and talk about why that was so important to you.
Alex: Well, look, I've always believed that who we fundamentally are as a person is ultimately who we are as a leader. Sometimes there's this image that we put on set of clothes and then we turn into a leader. And what I would say is that's BS. Are you caring? Are you somebody who likes to learn? Are you somebody that has a sense of humor, that doesn't take themselves too seriously, but perhaps takes the role very seriously and the potential impact that you can have. And I think that's who people really want to be around. They don't want necessarily what I would call the perfect leader, but they want a leader who cares, that gives a damn, that has empathy, that is going to take care of them, and challenge them along the way, help them be better, who they're gonna learn from. And I think that when we get comfortable in our own skin, with who we are, and we bring that best self to work, I think that's ultimately where you can have the greatest impact as a leader.
David: Interesting. You were very focused on diversity throughout your career at J&J, how do you create this environment where people show up as their best self to work? What was successful for you and the team at J&J?
Alex: I actually learned some of my greatest lessons about diversity and inclusion when I was in the Army. The unit that I was in, represented a great cross-section of American society. People from every different state, every different background, ethnicity, and I learned very early that if you couldn't connect with people on a really personal level, then you were never going to help them be their best and be able to work best together as a team. And it was only when you brought together these different perspectives
that ultimately you were gonna come up with a solution that was better than just one plus one equals two, but was maybe one plus one equals four or five.
Alex: Second, I had to learn that I had to adapt my style as a leader. You know, the days of, "Okay, I'm the leader, and you kind of adapt," forget about it. I needed to flex and to motivate, inspire in different ways. I tried to bring those skills with me into Johnson & Johnson and later in my civilian career. And so I think that look, diversity and inclusion, it's not just about doing the right thing, which I really believe that from my heart, but I also think it's the right thing to do for your business because you're actually gonna have a better outcome.
David: Let's spend a minute on some of the success of the company. This is one of the most admired global companies. You led it through some complicated times. Spend a minute on the pandemic. How did you steer the company during that time?
Alex: I couldn't be more proud of what our company does every day where we touch more than a billion people with our products and services, consumers and patients all around the world. That's pretty remarkable. If you would've asked me now almost 35 years later, "Gosh, would you be in one of the world's largest healthcare companies as a CEO and chairman and during a time of one of the greatest pandemics to ever hit the world, and oh, by the way, be in the hunt and a race for a vaccine to help make a difference for the world?" I would've said, "Are you crazy?" And look, I'll never forget that day in January 2020, when our team came forward and said, "Look we think there's a significant risk with this virus. While we had been through Zika and other things before, the fundamental nature and the early data and information that we were seeing reflected that this could be much more pernicious and have a much more significant effect around the world. Now, like a lot of things that you tend to see in corporations, this was a bottoms-up as well as a top-down kind of agreement where we had scientists, again, very early in the days who had worked on some of our platforms that we had actually created a vaccine for use against Ebola. And they felt quite confident that if they could take some of the genomic sequencing information that had been passed on out of China, that we could in fact come up with a construct that would work against COVID-19. And so very early on they began working on, on producing that very vaccine.
From the top-down, we knew that this was a very important moment from Johnson & Johnson and at a time, frankly when the world and think about it, when have our economies been more stressed and societies been more stressed? Being challenged in such a way that it was critical for J&J to put all our resources, our capabilities to work towards trying to help solve this really challenging situation. And Literally within a matter of weeks
the team came back and said, "We think, we think we have an approach that number one could be an effective vaccine, two, that could be done in a way that we could maximize the number of patients we reach because it would be a single dose. And three, what could we do to accelerate that timeline so that we could get all the appropriate clinical information, safety information, manufacturing up and running?"
And literally, that required a 24/7 effort that lasted, you know, for almost several years. The really important thing about this is yes, these were researchers, these were scientists, but these were also moms and dads who are taking care of their children who had uncertainty about their parents during this, but nonetheless, globally where we would work our hours in the United States, and we'd hand off to what was going on in Europe, let alone in other places around the world. When we saw the data come back we were really inspired.
David: And Alex, why was this so significant for not only J&J, but also the industry?
Alex: It wasn't only a really special moment at Johnson & Johnson, but I couldn't be more proud of our industry when we had new technologies like mRNA that really had always shown promise but still had significant hurdles, to see that discovered and developed under such a short timeframe and have the impact, I couldn't be more proud of the way the industry, impacted the world when it really it needed us most.
David: Very well said, and, to your point, you take the resources you had in that moment and tried to put them to the most productive work. You made a different decision. You said, "We're gonna do this in a nonprofit way." Why was that important?
Alex: We knew early on that while the virus in and of itself would be quite a hurdle to coming up with an appropriate vaccine that would work. The next major hurdle or obstacle was going to be access, and we wanted to make sure that patients, not only here in the United States but around the world, could get access to this where cost wasn't an issue. And that's why we made the commitment very early on to do it on a not-for-profit basis. And again, we just felt that was important to ensure access because look, if we're gonna beat this virus, we were going to have to do it globally.
David: And what was the final hurdle you had to overcome?
Alex: There were twists and turns along the way. As you know, there were supply chain interruptions. There were other unanticipated events that we had to manage our way throughout. But here too I'm so proud of the way that our leaders followed the science, they remained objective. The way that we worked collectively and collaboratively with our other colleagues, sharing information with the other vaccine companies real time, so that we could stay on this accelerated timeframe in a pro-competitive way, but likely in ways that we couldn't have imagined pre-COVID to work together and partner.
The way we partnered with governments, not only here in the United States, but around the world to ensure access because while discovering and developing the vaccine was gonna be important, that last mile of actually getting shots in arms and again, doing that in a thoughtful, equitable way just took an immense amount of partnership around the world.
David: I'd like to just cover one more thing as it relates to J&J and that's your decision to separate. It's a big one. It happened just coming out of the pandemic. How'd you get there, and what's your advice to other CEOs who are thinking through these big strategic moves?
Alex: I've always felt that I'm incredibly proud to be in this role, in one of the world's most iconic companies,
and it's so important for strategy to always evolve based upon what's happening in the world. And so as you see technology trends, industry trends happen real time, it's very important to continue to adjust, adapt, and modify your strategy to make sure ultimately that you're having the biggest difference for all of your stakeholders, the patients, consumers, employees, communities, and ultimately, your shareholders.
David: And how did you get to the final decision there?
Alex: Fortunately, we had an ongoing strategic planning review process in place with our board of directors that was very dynamic, and where we would not only have exchanges about strategy, but we would then matriculate that down into very specific action items where we constantly were reviewing different lines of business, how we would allocate resources, set priorities. And through that process I think what we realized, especially going through the pandemic, that the fundamental nature of how discovery and development takes place regarding pharmaceutical products and medical devices, it started to really stray significantly from the way that was done with consumer brands and consumer products in today's world.
And specifically, it's the clinical development requirements, the regulatory requirements, the complexity of some of the science and the technology, the way that third parties and other intermediaries get involved, vis-a-vis the supply chains and how the drugs and devices are actually administered. And so as we reflected on that, we felt that it would be in the best interest of all of our stakeholders to go forward where we took our consumer company and we would spin it out so that it could continue to, again, serve consumers.
David: Lets shift gears. Let's talk about the JPMorgan Healthcare Conference. As you know we're on our 41st year. This has become the event for healthcare globally. Talk to me for a moment just how important is this event for the industry?
Alex: The JPMorgan Healthcare Conference is a seminal event for the healthcare industry. I've had a chance to participate now for the last, at least seven or eight years. And I always looked at it as a real kickoff for the new year, because you always went there knowing that it was probably the most unique opportunity to meet partners from around the healthcare industry that you could find in the world. And so my typical daily schedule there might be meeting with 20 or 30 different partners across a pharmaceutical med tech and consumer businesses. You really got a chance to see what new technology and innovation was taking place. You got a chance to meet, face-to-face, with startup companies, ventures almost at every point on the continuum.
David: And has the conference had any impact on your strategic thinking?
Alex: Frankly, we looked at it to help us set the agenda for what we had done during our strategic planning and how we were going to think about partnering externally with new groups, with new companies to really, again, help accelerate our impact with patients and consumers and expand our business around the world. And there was really no other meeting that I'm aware of that has the kinda diversity, proximity of companies and leaders as the JPMorgan Healthcare Conference.
David: So what would you be most excited about as you think about healthcare in the future and this marriage of technology and healthcare that has been going on for a long time, but really seems to be accelerating.
Alex: I couldn't think of a more important time, or exciting time, than to be in the healthcare space. And why do I say that? Well, you know, as I look across our different domains, again, pharmaceutical, medical device, and consumer, I have never seen the kind of opportunities now where we're seeing science, technology, and innovation accelerating at such a rapid rate. I mean, look at what happened with COVID-19 where we're actually now able to take a new science like mRNA, like gene editing like cell-based therapies where we're actually going in and think of it as reprogramming the software of a cell to help, for example, be a catalyst for your immune system, or how to turn a receptor on or off of a particular anomaly, that makes a big difference in a disease. How are we integrating cloud based computing, artificial intelligence, machine learning, sensing devices in the medical devices so that we get even better outcomes? Incredibly exciting.
David: Where does data and data science fit in?
Alex: Now, we would never have been able, for example, to complete our COVID-19 clinical trials were it not for the incredible access we have now real-time to data bases to help us identify patients, patient subtypes, do stratification, again, real-time, and applying data science technologies, that we couldn't have even dreamed of five or 10 years ago. So there's not a place in healthcare, even in patient delivery, you can think about virtual care that we were able to expand significantly during COVID-19. All these areas are being impacted by some of these new technologies that we would usually equate only with Silicon Valley.
I think they're gonna be ubiquitous across all of healthcare in the next five or 10 years in a way, that may actually surpass the last 50 years that we've seen in traditional healthcare.
David: It is such a remarkable time in this business. But what's also interesting is if you look at the data though COVID, that health and wellness, taking care of yourself is such an important component for so many people. So you're a corporate athlete, you're a military guy, you've been doing this for a long, long time. What do you do personally and how does that impact your health?
Alex: Look, I've always been a believer, and I think that the data has proven this out, that the most important thing we can do for our health is to take care of ourselves. More than 75% of the diseases of usually the things that ultimately can lead to a really negative healthcare outcome are significantly impacted by our behaviors. So it's things like how we eat, how we sleep, how we recover, how we manage stress, and what are our patterns? And in so much of that are things that we can actually have an impact on or control to some degree or another.
So it starts with taking care of ourself. It starts with our daily rituals, our daily habits. And it doesn't require you, necessarilly, to be a triathlete or a marathon runner. Find an activity that you really like and that works for you. And, again, make that part of your daily ritual.
And when done the right way and in the right balance, these can have dramatic impacts as we age over the long term trajectory and arc of our lifetime.
David: How does your personal focus on health and wellness impact the corporate culture?
Alex: And so it's something that we've really tried to build into our corporate culture here at J&J. I've been fortunate. Several of our previous CEOs really embraced this concept of health and wellness and of energy. We have scaled it in a really significant way. Now the overwhelming majority of our employees at Johnson & Johnson have participated in wellness programs. We've seen a direct correlation, not only in terms of our health outcomes with our employees, but also with how they do at work, the levels of absenteeism, presenteeism, how they actually do in their jobs.
So, again, we think this is so important, not only here at Johnson & Johnson, but, frankly, for all corporations because when we're healthy, when we have the right kind and amount of energy, when we take care of ourselves, we're gonna show up at our best and, frankly, that's where we're gonna have the biggest impact.
David: Lets finish today's discussion with the seat that you currently occupy. So you have your J&J seat, which is a remarkably powerful seat. You also just recently joined the board of JPMorgan Chase, which we think is fantastic. Apple, IBM, you sit on New York Presbyterian Hospital and other foundations. So you have this lens that actually has probably expanded in a pretty unique way over the last couple of years for you. What are you thinking about as we enter 2023 from an economic point of view, and what are some of the trends that might be consistent across those platforms?
Alex: I feel honored and blessed to be able to sit on the boards of such great global institutions. A very diverse array of company from business to business, to business to consumer, to finance, to healthcare. It's a wide array of, of technologies of different business models. And as we've navigated our way through 2022 and into 2023, I think that are some key themes. One, we talked about this a bit earlier, the importance of technology across every kind of business in the world. And the fundamental impact it's having in the way that we discover and develop products, the way that we engage and interact with our customers and consumers, in the way we function as organizations.
And as a business leader, if you're not thinking about how technology can impact or transform your business, you're likely going to be left behind and you're not going to be near as competitive or as impactful as you can be. Secondly, we're likely entering a different kind of economic environment. For the last 10 or 20 years, we've had relatively low interest rates, low inflation. And
in a period of a fairly peaceful geopolitical environment.
And all that has changed, literally, over the course of the last 12 months where we could see inflation and interest rates up in the higher single digits, where we see a lot more uncertainty as it relates to, fuel access and energy supply around the world and, certainly, global conflicts on a number of levels that I think are just gonna require leaders to develop even more contingencies, and to have a bit more leadership flexibility in the way we plan and actually go about executing. And I think the other area that I would say is increasingly important is the understanding and the responsibility that all of us as business leaders have for, frankly, filling a bit of a leadership void around the world right now.
And I say that in all humility, because I think that done the right way, that business can play an extraordinarily important role for society. And I'm very proud of the work that Jamie and I and other CEOs did at the business round table to change the purpose of a corporation around stakeholders. So, yes, we've got to take care of the consumers and people we serve. We can't do that without taking care of our employees, and we also need to make sure that we're aware of the impact that we have on our communities. And we need to do that in a way that has the appropriate fiduciary responsibility to our shareholders as well. I think it's going to actually increase the faith that people have in capitalism, in the way that business can in fact be a force for good around the country and around the world.
David: Alex, I'd like to close this conversation with you, which it's just been amazing on so many topics. Congratulations on an unbelievable corporate career. It sounds like you're off to next evolution of that. And we appreciate the work you'll do with us at JP Morgan Chase.
Alex: Well, David, thank you very much. Really appreciate the conversation.
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