The Secrets to Corporate Longevity
by Adam George
October 14, 2014
Embracing change while maintaining authoritative stability epitomizes the secret to Merck’s success, according to Mr. Johannes Baillou, the Chairman of the Board of Partners for Merck, an international developer and distributor of pharmaceuticals. At the 15th Annual World Knowledge Forum, Mr. Bailliou detailed how his family-run company has withstood the test of time, being in business for more than 300 years.
Mr. Baillou said that having innovation at the forefront of Merck’s activity has led the company to high achievements. Initially starting out as a pharmacy company in 1668, Merck evolved to include a wide array of products that Mr. Baillou categorized into three fields: pharmaceuticals, performance materials, and life sciences.
“We are a conglomerate in the sense that we have pharmaceutical business and chemical business under one roof,” said Mr. Baillou. Because of this, Merck embodies a more specialized company.
“We’re a niche player; because after all, although we are quite big and known worldwide, we still are not a corporation and not meant to produce bulk,” he said.
In addition to pharmaceuticals, Merck has begun development with liquid crystals for use in today’s hi-tech gadgets and displays. Organic light-emitting diodes represent the latest aspect of performance materials Merck wishes to expand upon. As a result of this ambition, Mr. Baillou said Merck will be opening an OLED cite in Korea in order to work with customers such as Samsung. This is just another example of Merck’s ability to welcome variety within its product.
This unique dedication to international development and to patrons stems from what Mr. Baillou stated to be one of his company’s steps to success: putting the customer first. Merck relies on permanent feedback from esteemed customers, which he said is fruitful for both sides and has solidified a strong vendor-seller relationship.
In addition to this, Merck’s belief in transparency has generated a successful work environment.
“[We] take the issues and decisions and try to explain them to those involved,” said Mr. Baillou, hoping to dispel any disdain for authority within the company.
The foundation of a family board ensures corporate responsibility in a unique way, according to Mr. Baillou. Merck has and will always be a family business because of the unique familial administration. For professional reasons, the family members of Merck created a special board and welcomed shareholders to take some of the authority, but not all.
“We still have a say [in company procedures] but not as much ownership of the company,” said Mr. Baillou.
However, the creation of the family board is still intact. As a means to ensure efficiency by all involved parties, all members of the Executive Board are considered to be general partners of the entity, meaning more is at stake should a negative event occur under the leadership of the board.
Mr. Baillou culminated his talk with the company’s slogan: Living Innovation. Merck has succeeded primarily because of its employees’ fearlessness to experience change in different aspects of innovation. This has paved the way for the diverse products and locations of the company. Merck thrives on “sustainable ways of making our employees entrepreneurs [and] by letting them take responsibility and make mistakes.”
Merck’s willingness to promote constant innovation while keeping the family in control of the company has not only propelled the company to modern success, but has also undoubtedly kept the company salient over the past four centuries.