In business today, high performance is defined not only by numbers, but also by how businesses achieve results. While many companies make commitments in this area, the reality is that some do not operate with integrity. Some don’t follow the rules, some take shortcuts, while others simply play unfairly, putting global companies in a difficult position. When the competition isn’t playing fairly, how do you compete?

Today, society has increasingly high expectations for ethical behavior from global companies—expectations that often go beyond what is legally required. Earlier this year at our annual shareholders’ meeting, I was asked a question about our company having more misconduct cases than a year ago. After thinking about for it a moment, I said that although eventually those numbers must come down, I actually think this is a sign that two things are happening. First, people know what good behavior looks like, so when they see misconduct, they report it. And second, people are more willing to speak up. Five years ago, there was less of a speak-up culture, and today, people are more willing to identify bad behavior and talk about it.

I attribute this to our efforts to create a strong corporate culture that is rooted in our values, our mission, and our compliance foundation. These efforts are a journey that takes the commitment, dedication, and perseverance of every single person within the company—from the C-suite to the manufacturing floor. We want every person to understand the importance of their actions, know what our expectation is of their behavior, and feel comfortable speaking up when they see something that is not in line with our values.

To do this, we have worked to embed a high standard of ethics and integrity throughout all levels of the company. I think there are lessons here for other companies competing in markets where the competition doesn’t always play fairly.

 

First, we simplified and modernized the values and behaviors we reward. We went from a list of more than 20 to a chosen few, so that it is easier for associates to think about them and embed them in their daily actions. These six values—innovation, quality, collaboration, performance, courage, and integrity—have become the foundation for our performance management and succession-planning process. As such, performance against our values is tracked in each employee’s review. In order to qualify for salary increases or promotions, employees need to continuously demonstrate that they are upholding our values. In addition, we recently launched an internal story-sharing platform where employees can express their views on integrity and share experiences, encouraging a more personal level of engagement.

Second, we work to connect employees to our mission on a daily basis. A few years ago, we launched Long Live Life. It started as a way to rally our associates around our mission in a time of extraordinary change in the external healthcare landscape. Long Live Life is about celebrating the fact that every normal life is extraordinary. When somebody gets sick, all you want to do is to get back to normal. In the four years since we launched the program, it has turned into nothing short of a movement. Over the years we have asked associates to share photos, stories, and ideas across the organization, to engage with our mission on a personal level, and to explain what Long Live Life means to them. Participation has exceeded our expectations, and we’ve seen engagement with our mission increase.

Third, we have identified new and improved ways of engaging with medical professionals. In our interactions with the medical community, our goal is to help improve their knowledge, experience, and capabilities. That is why we made changes to how we engage with them, and our focus is now exclusively on scientific exchanges and education. From the end of this year, we will no longer sponsor healthcare professionals to attend international congresses unless they play an active role. We’re also increasing our use of digital technologies to deliver educational materials. For example, this year we began using a digital platform, Vivinda TV, to deliver medical congress materials online. We will continue to invest in this type of platform to extend access to high-quality information and education that will benefit doctors and patients worldwide.

Finally, we operate as a learning organization and place a premium on developing our talent pool to uphold the values it takes to operate with integrity. As part of this shift, we are moving from a rules-based approach to our compliance policies, to focus instead on the principles of good compliance. We’ve found that focusing on principles will encourage employees to better assess the purpose and intent of their activities, along with their ethical implications, thus further strengthening our culture of integrity. We’re also facilitating an internal annual risk-based global compliance training program using interactive digital technology. We discuss risks, including compliance risks, as an integral part of business reviews conducted by senior management. We’ve also worked to evolve the ways our teams interact with our compliance function, so that they’re seen more as a partner to our teams—a source of expertise and advice there to support sound decision making.

Over time, we’ve seen our employees come to live our principles on a daily basis, and I am encouraged by the way we are progressing on our journey. I spend a great deal of my time traveling to markets around the world where we operate. I talk with our teams, and many have told me how they’ve been working to root out practices that do not adhere to our high standard for integrity.

A great example comes from Ethiopia. Our Sandoz Country Head there, Ludmilla Reina, was working to build our business from the ground up. She began alone in a hotel room in Addis Ababa, with only a laptop and a printer, working day and night to get the first Sandoz products filed and approved in the country. However, as sales began to pick up, Ludmilla encountered distributors who weren’t being transparent. She and her colleague stood in the rain on a weekend, personally supervising the removal of our goods from the distributors’ warehouses while they protested and threatened legal action. I am proud of the actions Ludmilla took to make sure that we were doing business the right way. It would have been very easy for her to look the other way as she was working to build our business, but she didn’t.

It is stories like this that remind us how important it is to have a strong global foundation for ethics and compliance. In many ways, it’s a lot harder to take the high road. But I believe that playing fair is vital, regardless of where you’re playing. Because there is nothing more important than delivering on your mission the right way.


About the Expert:

Joseph Jimenez has been Chief Executive Officer (CEO) of Novartis since 2010. In September, Novartis announced Mr. Jimenez will retire from Novartis, effective January 31, 2018, after eight years in the position.

Under his leadership, Novartis has developed one of the largest pipelines of self-originated drugs in the industry, driven by a commitment to R&D. Mr. Jimenez has also transformed the company’s portfolio to focus on innovative patented medicines under Novartis Pharmaceuticals and Novartis Oncology, generics under Sandoz, and eye care devices under Alcon.

Prior to serving as CEO of Novartis, Mr. Jimenez held the position of Division Head, Novartis Pharmaceuticals. He joined Novartis in 2007 as Division Head, Novartis Consumer Health. Before that, Mr. Jimenez served as president and CEO of the North American and European businesses for the H.J. Heinz Company.

Mr. Jimenez is a member of the board of directors of General Motors Company. Additionally, he served on the board of directors of Colgate-Palmolive Company from 2009 to 2015 and the board of AstraZeneca PLC from 2002 to 2007.

He graduated in 1982 with a bachelor’s degree from Stanford University and in 1984 with a Master of Business Administration from the University of California, Berkeley, both in the United States.