Global expansion of Quintiles
This excerpt reveals some of the considerations business owners must face in expanding their companies overseas. Gillings describes expanding Quintiles into Europe and Asia, spurred in part by the beliefs that intellectual property right recognition would spread worldwide. He describes how he used common sense and local management to bridge cultural divides. The U.S. Food and Drug Administration's reputation for strict standards also helps allay concerns about safety.
Citing this Excerpt
Oral History Interview with Dennis Gillings, June 10, 1999. Interview I-0072. Southern Oral History Program Collection (#4007) in the Southern Oral History Program Collection, Southern Historical Collection, Wilson Library, University of North Carolina at Chapel Hill.
Full Text of the Excerpt
JM: At what point did you take the decision to say “We will move very aggressively in many corners of the world?”
DG: 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 needed seven to ten year lead time. So, in the middle '90s through to now, we started developing in that region with the anticipation that by about 2002 to 2005 we'd be in a strong position there. If the market had gone like we envisaged, we would be in a position to lead the market growth in these regions. So that was the theory.
JM: How did you manage this cross-cultural bridging? It must be a problem of, or a challenge of many facets.
DG: 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.
JM: It sounds like a fairly simple strategy, really.
DG: Yes. I don’t think it's too--. It's not Nobel Prize winning. I would call it common sense.
JM: 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?
DG: 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.