Robert Essner and Professor Syd Finkelstein chat with students.

Quiz Show

When Tuck students began firing questions at Wyeth President and CEO Robert Essner, he could well have been interviewing for a job.

What personality traits have earned confidence in you as a CEO? What methods do you use to be sure your decisions are right? How do you meet the challenges of managing a complex work force? How do you encourage managers to take more risks? How do you choose research projects? What are the biggest unmet challenges of your industry?

Students put these questions—and more—to Essner when he spoke at Tuck in September as part of the school's emphasis on leadership development. Professor Sydney Finkelstein, author of Why Smart Executives Fail, also quizzed Essner, who took time from managing a corporation with $17 billion in revenues and a market capitalization of about $60 billion to travel to Tuck. Most in the audience in Cook Auditorium were first-year students in the Analysis for General Managers course, taught by Professors Paul Argenti and Syd Finkelstein.

"It was a great opportunity for interaction on an important topic," said student host Michelle Schneider T'06. "There is a growing student interest in the healthcare industry, especially in biotech and pharmaceuticals. The pharmaceutical industry is rapidly changing in so many ways. And Wyeth is one of the most innovative companies in the industry."

How had Essner become CEO of Wyeth? Finkelstein asked.

"Don't follow the path I followed," replied Essner, who said he had never planned to be a CEO, but changed his course when his original goal of becoming a professor of ancient history didn't work out. "Join a pharmaceutical company as soon as you can. Follow people that can teach you something. And do something uncomfortable" at every opportunity, he advised.

"I have tried to listen well to people, to be open and honest with them," Essner replied to the student who asked about his personality traits. Early in his career, Essner said, "I thought I was a good leader, and I had good ideas. But nobody was following me."

"Being right is not enough," Finkelstein concluded.

To guard against unsound decisions, Essner said, "I surround myself with people who know a lot more than I do. And I listen to many points of view."

These techniques are essential in such a complicated industry as pharmaceuticals, where an enormous number of factors must be coordinated, Essner said. And, yes, the workforce is complex, and managing it is a challenge. "Most scientists are basically anarchists," Essner explained. They love their ideas and their sciences, objects of loyalties not easily subordinated. "What you do is, you love the scientists, and you tell them to make drugs. Show them that you care. Show them that the success of the enterprise depends on their success. It is by nature a little unmanageable, but they sort of love you back."

"I take offense with the term, anarchist," objected a student. "I am a scientist myself!"

"That is a sign of anarchy right there," Essner shot back, enjoying laughter from the audience.

As for how Wyeth chooses its research projects, the process has changed over time, Essner said. In the past, the company tried to predict whether a particular line of inquiry was likely to lead to marketable products. But the company learned its forecasting ability was unreliable, so today a pure sense of innovation is more important than trying to predict whether particular research initiatives will fit Wyeth and its market forecasts.

Essner named Alzheimer's disease as the biggest unmet challenge of the pharmaceutical industry, saying that the problem of insuring solvency of the Social Security system is minor by comparison with meeting the cost of adequate care for victims of Alzheimer's.

The industry also is challenged by price controls in other countries, skyrocketing costs of research and development, increased public scrutiny as drugs evolve from a minor to a major factor in healthcare costs, and legal defense expenses. "Any company is vulnerable to suits," he said. "There is a drastic need for tort reform." When juries confront sympathetic victims, he said, "There is nothing like a fair fight."

Robert Essner's visit was sponsored by Tuck's Beacon Capital Partners Leadership Speaker Series, with support from the Jonathan L. Cohen D'60, T'61 Leadership Development Program and the Alan Smith T'53 Visiting Executive Program.