Behind the Scenes of International Pharmaceutical Business Success: A Conversation with Horst Wallrabe
I grew up in the UK, worked in Belgium and France, and have lived in the United States for more than 22 years. I have a home in Plano, Texas, and in London. To say that much of my life has been spent going back and forth over the ocean is a minor understatement, but I would have it no other way.
While I am extremely comfortable with this dual existence, I have always been fascinated watching successful businesses either thrive or struggle as they expand beyond their home markets. And while I have observed, as well as helped, many successful businesses as they expand to new markets, the initial journey is virtually never a smooth one.
After years leading the Haig Barrett team to help US companies thrive in international markets or global companies prosper in the United States, it seemed a good time to start sharing some thoughts on the topic. To my mind, the best way to explore this subject is to talk with executives who have been there. There seemed no better place to start than with Horst Wallrabe, formerly the President of the Pharmaceutical Division of Bayer.
Horst is a German national who dreamed of seeing and experiencing the world and concluded that pursuing a career in international business was the best way to do just that. His first career position was based in Rangoon, Burma (now Yangon, Myanmar), for an export company. He then returned to Germany and joined the Bayer organization, leading to positions in South Africa, the UK, and, ultimately, the United States.
Horst is a fascinating individual, not only due to his long tenure in various leadership capacities within the Bayer organization, but also, after what most people consider a full career, for his decision to pivot from business leadership within the pharmaceutical industry to the scientific side. He pursued undergraduate and informal graduate studies at the University of Virginia and serves as a full-time volunteer staff researcher with the school’s biology department and Keck Center for Cellular Imaging.
While Horst’s current work is captivating, I was interested in learning more about his global business experience. Specifically, I wanted to hear his insights on the factors that lead to success, as well as elements that lead to the very significant challenges companies so often experience as they strike out to new markets.
Haig: What do you believe are the most significant determinants of success when beginning a leadership role in a new country?
Horst: I believe empathy, cultural sensitivity, and curiosity are the characteristics that are the largest contributors to success. You have to be willing to go into a market and be open to new ways of doing things that are more in line with that market.
Some people, no matter where they are from, are control freaks. There is a bit of that in Germanic culture and in other cultures as well. Some cultures simply have a more prescribed way of operating and they struggle in more fluid business cultures like the culture found in America.
While these cultural differences most certainly can be overcome by the right people, I don’t think there is a silver bullet or magic formula. There must be the willingness to learn and you must have the fortitude to be willing to tackle problems, not duck them.
Haig: An international business career sounds glamorous, but it is a journey filled with challenges. In your experience, what is the best way for professionals to start a career in international business management and for companies to groom their people in this area?
Horst: As unscientific as it sounds, trial and error. For the sake of both the individual and the company, send prospective international managers to a small country/market and see how they do. Small countries and markets are excellent training markets. When asked to operate within new environments and new cultures, some make it, and some won’t.
Management courses that strive to groom up-and-coming professionals provide good insights to detect talent; however, ultimately, it is very difficult for either the individual or the company to know how it will go without giving it a shot.
The biggest mistake I have seen companies make is sending a manager inexperienced in international business to a big, important market first. A management position in the United States, for instance, should likely not be a person’s first management role overseas. Start people out in small markets; for European professionals, moving them around a bit within the European Union (EU) provides great places to start.
Haig: What are the advantages of placing executive leadership from the country’s home office, rather than hiring all management from the local market? In other words, why would Bayer relocate executives from their German headquarters to America, for instance, rather than hiring all American management?
Horst: It is an issue of relationships and credibility. If you have spent time in the home office, you know the players—the movers and shakers—and you have established credibility over the years. You can pick up the phone and have a down-to-earth conversation with someone at the home office who might be trying to force a move that is not a good one. Because you have credibility with that individual and the team at large, it is much more likely that they will listen to you. Someone who has not spent time working at the home office simply will not have these relationships and they may not understand the business culture of the home office.
The Germans have a word for it—Seilmannschaft. This loosely translates to “the people all roped together”— like a climbing team scaling up a steep mountainside. They trust one another, and it is a trust established over a long time. This trust can be missing if you hire from the local market, no matter how competent the individual is.
On the other hand, if you yank someone from the German organization and plunk the person into leadership in a foreign market, that can be equally problematic unless the person can learn at a very fast rate. They simply don’t have any background with the legalities and culture of the local business market to succeed.
For instance, when Mercedes bought Chrysler, they put a German in charge. To say that this was not successful is a minor understatement. You must have someone who understands both cultures and has the trust of executives within the home office.
When I was working for Bayer in the US or in the UK, many times I had to convince the home office not to insist on doing something the “German way,” but rather, to execute the “American way” or the “British way.” This only worked because I had so many long-term and respected relationships within the home office.
Haig: When you moved the United States to run what was formerly Miles Laboratories, how did you handle this transition? What made the transition successful?
Horst: When I arrived in the US, my short-term predecessor was a member of the acquisition team—Bayer had just purchased Miles Laboratories. He was not really a business person, but had kept the company running as it was when we purchased it and he was sorting out legal issues, etc.
During a three-month transition period he was still in place, so I traveled the country and visited pharmacies, wholesalers, hospitals, and doctors to experience the pharmaceutical business at the ground level. For three months, I crisscrossed the US and then came back.
I then began interacting with vice presidents and other members of my management team. Without this market exposure, I would have had to have accept a lot of information and stories that were potentially not accurate or misunderstood by me; this would have hampered my ability to grow the company. My “boots on the ground” understandings gave me credibility with my team and, most importantly, unfiltered insights relating to the directions we needed to move.
Haig: You have had a long and very successful career and we have talked about a number of fascinating issues over the course of our conversation. Could you summarize some of the key elements for international business success?
Horst: Sure. It’s sort of humbling, really. But, when I look back on it, an entire international business career that was arguably pretty successful can be summed up by a fairly small number of words and phases: experimentation, sensitivity, open-mindedness, curiosity, passion, quest for learning, empathy, perseverance, trust, relationships, and teamwork—not all that different from a successful marriage or other human endeavors that are challenging!