Juan Ramón Alaix: 'As a CEO, you cannot sit in an ivory tower'
Juan Ramón Alaix – the leader of Zoetis – is the first inductee into Animal Pharm's new Hall of Fame. He spoke to Animal Pharm editor Joseph Harvey about animal health market trends, career choices and his motivation as a chief executive.
Juan Ramón Alaix joined Pfizer from Pharmacia in 2003 and, three years later, became the head of the firm's animal health business.
However, his first exposure to animal health came when he joined Pharmacia in 1998 and ran the company's operations in Spain. As part of this role, he oversaw human pharma, over-the-counter pharma and animal health.
So, with 20 years of experience in the sector, did he ever think he would be the head of a publicly-listed multinational animal health business?
"It never crossed my mind," Mr Alaix told Animal Pharm. "I remember I was a finance director in Spain, but I wanted to move more into general management. This was something I prepared myself for. After that, you need to work hard, and you need to take risks. In some cases, you need to change countries and change companies. I always say being the CEO of Zoetis is the result of being in the right place at the right time."
During his 13 years at the helm of Pfizer Animal Health and Zoetis, Mr Alaix has seen an industry that has gone through some significant changes.
He spoke about the most significant changes to his role and the company during this period: "One of the biggest transitions has been moving from being a part of Pfizer to being an independent company – changing the culture of our company. Pfizer has a culture that is very well developed for human health, but Zoetis is a smaller company with different needs and different opportunities.
"This was an opportunity for us to build a different culture that would support our objectives and create higher value for our customers, colleagues and shareholders.
"It was clear from the beginning that our people had an increased sense of ownership. Being part of a bigger company, it was difficult for our unit to influence the valuation of Pfizer. Now, as part of Zoetis, all colleagues have the opportunity through their daily jobs to create value for our company. This is increasing the sense of ownership. We all share the same objective, so it's much easier to act as one company and focus the entire team on animal health customers.
"We all know now the future of this company depends on enhancing the customer experience and making sure we create the highest value to them."
Pushing animal health into spotlight
With the Zoetis initial public offering, Mr Alaix led the company during a game-changing moment for the animal health sector. He said this move has resulted in a greater appreciation of the industry.
"The interest in animal health has risen exponentially," he stated. "Also, the knowledge of animal health has changed a lot. When we split from Pfizer and we went on our initial roadshow, it was clear the animal health industry was completely unknown by many investors, analysts and even bankers.
"One of the challenges we found when we went public was, because of the knowledge of human health, they extrapolated what they knew about human health into our industry.
"It was a positive surprise for many investors when they learned we are not dealing with third-party payers, generic competition has a completely different impact in our business, and the durability of our portfolio is significantly longer than in human health.
Mr Alaix said the growth drivers in animal health are now well established. Investors, analysts and banks have become more familiar with the industry's steady and resilient growth, as well as the stable and predictable nature of the leading companies' financial performances.
He suggested investor scrutiny was one of the biggest changes he had to deal with when Zoetis went public.
Mr Alaix explained: "Before, I had the experience of managing a unit within a large corporation and my internal focus was on providing reports primarily to the Pfizer management. When I became the CEO, I needed to move from just reporting internally to reporting externally and spending a significant amount of time discussing the details of our company with analysts and investors. This was a big change.
"The other big change has been interacting with the board of directors. Again, it is something you need to learn as CEO.
Trends and opportunities
Although there were clear trends governing the animal health space 10 years ago, Mr Alaix said the pace of change in the sector has picked up tremendously.
Juan Ramón Alaix: "As a CEO, you need to understand the trends and make sure you are responding to these trends faster than your competitors. The only way to understand the trends is to be close to the market and the customers. As a CEO, you cannot sit in an ivory tower."
"The ability of companies to succeed depends on how they can anticipate trends and respond," he stated. "This means the companies have to be very knowledgeable, very close to the market and close to the customers. And with these trends in mind, the most difficult role of any chief executive is to balance between short-term and long-term opportunities.”"
Mr Alaix said the accelerated speed of change in animal health is here to stay, with so many existing and new stakeholders in this space now keen to influence trends.
"Now, animal health is a very well-established business and a very attractive sector for investors," he said. "The opportunities for companies to execute their strategies are great.
"At Zoetis, we have a great opportunity to keep growing but also change the way we are delivering value to our customers. We now have an approach to animal health that is more comprehensive. Our core business will definitely remain vaccines and pharmaceuticals, but with our expanded portfolio – including genetics, diagnostics, devices, digital sensors and data analytics – we can really provide a continuum of care for customers."
Job motivation and advice
The Zoetis chief executive said he gets most of his motivation travelling around the world to meet colleagues and customers.
"I try to do that as much as a I can," he told Animal Pharm. "Reading reports in my office is not what motivates me the most. Although I know I need to do this, because it is important to make decisions with the right level of knowledge, I like coming to the office, walking around and speaking with our people."
Mr Alaix also offered advice for other leaders in the animal health industry: "You need to deliver your commitments and focus on creating a team that will help you deliver results. Focus on both developing the individuals and the team. Also, make sure you are creating value for the short term and also for the long term.
"As a CEO, you need to understand the trends and you need to make sure you are responding to these trends faster than your competitors. The only way to understand the trends is to be close to the market and the customers. As a CEO, you cannot sit in an ivory tower."