by Brian P. Watson, Dan Roberts

Mylan exec builds culture of leadership

Mar 08, 2016
CIOIT LeadershipIT Strategy

Former CIO Michael Smith focused on succession when transforming Mylan’s IT organization. It worked — and it could continue to pay dividends.

In December 2012, when Michael Smith arrived at Mylan, company leaders were plotting a new three-year strategy to fuel continued growth. The $9.8 billion generic pharmaceutical maker had already come a long way from its humble beginnings as a West Virginia-based drug distributor, but there was much more to come, including some aggressive M&A plans.

But Smith knew the IT organization was not on the right footing to execute on the assertive strategy. He had to retool the team. He had to build brand-new capabilities. He had to essentially rebuild the department’s culture from the bottom up.

One other important priority: Find his own successor.

That might sound a little crazy to some. Leaders talk about the importance of succession planning, but far too few actually put coherent plans in place (while many others, obviously, have no say in their successor). Smith did so while building his senior team and transforming the company’s IT operation — and in the process, he started a leadership development cadence that could yield Mylan’s IT leaders for years to come.

“Succession planning is obviously a big part of what I stand for. It’s a moral obligation to the corporation to have great succession planning,” Smith said. “It’s a moral obligation to your team — to let them know where they stand, to be open and transparent, to remove politics, and help explain why people get certain assignments.”

As he began settling into the role, Smith, a 22-year veteran of Nike’s IT organization, assessed his new responsibilities and quickly recognized he needed some new blood in the senior ranks. To oversee day-to-day responsibilities for his key areas — IT, global business services and information security—he was able to recruit senior executives from AIG, Amazon, Aviva, Costco, Estee Lauder, Nike and Ranbaxy, one of Mylan’s biggest competitors.

At the same time, he made a commitment to Heather Bresch, Mylan’s CEO, that his team would stand up new capabilities that would prove pivotal to executing on her three-year strategy. With even more key additions to his team, Smith built up operations in architecture, digital, innovation, enterprise business analytics and more.

The culture issue was a little trickier. A few years before Smith arrived, Mylan made two acquisitions that helped catapult its growth: India-based Matrix Labs in 2006, and Merck’s generic drug division in 2007. When he assumed the CIO role, Smith saw plenty of the overall Mylan culture — “relentless” and “passionate,” in his words — in IT, but he also found two subcultures. One existed among the many workers who had been with Mylan since before the acquisitions; the other, in the new talent brought in following the transactions. The incumbent group was more change averse, while the newer workers, who had spent their initial time at the company heads-down on integrations, tended to be more reactive.

[Related: Deloitte CIO finds strategic value in IT’s ‘sacred’ obligation]

There wasn’t much forward thinking, Smith said. Innovation was pretty much nonexistent. And it wasn’t a lot of fun.

So Smith set out to build on the best pieces of Mylan’s culture, but also empower his team to take more calculated risks. But it went further. It was about bringing forth new ideas that would be valued, developing talent, and celebrating successes together.  

He summarized his vision for the new ethos in a word: Joy. “Fun dissipates, but joy is sustaining,” he told us. “One definition of joy talks about a sense of achievement, a sense of well-being — that’s what I want.”

Building a culture is always a work in progress, but Smith said he is seeing big gains. He and his team continue to bring high-level talent to Mylan’s Pittsburgh headquarters, and they’re seeing increased employee engagement through events like hackathons and Lions’ Den (an in-house take on the popular television show “Shark Tank”), as well as awarding military-inspired challenge coins for success in demonstrating the company’s values. Smith has also ramped up an internship program, aimed at bringing more “digital natives” onto the team from top area universities. When Smith first arrived, they have five interns; in 2015, they had 75, with plans to hire as many as 60.

And since 2012, Mylan has experienced dramatic growth — it finished 2015 with $9.8 billion and forecasts around $11 billion for this year — outperforming both the generic pharmaceutical industry and the broader sector in terms of revenue growth. And in that time, while transforming the company’s IT and shared services operations, Smith began to see his earlier investments in talent start to pay some big dividends — so much so that, in December, one day after his third anniversary at Mylan, Smith was promoted to Global Head of Digital Innovation and Global Business Services.

In his new role, Smith will oversee all innovation for Mylan. He declined to disclose many specifics about what that entails, except to say that the company would be morphing from a generic drug maker into more of an end-to-end healthcare company, and that his tenure at Nike — during which it transformed from a company focused on footwear to apparel and later services — offers Mylan significant experience in driving change. Smith will also oversee all digital marketing, e-commerce and digital health initiatives.

Sliding into his old role is former Ranbaxy CIO Ram Rayapureddy, one of the external hires Smith made while rebuilding his leadership team. There are several other senior team members who can eventually step into the role, Smith said, having been hands-on in both the planning and execution of Smith’s transformation strategy. And at the end of that leadership bench are the interns, who, through the succession management processes he’s put in place, Smith believes will become Mylan IT leaders in the coming decades.