Case: GlaxoSmithKline
One of Emma Walmsley’s biggest challenges when she stepped into the CEO role at GlaxoSmithKline (GSK) was to use her power and influence effectively to start to change the strategic focus of the company. Under the prior CEO, Sir Andrew Witty, GSK had taken an approach rather opposite that of most of its competitors. Instead of selling fewer drugs at obnoxiously high prices, Witty pushed GSK to sell lots of drugs at lower prices throughout the world, including developing and underserved markets. While this approach led to plaudits such as GSK being named number 1 on Fortune’s “Change the World” list, it also brought a large amount of criticism from shareholders, who believed that the company was not as focused as it could be on growth and profits. Walmsley set out to make her own mark on the organization and to balance both of those priorities.
Even though she had already been with the company for five years, Walmsley was still considered to be an “insider-outsider” when she took the CEO job, given the 17 years she spent with L’Oreal and her marketing background. Walmsley embraced that view and believes that it allowed her to bring in multiple perspectives to a complicated company. Once she was announced, Walmsley spent the next six months on what she refers to as a “GSK listening tour,” discussing viewpoints about the organization from both insiders and outsiders. Shortly after taking over as page 434CEO, Walmsley gathered all of the top research and development (R&D) people in the company and made them listen to stock analysts giving their opinion about the company’s R&D performance. One employee said it was a “punch in the nose” but that Walmsley’s overall message was, “Everything’s on the table here. The world is saying it’s broken. Let’s see if we can fix it.”
Although Walmsley is regarded as being a good listener, she is also known for having an honest and urgent approach to leadership with a bias toward rational persuasion. She replaced more than 50 executives throughout the company shortly after taking over to help shake up the culture. She says about her role, “The most important thing I can do is hire people who are aligned with the ambition and challenge of what we have to do . . . and give them the ability to use their expertise to make difficult decisions.”* Under Walmsley, meetings always begin pointedly with a “What are we here for?”* When colleagues were asked what would happen if they arrived unprepared for a meeting with her, one responded, “You just wouldn’t do it.”
13.2Although it’s not uncommon for new CEOs to rebuild their management team, what kind of message do you think it sends to employees?