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Transcript on deposit at The Southern Historical Collection, The Louis Round Wilson Library
Citation of this interview should be as follows:
“Interview
I-0072, in the Southern Oral History Program Collection #4007,
Southern
Historical Collection, The Wilson Library,
University of North Carolina
at Chapel Hill”
Dennis Gillings is the chairman and chief executive officer of Quintiles Transnational Corporation, a company specializing in consulting for the pharmaceutical agency. In this interview, he describes the decision, made when he held a professorship at the University of North Carolina at Chapel Hill, to apply his training as a scientist in the corporate world. Gillings left academia after his corporation's growth seemed secure. He shares his common-sense driven business philosophy, which, despite its lack of nuance, appears to have served him very well.
Chairman and CEO of Quintiles Transnational Corporation describes his company's success and his business philosophy.
[START OF TAPE 1, SIDE A]
[This is] an interview with Mr. Dennis Gillings of Quintiles Transnational Corporation at their offices in the Research Triangle in North Carolina. My name is Joe Mosnier. This is cassette 6.10.99-DG. This interview is being conducted for the Southern Oral History Program's series, North Carolina Business History. Thank you very much for sitting down with us for the series. I appreciate that. Let me ask you, just to open, if you could give a quick sketch of your [life], even reaching back say to where you were born, childhood, how you ended up those years later teaching at Chapel Hill.
I was born at the end of the Second World War in London, England and was educated in the inner city of London through to the age of eighteen. Then I attended the University of Exeter. Actually, starting at the age of nineteen, I attended the University of Exeter in the southwest of England reading mathematics for a bachelor's degree. From there, I went to the University of Cambridge to do the equivalent of a Master's degree in mathematical statistics. It was actually called a diploma in mathematical statistics. Then I returned to Exeter as a faculty member, doing my Ph.D. at the same time. Subsequent to that, I came to the University of North Carolina here at Chapel Hill initially as an assistant professor and then rising through the ranks. I made a full professor, if I recall [correctly], in 1980. My corporate life had started in a consulting role before that—.
Can I jump in with that? Let me ask just a little bit more—. Anything in particular that you would think — taking the measure from today's distance — was especially significant about your family, about early influences or mentors that would have some substantial role in making you the man that you are?
Yeah. I've been asked that a lot. I always find it difficult to pinpoint people. There were a couple of people at the University of Exeter that had a considerable influence on me. One was Professor John Ashford who was the professor of statistics because he suggested I should go to the United States. That led me ultimately to come to here. Another was a physician, Dr. Norman Pearson, who was my boss at the Institute of Biometry and Community Medicine while I was at the University of Exeter doing my Ph.D. I was working as a faculty member for him in this institute. So those two people — he being an epidemiologist and Professor Ashford being a statistician, did have some influence. Ashford guided me, actually, to the United States.
What's the specific story about how this Chapel Hill position came to your notice?
Well, it definitely came out of the blue. In fact, it was John Ashford who came back from a tour of the United States. He was giving a lecture tour. It was just prior to my taking, if you like, a leave of absence and making a journey across Africa by Land Rover. He said to me, "Would you like to work in the United States?" I didn't really know what to say because I hadn't thought really of that. Apparently, he'd given a lecture at University of North Carolina here at Chapel Hill and the chairman of the Department of Biostatistics, who is Dr. Bernie Greenberg, had identified a position that he'd been searching for for between one and two years and had been unable to find within his department. Apparently, I fitted the bill. So, that came out of the blue. I did then meet Dr. Greenberg in Germany about a month later, or maybe just a couple of weeks later, at some professional meetings for statisticians. As a result of that, [I] got offered a job, which I turned out to accept at the conclusion of my African sojourn.
Had your ambition been and was it then to be an academic?
No. Sometimes that makes me uneasy. I found earlier on, I didn't know too well what I wanted to do. I was reasonably good academically, and I feel I followed my nose. You do well in school and you go to the university, and you do well at bachelor's and you go on. Then a decision time comes and then, in this case, I was carrying on. Then someone was offering me a job that was very attractive — certainly by English standards because the salaries of professors, even though they may be modest in an American environment, were very substantial relative to the British environment as it existed then.
What were your impressions of Chapel Hill, when you arrived, as a place to live and a place to begin building a career?
Well, it was certainly a beautiful place. I had a little difficulty relating to it. I was definitely from London and enjoyed larger cities, and I suppose I hadn't really thought [about] what I was coming to. Back in 1971, this was a pretty rural area. The Research Triangle, as we know it today, hadn't really developed. It didn't seem at all like—. My only sort of contact of the US had been through the movies and things like that, so it seemed vastly different. Back in those days, although I did a lot of travel, there wasn't quite the interaction that goes on today. So, I think there was a less clear picture of what another country was like.
Obviously your thoughts and professional time were given over to work at the University, did it seem — as much as you can recall — a place that was in a very dynamic period of its economic history?
That wasn't clear to me then. It became clear to me as I saw a lot of companies building up in the Triangle, and I saw the universities continuing to expand. Also, the airport and road systems expanding far quicker than I'd ever experienced in the past. So, I believe by about the early '80s, I had really recognized that. But, I would say that during the '70s, it certainly wasn't so obvious to me.
How about your sense of the state's political regime in those years?
Generally, whichever party was in, I felt very positive because they were very supportive of education, it seemed to me. It did seem that North Carolina had made a big investment in education. I was very much positive to that, very much so. So, I found each successive governor pretty attractive from my point of view.
Jim Hunt would've been serving his two terms in those eight years after you arrived, '72 to '80.
That's right.
Before giving way to Jim Martin.
Well, Holshouser—
Oh, I beg your pardon. You're exactly right. Holshouser was '72, '76 and then Jim Hunt.
And then Jim Hunt, that's right.
Indeed. Indeed. Holshouser the first Republican governor of North Carolina.
That's why I said both parties. When I first came, it was Bob Scott, Governor Scott, if I remember.
That's right.
I was fortunate, a bit fortunate, to meet all of them. So, I do remember them as individuals.
Anything especially noteworthy in this context of your early few years at this university?
One thing, I have to mention Bill Friday, which is part of the reason that I'm at this interview. I distinctly remember Bill Friday as the president of the university system and he would always say hello to you. In particular, he always said hello to me. I was always impressed with that because he said it definitely as though he recognized me. He may have had a talent to do that, but it seemed very genuine. I couldn't have been more pleased when he always, every time I passed him, he said hello and it was very nice feeling. He's a wonderful man.
Tell me about this call out of the blue, as you previously described it, from Hoechst in '75.
Yes. Well, there was a statistician at Hoechst that made the call, and
he happened to have gone to school with Professor Gary Koch, that's
spelled K-O-C-H. Gary was the co-founder of Quintiles with myself and a
strong colleague of mine at the University of North Carolina at Chapel
Hill. Apparently Ken had asked Gary's advice about someone who might do
a specialized piece of consultancy on a study. As a result of that
conversation, the statistician at Hoechst called me, and so to me this
came out of the blue. The problem roughly as follows, fifty-six people
in the then West Germany had died while at the same time they were on a
drug that was for diabetes. It was an oral sulphonyl urea. I think it's
marketed today under the brand name of Diabeta. This association that
all these people had died, and they were at the same time on the drug,
Was it that episode specifically that immediately gave rise to this notion that there might be a wider range of consulting work available to you if you sought it out, or how did the consulting practice unfold?
I suppose. I was so successful in that particular project that until this day I [still] don't know whether I discovered something or whether the company already knew it. On this project, I found out that all the patients were elderly and had excretion problems through their kidney and liver. So, the drug built up in the system, obviously, with people that had these problems, and they died from hypoglycemia, too low blood sugar. My recommendation was that the drug just needed to be labeled so that these sorts of people were not prescribed the product. I think that turned out to be an accurate prediction. Now, what I don't really know is whether they already knew that. I thought it was sufficiently easy to find out, so that I couldn't believe they wouldn't have known it. But, who knows? I was sent these fifty-two hospital charts in German, or fifty-six I should say. That's all I received. So, there was a lot of detective work that's related to them figuring all that out. Now as result of that, I suppose there was a fair degree of positive response because the report was very well accepted and it seemed to eliminate a potential labeling problem about the drug. As a result of that, Hoechst asked me to do several other pieces of work. Then other companies asked me to do several pieces of work. That was definitely the founding event of that consulting in the pharmaceutical sector. No question about it.
How did all this consulting work expand in the late '70s?
By about 1980, I might be employing about twenty students and research assistants to help me with projects at any one time, but they would wane and lull and surge and wane. It was by that time I realized that if this was to carry on, I would be forever trying to find people and get rid of people. It seemed that if there was a sufficient constant throughput, I might be able to set up a company. That's what happened in early '82.
Talk a little bit about the germination of that idea — how you thought your way through putting a business together? Did you have mentors? Did you have models? Were you flying by the seat of your pants? How does one do that, a university professor?
I really—. Maybe it was by instinct. The only thing that I did
was visit a lawyer to find out what sort of companies you could set up.
I discovered that you could set up a company that was like an extension
of your own alter ego, which was a subchapter S. Basically, all your
profits became part of your own taxable salary or earnings. Or, you
could set up a C corporation, which was a real entity that was no alter
ego. It was an independent entity, which had its own tax structure.
There were different advantages [to each one], but the one point I
gathered was that a C corporation was a real corporation with longevity
in its own right. I plumped for that [one] because I thought there would
be more permanence attached to that. But apart from that, there wasn't
really any other advice, because I found the building where we would do
it. I found the business to put through the company and [I] employed the
people. I did get the advice of an accountant, obviously, to help set up
the payroll system. That seemed pretty obvious
You stepped away, in a formal sense, from the university in '82?
No. Not until '86. Then formally, not until '88. What happened, from '82 to '86, the company began growing strongly, but since I had good staff, it wasn't a full-time effort by me. Probalby, I would say [it was] a half time [effort] — pretty much evenings and weekends would take care of it. So for the three years, '82 to '85, I was easily able to continue my professorial appointment. What then happened was I began to see the opportunity to expand even further, so I realized that if I carried on expanding and put my full efforts into business development for the company, then I would have to give up my professorship. What I decided to do was take a two year leave of absence to make sure everything worked out. That was from the period '86 to '88. Then in '88, I did tender my resignation.
By that point I suppose business had developed well enough that it didn't seem obviously risky a move to step away from a tenured faculty position? You felt comfortable with that decision?
Certainly by '88. I felt pretty comfortable in '86, but there's no
reason to not have a security blanket. To other people,
though—. I remember definitely some colleagues saying,
"How could you possibly give up a tenured slot for something
that was risky and totally unknown?' I suppose I didn't quite see it
that way because in the University there's a lot of what's known as soft
money, which is grants and contracts from the government and other
sources. I really didn't see myself doing anything much different.
Perhaps the only difference was it was one hundred percent soft money
instead
Give me an example of a bread and butter project early on in that early '80s phase.
Bread and butter. Well, we had—. I remember a cancer project where there was a drug for colon cancer that turned out not to be efficacious. But of course that was the charge, to try to figure out if it was or wasn't. It was an oral product that you would take, and the idea was that it got to the colon cancer quicker than if you had an injection. So, it was quite intriguing, but never worked out. I did a variety of studies. I'm not sure anything was bread and butter. I was pretty good at the statistical side, but hadn't necessarily worked in each of these therapeutic areas. I can go over—. We did [studied] depression [medication]; we did peripheral vascular disease; we did sleep; we did anxiety; cancer, as I just said; and arthritis. All those therapeutic areas were done certainly in the first couple of years, so none of them were bread and butter because I was continually learning new therapeutic areas and more about the biometric measurements that would be the outcomes for those particular diseases.
How did you find key colleagues, staff? What sorts of instincts and rules of thumb did you use to put the group of professionals together?
At Chapel Hill we had lots of good students. Students always need extra
dollars, so that was a remarkably potent weapon. They would work all
hours of the day or night. We would pay fifteen or twenty dollars an
hour, which was very good money. The students would work enormously hard
and get things done very productively. There was absolutely no problem.
In fact, the students used to like it because they would work
Tell me about building an entrepreneurial business in the mid-'80s in this part of North Carolina.
It wasn't very common, that's for sure. At least I didn't meet many other people that did it. Maybe it was more common than I realize, what with my contacts being mainly academic. You tend to stay often within your contacts. I suppose the other part of that is my business wasn't all that easy to describe. We were doing what we commonly call now "outsourcing" for the pharmaceutical industry in drug development. At that time, for anyone to imagine that a big company like Glaxo might contract with someone like me to analyze their studies didn't seem feasible because why wouldn't they do it themselves? So, it was quite hard to explain. In point of fact, the explanation then was far different from what it would be now because, I think it's fair to say, Gary and I had a lot of skills. We probably had more skills than was present in most big pharmaceutical companies at that time, so we were able to bring a skill level to the data that was presented to the Food and Drug Administration that was a step up. Now a days, of course, there's a lot more trained people and a lot more of that skill level would be resident in the major companies.
Were you ever offered the opportunity to come in house by anyone of them?
Yes, yes.
So people saw that as something that might make sense—.
That's correct. For me, it was a much better life being a professor with the consulting than actually working for a corporation.
Why were they outsourcing? [Was it] just a matter of not having the in-house expertise? Why didn't they go out and get it?
We tended to specialize in those early years in things that were quite hard problems. Just take the fifty-six deaths. I don't know whether anyone in the company would've solved that. Perhaps on the one hand there wasn't the confidence. Then, on the other hand, there's always this thing — an external person that's a professor has a reputation and an independence that lends greater weight to the conclusion. That's one of those inescapable things that often happens.
One of the things that's interesting about this study is exploring the extent to which a regional distinctiveness is still evident in business. Were there times that it mattered, in your effort to put this company and develop this company here, that you were not a southerner?
Oh no. I would say almost the reverse. It's probably fair to say that my customers more came from New Jersey, but of course Glaxo and Burroughs-Wellcome — at that time they were separate companies — were local customers. Everyone always thought that we entirely developed because of those companies and that was not true. The genesis came out of New Jersey, and then we gained other customers later.
But you're selling a service, so place matters less, I guess.
In fact, I often found that my English accent was an advantage. For some
reason it gets credited with intelligence. I don't know why. I get that
sense in the United States, maybe. You can judge [for] yourself whether
you think I'm correct, but for some
Any folks who stand out from these early years, mid- or late-eighties, as key contacts, key sources of insight or perspective? Someone who you met along the way who offered something to think about, that ended up being quite significant or opened a door for you or gave you some regulatory insight perhaps?
Some of the people, our customers [were important]. One I remember well, Dr. John Nelson, who was the physician in charge of clinical research at Hoechst. He was originally from Scotland. He was very focused on the point of the study and what it was trying to accomplish. That focus and penetration of thought, I felt was a very good thing. I did observe that and I got on well with him, I believe. Another colleague I might mention, who was at that time at Bristol-Myers, was Dr. Joe Armellino. He certainly taught me a lot about the development process for new drugs. So, I did find I was learning a tremendous amount. I came at this from a narrow disciplinary skill and quickly learned some of the business angles, like how to focus on what the key things were and also some of the wider angles of what a pharmaceutical company is trying to do and how does it get a new drug on the market. That did help me then with the next iteration of the company, Quintiles, because I figured we could really manage a broader process than just analyzing data from an individual clinical trial. We could manage all the databases and we could actually run the clinical trials.
When did you really turn your efforts to that expansion of the services you were selling or considered selling?
Well, from '86 to '88 I put my attention at expanding the database management and we expanded it across to the United Kingdom, so that it was transatlantic. I did that first because I felt that Europe would become a single market. Being from Europe or the UK, I was probably closer to that development. If it became a single market, it would mean that drugs were developed in Europe much like they were developed in the United States, which was not true in the '80s, so that made me decide I needed to build a data processing and analysis capability [on] both sides of the Atlantic to accommodate multi-national clinical trials. When that was successful, I figured that then we could put in the expertise to manage the trials, design the trials, and monitor the trials. So then, from '88 to '90, we began to put that in place.
How dependent was that expansion on key hires at Quintiles? Did you have to bring in—.
Yes. Yes. I brought in Dr. Bob Butz who had worked for
Burroughs-Wellcome and then had branched out on his own. I was very
impressed with him and so he helped develop our clinical and regulatory
capability. Also at that time Dr. Bill Solliceto — he had been
my research student and had joined the company right from the outset
— took over the management of the statistical and data
responsibilities as I took on a broader role, managing the whole company
and developing the business of the company. Bill was very influential in
us making substantive progress. Then Rachel Selisker, who is currently
our CFO and has been always our CFO, she joined us in 1987. She had been
with us pretty much since 1982 because she had been the accountant that
So there certainly was a connection to the university through folks—
Absolutely. Yes, because of those people. Bill and Sid came directly from UNC-Chapel Hill. A number of people [also had university connections], though. Connie Morreadith, my secretary Bea O'Quinn, came out of the university. They had either worked for me there or had moved onto other things and then came back.
How easy or not was it to begin managing all of the business side rather than the service provision side of a growing business? Did it suddenly start eating up all of your time or were you able to—
When it started eating up all of my time is really when we became
international because I needed to be both sides of the Atlantic at the
same time. That did transform everything into very high demand. No
question about that. I probably expanded internationally more quickly
than anyone would've recommended I did, but I
Before we turn to the many issues related to international expansion, what was your—. Here you are some years after having been working as a professor, you're running a growing and dynamic business. Did you suddenly have to pay attention to tax, fiscal, regulatory issues?
Oh, yes.
All that stuff. I'm wondering two things. One, whether or not the discoveries you made and encountering all these things that were suddenly on your plate, how that matched up against the perspectives you'd carried forward both as somebody who came over from England and somebody who'd worked in the academy — that sort of academic consideration versus practical. And also—. Well, let me just leave that with you.
I actually think an education in England has some advantages because
there's a tendency to rely on a little more creativity in the earlier
school years than rote [learning] — turning back the answers
to individual questions [to the teacher]. I have noticed that as a big
difference in my own education to what I see practiced here. We
Any sense at the time that there were areas of the law — areas of the state's tax or fiscal policies — that were problematic for you as you tried to move your business forward?
Not really. I think we were fortunate that I founded a business that was
profitable from day one. The accounting issues seemed to me to be pretty
straightforward. Since you make more money than you spend, there is some
bottom line. You have some flexibility about whether you're [doing]
accrual accounting or cash accounting in the early stages. That I was
not aware of, but of course Rachel advised [me
How big is the company in '87 or so when you began to start looking overseas? [What are numbers on] revenues and employees?
Four million dollars of revenues and about forty employees. It was pretty small.
You mentioned you were profitable from the get go. Any occasion where you had to go out and find a bank to give you working capital or something?
Yes. One of the things that I calculated early on was that if we grew
twenty or twenty-five percent annually, we were totally self-sustaining.
But, as we started growing forty and fifty percent annually, we used up
more cash in capital expansion than we could generate profits. I came to
this conclusion pretty quickly, actually. We did have to start borrowing
in order to finance that cash flow. To start with, we borrowed through
bank loans. I cosigned all the loans and they were secured against my
house and
How did you go about that? How did you go looking for someone to fund you, find the right sorts of perspective investors?
It was odd how that turned out. There was a person called Epps Robinson who was part of a limited partnership of what was then NCNB, which is now Bank of America. At that time it was NCNB, before it was called NationsBank and then Bank of America.
I'm actually interviewing Hugh McColl on Monday.
Okay. Well, at NCNB—. Sorry, I'm losing the question now.
How you went about—.
The venture capital. It was Epps Robinson. They had a limited
partnership and Epps Robinson sort of called me up out of the blue. It
was funny. I don't know how he learned about Quintiles, but he wanted to
become an investor. That happened to be at the same time that I was
thinking we needed some infusion of capital through equity, but I was a
little bit queasy because it's your heart and soul, and you don't like
to give up
This was about 1990?
This was about 1989 or 1990, something like that. From there, as we were more comfortable with that, he introduced us to people that were venture capitalists that would put more money in. That's how that whole thing evolved.
Did that tend to be a circle of North Carolinians initially?
It was really interesting because NationsBank had a connection with a
London bank called Panmure-Gordon. I don't know whether they owned them
or what it was, but there was a connection. Through that connection I
was introduced to Richard Thompson of Thompson Clive. Thompson Clive was
a London based venture capital group. Since we were international, I was
quite interested in that. Thompson Clive or Richard Thompson wanted to
invest, and we came to an agreement. At the same time Epps Robinson
invested more, and then there was a third investor, David Smith, who
unfortunately now has recently died. David Smith had founded Praxis,
which was a biotech company and sold that company to then American
Cyanamid. Then David had
You mentioned one advantage to Epps Robinson's participation was that he could bring a certain sort of financial expertise to the board. How did you go about putting a board together from the early stages and then how did you gauge the need for new sorts of perspective and expertise to add to that?
Well, in the earlier stages, I used valued advisors and colleagues. Professor Chester Douglas, who had been a colleague of mine — he was at Harvard — joined our board. Then Dr. John Fryer — who had actually been a colleague of mine back in the United Kingdom and then he'd come to the University of North Carolina to assume the professorship in biostatistics that I had vacated — he joined our board. Then with the venture capitalists on the board and myself, we began to have a really viable board.
Let me step out of the narrative of the company's expansion for a moment. What instincts, what expectations guide you in finding your way into professional business relationships with other persons? How do you hire? How do you make assessments of people you want to have participate in your venture?
Well I think there has to be a certain chemistry on the one hand. I actually look for people that are strong at things that I'm not strong at when I'm hiring. I actually look for people who have accomplished something on the grounds—.
[END OF TAPE 1, SIDE A]
[START OF TAPE 1, SIDE B]
[This is side] B of the first cassette [of an interview] with Mr. Dennis Gillings on the 10th of June, 1999.
I don't hire from the perspective of employing a superman or superwoman who's skilled at everything that you can possibly name. Particularly as the job gets very senior, there's a tendency to demand someone who is skilled at everything you can possibly think of. I'm not a believer, myself, in that. I believe that it's a little counterproductive to what I call the team effort. I look for team players because if you've got a superman, there's also the tendency that everyone else pays lip service to them. If you generally believe that individuals bring key talents and skills, and perhaps other secondary skills, you tend to look towards the people with the key talent as being the spokesperson for that talent. That then builds a team akin to a good basketball team or in England a good football, or soccer team as it's called here. I tend to aspire to the sporting analogy of a good management team. Therefore, as you build some components, then you look for the other components, and you build accordingly.
Did you ever have to stop and reflect on how you were perceived as a leader and what sort of style you have not as a leader, but a manager? Or was it a natural thing that sort of evolved over the years?
Well, the funny thing is I never really perceived myself as a leader. I
also, though, strongly believe that if you're in a role, you've then got
to execute that role. I think if I exercise leadership, it's because
it's the role that was then ordained for me in some fashion, either
because I created it or—. I suppose it was possible that
someone else would've founded the company and then I worked for them,
but that was not the way
Let me turn to your evolution of your strategic vision for the company. [The company is] incorporated in '82. By '86 you decide it's time to take a leave [from the university] and your efforts [to the company] full time. What's the prize down there road? What's pulling you forward? Where are you wanting to go?
Well, it's changed over the course of time. I think to begin with it was this independence and capability of having an organization that did what I thought was very socially responsible work. You know, does a new drug work and how do you get people better and making a sound economic living and creating nice jobs out there. That was the original motivation. I think as the company grew though, a broader motivation crept in, particularly as there were no financial issues. Really, I never developed a company for money anyway. It's just that you need, obviously, some financial rewards to feel comfortable. As we began to be successful financially, actually the part that grabbed me was, we may be able to build a company that makes a difference. That's really what drives me now. It's evolved from being independent to, can you make a real difference?
What's the difference? What exactly do you want to accomplish?
Well, the pharmaceutical sector is extremely productive in inventions.
Only, too often inventions don't get to human beings very quickly.
Sometimes they're not
Let me take you back—. Step back into the narrative story of Quintiles. It's 1987. It's the end of the Reagan era. [It's the] opening to George Bush's term, obviously. There's a certain type of spirit in the air in terms of political philosophy in this country. That has implications, obviously, for the health care environment in this country. You'd come from another place and had a different perspective and pattern of experience, I suppose, growing up in the UK. What measure did you take of US health care delivery generally and in comparative terms in particular? I'd be interested in how relatively efficient, how relatively socially advantageous—.
Oh, sure. That has changed from then to now, actually. Back, let's say,
in the '80s, I think health care in the United States was a bit more
expensive than elsewhere. It also seemed as though there was less access
to [healthcare] for the whole population than there was certainly in the
United Kingdom, where pretty much everyone got equal access. Maybe very
wealthy people got super access, but that was such a tiny thing that it
didn't seem to make a lot of difference. I think health care, although
it remains expensive in the United States, with managed care and the
competition, is—. Probably the amount by which it's more
expensive than other countries has lessened a little bit. I don't think
that it's quite such an issue that it was some time ago. I think the
fact that you only tend to get good access to health care if you're an
employed person is probably a big difference. Generally, you have to go
on welfare outside of [employment to get affordable access to
healthcare]. That big difference is so socially—. One is aware
of
Tell me some stories about taking the company overseas and finding new markets and building businesses there. No small task.
No. That's true. I mean, I was at a bit of an advantage, I should say, in the UK because I came from there. It didn't seem anything other than going home. The objective was to then build the company in continental Europe, so we could have this trans-European capability. That's exactly what I proceeded to do. We first built it in the United Kingdom. After that we set up in Germany, in Ireland, in France, in that order. After that, [we set up] in several other countries and now we're present in every country in Europe.
In those early instances, are you opening new business or acquiring [companies]?
[We were] always opening new businesses. At that point we didn't acquire. Even to this day — I think I'm right — we've always opened up in a country before we've acquired in a country. We've never actually gone to a country through an acquisition. I've had a specific purpose there. I do think multi-national organizations are quite hard to build. I've always had this inclination to understand a little bit more about how business is conducted in a country and learn, if necessary by a few mistakes of hiring people, before thinking about making an acquisition.
What was the pattern of experience you had, first in England and then you said in Germany, France, and Ireland?
I think in England it was, if anything, a little bit easier than here. Not because it would've been easier absolutely, but because we were backed by a thriving business. That reputation enabled one to get the work that generated the business. I think in the other countries it evolved because of the sorts of businesses we were developing in the United Kingdom. That tended to be trans-European and so we developed business in Germany and therefore needed a German organization. We developed an organization in Ireland in part because of some of the financial incentives that we were given by the Irish government. I don't want to say this in a detrimental sense, but that was almost like an extension of the UK. It's a different country, but English is the language. It's close. It's less different and all the structures were pretty much the same. Starting a business in Germany, though, is entirely different because you do get the continental Europe legal systems rather than the Anglo-American type legal system. A little later we went to France. That was probably the most difficult because we'd never really had a full start. The first head of our French unit didn't work out, so we then had to replace that person. That was an example of an initial mistake and then trying to correct it.
How was the CRO sector evolving in these years, the late '80s or early '90s?
Well, very strongly because the actual market itself was growing
strongly. I would estimate that the demand was growing by between twenty
and twenty-five percent, so we were growing more like fifty percent a
year. We tended to double or more than double the growth of the market.
In a growing market it was less that you were taking
At what point did you take the decision to say "We will move very aggressively in many corners of the world?"
Well, once we began to be successful in Europe—. I should
mention Ludo Reynders, here, because Ludo is now the CEO of our CRO
Division. He started in 1988 and was the head of the UK and then became
the head of Europe and the CRO. He was very instrumental in our success
throughout Europe. I think that success caused us to expand all over
Europe and then caused us to look further afield toward the Asia Pacific
region, in particular toward Japan and other countries. Now there was
another thought. You see, pharmaceuticals is a global business and at
the same time there was a movement for intellectual property rights to
be more widely recognized throughout the world. It started at what was
the Uruguay Round and ended up in the World Trade Organization. Now
generally it is thought — by at least the people that I talk
to — that by about 2005 most countries in the world will
pretty much recognize intellectual property rights. Back in the early to
mid-nineties I felt that the recognition of intellectual property rights
was going to have a big impact on the pharmaceutical sector. In
particular, [I thought] it was ultimately going to create a bigger
market place in Asia because there was a fair amount of avoidance of
intellectual property rights [there], so there was less incentive for
many pharmaceutical companies to develop products in [those] particular
countries. With that thought in mind, which was not unlike my European
Union thought in the middle '80s, it was the rationale why Asia would
ultimately become important. The other thing I realized [was] since I
didn't know Asia, instead of a five year lead time, I probably
How did you manage this cross-cultural bridging? It must be a problem of, or a challenge of many facets.
Well, I'd wouldn't like to say there was any great talent there [on my part], because I don't speak Japanese or anything. I think one thing you do do is observe, and you try to behave politely within the culture you're in. You learn a few things so you can do that. I mean, when we go to Japan we always take gifts. I always bow and I know when to bow a little bit or a lot and when to do it. I know the greeting. The thank you and the apology is a successively deeper bow. Those sorts of things you don't have to spend a lot of time learning, but I think they make a very big difference. I think the other thing you must be careful of, is not assume the country is your own country. You must assume it is a different country. Therefore, you try to show respect for the cultural ideas or prevailing ideas within that environment. That's what I do. I will take pains to travel a little bit in a country before setting up a business there. For example, I made about three visits to China and toured around China before we established a business in China. I think those sort of things are important.
It sounds like a fairly simple strategy, really.
Yes. I don't think it's too—. It's not Nobel Prize winning. I would call it common sense.
But there's got to be a part of this that — at least on two fronts — that's got to be more complicated still. One is integrating overseas portions of your company into whatever Quintiles's institutional cultural and enterprise is. That's A. B, deciphering the particular regulatory regimes of these places. What are your strategies there?
The regulatory regimes are not too difficult because the FDA does set a high standard. That's not to say it's the only standard, but if you satisfy the FDA, you do tend to satisfy most of the other things as a general rule. We actually work towards what we call the ICH standard, which is the International Conference on Harmonization of regulations across Europe, North American, United States, Europe and Japan. That isn't so different from the FDA standard that that keeps you in good stead. I think on the regulatory side since the US is so widely recognized as having strict regulations, we have a natural advantage there. Now on the integration, if I understand your other question across the different cultures and management styles, I think you have to tackle it a little bit by—. First of all, you do have a little bit of representation from each. You have to work at that. It's no good trying to run China and just sending Americans there, and you think that's sufficient. If you can't find the trained people, you may still have to send someone there, but you have to have a strict plan to recruit and train and bring the local nationals to the management positions. I tend to have the rule in my mind that you've got to aim for strong local management. But I never like saying a rule that you can never violate. It's more that's what your goal always is. Now if you do do that, I think you do allow each country to feel it's participating. Then I think at the next level of management where the overall corporate management is, you have to again be careful that you have some representation that's reasonably broad.
Tell me about how — in managing these sorts of processes — how your daily calendar has evolved over the last ten years, ten to twelve years, when you really started to—. How do you spend your time? How has that changed?
Well, the biggest issue more recently is the pressure for my time. You have to have a group of people helping schedule [your time] because you can't actually even remotely field all the things yourself. You have to have people that are assessing who wants to see you and trying to work out priorities and making suggestions, which you then agree with. That's a relatively recent phenomenon. I would say that's more a phenomenon of the last two to three years. This past year it's gotten quite excessive. Now prior to that, something like half my time was people wanting to see me or events creating the need for me to spend my time that way. The other half was pretty much [what] I determined I would focus on to grow the company.
Strategic thinking.
So that was naturally how it tended to be. I've always been, I think, a reasonably good delegator. I've never tried I think to overly manage the day to day operations of the company. I've been bringing [in] good managers and generally delegate. During the period [of], let's say, '90 through '96, I was first of all learning how to run a public company
I'll have some questions about that too.
And then we took it public and then [I was] learning how to do some
acquisitions. I think [I was] getting more skilled at integrating those
and managing the growth. More recently, I suppose in general, that was
the lesson. You said "How do I manage my time and how do I deal
with it?" For those years, was all you had to be good
Let me take you back again to this period, say starting '87 [and]
forward, where you were really looking to move the company with a lot of
overseas growth and expand your range of service provision in many new
fronts. One very interesting question, I think, is that—. You
mentioned earlier today that you were able to draw upon the advantages
of style and intellectual training, if you will, of the British system
with some general regard. That will probably be at play here in this
question. I'm wondering
I naturally I think I store away information and analyze it as a trend. I think that's a natural thing that I do. I also both quantify and subjectively prioritize, in some non-objective way, all the information that I get. I think that helps identify the business trends that should be in our sphere of influence. Perhaps there are two sorts of trends, those that are emerging inspite of you and those that could emerge more strongly if you did something. With an identification of which sort you're in, if they're going to emerge in spite of you, you'd better do something about it anyway. If you could lead them—. Obviously you want to lead it, but you can only lead it if you have the right tools at your disposal, and you may have more flexibility of timing of how you go about it. A healthy regard to those things and a constantly learning by iteration—. I mean, some people I find that you have a conversation with, and then the next time it's as though it never happened. There's no behavioral change. I like to think that as each day goes by, I have a degree of behavioral change because something new has occurred.
Let me see if I can pursue this through a little bit further. What do you read? What is your social circle like? What are the sorts of things that impinge on your attention outside of this office?
Well, I suppose one thing is that when you're born in one country and
live in another and routinely travel around the world, you do get a
perspective that would be very hard to get if you stayed in one place.
That is definitely the case. Just by comparing
I want to look at the clock here. We probably have just a few minutes here before we should comfortably end. I'm wondering if in fact this might not be a bad spot to stop, if we could maybe look some point further down the road about all of the expansion of the business and so forth.
Perfect.
The IPO.
That would, because the part that you have ahead is a fairly long part and probably would be a nice one to one and a half hours continuously.
Good. Thank you so much.
Perfect.
END OF INTERVIEW