Takeda President Says Firm’s Reform Was “Stressful,” But “Essential.”

（The English version is based on the interview published in Japanese.）

By Igarashi Daisuke

Takeda Pharmaceutical, Japan’s largest drug maker, got shareholders’ approval for its acquisition deal with Irish drug maker Shire in December 2018. The company recently announced the listing of its shares on the New York Stock Exchange on Dec. 24, trying to boost its presence in the United States, the largest drug market. In the second of our interview series with President & CEO Christophe Weber, we asked how he has tried to reform the company since he took office in 2014.

――Since you came to Takeda in 2014, how much do you think Takeda has become a “global company”?

I have always explained this using the image of a “home.” While every country has its individual region-specific characteristics, our employees understand and are guided in their work by Takeda’s global strategy, which over time, has increasingly served as the one home that unites us.

Our executive team is very diverse, with our current team made up of eight nationalities. For some employees, this process of globalization was entirely new, and so initially there was much concern about the changes, but now everyone is used to it. In that sense, I think we have come a long way.

Let me give you an example. In 2014 we decided to create a global organization in the manufacturing division, to which all manufacturing sites would belong. The head of this manufacturing organization is German, with 25 years’ experience in the industry, and based in Zurich. For the employees at our Japanese manufacturing sites, this was the first time to have a non-Japanese manager. When I first visited one of the Japanese sites, the Hikari Plant in Yamaguchi prefecture, I could see that it was a very local operation. They had their own style of working and hardly anyone spoke English.

The plant seemed to be struggling in its efforts to become a global site, because in order to do so, it needs to be registered with regulatory authorities across the world, such as the FDA (the U.S. Food and Drug Administration).

But today, this plant is on the cutting edge as our pilot site for artificial intelligence and digital applications in manufacturing. When I visited the plant recently, all of the presentations were given in English, which was a significant change. From the viewpoint of regulatory authorities outside Japan, the quality standards have also further improved. So, although ours is a never-ending journey, I see that we have come a long way.

――What changes did you make to the research and development (R&D) operations?

We have accelerated R&D organization transformation. Implementing the transformation has been very tough for the employees at all of our R&D sites, not only in Japan, but also in the U.S. and the U.K.

――How did you change it?

In order to treat a disease, pharmaceutical companies have traditionally done R&D by selecting a “target” such as a specific receptor (a protein contained in cells) and carrying out a process called screening, which involves searching among some two million types of molecules to find one that is effective against this target.

At Takeda, we were carrying out this process for a very broad range of diseases, such as cardiovascular diseases, obesity, respiratory diseases, and so on. But now we have changed to a method whereby we identify a single target and “design” a molecule that is effective against it, which has reduced the need for screening. Whereas we used to handle some two million small molecules, we now handle large molecules.

What we decided was to focus our R&D on a few therapeutic areas, while having the best possible teams working to develop treatments for them. In order to introduce advanced technologies, we would actively seek out partner companies. And so, we selected just three therapeutic areas, to focus on: gastroenterology, oncology and neuroscience.

Currently, we have more than 180 partnerships with biotech startups and academia. The majority are in the U.S., but we also have about 30 in Japan, meaning that our partnerships are truly global.

――What personnel changes did you make within the organization?

First, I had to search for someone who had the necessary experience to lead the R&D division. Our new R&D head joined the company in early 2015.

We currently carry out neuroscience research in Japan and gastroenterology and oncology research in Boston. We closed our research facility in Europe. Some of the researchers transferred to subsidiaries or partner companies, some underwent retraining, and some left the company. Also, about 100 Japanese researchers moved to Boston. That was a significant change, but if we hadn’t done it, we wouldn't have been able to propose the acquisition to Shire.

――Did you face any backlash within the company?

It was a very stressful time, but this is where I think it’s really important to have good engagement and communication with employees, going on site and carefully explaining why the changes are necessary. I never implemented the transformation with pleasure. I carried out it because I believed it was absolutely essential for the future of the company.

At that time, the most recent truly innovative medicine that Takeda had developed was in the early 1990s, meaning that the company had not developed any truly innovative medicine for about 20 years. I had to do something about this—we couldn’t carry on in the same way, especially with the global market becoming tougher.

――Of the 14 members of your executive team, 11 are non-Japanese. Why are there so few Japanese executives?

To be on the executive team, you need to be a leader with global experience, to have broad experience and an understanding of different cultures. In order to have more Japanese employees join the executive team, we need more of them to gain global experience.

Let's go back to the manufacturing example I gave earlier. We have 21 manufacturing sites around the world. These are spread out everywhere, in Japan, the U.S, Europe, Latin America, and Russia. The manufacturing division needs to have a well-rounded, culturally aware leader, and the current head has significant experience of working in different countries. In the past, Takeda was not organized as a global company–Japan was run from Japan and the rest of the world was run overseas.

We are sending many more Japanese employees abroad, so eventually there will be more Japanese rising to the director level. But it takes five to 10 years to develop human resources and we couldn’t wait for that to happen, so I recruited most of the current executive team externally.

However, my philosophy is to develop personnel internally. It reduces risk and also provides more motivation for employees. We have already announced our future executive team following completion of the acquisition of Shire, of which the head of Corporate Strategy Department will be Japanese. He is currently a general manager in Sweden, and before that he worked in Mexico.

(In the next interview, we will get into the specifics of how Takeda is developing Japanese employees with global experience. We plan to publish the interview in January 2019)

Japanese version: 組織改革、精神的に辛かった　それでも必要なことはやる