On Leadership In Health Care And Giving Back: An Interview with Professor Sharer, Former Amgen CEO

1. Are you effective in managing the context in which you find yourself?

2. Are you an efficient worker? What goals have you accepted?

3. Are they goals that are achievable, or are they goals that are just impossible? How good is your team?

4. Are they good enough to do the job, or do you find yourself always having to do their work?

5. What kind of decision processes do you use?

6. Do you have an effective way based on trust to get input from people?

7. Finally, do you decide that taking vacation is important or have you decided that hours equal professional success?Q: How did you manage your time and prioritize things in your schedule? Kevin Sharer: First of all, I was very efficient. I tried to not do things I didn't have to do. You have to have a really good team, a shared reality among team members about what you are trying to do, and have a high level of trust. For me, communications were timely, rapid, and efficient. It is also important to have powerful and effective delegation, so you know who has the decision rights. It wasn't like the CEO had to make every call. I tried to make it so the company operated seamlessly no matter where I was. I'd use every methodology available to me electronically to make decisions. Finally, I also made physical fitness of central importance to me. I would get up early and go to the gym before work. There is the work part of my life, and when I'm at work, all I do is work. But there is also the fun part of my life, and I tried to blend it. If I was going to New York City for business (which I had to do often), I would see my friends there. The facts are I had a lot of resources, I had a company airplane, I had drivers, I had financial resources. I know that this is not normal. However, I observed a lot of people who had similar roles who thought the moral high ground was working all the time and having no fun. To me, that's self-defeating. You're not bringing your best self to the job, and you're setting a horrible example for the rest of the company. Q: You came from a background where you did not have domain expertise, but you ended up being a leader at Amgen, a biotech company. How do you see people with different backgrounds making an impact in heavily specialized industries like biotech? How do you make good decisions without knowing the technical details especially early on?Kevin Sharer: I had an intensely technical background. I have an advanced degree in Aeronautical Engineering. I was the chief engineer of the Los Angeles class submarine and responsible for the nuclear power plant. I had run a satellite company. I had run a software business. This meant I had deep technical knowledge, but I didn't have domain expertise. The first thing I realized was that I had to learn. I couldn't skate on what I knew before. I had to learn the basics of biology, the basics of medicine, the basics of regulatory, the basics of manufacturing, and the basics of drug development. The big breakthrough came for me when I realized that human biology represented the world's most exquisitely complex automatic control system. I had a lot of experience with automatic control systems. So as soon as I had that breakthrough in my own conceptualization, I was able to grasp biology in a way that made me able to understand what really was going on and assess the risk. I developed five questions that I used every time we had to make a big decision: - Tell me, biologically, why you think this drug works. - What does the human data tell us? - What is our competitive position? - What is our intellectual property position? - What was the next experiment you wanted to run? What was it designed to answer? How much would it cost? When would I get the answer? Those relatively simple questions allowed me to make judgments about risk. I would never second-guess the head of R&D. However, I would want to know what he thought about these questions. The main point I'm trying to make to your readers is this: You have to get sufficient domain expertise to be able to do your job, and that means talking to people who know what's going on. Find experts and say, "I don't really understand this, could you explain it to me?" I found a scientist who helped me. I read books, I talked to other people. You'll have to create your own learning program, but it almost always involves reaching out to somebody in the organization. And when you are doing this, you are communicating as a leader, "I care." Q: At Amgen, you led a company in a very highly regulated industry. We are seeing a lot of technological advances now that are “outpacing” the current laws. For example, Uber, genetic modification, precision medicine. How should leaders go about trying to balance innovation versus regulation? Kevin Sharer: First of all, it's imperative that we obey the law and live within the regulations. It is unacceptable to decide, that our technology is so different that laws and regulations don't apply to us. Secondly, as a leader in the industry you have an obligation to participate in determining the laws and regulations which are implemented. I found again and again – in Congress and the Senate, at the FDA, and in the executive branch – good people who wanted to do the right thing, and who wanted to listen. We were able to have a real impact on some profoundly important laws and regulations from our little perch at Amgen. Q: How should leaders balance ethical and economic decisions on emotionally charged issues? For example, drug pricing is a major news topic these days. Do you think the increased public scrutiny is justified? How should the industry react to this? Kevin Sharer: Sometimes ethics are clear, and you never do anything to violate ethics. But some people's ethical questions are somebody else's economic questions. You have got to be careful when somebody says something is an ethical issue. What they really might be saying is, "To me, the answer is obvious." For example, let's take drug pricing. In America, we pay more for drugs than Canada. Is that an ethical problem, or is that a different kind of problem? Is it ethical that America basically pays for the R&D of the world? The real question is this. What is the right balance to make sure we have an environment that supports innovation? In the newspapers today, we read about characters who are, in my judgment, reprehensible. For example, or Valiant. I don't think they are representative of the drug industry. For me the big question is: How do you set drug prices? In an ideal world, it's based on value delivered to society. For example, suppose that one of the companies finally has an Alzheimer's drug that works. How in the world do you price that? You can price it at almost anything you want because it's such a devastating disease, but you have to have some economic explanation for the price. Pricing has to be based on value, not monopolistic power. Q: What do you hope the healthcare system and biotech/pharma will look like in the long term? Kevin Sharer: There are diseases that today that are seen as scourges of humanity – CNS diseases, Alzheimer's, Parkinson's and ALS. I hope that in twenty or forty years, we have cures for those diseases. I think we understand the fundamental biology, and it's a matter of getting the right molecule that's maximally effective with the least side effects. I hope that our understanding of the genome expands. The human genome is just a parts list for the human body. We have a parts list for the world's most complicated computer, but we're not sure how all the transistors operate and connect to each other and under what conditions, what happens. I hope that some of the work that we've done on the human genome elucidates the underlying biology of disease states in a way that we can interact productively. Personalized medicine is a popular concept, but it requires more understanding of biology to actually work. I hope we make progress there. Q: This is your fourth year teaching. What have you learned most about yourself since you've started here? Are there any surprises and any lessons you might think are helpful for people as they progress along their careers? Kevin Sharer: My preconceptions about Harvard Business School were, in some ways, validated, and in some ways overturned. I didn't go to school here, but I visited plenty of times when I was working. The arrogance factor here is a lot lower than I thought it would be. It exists, but it is lower. The quality of the people here is higher than I imagined. The receptivity of the enterprise to an outsider is genuine and comforting. The opportunity to contribute is wider than I thought. My post-CEO life concept was to be intellectually challenged and continue to grow while being able to give back at the same time. that growth is a lifetime experience. I came here as an absolute raw rookie. I was terrified in my first year of teaching. Becoming a teacher took everything I had, and it's quite different than being a CEO. To find out that even at this stage in my life I had the potential to grow is comforting, and I really value that. Q: What are the differences between being a CEO and teaching at HBS? Kevin Sharer: They are profound. CEO is a position of enormous responsibility and power. It is very lonely and it is also enormously powerful in that you set the direction. You are not a dictator, but the authority of power you have as CEO and the way people react to you is unusual in our democratic society. Not very many people are going to disagree with you unless you help them, and you are never going to get honest feedback unless you structurally go out and ask for it. Here at HBS, you are not talking. You are trying to, in the best way you can, to get the students to talk and learn themselves. While certainly you have some presumption of capability, you can lose it really fast. The students don't work for you, and the faculty doesn't work for you. You're just a raw rookie. This means you go from king of the hill to a raw rookie where you've got to earn respect all over again. It's humbling, but it's also fulfilling. I don't miss being CEO one bit. I had a great run, did everything I wanted to do, and it's a joy to have this new chapter in my life.