Raymond Gilmartin, Former CEO of Merck & Co, Inc

RGilmartinOct06Raymond V. Gilmartin is the former Chairman, President and Chief Executive Officer of Merck & Co., Inc., a global research-driven pharmaceutical company that discovers, develops, manufactures and markets innovative vaccines and medicines. In July 2006, he joined the faculty at the Harvard Business School as Professor of Management Practice teaching in the MBA program.

Mr. Gilmartin joined Merck as President and Chief Executive Officer in June 1994, was named to the additional position of Chairman of the Board in November 1994. He served in those capacities until May 2005 when he relinquished those titles as part of the succession planning process leading up to his planned retirement in April 2006. In the interim, he served as Special Advisor to the Executive Committee of the Board of Directors.

Prior to joining Merck, Mr. Gilmartin served as Chairman, President and CEO of Becton Dickinson, a global company that develops, manufactures and markets medical devices and diagnostic products. He joined that company in 1976 as vice president, strategic planning, and took on positions of increasing responsibility over the next eighteen years.

Mr. Gilmartin joined the Microsoft Board in April 2001. He also serves on the board of General Mills, Inc. and the Board of Dean's Advisors for the Harvard Business School.

An active participant in health industry affairs worldwide, Mr. Gilmartin is a stakeholder in the Harvard Program for Health System Improvement, is a past chair of the Healthcare Leadership Council and was a board member of the Alliance for Healthcare Reform. In addition, he is a past chair of the Pharmaceutical Research and Manufacturers of America and a past president of the International Federation of the Pharmaceutical Manufacturers Associations.

Mr. Gilmartin also has been involved in global economic and trade issues that concern the pharmaceutical industry. He was a member of the President's Export Council and is a past chair of the Council on Competitiveness. He was a member of the Transatlantic Business Dialogue and of the Trade and Poverty Forum, a project of the German Marshall Fund.

Mr. Gilmartin received a BS in electrical engineering from Union College in 1963 and an MBA from Harvard Business School in 1968.

 

Shiv Gaglani (JYI): On behalf of the Journal of Young Investigators we are honored and privileged to be talking to Professor Raymond Gilmartin at the Harvard Business School. Professor Gilmartin is well-known for his role as Chief Executive Officer of Merck, and today we will ask him a couple of questions about his undergraduate experience and how that set him up for a great career.   So thank you Professor Gilmartin for taking time to be with us.

Raymond Gilmartin: It’s my pleasure, thank you.

JYI:  So I think the first thing our readers and listeners at JYI want to know is, what’s your background - where did you go to college, and how did you reach the position you are in now?

Gilmartin:  Okay. I will start off just by saying that I grew up in a small town, about 50 miles from New York City, and was the first in the family to go to college, and for a long time the only person that had gone to college.

I went to a small school, but a good school in Schenectady, New York, Union College, where I studied Electrical Engineering. From there, I went to Eastman Kodak, where I spent three years working as a Development Engineer in a manufacturing operation, and then came to Harvard Business School in 1966.

Then from there I went into consulting, and from there to a medical device company, Becton Dickinson, which I joined in 1976, and then became Chairman and Chief Executive Officer of that company, in 1987 President, and 1989 CEO, and then Chairman a year or two after that.

Then I joined Merck in 1994 as Chairman, CEO, and President, and was there with them for about 12 years till my retirement, and now here at Harvard Business School, which is terrific.

JYI:  Right. It’s pretty impressive how you made that transition. I know you mentioned that you started out as an Electrical Engineer. What got you interested in business from your experience as an Electrical Engineer?

Gilmartin: I think as an engineer I was more interested in the theory - like a lot of people going into engineering, I was good at math and science, and it seemed like a logical thing to do.

On the other hand, when I was in school, one of the electives I took and enjoyed a lot was the ‘The History of the English Novel’. A broad education really gave me a very solid foundation for the rest of my career.

I considered other types of engineering, but Electrical Engineering just fit me, because of the amount of theory that was involved.

However, I always had a sense that I would be heading more in the direction of general management in the company. I used my engineering background to some extent by being a Development Engineer at Eastman Kodak, and that was also a very good developmental experience in terms of being involved in operations closely, seeing how the world really works.

I mean, when I got to Merck, there were all scientists and not engineers, but as an engineer I am certainly equipped with the vocabulary and not intimidated by the science. So it was not that hard a transition.

JYI: Even though at Merck and the medical device company you worked at, a lot of the scientists you were working with were into other fields such as organic chemistry, and you trained as an engineer. How did you manage to pick up the science at that stage?

Gilmartin: Right. Well, at Becton Dickinson, being a medical device company, a lot of it there is engineering, so it’s more engineering-intensive, more manufacturing-intensive. But going to Merck, it’s quite a dramatic difference, because it’s science-intensive there. So your question is very relevant, how do you deal with organic chemistry, how do you deal with organic chemistry in any form? I think it’s more the vocabulary.

So when you are the CEO, you have somebody as the Head of Research; in my case I was fortunate to have Ed Scolnick and then later Peter Kim, who came from MIT originally. These guys are brilliant scientists.

The scientific vocabulary is important, and not being intimidated is important. I could understand conceptually what they were talking about and understand what they were doing, but as a CEO you are not in-charge of trying to do the science. You are more in-charge of making sure that you have the right people doing the science, and also from a strategic standpoint that that fields we are working in make sense, and will lead to the kind of result we are looking for.

But I think there is no question that you could do this job without some sort of underpinnings either in engineering or science. I feel very strongly, you cannot lead a science-based business or an engineering-intensive business without a background in science or engineering.

JYI:  That’s encouraging, because a lot of the people who contribute to and read JYI are science and engineering majors at universities all across the world.  So when you were an undergrad at Union College, you mentioned that you took some interesting courses, such as the English History one. What other courses still stand out in your mind?

Gilmartin:  Well, it’s interesting, because it seems a little unusual how I am going to answer you, but one course that sticks out in my mind is the course I had on transforms, although how to do them doesn’t quite stand out in my mind. Professor Craig taught the course, and I remember clearly at the outset of course he said, “the key to being successful in this course is to understand which integral equation applies to the problem you are trying to solve, because if you can do that you will be able to solve all problems of that type.” He discouraged only focusing on the problems in the back of the chapter, because then those will be the only problems you will be able to solve.

This advice has remained relevant to me even at this stage. I taught a class today about how to apply theory to business practice. So the intersection between theories and execution or practice or implementation of those ideas has always been an interest of mine.

So that course was of significance to me, because it just locked in my mind the importance of being able to step back and think, “what is the conceptual framework that applies to this problem, and how should I go about solving it?”

So I guess that’s probably quite a direct example of the engineering influence on how I have approached management.

The other courses that I remember were related to history and other liberal arts. Combining some liberal arts with the engineering was helpful to me because it broadened my perspectives. It also reflected my attitude in terms of where I ultimately wanted to go with my engineering degree, which is more toward general management.

But, frankly, I pursued those courses not to become a General Manager, but rather because they were interesting.

JYI:  It’s probably the best way to do it.

Gilmartin:  Yeah. In terms of my courses and career, I based my choices on some instinctive feeling about them: “this is something I think is going to be very interesting, I am excited about doing it, and I am going to learn something in the process,” as opposed to having some sort of grand plan that I should take this or I should take that because that’s going to be important to what I am going to do 15 years from now.

There are so many things that happen to you through your education and through your career experiences, and opportunities open up to you that you never knew about before.

I used the strategy of pursuing what’s of interest and really just asking myself, “am I going to learn something, does it increase my options?” and then just having a sense of whether there is something else I am going to do beyond this – “I don’t know what it is yet, and I will know when it comes.”

I think that a lot of people that who have come into the positions that I have, have followed this approach. You will always find someone who will say, “Yeah, I just wanted to be a CEO, and I did this and this and this,” but my sense is that people are responding to opportunities and developing themselves in the process as opposed to working on some grand master plan.

JYI: Right. The key is to excel at what you do. I am sure you were noticed by Merck at Becton Dickinson, and then the opportunities fall into place.

Gilmartin: You are more visible than you ever realize actually in an organization. My theory is that you should really focus on the job you have at hand, not the job you may have down the road.

The second thing is that you actually have to accomplish something to get that recognition. Early in my career when I was at Eastman Kodak, looking back on it, I realized that there were times that I was really expecting more to be rewarded on my potential and my track record than what I actually was doing at that time.

So I feel very strongly that if you want to be successful, if you follow the approach in saying, “look, I am in a situation, how do I contribute to it, how do I make a difference, how do I advance the situation?” and not worry about the rewards.

The other thing I feel strongly about is treating everybody around you with dignity and respect; particularly as you move up and you have people working for you, and then finally it’s important to conduct yourself to the highest standards of ethics and integrity. If you do those things, you inspire confidence and trust in the people around you, and people will help you become successful.

You don’t ever want to make a mistake of thinking that whatever you have achieved in life is something you did all by yourself, its other people that have actually helped to make you successful.

The other part of it is that at various points in your career you may be misunderstood, and you may get into difficulty. If you have conducted yourself in that fashion that I have described, people will help you out, often in ways you never know about.

So I think approaching your career with more of a philosophy and a theory; if I may return to that again, rather than trying to be so specific about it. I think if you become too specific about where you want to be at one point or later, you run the real risk by over-managing your career, and you miss opportunities you never knew about, and which actually may turn out to be better than your game plan.

JYI: That’s really helpful, because I think a lot of students nowadays are very focused on working towards a vision of themselves 20 years in the future. I think the tunnel vision makes people miss some opportunities.

Gilmartin: I think so. For example, when I got out of Harvard Business School, I had no idea that I would ever end up being a CEO. I went into consulting, as I mentioned before, as my first job out of business school. I did it because I thought it would be interesting, and also, I would learn more about the world.

But you can do that just as well by going into a company. Pick an environment that you find exciting, and importantly, that there is a group of people you like to work with.

JYI:  I just want to return to your undergraduate experiences very quickly as well.

Gilmartin: Sure.

JYI: What type of extracurricular activities did you do in college, or what hobbies do you enjoy?

Gilmartin:  Union College, being a small school, gave me an opportunity to do a lot of things, which I probably could not do anymore given how society has evolved.

For example, I played three sports; I played football, I wrestled, and I played lacrosse, and I was captain of the wrestling team.

I did well enough so that out of nine possible Varsity letters, I won eight. But I could do that because it was a school where going to your chemistry lab was more important than going to your football practice. So they had their priorities right. It was possible to be an electrical engineer, and I did reasonably well academically.

In addition to that, in my junior and senior years, I decided almost on a dare to run for Class President and narrowly won the elections. That’s how I became involved in student government.

Even as I was moving up in responsibilities in the companies that I was with and so on is that, I always made time to be active in outside organizations, especially nonprofits.

For example when I was early stage in career at Becton Dickinson, in New Jersey, I was on the Board, then later Chairman of the local United Way. I was also President of the Boy Scout Council.

Then I moved to become a member of the local hospital board, and then to nationwide involvements, such as Chairman of the Trade Association, Chairman of the Council on Competitiveness, Chairman of the Ethics Resource Center. I wasn’t doing this all at the same time, but these were all opportunities that let me continue to broaden my experiences and learn.

They were activities that were related to the work that I was doing and the companies that I was with. I think you need to continue to find ways to continue to grow and learn, and there are not that many formal opportunities. So I always found that being involved in these nonprofits allowed me not only to contribute, but to learn some things that turned out to be valuable to me in the process.  Additionally, having a sense of making a contribution to the well-being of society is very satisfying.

JYI: You found it relatively easy to wear both hats; one in the for-profit realm, and then also with the nonprofit?

Gilmartin: Yeah. I mean the thing is that, in many respects nonprofit faces all the same challenges and issues that a for-profit does; the only difference is they don’t pay taxes. But they do have to generate a little bit over their costs in order to be able to continue to grow the organization and accomplish their mission.

JYI: So that’s pretty impressive that you were also President of your student class - do you think the Merck Board of Directors looked at that experience before they requested you to be CEO? (laughter)

Gilmartin: (laughter) No, because by that time they are not looking at your college resumes anymore, but certainly my first employer and also Harvard Business School looked at it.

JYI: So that helped you get into business school.

Gilmartin: Yeah. Once again, to be clear, I had no idea I was ever going to go to Harvard Business School. This is an example of, sort of, recognizing an opportunity when it comes to you.

So I had been working for a couple of years. A friend who had the same background as mine applied to Harvard Business School and got accepted. I happened to be away in the army for six months, active duty at that time, and I came back and found out what he had done.

I was about to get married, so I said to my wife-to-be, that applying to business school seemed like a good idea. If Bill can do that, I think I can do that too. I followed him here at HBS a year later.

That was an important educational experience for me to raise my aspirations and set myself up to pursue the stuff that I did once I got out of here.

JYI: I know time is running out, so I only have a few final questions for you. First, when you were in college I know you did quite a few things, I doubt that you had time for research, but did you pursue any type of research actives or build anything with electrical engineering?

Gilmartin: Not at that time; we are talking in the early 1960s. Perhaps a place like Harvard or MIT always was oriented toward providing research opportunities for undergraduates, but Union didn’t really have that opportunity.

The President of Union College came by to visit me just a few weeks ago. At one time I was on the Board of Trustees at Union, because I really owe a lot to Union College. This was a great developmental experience. I would have stayed on if I didn’t have so many other things I was involved in. If I get involved on a Board I have got to be able to really contribute on that, not be there just for my name alone.

But through that involvement with the Board of Trustees and the President’s recent visit, I learned that Union has changed completely in terms the nature of engineering education is. There are many more opportunities for student research that when I was there, which I think is terrific. That’s something that would have been fun to do.

JYI: Do you think that helps at all? I mean, you have hired many scientists as CEO of Merck, did a lot of them have undergraduate research maybe that helped them in their careers?

Gilmartin: I am sure it did, yeah, I am sure it did. I can’t imagine that it wouldn’t.

JYI: That’s great, it’s very encouraging. I know currently you are also serving as Board of Director for Microsoft and General Mills. How is that experience, working with those two companies?

Gilmartin: It’s great. They are two very excellent companies. The Boards and Management are very strong, so it makes for a nice spectrum of experiences -- at one end there is General Mills whose R&D is primarily incremental innovation, with a few things that are more breakthrough.

Then at Merck it’s all the breakthrough side, in terms of new science, new pathways for diseases.

Microsoft is some place in the middle of that; in terms of doing some pretty advanced work in computer science. They do have a research capability, but the kinds of products they come out with are either major advances or incremental improvements in the field that they are already in.

But the common theme among all three companies is innovation. In the mid-80s, the basis of global competition was really established by the Japanese, who were focused on improving quality while lowering cost. So there is a lot of work coming out of manufacturing and manufacturing systems. But the basis of global competition has really now changed to innovation. Therefore, science, engineering, and those kinds of capabilities are even more crucial than they were, say, 20 years ago.

JYI: Right. That’s also encouraging.

Gilmartin: Yeah. Unfortunately, I don’t think we have enough engineers; there is a real shortage of them.

JYI: Especially compared to other countries now.

Gilmartin: That’s correct.

JYI:  It’s interesting, because the Journal of Young Investigators actually wrote an article recently, that’s now submitted to Science and it’s being reviewed by the Editors there, about how this economic crisis will inevitable place downward pressure on budgets for NSF and NIH, as well as some funding for engineers and scientists, and how we can’t let that happen. So hopefully you will see that in the Journal of Young Investigators soon.

Gilmartin: Good for you, because it’s something that, even in better times, you have to keep advocating. I mentioned before, I was Chairman on the Council on Competitiveness, which is a great organization and has representatives from the major research universities, as well as the private sector and some from government. Just as you have done, we were big advocates of ensuring funding for the NSF, NIH, and other science institutions. We recognize the merits of the research strategy of the United States, which was actually set by Vannevar Bush, who had been in the government during World War II, and at one time was Chairman of Merck. But that’s when the country set up the idea that the government would provide funding for basic research, development of fundamental knowledge for the common good, and funnel that through research universities to develop scientists and engineers. It is because of these investments that we have had spinoffs of technology companies.

The biotech and pharma sectors, in particular, have benefited greatly from the funding of NIH. So it’s a good thing that you are weighing in on that, because it’s very important.

JYI: Great. Do you have any last words of advice for any undergraduates who are listening to this or reading this?

Gilmartin:  Well, I guess I would just reiterate what I said before. First of all, there is no question in my mind that having an engineering degree gave me a foundation for the rest of my career. Coming into business school, I felt I had an advantage because the business world is quantitative and its increasingly technology intensive, so that foundation that I had prepared me extremely well.

It’s interesting, because many liberal arts majors, who are very smart sort of, opt out; you may have seen this among classmates – they opt out of the technology, and they opt out of the quantitative stuff, which they could probably do if they were committed. But I think that engineering background gives you a lot of confidence about your own ability to take on these kinds of things.

Also, I think it’s hard work. I think that one gains a feeling of accomplishment after going through a very difficult and rigorous program, particularly in the kind of schools that your listeners are at. It is very good for your development. As mentioned before, the vocabulary is important and things like that, but the willingness to take on tough complicated problems is important as well.

So I think that it’s a great starting point. I decided to go into the general management direction just because that’s where my interest and to some extent my skills are. I am probably better in general management than I would have ever been in engineering had I stayed in that.

The current Head of Merck, my successor, is someone who is also an engineer, who came up through manufacturing and operations.

So I applaud everyone who is choosing this as a field and profession, I think it just opens up great career opportunities for everyone.

JYI: Great. Thank you very much for your time Professor Gilmartin. I appreciate it.

Gilmartin: My pleasure. Thank you.

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