1. Leadership = Serve

I grew up in a village in rural Switzerland, where my father and my friends’ fathers were railway workers. Moreover, I saw how tough life became for my friends when their fathers had no work anymore.

This made me realise that business decisions affect people. Hence I always ask, “What does it mean in the impact for everybody involved?” Even when leading at the top, never for a single moment forget that in a public company, one is just a manager that is hired to serve.

To serve may require you to go down to the level of others. The world is complex, and as a leader, you deal with very complex issues. However, not everyone may be able to. Whenever I made a speech at Roche, my speech had the ambition to be so clear – to break down complexity into digestible parts that if a blue-collar worker of Roche would go home and tell my story and key points at the family table, people would understand why things were going the way they did and could respect the argument behind it.  

2. Challenge with Credibility

My friends’ fathers woke up to no work one day because they “didn’t see it coming” and reacted too late. This observation from my childhood has stayed with me ever since. While a crisis can be a trigger for change, I like to already challenge the status quo. I believe this is the way of achieving breakthroughs. Even when at school, I had already developed the philosophy of asking “why not?”.

However, it is too easy if you only challenge things. You must have the right to challenge and form the right arguments. Thus for all the deals encountered in my career, I gathered the best and the brightest to question all possible outcomes and create complex decision trees with probabilities. We would also anticipate the behaviour of the other parties involved in the deal through simulation.

This was exactly what I did when I was CFO of Roche. In 2008, Roche needed to raise USD44 billion to acquire full ownership of Genentech. The traditional way was to go through banks. Unfortunately, banks at that time were going through the worst financial crisis in 80 years. I decided to cut out the banks and go to the cash owners themselves through the corporate bond market.

My proposal was met with extreme negativity. No one had ever issued such a large amount of corporate bonds, and in so short a time. To make things worse, Roche was a ‘nobody’ in the bond market.

Through my learning visits with leading bondholders across the globe, I knew there was so much cash looking for a reasonable investment in uncertain times. Similarly I knew that Roche was rock solid, and the business transaction was equally rock solid. As I was convinced that it was the pragmatic thing to do, I dared to stand up to pressure and challenge the naysayers, “How can you claim it cannot work if it has not been tried out before?”

In the end, Roche’s bond issuance became the world’s largest-ever corporate bonds.

3. Push On with Perseverance

However, having the right arguments is just the first step in a long process. You have to persevere to turn an intellectual argument into a business reality.

In the Roche financing example, the starting point was to find potential contacts on the Internet and fly to meet them. For one of these meetings, we were originally told that three people would meet us. When we arrived, it turned out it would be only one person instead of three – a young man that walked in with a Starbucks coffee. He was only meeting us as his mother was working for a competitor of Roche’s and he was personally interested in the biotechnology industry. At the second meeting, we grabbed the attention of two persons. At the last meeting, we met with five people. Finally, they bought USD2.1 billion worth of bonds.  

4. Take Responsibility

Perhaps more fundamentally, leadership is about taking responsibility. In particular, a leader is the top troubleshooter when things go wrong. A robot can deal with business as usual, but a leader is needed to guide — not blame — the team when things fail, and to take ultimate responsibility. In the Roche example, while I had the support of my chairman and CEO, it was made clear that it would be “the end of the story” for me if I did not manage to deliver. To add then, it is always advisable to have a Plan B, which I fortunately did!  

One aspect to my success is that I have never celebrated myself. I usually speak with the ‘we’ word. Perhaps in the Roche financing example, I used a lot of ‘I’, but that was because I was then taking personal responsibility for it – the CEO would only fire me if the deal did not work. My team had a protection guarantee.

It is important to give people successes and medals. Take extra caution to be particularly sensitive to key moments. For instance, while opening ceremonies are usually done by top management, I never did the ribbon-cutting by myself, but with workers or people who had worked on the project.

6. Uphold Accountability

The ‘we’ mentality is not always about receiving praise. There should be an element of accountability as well. At Roche for instance, the speed of group financial reporting due every month was enhanced significantly. We did this through the brutal openness of peer pressure, where anyone could go into the system and see which legal entity in the group had missed its reporting deadline and why. Some managers balked at this initially, especially if it was due to computer issues that their legal entity ended up looking poorly to the rest of the group. My response was, “Sorry, next month you can show you have everything under control.” More importantly, it is not a culture of excuse we want to build, but a culture of fact. In addition, it is a fact that the group cannot close on time if one legal entity cannot deliver on time. 

7. Keep the Gap between ‘Declared’ and ‘Actual’ Minimal

If you take care to celebrate the ‘we’, you will measure the health of your company by one indicator: the gap between its declared and actual reality.

To explain this point, there is the declared reality from top management, such as the chairman’s statement. Then there is the actual reality, which is the experience of thousands of employees. The smaller the gap is, the healthier the company. It is thus necessary to engage and empower your employees.

For this, I admire Arthur Levinson, former CEO and chairman of Genentech, and now chairman of Apple, for the way he developed Genentech. He spent one hour every morning answering personal emails that employees had sent to him. He truly kept the gap between declared and actual reality at Genentech minimal.

My own practice of reducing this gap at Roche was to use crowd-sourcing to empower employees. Basically, crowd-sourcing can start with five priorities listed on a website. Employees can vote for one, a few or all of the five priorities, allocating from a fixed amount of points. Similarly they can add new priorities, which subsequent voters can vote on. At the end of one exercise, we found that two of the original five priorities were dropped, and two new ones made it to the final list. It was a great learning experience for management, and we had better buy-in from employees. Not to mention, this became a great way to actualise the ‘why-not’ culture in the company. 

8. It All Starts with Values

Leading business and people begins with leading the self. This leadership starts with being strict in small matters, to cultivate one’s character to separate right from wrong. An example: I never sent out a private letter through the company mail system, but kept my own stamps in the office. Give yourself simple elements of conviction, and never risk overstepping them.

Earning respect and credibility is the strategy to winning people’s hearts. Particularly in Asia as the war for talent escalates into a bidding war, your employees’ respect may be the asset to keeping them when your money cannot buy their trust.

As I look at Asia, I admire its resilience in the face of challenges. However, what fascinates me most as the region transforms itself is: Where is the value system of Asia? The current times appear to be all about consumption and materialism, yet a lot of success is founded on a truly solid value system.

However, there are observed basic elements such as respecting others, honesty and truth that cut across all. They apply to your work whether you are a railway union leader in rural Switzerland or a global CEO with worldwide responsibilities.

My father made it very simple. “We are very poor people, but I am a proud man. Never do anything that lets you lose your pride.” To me, this value principle has lasted forever.  

This article was first published in HQ Asia (Print) Issue 04 (2012).