The August 15th issue of Fortune magazine featured the inside story behind the exit of Jeff Kindler, who had been the CEO of Pfizer before being called before three of the board members in December 2010 and then forced into retirement.
Pfizer, one of the largest pharmaceutiical companies in the world, holds the patents for Viagra and Lipitor, which are very popular drugs that are near the end of their patent lives. Pfizer grew from a second-tier company to a skilled drug marketing company that bought up other drug companies. During its heyday, Pfizer's CEO was William Campbell Steere, who retired in 2001, but maintained a seat on the board and had a hand in the internal politics that both manipulated the elevation of Jeff Kindler to CEO and was involved in his ouster.
Jeff Kindler, trained as an attorney, seemed to have two distinct sides to his personality--one side was charismatic, brilliant and visionary; the other side was micro-managing, indecisive and divisive. Over the course of his tenure, he aligned himself with an unpopular Human Resources director who had been fired from her previous company, and against some very competent top managers who comprised the Executive Leadership Team (ELT). He also had several episodes of losing his temper in public--once with a board member.
The interpersonal issues might not have been such a major factor if the business and product-mix aspects of the business had been thriving. Kindler had championed a large research and development budget while he was CEO--seeing it as a necessary risk for the long term fortunes of a Big Pharma company. The big risk with R & D is the amount of time it takes before the company knows if it has a product "winner." Two of the products that had looked promising for Pfizer ended up being yanked from the market. One was an insulin drug that could be inhaled rather than injected called Exubera. Unfortunately, it did not catch on with consumers. Another was torcetrapib, which was supposed to raise "good cholesterol," but was correlated with higher death rates in clinical trials.
Nevertheless, the immediate factors surrounding the ouster of Jeff Kindle were more related to his perceived management style. After the dust from the drama settled, the board of Pfizer promoted Ian Read, who had been with the company over thirty years, and had come up through the ranks as an accountant. His approach has been to cut costs, shrink the company and promote an internal environment of stability and improving morale. Pfizer's stock price has risen since he has taken over. There are still some questions about the future, as drugs that were developed under Kindler's tenure will be released over the next few years, and only time will tell how they will fare in the market. Maybe more importantly for the long run, it remains to be seen if a low-key management approach can inspire the kind of product development that will be needed for long-term profits.
Article from Fortune, via www.cnnmoney.com
1. Please read the complete article linked above. Are you surprised by the interpersonal drama described in the article? Please comment on the dissonance between the behind-the-scenes action described in the article, and the press releases that are quoted.
2. Are you interested in working for a large multi-national corporation as a top manager? Which of the top managers (in the ELT) would you have sided with in this situation, without knowing the outcome? What do you think the role personal temperment plays in successful management? Can the temperment of a "leader" be different from a "manager"?
3. Have you been in a work situation where you have not had a good relationship with your contacts in the Human Resources department? What are the risks of alienating the Human Resources department if you are an underling? How might things be different for a top executive?