Slow death of an industry giant…. - Director GSK Employee Review

The company is going through a demerger, carving off the consumer healthcare division as a separate entity. A variety of reasons have been provided for this but ultimately it comes down to the CEO Emma Walmsley being pressured by corporate shareholders to “create value”. The strategy behind this is IMHO questionable since the consumer division provides a fairly stable stream of revenue. Regardless, two entities will be created and the pharma and vaccines divisions which will go on as GSK will be able to reduce debt and make acquisitions, as debt will be offloaded onto the spun off consumer unit. Having been at GSK for over 20 years I can say that I’m not unfamiliar with corporate restructuring. These used to be about every three years but as the company struggles the pace and intensity has increased. My position has been in threat 5 times in 6 years so if you seek a measure of job stability, GSK, and GSK Consumer Healthcare in particular, is no place to be. In terms of broader GSK (pharma, vaccines and consumer), the company has been less innovative over the years although there are signs that R&D under Hal Barron will do better if he is given the time and space needed to innovate. With the recent COVID pandemic it’s interesting to note that as the largest vaccine manufacturer in the world we were not the first come out with an mRNA vaccine. You may ask why. The reason is simple….. GSK had done foundational work on the delivery system about a decade ago, then through acquisition of Novartis vaccines had valuable Patents in this area. For whatever reason, senior management decided it was too risky to progress and walked away from the technology. Sadly, this play-it-too-safe approach is endemic at GSK at it leaves us walking away from technology after technology because we don’t have the patience, commitment and nerve needed to see something through to its end. We look outside for buying opportunities but they are often oversold and under deliver. Often these are buys senior leaders like and so they happen without intellectual and scientific honesty about what they can really deliver. Hopefully this will change in pharma and vaccines under Hal Barron. The rest of this pertains to Consumer Healthcare!!! The Consumer Healthcare unit has been through two massive integrations, first Novartis and then Pfizer. The current and previous R&D Head’s were/are not qualified for this role with no advanced qualifications in Science or Medicine. The company places a premium on MBA’s even in a strong scientific role like this, and though it talks about science being a central pillar of what it seeks to do the appointees for this role (whilst nice people) are not really qualified to run an R&D operation. It’s sad to say, but GSK CH waxing lyrical about science and innovation is just for the press and corporate investors (and new hires naive enough to buy it!) If your idea of science is flavor changes or appearance changes then this is the company for you. Any science that requires deeper investment, longer timescales or a clinical study are much more difficult if not impossible to progress. Meaningful science and innovation requires longer timescales than what management is prepared to invest in. This could be argued as the consumer healthcare business, but if this is the model that GSK Consumer Healthcare wants to adopt it should be transparent and just say it’s not really an innovator. This is further proven by the lack of a clearly articulated scientific strategy which the Head of R&D should articulate. Neither the current or previous Head’s have been able to articulate a strategic ambition for the short, mid to long term for scientific areas of business focus instead opting for short term band-aids and general principles which seem to reflect their lack of technical depth. At this time we have a 70:20:10 approach adopted from Google, but that isn’t a scientific strategy just how they want to allocate resources! Where is the tangible scientific strategy? It doesn’t exist! Compare this with the Pharma organization where Hal Barron has defined a very clear vision for immuno-inflammation and aligned the business around it. The R&D organization within GSK CH therefore feels rudderless and lacks managerial leadership to focus its resources on clearly defined areas of interest. Allied to this is a schizophrenic commercial organization which compounds the situation as it lacks the discipline and focus to define clear business needs and then stick with them. Any commercial organization has its focus on short term business goals (< 18MN) , but when commercial partners chop and change the product they are going after every couple of months, product development is practically impossible. Further worsening these structural defects, thecompany is at this moment going through another reorganization after having put its entire employee base through a similar exercise less than 18 months ago. Clearly this is a cost saving exercise prior to demerger to make us appear efficient, but it leaves the senior management with a serious lack of credibility employees and leaves employees wondering about what their futures hold and what the ulterior motives of senior management really are. Through repeated reorganization the company has lost seriously capable scientific talent either through attrition or redundancy. What is left is an ever shrinking cadre of capable scientists that seek to innovate in a company that merely pays lip service to this ambition. What we have increased is the number of middle managers who understand business process but lack the technical depth and true understanding to perform science on which innovations are built. This has been progressively devalued and eroded. The company then wrings it hands and wonders why it can’t innovate. Innovation requires focus, time and pressure and sadly GSK CH has less and less appetite for this despite making overtures to the opposite. A demonstration of science not being seriously considered is the lack of a scientific career track. All that exists currently is a managerial track. As such only managerial skills are deemed valuable which sends the wrong signal to employees. A long term focus on managerial track has resulted in a less innovative organization, Senior leaders don’t see the connection as those on the ground do, and as such haven’t and seemingly won’t implement a scientific career track. In terms of equal opportunity again this is not handled well. Prior to the current reorg we had one SVP as an R&D leader (so on a % basis about 10-15%), yet the R&D organization probably has a demographic of around 40% minorities here in the US. The discrepancy is even more apparent at the C suite level where the leadership is even more monotone…..although the recent appointments of APAC member does address somewhat, this comes out of a desire to grow the business in China and so presumably this was necessary rather than a voluntary decision. Bottom line is that if you are not white you won’t rise to senior leadership (VP level and up) based on your skills sets. This may seem harsh but the numbers don’t lie. It’s a harsh review of the company and one that saddens me after 20 years at the company. It used to be a really great company. I like many others, have no faith in the leadership of this company. All the indicators seem to point to a demerger that will end badly and the consumer organization being carved off in chunks. I for one hope this doesn’t happen and I’m wrong, but based on the extensive structural defects the company looks like it will struggle going forward. Don’t come here if you want to do meaningful science and work on truly innovative, transformative products. That kind of work doesn’t happen here,