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Leadership Personified: Ken Frazier, CEO of Merck

I had the opportunity to hear Ken Frazier, CEO of Merck,  speak at the SC50 meeting.   Ken was a single child raised by a single father in Philadelphia, making his way into Harvard Law eventually.  Prior to becoming CEO, Ken was the general counsel for Merck, and was the lead representative in defending Merck against the 60,000 individual lawsuits associated with the Vioxx scare.  Ken spoke at length about many of his experiences during this time, not least of which was his ability to allow the company to survive the barrage of lawsuits and settle them in an appropriate manner.  He also oversaw the downsizing of the company, involving layoffs of over 1/3 of the company, a period he described as “one of the most difficult experiences I’ve ever been through”.

Ken also spoke about the problems of opioid sales, the $86B of sales in this category, which has led to so much addiction.  “This is more of a reflection of a lack of hope, in parts of the country where peope have been left behind.  Fortunately, the CDC is beginning to limit the prscription length and number of people, and research is on-going to develop other forms of pain medication that is not addictive.”

Merck has an incredibly complex supply chain, supplying 140 countries, 60,000 SKUY’s, and over 200 products.  This includes tablets, vials, injectable’, implants, and inhalers, to name a few.  The company is also involved in cold chain under difficult circumstances, including distribution of Ebola vaccines in sub-Sahara Africa which goes to small villages with no refrigeration.  Ken noted that “our SCM team is incredible!”  Two days after we had a cyber-attack and our computers went down, we didn’t even miss a single shipment, due to the hard work of our SCM team.  During the recent weather disasters, Merck has been on the front lines helping people.  “We were bringing jets into distribute pallets of water to people in Puerto Rico, for example.

When asked about being the first person to resign from Trump’s Manufacturing Council earlier this year, Ken was very circumspect about this.  “In general, I don’t believe CEO’s should be involved in politics.  But this situation was not about politics.  Charlottesville was an event that was against our values as a country, a country which reinforces tolerance.  Prior to resigning, I called all the Board Members.  The US Government, after all, is our biggest customer, and this could cause some waves.  The Board unanimously supported me.  Although the President wanted to learn about our industry, I didn’t feel like I remain on the Council  after he made those comments.  I felt like the first Wildebeest who runs into the river with all the alligators in there.  But once I did so, all of the others followed me, and the alligators were scared by a herd of stampeding wildebeests!  A big part of driving change is to learn from our failures, as well as our successes.  We have to get people to stop fearing failure, and push them to learn.  Only then can we grow as a nation and as a community and adopt to the changes going on around us.”