Creating an Innovative Culture

Fabrice Chouraqui, former president of Novartis Pharmaceuticals US, discusses his vision for creating an organization that is fueled by innovation.

PV: How do you define innovation and what was your vision for reshaping of the pharmaceutical division of Novartis in the United States to become more innovation focused?

Chouraqui: Innovation is used a lot and means different things to different people. Innovation is more than generating new ideas. It’s about turning creative thinking into tangible output. It’s about changing the status quo to create meaningful value to customers. Innovation requires purpose, resilience, and personal accountability.

Our vision was to create an environment among employees that would foster disruption and challenge the status quo to make a difference for patients. We wanted to create the right environment for Novartis, as a world leader in pharma, to develop the company’s competitiveness, and to improve the customer and patient experience.

As you know, medical science has never progressed as fast as it is progressing now. We are developing even more sophisticated therapies, and data science and digital technologies are fundamentally changing the way we manage drug discovery, clinical development, and commercial operations. Payers are under increasing strains to manage their budgets and they now require that new treatments not only deliver strong clinical value to patients but offset other costs. In this context, I felt that embedding a strong innovative culture would be critical to stay at the forefront of our business environment.

PV: When you started this process, how did you define the goals and objectives?

Chouraqui: An innovative culture must start with a strong purpose. Everyone needs to be on a mission and committed to addressing all the possible hurdles along the way. A strong purpose has to be deeply rooted in the company, role modeled by top management, and not superficially driven by corporate messages.

Real innovation means failure. You have to foster an environment that is psychologically safe to allow people to experiment and on occasion, to fail. One way that we fostered a psychology-safe environment, was to create a “fall forward" award, which rewarded people for the valuable learning — not the failure — that the team gained, when the innovated but failed.

We also focused our efforts in driving strong personal accountability.
Accountability in delivering for colleagues and customers, accountability in making the required decisions and owning the consequences. Throughout the organization, people started asking “can I count on you?" as a common question to secure personal commitments.

PV: How did you evaluate if you were making progress against your goals and what were the results?

Chouraqui: Metrics are important to measure progress and to take corrective actions if necessary. The metrics we used to measure our progress were centered on employees’ engagements, on financial performance, and on competitiveness in specific areas. We focused on the output of the new culture and its impact on the performance rather than measuring upstream activity. As such, we used criteria like overall growth and market share gains. We also used customer surveys and employee engagement surveys as a way to monitor our progress along the way.

The scores increased very intensively over time. I think that the culture had a major impact on the increase. It drove total engagement. And, not only did it reinforce the strong purpose, but it also fostered a satisfying working environment. Who doesn’t want to operate in an environment where you are empowered to make decisions, an environment where you can speak openly without fear, where you can make mistakes and learn from them, and where you feel you are constantly pushing boundaries to deliver tangible value for your customers. All of this had a major impact on people engagement at every level in the organization.

We found that our biggest gap was actually also a great opportunity. We saw quite quickly that people were not necessarily comfortable challenging other people’s ideas. A challenge was seen as a personal critique and not as a way to pressure test an assumption or a fact to make the best possible decisions for the business. To counter this, I encouraged, very openly, people to challenge my own ideas. We — myself and the members of the leadership team — engaged in real debates in front of employees. I think this helped shift the culture.

PV: What were the first steps you took on this journey?

Chouraqui: The first thing I did was to make sure that this journey would be owned by the leadership team of Novartis Pharma in the United States. I made the necessary people changes in my team to ensure that every member of the leadership team would be collectively accountable to one another, not just to me as a leader. I surrounded myself with people who would embrace diverse points of views and backgrounds. In an environment that is ever-more complex and ambiguous, we need leaders who are on one hand confident and secure, and yet are also humble, who listen, and who dare to be challenged. This new behavior, this new tone from the top, was instrumental, in my opinion, in igniting this cultural change. I think we were able to move the culture from consensus-building and conservative to questioning, experimenting, and innovating.

PV: What advice would you give to other executives who are interested in moving their companies forward in a more innovative way and improving their company culture?

Chouraqui: Driving an innovation culture is a journey without a finish line! You’re never there, you can always progress and make things better. The journey requires clarity on the dynamic tension it will create in the organization For instance, experimentation is not only about following your gut, it requires strong evaluation criteria and an efficient decision making process.

Collaboration means open dialogue, but it also means the ability to accept constructive criticism. Failure can be tolerated, but only if it comes with clear learning and not just the result of a lack of judgment. A real cultural change, in my opinion, comes from leaders role modeling the behaviors they want to see beyond communicating talking points.

PV: What’s next for you?

Chouraqui: I’m passionate about progressing medical sciences and bringing innovation to patients. I think much remains to be done on these two fronts, and I’m committed to continuing to play an important role in ensuring that the pharmaceutical industry is an unquestionable bridge between science and society. That’s my way of saying stay tuned.(PV)