International -- Int'l Business: MERGERS
FROM BEDSIDE MANNER TO CORNER-OFFICE SAVVY (int'l edition)
Daniel Vasella still squirms at the thought of his first foray into the world of finance. Sheltered by hospital life in Bern, the Swiss doctor wanted to get in on the hoopla of the booming '80s. But when he reached into his savings to buy stock, he lost his entire investment. He won't say how much. "It was enough money to make me never play that game again," he says with a grimace.
But it didn't stop Vasella from ditching his medical career to dabble in the drug business. And that has turned out to be a savvier bet. At 42, Vasella is poised to take on the job of president and CEO at Novartis, the $21.8 billion friendly merger of longtime Swiss rivals Sandoz Ltd. and Ciba-Geigy. After the deal is approved, he faces the challenge of cutting 10% of the workforce, streamlining overhead, and wringing more new drugs from the research and development labs. "I will not cut deeply into our lifeblood," he says. "Innovation is the key to success."
Vasella got a late start on his journey to the top job in Swiss pharmaceuticals. When he was 8 years old, he contracted tuberculosis and meningitis. Bedridden for a year, he idolized the doctors who saved his life and decided medicine was his calling. After marrying his high school sweetheart, Anne-Laurence, and graduating from medical school in 1979, he worked for hospitals in Switzerland. By age 31, he was an administrator at the University Hospital in Bern.
Then, in 1988, Vasella hit an early midlife crisis. He felt as if he were missing out on something. "Some people take a sabbatical and sail around the world," he says. "I applied to business school." Family connections played a role. Before accepting a spot at INSEAD, a business school near Paris, Vasella had lunch with Sandoz Pharma Ltd. chief Max Link to talk about a future job. Vasella's wife is the niece of Marc Moret, chairman of Sandoz. Link persuaded Vasella to join the company, and he was sent to New Jersey.
TEAM PLAYER. It was quite a jolt. As part of a two-year training program, Vasella sold drugs. His English, though fluent, sometimes failed him as he struggled to talk his way into doctors' offices. But Vasella went on to make his mark in the U.S. as director of marketing. Back at Basel headquarters in 1992, he sped up the R&D cycle. In May, 1995, he became CEO of Sandoz Pharma, the company's pharmaceutical division.
Over the years, Vasella has become known as a team player. But he's also a "tough-minded" manager, says Kim Clark, dean of Harvard business school, who knows him. Vasella is moving swiftly to put his stamp on the new Sandoz-Ciba enterprise. To avoid the hyphenated names that remind merged companies of their histories, he decided on Novartis, from the Latin for new skills. And he plans to move his office to neutral ground between the two companies.
Some competitors speculate that Vasella's limited experience could be a disadvantage. But Vasella counters that as a doctor he can relate to customers and employees nervous about the merger. An internist who specialized in psychology, Vasella compares running a business with practicing medicine. "You have to act with your gut, making decisions while knowing you don't know everything," he says. So far, his method seems to have worked.By Karen Lowry Miller in Basel