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Respect for local culture vital for survival as CEO in Japan

A European CEO's Challenge フランス人社長 老舗を背負う
武田薬品工業のクリストフ・ウェバー社長=五十嵐大介撮影
Chiristophe Weber, CEO, Takeda Pharmaceutical

【日本語の記事】武田薬品・ウェバー社長が語る「外国人が日本企業でやっていくカギ」

By Daisuke Igarashi

Q. After more than a year since the acquisition of Irish pharmaceutical Shire, how do you see the integration process so far?

There has been an enormous amount of progress. When we last met in February one year ago, it was only a month after the acquisition, so we were just at the start of the process, whereas now we are approaching completion.

We will finish the IT system convergence this year, but that will take a little more time. Overall, though, I'm very much looking forward to seeing the results of all the hard work everyone has put in over the last year.

We held an R&D day last November, where we announced that we would launch twelve highly innovative new products in the next five years, through a pipeline achieved as one result of combining the companies.

Q. You visited the United States late last year. What did you talk about with your colleagues there?

I'm always going back and forth between Japan and the U.S. because we have a huge operation there. I'm traveling 50% of my time, so I spend half of my time in Japan and the other half overseas, the U.S. being one country I often visit. I always try to interact as much as possible with our employees in person through meetings with our teams. On top of that, in order to listen to the voices of our employees, we conduct a survey. We have already conducted two employee surveys, one in February and one in June last year, both with excellent results.

Basically, we asked a set of simple questions to understand the morale of the employees, and what was immediately apparent was that, naturally, people wanted to know as soon as possible what their position would be in the expanded company. We were pleased that we could alleviate a lot of anxiety successfully by assigning people their new roles swiftly and efficiently.

米国のテレビ番組に出演する武田薬品工業のクリストフ・ウェバー社長=五十嵐大介撮影
Takeda CEO Weber appeared on a US business news program, shown on a wall screen in Takeda headquarters lobby (photo by Igarashi Daisuke)

But, of course, there are areas where we still need to do more, for example, fostering the feeling of belonging within the company when half of our current employees have come from Shire. In some departments, a few people still don't feel genuinely part of the Takeda team, so we still need to make every effort to help them. But that's normal, I mean, you can’t create that sense of kinship in just five months.

Q. How do you see your achievement in the past six years? You said you would remain as the CEO until 2025. What about after that? Do you think a leader should stay in their post for a long time?

Firstly, it’s important to say that at Takeda we have a very strong board - and that the board is my boss. So, if you are asking me how I feel about my performance, to be honest, that’s a question for the board. I do think that, especially in our industry, we deal with things based on a long-term cycle, and change takes time.

We initiated a huge transformation five years ago in R&D, and we are just starting to see the result of that now. And in fact, we won’t really see the full benefits of this change until after 2025. It's the same with the acquisition.

武田薬品の新社屋ロビーの壁は「木」と「土」の文字がデザインされている=東京都中央区、五十嵐大介撮影
The lobby of Takeda’s new headquarters in Tokyo. Plenty of wood was used for the wall and floor (photo by Igarashi Daisuke)

Q. There have often been news reports that your compensation is too high. Is there anything that you would like to say on that matter?

There always seems to be a debate about my compensation, but it is entirely determined by the Compensation Committee. It’s important to remember that people join a company because they are interested in its future, they share the same values, they are passionate about its vision - they don't join a company purely based on the salary. But at the same time, if you're not offering a competitive compensation package, those people will go elsewhere.

What we did at Takeda to set our compensation was to look at a group of sixteen pharmaceutical companies from the U.S., Europe, and Japanese companies like Astellas—we call this our peer group. We use these sixteen companies as a benchmark, and based on data, and looking at how much these companies pay CEOs and managers, we then make a decision based on the median value.

本社ロビーのスクリーンでは、ニューヨーク証券取引所への上場を祝う武田薬品工業のクリストフ・ウェバー社長らの映像が流れていた=五十嵐大介撮影
Takeda CEO Weber and other executives celebrate the company’s listing on the New York Stock Exchange, shown on a wall screen in Takeda headquarters lobby(photo by Igarashi Daisuke)

Q. In an earlier interview, you said you had been advised by your friends not to take the CEO job at Takeda. Is a top job at a Japanese company not an attractive position?

It was more of a warning rather than an intervention purely because the success rate of foreign nationals as a top management in Japan is very low. People asked me, “Are you sure it’s the right decision? Westerners tend to fail in Japan.” But I still decided to accept the challenge. I hope I will be able to show that foreign nationals can be successful here.

Q. What is the key to surviving in a leadership position within the Japanese corporate culture?

I think that you have to be a good listener. You need to be considerate in your opinion of others, and I am very respectful of the local culture, a sensitivity I have probably developed from living in so many countries. But, you can be respectful of the local culture and also drive change. The important difference is the way you approach that change because that will depend on what country you are in.

I also try to be as close to our employees as I can and I do this by holding meetings where there are no presentations, just a Q&A session. Of course, the leader has to adapt to the company, but the company must also adapt to the leader. It has to be a two-way street - if it's only one way, it simply won’t work.

Q. We regularly witness corporate scandals at Japanese companies, including the one at Nissan. Why do you think such governance issues happen at Japanese companies?

From what I have read and seen, each case is different, with its own particular circumstances. But it’s crucial to have strong corporate governance to avoid these things happening. It's not easy, though, because you need to have a board that is independent, strong, and functional. In addition, directors and board members must have the kind of relationships in which they can work together on everything within a high level of trust.

Q. Why do you think it is difficult to have a strong board?

Because first, each board member will usually have a strong personality. When you put ten strong personalities around the table, you need to have a common focus, which is to do the right thing for the company.

Secondly, there must be a sufficient number of truly independent directors, which is important to counter groupthink. Of Takeda's sixteen directors, eleven are independent and only five internal. To be honest, the practicality of this isn’t easy, because independent directors are not at the company every day, but our board asks them to make very important decisions at the meetings. Only through complete transparency and providing as much information as possible, can we ensure that they have faith in the decisions of our company's executives. It’s essential to have these relationships built on trust when you have independent directors and executives.

In our board meetings, for example, we always start with a CEO update from me, in which I’ll talk about what’s happened in the last month. I feel it’s very important to share both good and bad news because the reality is there will always be bad news in management. Only by being completely open and transparent can you maintain this necessary level of trust.

In our final interview, we will ask Weber to share his message for the Japanese business community. (To be published on April 8th)