[00:00:50] Gary Bisbee, Ph.D.: Alex Gorsky has been with Johnson & Johnson for 30 years, including almost a decade as CEO. We discuss lessons that he learned as CEO and how he approached setting goals. Above all else, he emphasized the importance of listening to employees and customers, and transparent communication, which is a never ending priority for CEOs. The pandemic has been the most complex, fast moving, and challenging situation alex faced at J&J He shared that his proudest decision was to evolve J&J’s credo so that its vision remained relevant far into the future. We discussed the J&J spinoff of the consumer products division with well-known names like Tylenol and J&J Band-Aids. Alex explained that after much research, it was decided that to improve customer centricity and allocate more dollars to research and innovation in the pharmaceutical and medical device divisions, consumer brands would be better suited in an independent company. Alex shared his excitement over the recent agreement with Microsoft to expand J&J’s cloud services and technology. Alex predicted that we’ll see more partnerships between biopharma and Silicon Valley technology. We turned to governance and Alex described how effective board members represent stakeholders above all else and help cultivate a culture of transparency, preparedness, and support. for young leaders, alex advised that you find an organization that aligns with your values and who you are as a person.

Well, good afternoon, Alex, and welcome.

[00:02:28] Alex Gorsky: Hey Gary, it’s great to be here with you today.

[00:02:30] Gary Bisbee, Ph.D.: Well, we’re pleased to have you at this microphone. As you know, this show is about the pursuit of leadership excellence. And if there’s anybody that has demonstrated that it’s you and your marvelous career. Our plan today is to better understand how you think about leadership and then to draw on your experiences and see if we can add that to our own leadership toolkits. And congratulations. You’ve been at J&J now 30 plus years and the last 10 as CEO, most of those as chairman and CEO, and now you’re Executive Chairman. So, it kind of begs the question, Alex, why did you join J&J to begin with?

[00:03:15] Alex Gorsky: Well, look, Gary it’s hard to believe that more than 30 years have gone by. I think the saying says something to the effect of, the days are long, but the years of short, and that certainly has been the case with me. Now, that being said, look I couldn’t be more proud of what all of our J& J colleagues have accomplished throughout that period. When you think about the twists and turns and the ups and downs, particularly over the last 24 months as we’ve been dealing with COVID. The impact that they’ve had on patients and consumers around the world has just been amazing. But, if I reflect back I wish I could say that I had a great strategy in place and that I knew exactly what I wanted to do, but as I was contemplating getting out of the Army, at that time, as a Captain, considering what I wanted to do with the rest of my career, I guess there were two major factors that drove me to Johnson&Johnson. One was just an innate interest in healthcare. And it was something that I thought about a lot. At one point I had thought about going to medical school and that’s something certainly that touches all of us in a very personal way, but also has a huge impact on society, on our economies, on governments, really on people everywhere. And then the other piece for me was finding a company that had a value system and shared characteristics that I had been used to in serving in something like the United States Army, where I knew that character was going to matter, where purpose mattered. And after a lot of research and discussions I found just that kind of place in Johnson & Johnson. So to really bring those things together, a passion and interest in an area, along with values. To start at a company like J&J and end here more than 30 years later, has really been a dream come true.

[00:05:04] Gary Bisbee, Ph.D.: Well, once again, Alex, congratulations on a truly remarkable leadership career. Question, as you began to work your way up the ladder at J&J, how did you assess your leadership capabilities and how did you figure out where you needed to develop?

[00:05:21] Alex Gorsky: You know, Gary, I was really fortunate. From day one, when I joined Johnson & Johnson, I knew that there was a very strong commitment to development of talent and leaders within the organization. That was emphasized to me even through the interviewing process and, very quickly, in the kind of training and development assignments I was provided really every step of the way. So, as they say, feedback is a gift. I got a lot of great feedback and had a lot of great role models and mentors along the way. Really at every turn, it was always about performing well in your current role, but also laying the tracks in place, so to speak, to help you also perform and develop at the next level. And it was really that kind of environment that enabled me to do what I’ve done.

[00:06:09] Gary Bisbee, Ph.D.: Thinking back, was there one assignment or one position that you had that really brought all your kind of leadership thinking together, that really kind of stood out to you? Or was it just a steady evolution through your time there?

[00:06:25] Alex Gorsky: Well, it’s probably a little bit of both. Every step in my career, I was exposed to a slightly different situation, slightly different challenge. And I think having a diverse group of experiences where you’re exposed to different business situations, different team members, different leadership styles, all those really help build your confidence and your foundation and your leadership platform. If I had to pick one, I would probably say going to Europe and leading our pharmaceutical business in Europe, the Middle East, Africa, and Russia. Going to a different continent, having to learn our portfolio, very different healthcare systems, different reimbursement programs, and doing that in a way where you’re constantly balancing the business demands, the demands of your people across multiple regions and countries was just a tremendous experience. And by the way, the personal side of that was also great, having your children attend an international school, living abroad. It was really a seminal professional and personal experience for both me and my family.

[00:07:31] Gary Bisbee, Ph.D.: So you were only the seventh chairman and CEO of J&J in its, what, 136 year history, which is incredible when you think about that. But when you were appointed CEO, Alex, how did you think about goals for your term as CEO? I mean, how do you even think about what your vision is or what your goals are for your time as CEO?

[00:07:55] Alex Gorsky: Well, look, I think it’s always a careful balancing act that you’d need to contemplate, particularly as a new CEO in an organization. I think your first objective should be to listen, to really go out, to listen, to learn, to make sure that you understand the markets, the technologies, the human dynamics, the people, other situations that the corporation, the company that you’re working with at the time, might be facing. As my mother always said, I never learned anything while I was talking. And making sure that you’re absorbing and taking it all in. And then I think there does come a point, however, where it’s clear to have a point of view about what the priorities for the company should be. If everything’s a priority, nothing is a priority. In my case, after doing that kind of listening tour and assessment, I thought it was imperative to establish a very clear and explicit set of priorities and goals for the company in a way that clearly recognized the scale of the diversity of somebody like Johnson & Johnson, where there are literally hundreds of priorities. But also, made it indelibly clear that for us as a corporation to succeed, that these three or four things were certainly going to be at the very top of our lists. And then it really comes down to communicating, and communicating, and communicating those things because, while it might be the 15th time that you’re talking about those priorities in a presentation or discussion, it’s likely the first time that the people in the company are hearing you. I think when you’re that explicit, when you build that kind of consistency, that really resonates and generates alignment within an organization that is so important, I think, to making sure you’re getting the resources, the management attention, and frankly, the feedback to be successful in a company, particularly early on.

[00:09:56] Gary Bisbee, Ph.D.: You mentioned earlier, COVID and the environment within which you were CEO. But you know, you came into office just as the ACA been passed and was just being implemented. You’re going out as CEO, at least, with COVID. Amazing. Who could have anticipated that? And then there were three presidents that you worked with: Obama, and Trump, and Biden, all three completely different ones, right? So how did you stay flexible and how did you adapt to all these changes during the 10 years or so that you were CEO?

[00:10:35] Alex Gorsky: Well, look, I think another really important tenet for CEOs is always remembering that you are in service of the company with which you are representing. And ultimately in my case, it wasn’t about being red or about being blue, it was about doing what we felt was in the best interest for patients and consumers and healthcare here in the United States and around the world. And really by staying focused on our credo, our moral compass, that commitment to patients, to our employees, to communities, and ultimately our shareholders, I think that helps you understand the importance of being able to deal with administrations and people on both sides of the aisle. We’ve always tried to take a bipartisan approach, a principle based approach. Staying true, I think to that kind of an ethos really helped us navigate through a number of the situations and different political challenges that not only we faced, but our country faced, throughout that decade.

[00:11:32] Gary Bisbee, Ph.D.: During your time as CEO, what was the most complicated decision that you had to make?

[00:11:38] Alex Gorsky: Well look, I think without a doubt, the experience of the last 24 months with COVID-19 was likely the most complex, fast moving and challenging situation that almost any of our companies have faced during that period. Think about the biology, the chemistry, the engineering, the political, the operational issues that we were facing, not only as a company, but really as a country and as civilization during that period. You’d be hard pressed to find something that was more seminal than that particular period. And again, I couldn’t be more proud of the way our people, my colleagues stepped up. We deliver more than 350,000 SKUs on any given day to healthcare systems, to hospitals around the world, to make sure that we are keeping products flowing, at the same time taking on the challenge of discovering and developing, manufacturing, distributing a vaccine that, our goal was clearly to do it in a way where it could help patients around the world in the very best possible way. And all of that in a time of just significant uncertainty and political pressure, I think tested the organization, certainly tested me in a very different way. But again, ultimately, I couldn’t be more proud of what we’ve been able to do. Still much more, obviously, that we need to do about getting access and distribution to more people around the world. But we remain committed to doing just that.

[00:13:11] Gary Bisbee, Ph.D.: There’s a lot been written about CEOs and a 10-year CEO in a large company like J&J. And a lot of people have posited that 10 years is about the right time to be CEO. What do you think of that, Alex? How do you react to that?

[00:13:28] Alex Gorsky: Well, look, I think it all depends on so many different factors. And I think the average tenure now for a CEO is probably somewhere between six and seven years. And as you mentioned, most of the CEOs at J&J have been there for about a decade, plus or minus a few years. In my case, I think it came down to a number of different factors, what we were experiencing as a company. Of course, the other big question or factor is, do you have a successor who’s prepared and qualified to step into the role? And also, how you’re going to actually manage your way through that transition. And in my case, I’m really proud of what we’ve been able to accomplish through the kind of things that we had mentioned earlier. I’ve got a great successor candidate in Joaquin Duato, a real credo based global leader who I’ve worked with closely, literally for decades, and a very supportive board as well that I’ve worked with very closely to run a robust process to do our best to really navigate and chart out the best possible transition. Again, I think it can depend on a lot of factors within a company and timing. But in this case I feel very good about the decisions we’ve made and the progress that we made so far.

[00:14:46] Gary Bisbee, Ph.D.: So you’re now Executive Chairman. For those that aren’t familiar with that role, can you just share with us, what are your responsibilities as Executive Chairman?

[00:14:57] Alex Gorsky: Yes, you’re exactly right. As of January 3rd, Joaquin became the CEO and I’m staying on as an Executive Chairman, which means that I’m still an employee of the company. And I really serve as an interface between the CEO and our Board of Directors. This is a wonderful opportunity for Joaquin to fully step into his role. We’ve recently announced a very important strategic decision for the company regarding our consumer division. And so, getting that off in the right direction, while continuing to work our way through some of the challenges presented by COVID, both as it relates to our innovation or with our customers, as well as even with our employees and communities, it makes for a very good transition with us and it’s something, again, that our board is very committed to.

[00:15:42] Gary Bisbee, Ph.D.: This is another, probably on one hand, easy question. On the other hand, more complicated, but what are you the proudest of during your 10 years as CEO?

[00:15:53] Alex Gorsky: Oh wow, Gary, that is a tough one because there’s so many events along the way that I’m very, very proud of. If I had to select one, I would probably say that it was when we made the decision to evolve our credo at Johnson & Johnson. And as you know, our credo was introduced about 78 years, 79 years ago by the son of our founder. And it was that very elegant but yet eloquent outline of, what should Johnson & Johnson stand for? And of course, it talks about patients and consumers, about mothers and fathers, and doctors and surgeons who use our products. And it talks about our employees and making sure that they’re treated with dignity and respect, that they can be their best, and about giving back to the communities where we live and work, and working with our business partners in a fair and equitable way. And of course, also making sure that we give back to our shareholders because they have invested their capital in us. There’s many pensions and other groups that depends on us for that. And when we made the decision at the 75th anniversary to say, look, should we change it, should it evolve, as you can imagine, there was a lot of debate inside the organization saying no, that these are principles literally etched in stone that need to stay constant throughout time. And there was another school of thought that says, yes, that’s true, but how should we ensure that they stay relevant for the next several decades as they have been for the past several decades? And how can we evolve them for the future. And after really canvassing thousands of our employees and getting our executive committee to roll up their sleeves and have small tabletop discussions, we decided that, in fact, that was the right path, was to use this as a really important inflection point to evolve it, staying true to our very principles, but adding in certain changes that we knew would make a profound difference in the commitment in this and the next generation, several generations, of employees and stakeholders going forward, and to make it even more relevant. The day that we announced those changes on a web cast around the world, and we had thousands and thousands of J&J colleagues, and the excitement, and the commitment, and the passion, and the enthusiasm. You felt it was just really rewarding and inspiring at the same time. And it’s certainly a moment I’ll never forget.

[00:18:29] Gary Bisbee, Ph.D.: I think it’s an indication of your leadership and the importance of values for both you and J&J that you would list that as the thing that stands out for you. I was looking at a set of changes during your tenure. The market capitalization increase at 170% up to whatever it is now, $470 billion increase in earnings per share. And what you’ve done with medical devices and digital focus there. And you’ve been a leader in diversity during your time. So there’s many, many things that have happened there, but it all does start with the credo, I think, for you and J&J.

[00:19:09] Alex Gorsky: Absolutely.

[00:19:10] Gary Bisbee, Ph.D.: So you mentioned the consumer spin off. Can you share with us some of the thinking behind that?

[00:19:16] Alex Gorsky: Look, we have always been proud of the diversified, broad based approach that we’ve taken towards healthcare and the way we think about our portfolio and ultimately impact all of our credo stakeholders. And I think, for decades, having a presence in consumer medical device and pharmaceuticals, we felt enabled us to really best serve patients wherever innovation occurred. It gave us a broader presence, particularly on a global level, to reach even more patients and consumers. And that was a playbook that I think could work extremely well for the company through many different periods of innovation, the different healthcare cycles, different business cycles. And as we discussed with the board and, by the way, annually, we would get together and have a robust review and debate around our strategy that would always include a challenge of some of our fundamental tenants and saying, look, is this something that should remain constant or is it something that should evolve? And I think it’s fair to say that as we watch the marketplace evolve, and what I mean by that are the way that products are innovated, the manner in which products are distributed, the way that regulatory agencies around the world look and review and process products. We saw some pretty significant changes taking place between what you would expect for pharmaceutical prices and medical devices, and more consumer oriented brands. And so rather than really allowing our strategy to not just be iconic, we said we wouldn’t be iconoclast, but as that changed, that our strategy needed to evolve as well. It’s one that we put a lot of thought and effort into. As you can imagine, this is a really important business segment to Johnson & Johnson. It’s one that we’re incredibly proud of. That in and of itself has got multiple billion dollar brands, I think almost 20 brands over $150 or $200 million. I’m talking iconic brands, whether it’s Tylenol, Avino, Neutrogena, our baby brands, but doing that in a way that wasn’t just focused on the past, was thinking, how do we unlock and unleash that kind of innovation and those kinds of brands for the future. We felt would be best suited to be done as an independent company. So we made the announcement. We’ve had a lot of conversations with our colleagues, with other stakeholders along the way. We’re going through the process as we speak. But look, we think this will ultimately result in a Johnson & Johnson that’s really focused on our pharmaceutical business and our medical device business, is still going to be focused on very high technology and innovation, will still be the world’s largest healthcare products company around the world. We also believe this will unleash innovation, even improve customer centricity and connectivity with our consumer brand. And we think it will create great possibilities for our customers, for our employees, and for our communities, and ultimately our shareholders as well.

[00:22:23] Gary Bisbee, Ph.D.: So will those consumer products continue to carry the J&J brand or will they have to give that up?

[00:22:30] Alex Gorsky: Basic brands will remain as they currently are because we recognize that consumers have a real affinity to those brands. We also realize we still have work to do on the exact naming of the new company and that’s still work to be done and work in progress. But look, we’re very confident that we’ll get to a place that maintains, I believe, the trust mark, the integrity that those brands have represented to so many generations of mothers and fathers and families and consumers around the world.

[00:23:00] Gary Bisbee, Ph.D.: So we talked briefly about COVID and the challenges that that’s brought for all. Of course, J&J was right at the front on the vaccine development and production. What lessons have you learned about vaccines and all that went into that, the politics and so on, the uncertainties, what lessons would you take away from that whole experience, Alex?

[00:23:27] Alex Gorsky: Oh, gosh, there’s so many different lessons that I think not only those of us at Johnson & Johnson have learned, but I think the industry has learned. So look, if I start at a higher level, I think it’s given us a newfound appreciation for the power of science and innovation, and the difference that it can truly make for people around the world. I mean, think about the importance of healthcare. And I think all of us realize now that, look, if we don’t have strong, innovative, viable healthcare, global public health care programs in place and innovation around the world that, look, we don’t have national security, economic security, security as society. And so, I think that’s been a massive lesson for us, too, about really the importance of purpose in what we do. And when I think about, nearly two years ago, when we first knew that we were going to need to stop working the way that we were, to work virtually because of the threat of the pandemic, were we going to be able to operate in this new way? I think making sure that people felt they did have a purpose, that they were working for something bigger than themselves, was more important than ever. Especially when you didn’t have the day-to-day contact, outside of Zoom at a very personal level, having that purpose was really important. I think we learned the importance of communicating and staying connected. And even though it was different, whether it was dealing with the pandemic itself, dealing with some of the issues of social unrest, racism, other topics, that in fact, I think our employees or other stakeholders know that it’s important for business to have a voice on these issues. And I think it needs to be thoughtful. I think it needs to be very principled, taking a principles based approach. But I do believe that the voice of business is critical during this time when, frankly, so many other institutions aren’t able to provide the kind of direction, the kind of unifying force that we would be expecting. And so, to make sure that we are doing that in a right and an appropriate way is more important than ever. I think that, look, the other thing that we really learned is the power of our people, and by giving them the right amount of autonomy, the right amount of support, by encouraging them to be innovative and using ingenuity to stay connected, what they’re really capable of. If you would’ve told me two years ago that we would have ran the organization for years virtually, closed our books, been able to innovate at the same rate, operationalize it, I’m not so sure I could have seen that. And what we found is that, look, when you empower, when you inspire, when you support and resource your employees in the right way, that a lot of great things can really happen. And look, I think, last but not least, all of us also have come to understand the importance of taking care of ourselves and our families. More and more, that line between work life and personal life has gotten blurred. Even right now, as we go through what we certainly hope are maybe the final throes of this pandemic with Omicron, many of us know, I have friends and colleagues who tested positive and are experiencing the virus as we speak. All of us have a new found appreciation for health, whether it’s physical health, whether it’s mental health, whether it’s not only our health, but the health of our families and putting time, and effort and energy there is more important than ever.

[00:26:52] Gary Bisbee, Ph.D.: One other just recent announcement was signing the agreement with Microsoft about the cloud and technology, and so on. Can you speak to the importance of the cloud for Janssen and for the medical device business?

[00:27:06] Alex Gorsky: Sure, look, there’s few things that I think we are more excited about nor see a greater opportunity than this convergence of what I would call the biopharma and med tech space with technology that we would usually equate, for example, with Silicon Valley. And so, what I mean is, more and more going forward, whether it’s the cloud, whether it’s data sciences, whether it’s artificial intelligence, whether it’s machine learning, whether it’s robotics, whether it’s digitization, connecting real time. We believe that we’re going to see more and more emerging of these various innovations in the healthcare ecosystem. And so that can mean how we identify and find new receptor sites, new mechanisms of action in our pharmaceutical group. How do we incorporate that into our clinical trials so that we can do smarter, more efficient, more effective, safer trials that actually gets product to patients faster? How do we have a better surveillance program of how our products are actually being used and better understand the safety and efficacy signals as they evolve over time with real-world evidence? How can we take some of what I’d call our static instruments that are used by surgeons, by healthcare systems every day, and how do we make them smart systems that are actually capturing more data, and information, and integrating that real time to help improve the outcome and the experience for all concerned? How do we connect some of these things so that we are sharing real-time information, so that we have a better historical perspective of what’s occurred in the past so that it actually improves performance and outcomes in the future? So we’re very excited and we’re partnering with a number of technology companies right now across the spectrum. We know that we can’t do this by ourselves. It’s going to take some great partnerships. But again, we think it’s going to open up tremendous opportunities and potential breakthroughs, again, for patients, for consumers, for healthcare systems, and for our company as well.

[00:29:12] Gary Bisbee, Ph.D.: Let’s wrap up with governance, Alex, if we could. You currently sit on three boards, J&J, IBM, and recently joined the Apple board. As a CEO, how do you look at board members? What characteristics about board members make them good supportive board members?

[00:29:30] Alex Gorsky: I feel incredibly fortunate and blessed to sit on the boards of three iconic American companies. You think about the billions of people they are literally touching every day, whether it’s in cloud, direct consumer, phone, watch, other mechanisms, or certainly what we’re doing at Johnson & Johnson. Now I recognize this tremendous responsibility and ultimately, as we all know, board members’ first responsibility is to represent the shareholder interests to the company, to be able to work with, challenge management, to engage with management in a way that’s in the best interest of all stakeholders. I feel very good that the boards that I sit on, if you think about the capabilities, the experience, the history of the people themselves, what they bring to the table, the commitment that they have to ensuring that ultimately the shareholders interests are looked at, but really all stakeholder interests are considered to have long-term sustainable performance is at an extremely high level. And I’ve been encouraged by, especially as of late, I think the acknowledgement of the important role that boards play in taking this broader approach. And it’s certainly something that we’re going to continue to work on going forward as well.

[00:30:47] Gary Bisbee, Ph.D.: When you join a board like Apple, congratulations by the way, that’s a very iconic company, along with IBM and J&J, for sure. But how do you prepare to become a board member for a company like Apple?

[00:31:03] Alex Gorsky: Well, look, I think it takes several things. I think, one, it’s really incumbent upon all boards, when you’re thinking about future board members, of what are the capabilities that are required for that particular industry or that particular company, as they’re thinking about the future. And that could be specific technologies. That can be managing large complex organizations. That could have regional, global. That could also put a heavy emphasis on diversity and making sure that we’re understanding the needs of all stakeholders in a very inclusive way. And so I think it’s taking all those factors into consideration and trying to bring those to the boardroom and to the table. I think it’s about making sure that you set the right culture and expectation around the collective nature of a board as well. Just as you would in a company, there’s a certain culture that you want to establish, one of transparency, preparation, people are doing their homework before they come in, there’s always a lot to be learned to absorb. It’s understanding the role of a board member is there, not to manage, but again, to represent shareholders and other stakeholders. It’s important to know how to listen, how to learn, but also to contribute and to be working with management, again, to ultimately try to support that long-term sustainable performance that I think all of our very best companies are trying to do each and every.

[00:32:27] Gary Bisbee, Ph.D.: Alex, this has spent a terrific interview. I have two leadership related questions if I could ask them. First, you’ve been a leader for your entire life. Where does that drive come from? Because you really do need to be driven, I think, to be the kind of leader that you are. Where does that drive come from, Alex?

[00:32:47] Alex Gorsky: Well, look, it’s hard to say. I think it’s always a combination of factors. I think part of it is being the middle child of a six child family. Having parents who raised us in a manner that said, look, if you’re willing to work hard enough and put in the time and energy and effort, there’s nothing that you can’t do. And then it’s also, Gary, an understanding that there is no such thing as leadership without followship, and it’s being able to work with your colleagues in a collaborative, open, transparent way that ultimately helps us all feel part of something bigger than ourselves. And that’s what I try to do every day.

[00:33:19] Gary Bisbee, Ph.D.: Final question. For the developing up and comer, younger leaders in our audience, what advice do you have for them?

[00:33:29] Alex Gorsky: Oh, gee. That’s always a challenging one. And I’m always a little bit reluctant to give advice because it always depends on the particular circumstances where you are. But look, maybe a few things. One is, just do whatever you can to have an insatiable desire to learn. You think about how quickly things are changing and all of these fields of innovation, science, and technology right now. And having a desire to constantly be learning, a curiosity to learn about some of these new changes is I think, more important than ever. That’s number one. Number two, really try to find something that aligns with your purpose, with who you are. When you do that, you’re more passionate. You have a greater connectivity, a greater affinity for what you’re doing. And look, you don’t want to try to, quote, fake it for decades if you don’t really enjoy what you’re doing. So having that kind of passion and purpose behind what you’re doing is, I think, also absolutely critical. And last but not least, try to find an organization that’s aligned with who you are as a person. And I think when you do those kinds of things, not only are you going to do better in your career, you’re going to enjoy it more and make even more of a difference.

[00:34:45] Gary Bisbee, Ph.D.: Thank you, Alex. I hope you’ll come back and join us in the future so we can track your incredible career. But thank you very much for your time.

[00:34:53] Alex Gorsky: Well, Gary, thank you very much. I hope everybody stays healthy, stays safe. We are going to get through this together. And I couldn’t be more proud of our healthcare industry and what we’ve been able to do to make a difference. Still more work to be done, but stay safe, everybody.

[00:35:09] Gary Bisbee, Ph.D.: Thank you, sir.