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Volume 20, Issue 12
You don't have to spend any time in the company of its chairman to see that there is no other Big Pharma company like Servier.
You don't have to spend any time in the company of its chairman to see that there is no other Big Pharma company like Servier. A browse of the company's literature and a glance at its amazing history illustrates clearly that, for its size, longevity and success, it is unique among businesses. It is the largest private-owned drug company in France, and the second largest in the world. It ranks among the top 30 pharmaceutical companies worldwide, the top 10 in Europe. Yet it has remained steadfastly independent for more than 50 years. The company's ethical practices and staff working conditions have been far ahead of its time, and it reinvests a staggering 25% of its turnover — 10% more than the industry average — back into its R&D activities.
But after spending an hour or so with the Servier Foundation's 86-year old chairman, Dr Jacques Servier —a man who is as life-affirming as his drugs are life-prolonging — it may be fair to say that Servier is unique amongst all industries. Where other world leading companies can be male-dominated and aggressive, Servier is feminine and cyclical, nurturing and humanistic. Where other pharma companies frantically merge and acquire, and chase faster and faster profits, Servier cultivates its talent and business as it develops its products: slowly, carefully and with a focused commitment to long-term principles. Staff turnover is so low as to barely exist — leaving the company seems akin to leaving a loving family. And its mission is simply defined: the discovery and development of new medicines. Talk of profits, stocks and shares is almost redundant in conversation with Dr Servier; it seems quite vulgar to mention them. He is cheerfully opposed to the idea of making money for profit as his job is and has always been to create new products, to improve and save lives.
And yet, in the face of more conventionally capitalist competition, Servier continues to go from strength to strength. It now employs 20000 people in 140 countries; its consolidated turnover for the 2006/2007 financial year was €3.5 billion; and it is a leader in cardiovascular disease, high-blood pressure and osteoporosis treatment. It has also expanded successfully across the globe.
The key here is the difference, as Dr Servier sees it, between profit hunting and entrepreneurialism. Dr Servier has said that money "is not God, but it isn't the Devil either." Rather, it's a fabulous tool in the hands of those who know how to make intelligent and considered use of it. "An entrepreneur who doesn't like money is like a miller who loathes the wind."
Culturally sensitive architecture - Servier's Casablanca facility.
Certainly, the Servier Foundation's reinvestment of all its profits did not spring from a 'hatred' of profit per se, but from business necessity. When, in 1954, the 32-year old Dr Servier took over a small factory of nine people in Orléans that made 'medicinal syrup', he had no choice but to continue putting all of the money back into the business. The company's early years were a struggle, but from the outset, Dr Servier was driven by his mission to make medicines, not money. It was 10 years before he established his first foreign subsidiary, in London (UK). Then, the hard work began to pay off (for want of a better phrase): the British operation, quite unexpectedly, became successful very quickly.
Since then, Servier's approach to international expansion has been respectful and sensitive, and similarly focused on the long term. It is also about bringing treatment to areas that need it. "We are not here to expand internationally just for the sake of it," he comments. After initial expansion into the UK (where few French companies had succeeded) and Brazil, the company went into Russia, Poland and Romania, "where healthcare had been neglected for many years," says Dr Servier. "The results from these different countries were only modest at first, but we stayed there. It wasn't until the Berlin Wall fell that we really started to succeed in the Eastern bloc. At that point, many companies followed us into Russia."
This international success highlights how different, how against-the-grain, Servier's business policy has been. The company took time to understand, culturally, the markets it entered (before that became a fashionable practice), and then entered them without fanfare, bracing itself for potentially difficult times ahead. As a result, the company has survived in places where others have faltered. "When the major economic crisis hit Russia in 1998, the US companies, for example, shut their doors overnight," says Dr Servier. "We stayed there because we were small. When things started to improve, we were already in place, and now we are very successful in Russia."
This cultural sensitivity expands to the building of Servier's facilities. The architect Jan Losowski has designed and constructed most of the company's offices, factories and clinical research centres worldwide and "he always does them in a style that is particular to the country we are investing in".
The building of the Servier facilities is also a key factor in its ethical approach to its staff and working conditions. Dr Servier is concerned that when a building is designed: "the offices are always light, have good space, and are very ergonomic." This is just another in a series of benefits to a workforce that is paid more than the industry average and treated like family. ("Actually, better than family," Dr Servier suggests. "You can't change your father, or your sister-in-law!")
As a result, as mentioned earlier, staff turnover at Servier is incredibly low. That's not to say that getting a job there is easy — the company asks for six referees and interviews each one face-to-face. "We are very concerned with finding the right job for the right person," he continues. "When we find someone who seems like a good investment, they spend about a year going around the company, seeing the different jobs, so they can find the job in which they'd be best placed, motivated for and able to do. It can take a long time to find the right positions, but good hiring is of fantastic importance. You have to follow a product for a long time, so we have to have a long-term vision for recruitment."
The importance of women in the company is also notable, and reflects an equal opportunities environment that remains ahead of its time, particularly in pharma. Women represent 60% of Servier's workforce (56% of executive staff, 71% of administrative and technical staff, and 50% of skilled workers.) However, Dr Servier adds that the recruitment of women "is not a particular policy—we just take on the best candidates and they happen to be women." Nevertheless, there's no question that the high female contingent helps to create the familial atmosphere that pervades the company.
In 2004, the ownership structure of Servier was changed to a foundation. This status means that the group cannot be sold to another company, and can keep a firm grip on its independence. Dr Servier has said "a foundation is the best defence against a takeover bid." He realized early on, when Servier was just a small provincial company, that companies listed on the stock exchange "were permanently exposed to substantial swings from one extreme to the other, and that around me, family companies, even in towns better off than my own ... could fall into difficulties."
But it is also revealing when he says the foundation status "means stability; it means the company will continue when I'm no longer here. It means that we can continue our activities." At 86, Dr Servier's vision for his company is still a long-term one. There is no talk of retirement; there isn't a sense of resting on laurels, but one of new beginnings.
This is what motivates Dr Servier to turn up for work every day when he could be relaxing in the sun. He has not been one to bask in the wealth that helming a successful company for half a century can bring. "Of course, it is important to have a comparatively cosy life, and I am very glad to have a steak now and again, or a good bath in the morning," he says. "In the early days, when I was without a penny, the second penny was very important. But the day you have an acceptable salary, there is no reason to ask for more, because what do you do with that? You could get a super sports car or an expensive mistress, but in France that would just generate jealousy and hatred."
I wonder, then, if Dr Servier has any interests outside work, outside reading about medicines and writing books about medicines. He thinks for a moment and says: "I have a garden and I grow trees. I'm crazy for growing trees!"
The link with drug making cannot be ignored. Servier plants the seeds and, with unwavering patience, he watches the trees grow slowly. Eventually they stand tall and strong.
Meanwhile, there are new seeds to plant and new heights to reach.