Interview with Etienne Jornod

swissVR Monitor: What does the term ‘innovation’ mean to you?

Etienne Jornod: It is a company’s ability to challenge the status quo in all areas in order to remain competitive and become a market leader.

swissVR Monitor: How should a Board of Directors, and in particular a Board Chairman like you, approach a company’s innovation process?

Etienne Jornod: Under Swiss law, the Board of Directors is responsible for strategy, which it may delegate to management. It retains, however, ultimate responsibility. In my experience as VRP of NZZ, Executive Chairman of Vifor Pharma and Chairman & CEO of the Galenica Group, I have always felt fully responsible for strategy and therefore for innovation. I shared this responsibility with the whole Board, and we have always had highly entrepreneurial Board meetings. Innovation and strategy are closely intertwined. Innovation is decisive in the strategic process if a company is to become a market leader.

Let us consider NZZ. The first task of the new Board of Directors in 2013 was to define NZZ’s strategic position: “Our services must reach a level of excellence so that our customers (we defined the reader as our main customer, even before advertisers – a true reassessment and de facto the first revolution!) are willing to pay a relatively high price (premium relative to the market) to access them. This price must be high enough to enable us to earn a living. We use digitalisation, in particular, to deliver our products to our customers, prioritising ‘digital first’ and even ‘mobile first’. This means that texts must be designed to be read on a smartphone."

This approach was fundamentally different from that taken by many publishers, who bought digital platforms to fund their media indirectly. We then looked for a CEO who understood and shared our highly innovative vision and editors-in-chief who fully accepted the ‘Fokus Publizistik’ and ‘Digital first’ strategy. In this regard, I remember in particular a trip to the United States with our Editor-in-Chief, Eric Gujer. Decisive moments included our discussion with Martin Baron, Editor-in-Chief of The Washington Post, who emphasized the fact that unlimited access to technology was Jeff Bezos’ key contribution. At The New York Times, we were convinced by the global strategic concept. These two examples show that simple and clear innovative choices have decisive impacts on a company. This is the case with NZZ: during the last nine years of transformation, we first stabilised sales of subscriptions that had been falling like everywhere else, and then began to gain market share to reach record levels.

swissVR Monitor: How can the Board actively promote innovation?

Etienne Jornod: Without change, and therefore without innovation, we could never have turned the NZZ Business Unit around. It was in the red and is now clearly profitable. In this broad strategic framework well defined by the Board, management and editorial staff are free to express their creativity, entrepreneurial spirit and innovative capacity, while obviously sticking to the budget. The Board's role is then to challenge these initiatives. For this reason, the role of the CEO and Editors-in-Chief is absolutely crucial. I know they love this freedom.

swissVR Monitor: How can the Board of Directors create a good innovative culture in the company?

Etienne Jornod: I will draw on my experience at Vifor to answer this question. We understood that iron deficiency anaemia was a very serious disease that exists in many forms and we decided that we would concentrate on this area. We invested heavily in R&D and Marketing and consistently advocated the ‘right to error’ and process limitation. We created a truly innovative corporate culture. It worked very well until the company became the third largest pharmaceuticals company in Switzerland, with a market capitalisation of over CHF 12 billion. From that moment on, with the increase in the number of executives (joining) from large companies, it became an increasingly difficult ‘fight.’ Maintaining an entrepreneurial culture in a context of strong growth is extremely difficult. The responsibility lies with the Chairman, Board, CEO, EC, and so on, and they must lead by example.

swissVR Monitor: What are the main challenges and obstacles to innovation that a Board must be aware of?

Etienne Jornod: First, we need to know how to listen because we are never alone in being right. Second, as soon as a decision is made, you must have an iron will to make it happen, because there will always be many opposing forces. To do this, it is essential to have Board members and Management executives who are modest and listen to others, but who are also very strong. Strategic and cultural mistakes are often the result of people hiding behind processes, who do not listen, who do not have guidelines, who are in fact ‘weak.’ Choosing the right people is extraordinarily difficult.

swissVR Monitor: How can the Board of Directors organise itself to support innovation in the company?

Etienne Jornod: Strategy and innovation must be regularly on the agenda, at least at the time of the Board’s retreat (two-day annual meeting). But in fact, it is a matter of a constant daily attitude, of corporate culture!