Leadership: A Lesson from Industry

Leadership: A Lesson from Industry Presented By: Gaetano Crupi, President and General Manager, Eli Lilly Canada Inc. Date: October 30, 2002

Eli Lilly Canada A leading innovation-driven pharmaceutical corporation Awarded 5th Best Company to Work for in Canada (ROB Magazine 2002) Awarded 1stPharmaceutical Company for third year in row (ROB Magazine 2002) More than 700 employees at Eli Lilly Canada

Lilly’s Core Values Respect for People Thirst for Excellence Integrity

Lilly’s Mission and Vision Mission To provide customers “Answers That Matter” through innovative medicines, information, and exceptional customer service to enable people to live longer, healthier and more active lives Vision “Answers That Matter” is the foundation of our promise to our customers. We will deliver on our promise by listening to and understanding our customers’ needs and providing unmatched value to them

Lilly’s Strategic Intent Outgrow all competitors through a constant stream of innovation

The Leadership Journey -Getting Started • Leadership is key to balance between long term vision and reacting to short-term opportunities • Effective decision-making is vital • Communicate clearly and concisely • Seize the moment • Invest in people • Assess how latest technologies suit your needs and adapt business processes accordingly • Don’t pay lip-service – be prepared to act/change • Plan ahead - but remember the 80/20 rule • Put the customer first • Don’t be afraid of a little conflict

What is Governance? Why is it Important? • The term “Governance” describes the structures, or teams, that a company puts in place which specifies not only the responsibilities of various participants in the corporation, but also the rules and procedures for how decisions are made. • These structures provide the framework through which company objectives are set, the means for attaining these objectives and for monitoring performance. • Since governance involves the relationship between the company and its shareholders, the infrastructure should ensure that right people are appropriately in place to make the decisions that will yield the best business results.

Culture/Values Top 50 = 89%You = 91% (+2%)BQ = 74% Total Compensation Top 50 = 73%You = 78% (+5%)BQ = 48% EngagementTop 50 = 79%You = 82% Opportunities Top 50 = 73%You = 75% (+2%)BQ = 49% Relationships Top 50 = 81%You = 82% (+1%)BQ = 63% Quality of Life Top 50 = 81%You = 80% (-1%)BQ = 63% Leadership Top 50 = 78%You = 84% (+6%)BQ = 50% Engagement – Eli Lilly Canada Work Activities Top 50 = 80%You = 82%(+2%)BQ = 60%

Culture/Values You 2000 = 84%You 2001 = 90% You 2002 = 91% (+1%) Total CompensationYou 2000 = 70% You 2001 = 81% You 2002 = 78% (-3%) Work ActivitiesYou 2000 = 71% You 2001 = 80% You 2002 = 82%(+2%) EngagementYou 2000 = 74%You 2001 = 83% You 2002 = 82% OpportunitiesYou 2000 = 61% You 2001 = 74% You 2002 = 75% (+1%) RelationshipsYou 2000 = 74% You 2001 = 82% You 2002 = 82% (0%) Quality of LifeYou 2000 = 61% You 2001 = 71% You 2002 = 80% (+9%) LeadershipYou 2000 = 70% You 2001 = 83% You 2002 = 84% (+1%) Engagement – Eli Lilly Canada

Leadership vs. Management “Management is about coping with complexity. Leadership by contrast, is about coping with change.” John P. Kotter, Harvard Business School Leadership complements management; it doesn’t replace it.

Setting a Direction vs. Planning and Budgeting • Setting direction is never the same as planning or even long-term planning • Planning is a management process, deductive in nature and designed to produce orderly results, not change • Setting a direction is more inductive

Aligning People vs. Organizing and Staffing • Managers “organize” to create human systems that can implement plans as precisely and efficiently as possible • Aligning is a communication challenge • Credibility- getting people to believe the message

Motivating People vs. Controlling and Problem Solving • Systems and structures are to help normal people who behave in normal ways to complete routine jobs successfully, day after day • Motivation and inspiration energize people, not by pushing them in the right direction as control mechanisms do, but, by satisfying basic human needs for achievement, a sense of belonging, recognition, self-esteem, a feeling of control over one’s life, and the ability to live up to one’s ideals • Articulate the organization’s vision in a manner that stresses the values of the audience they are addressing • Leaders also regularly involve people in deciding how to achieve the organization’s vision • This gives people a sense of control

Creating a Culture of Leadership • Recruiting people with leadership potential is only the first step • Managing their career patterns • Leaders almost always have had opportunities during their twenties and thirties to actually try to lead, to take a risk, and to learn from both triumphs and failures

See It! Feel It! Own It! Communicate It! Who When Simply Whom Results! Creates Energy Increase Ownership Provides Focus Reduces Trauma Leaders Learn From Leaders Big Ideas: The Power of Vision

The Leadership Journey – Keeping it Real • Think strategically and invest in the future - but keep the numbers up today • Be entrepreneurial and take risks - but don’t cost the business anything by failing • Continue to do everything you are currently doing even better - and spend more time communication with employees, serving on teams, and launching new projects • Become passionately dedicated to “visions” and fanatically committed to carrying them out - but be flexible, responsive, and able to change direction quickly • Succeed, succeed, succeed - and raise terrific children

Leadership: A Lesson from Industry