Vice-Chairman & CEO's Message
Dear Stakeholders,
One can imagine the immense challenges faced by an organization like ours that has to take into account the interests of diverse stakeholders and balance various and apparently conflicting interests such as profitability, social impact, climate change and product responsibility. At the beginning, it appeared extremely challenging to invoke the trust in our stakeholders that we would not maximize the interests of any one particular stakeholder group at the expense of another.
But over the 25 years of our existence, we have realized that this is not as difficult as it appears to be due to a very simple reason. It is the understanding of the interdependence (as against independence) of our stakeholders that has encouraged our simultaneous pursuit of a people, purpose and planet approach. Our investors (shareholders), whose primary interest is consistent and profitable growth, are also part of the society at large and affected by our environmental and social impacts. The communities around our manufacturing locations benefit from the economic opportunities that our facilities create for them. However they are also concerned about the adverse impact of our operations on resources like water and air. Our employees are also members of the civil society that is affected by our social, economic and environmental impacts. Our consistent pursuit of creating an ever-flourishing organization built on a platform of unyielding integrity and sound values has, indeed, gone a long way in earning us the trust of all our stakeholders and in making our employees proud to work with us.
We have the opportunity to transform not just the organization, but substantially impact human lives. Each one of us, irrespective of position, function and location, has a key role to turn this opportunity into a reality and bring more meaning to our work. As we expand our global footprint and continue to pursue Execution Excellence to add significant value for our stakeholders, we are in fact strengthening our ability to provide affordable and innovative medicines for healthier lives.
Our efforts are gaining us the trust and confidence of all our stakeholders, and we will continue to maintain the standards that are expected of us. From substantial, Company-wide programs to small, personal initiatives – every contribution is helping us build an extra-ordinary Company.
It would also help us in a significant way, to learn your personal views on Sustainability. Do write to us. Your feedback and suggestions will be of immense value.
GV Prasad
We have taken steps forward, from “Helping people lead healthier lives” to “Providing affordable and innovative medicines for healthier lives”. This brings a clear focus to our business – that of providing affordable and innovative products to people across the globe. In a world where over 2 billion people cannot get medicines they need or where there are many diseases without satisfactory cures, we felt that our purpose must reflect the problems we are trying to solve through our organization, in a sharper way. We also felt the need to make our purpose specific, meaningful and more inclusive of what each one of us does in the organization.
We also noticed a subtle change in your extranet regarding the Sustainability approach from "People, Profit and Planet" to "People, Purpose and Planet". Any comments on this? I would like to quote these words spoken by former Merck president, George W. Merck which I saw written on the white board in our Chairman, Dr. Anji Reddy’s office:
"We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered it, the larger they have been."
In a sense, we too have a similar belief that the pursuit of our Purpose will ensure that the Profits will follow and I just want to make sure that we have these in the right order of priority.
How are you ensuring that the Purpose Statement will actually get internalized into the mainstream processes?
For our organization to be truly sustainable, we have to be distinctive in a few areas, while being good at most activities that we do. We believe that our strategy of "Leveraging industry-leading science & technology, product offering, and customer service with execution excellence to provide affordable and innovative medicines for healthier lives” helps us focus on the right areas. We are concentrating on Execution Excellence by adopting a global business practice that first identifies an organization's constraints and then provides a definition of the supply chain and market offer which is necessary to achieve set objectives. We are transforming our organization to become distinctive in the areas of science and technology, product development, manufacture and supply chain performance. We will integrate these distinctive capabilities to serve our customers’ principal needs in a way that no other significant competitor can. This transformational initiative is very close to the heart of the management at Dr. Reddy’s, who is devoting valuable energy and resources to ensure it succeeds at every level.
What bottlenecks, if any, do you foresee in the desire to build an extra-ordinary company? How do you plan to tackle these?
I strongly agree with and believe in the statement that “Great people build great organizations”. We are now at a transformational stage in our evolution where we require the leadership bench strength to take us to the next level of growth and performance. Very frankly I see no other serious constraint other than this. We would like each of our employees to view his or her job as a platform to achieve greater things in life. Going forward, we are deeply committed to developing and empowering high potential leaders and in creating a distinctive culture of leadership in our organization, to sustain our development well into the future.
What does the “People, Purpose and Planet” approach mean for Dr. Reddy’s?
To arrive at our key focus areas it’s important to consider issues that are of significance to our stakeholders as well as to the Organization. Through engaging with our stakeholders and internal debate amongst senior management of the organization, we have arrived at 6 key focus areas. These are: Providing affordable and innovative medicines, Being an employer of choice, Environment management and climate change, Caring for communities, Sustainable sourcing and Product responsibility.
In a relative sense, in which of these areas would you say, has Dr. Reddy’s moved ahead, so far?
Based purely on external feedback & recognitions received, I would say that we have covered more ground in the focus areas of Providing affordable and innovative medicines, Being an employer of choice and Caring for communities. Being in the generic Pharma space has enabled us to do quite a bit over the years, in making medicine affordable and available to a large section of the population. We have also won many recognitions and awards recognizing us amongst the best employers to work for. Our social impact through our LABS program has won us national acclaim and the program is now almost self-sustaining, with the Government and other Corporates partnering with us to take this model forward.
Should initiatives regarding Environmental Management and Climate Change be mainly driven by compliance?
There are some countries, like Sweden, where complying with the framework of environmental compliance goes a long way in combating Climate Change. In Sweden, economic instruments like taxes, fees and subsidies are used to influence people to act in a more environmentally friendly and sustainable manner. Examples include Carbon dioxide tax, Nitrogen Oxide tax, recycling fee, Electricity Certificates, etc. In India though, we see a modest beginning being made in this direction; there is still a long way to go, and Corporates need to take proactive measures and go beyond compliance. Climate change is a recent conversation within our organization and we hope to build greater momentum on it in the coming years. A suitable blend of energy conservation, use of renewable sources of energy, water conservation, control on generation and disposal of hazardous waste and green chemistry is required to take care of our short-term and long-term responsibilities. For example, a great sense of passionate involvement accompanies the creation of our upcoming SEZ projects (one each in the API and Generics space) wherein we will strive to develop world-class facilities that show-case these aspects and be in the forefront of our fight against Climate Change.
Why is Sustainable Sourcing becoming increasingly important to Dr. Reddy’s?
The rapidly changing business environment we operate in, often blurs the boundary in the value chain. The challenge now, is to decide how far behind and how far ahead in our value chain that we choose to influence; but the days are gone when we could narrowly focus on only our internal practices and impacts. Outsourcing can provide us with operational flexibility and a cost advantage to some extent. However, we are ultimately responsible for social, economic and environmental impacts of our entire value chain and have to take responsibility for the manner in which our vendors carry out these outsourced activities. We have begun to examine these aspects over the past few years and have begun in a small way, by trying to influence the quality and safety related systems of some of our strategic business partners from whom we source some of our key starting material.
What is the reason Product Responsibility feature in the list of key focus areas for Sustainability?
We may excel in all the aspects mentioned above, but are bound to face severe consequences if the life-saving drug ends up endangering the life or well-being of a person. Any lapses in product responsibility in terms of quality and regulatory norms can mean the end of the basic trust that a patient or a Doctor has in us. In the recent past, several Pharma players have faced this challenge. At Dr. Reddy’s, we believe in following stringent quality control and quality assurance systems, as specified by regulatory requirements wherever the Company operates. We have appointed independent teams to ensure multi-stage quality compliance, while various procedures are in place to see that the safety, efficacy and quality of products are maintained.
One can imagine the immense challenges faced by an organization like ours that has to take into account the interests of diverse stakeholders and balance various and apparently conflicting interests such as profitability, social impact, climate change and product responsibility. At the beginning, it appeared extremely challenging to invoke the trust in our stakeholders that we would not maximize the interests of any one particular stakeholder group at the expense of another.
But over the 25 years of our existence, we have realized that this is not as difficult as it appears to be due to a very simple reason. It is the understanding of the interdependence (as against independence) of our stakeholders that has encouraged our simultaneous pursuit of a people, purpose and planet approach. Our investors (shareholders), whose primary interest is consistent and profitable growth, are also part of the society at large and affected by our environmental and social impacts. The communities around our manufacturing locations benefit from the economic opportunities that our facilities create for them. However they are also concerned about the adverse impact of our operations on resources like water and air. Our employees are also members of the civil society that is affected by our social, economic and environmental impacts. Our consistent pursuit of creating an ever-flourishing organization built on a platform of unyielding integrity and sound values has, indeed, gone a long way in earning us the trust of all our stakeholders and in making our employees proud to work with us.
We have the opportunity to transform not just the organization, but substantially impact human lives. Each one of us, irrespective of position, function and location, has a key role to turn this opportunity into a reality and bring more meaning to our work. As we expand our global footprint and continue to pursue Execution Excellence to add significant value for our stakeholders, we are in fact strengthening our ability to provide affordable and innovative medicines for healthier lives.
Our efforts are gaining us the trust and confidence of all our stakeholders, and we will continue to maintain the standards that are expected of us. From substantial, Company-wide programs to small, personal initiatives – every contribution is helping us build an extra-ordinary Company.
It would also help us in a significant way, to learn your personal views on Sustainability. Do write to us. Your feedback and suggestions will be of immense value.
GV Prasad
Q&A with GV Prasad regarding his views and thoughts on various aspects of Sustainability
Dr. Reddy’s has recently modified its Purpose Statement. Could you explain the rationale behind the same?We have taken steps forward, from “Helping people lead healthier lives” to “Providing affordable and innovative medicines for healthier lives”. This brings a clear focus to our business – that of providing affordable and innovative products to people across the globe. In a world where over 2 billion people cannot get medicines they need or where there are many diseases without satisfactory cures, we felt that our purpose must reflect the problems we are trying to solve through our organization, in a sharper way. We also felt the need to make our purpose specific, meaningful and more inclusive of what each one of us does in the organization.
We also noticed a subtle change in your extranet regarding the Sustainability approach from "People, Profit and Planet" to "People, Purpose and Planet". Any comments on this? I would like to quote these words spoken by former Merck president, George W. Merck which I saw written on the white board in our Chairman, Dr. Anji Reddy’s office:
"We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered it, the larger they have been."
In a sense, we too have a similar belief that the pursuit of our Purpose will ensure that the Profits will follow and I just want to make sure that we have these in the right order of priority.
How are you ensuring that the Purpose Statement will actually get internalized into the mainstream processes?
For our organization to be truly sustainable, we have to be distinctive in a few areas, while being good at most activities that we do. We believe that our strategy of "Leveraging industry-leading science & technology, product offering, and customer service with execution excellence to provide affordable and innovative medicines for healthier lives” helps us focus on the right areas. We are concentrating on Execution Excellence by adopting a global business practice that first identifies an organization's constraints and then provides a definition of the supply chain and market offer which is necessary to achieve set objectives. We are transforming our organization to become distinctive in the areas of science and technology, product development, manufacture and supply chain performance. We will integrate these distinctive capabilities to serve our customers’ principal needs in a way that no other significant competitor can. This transformational initiative is very close to the heart of the management at Dr. Reddy’s, who is devoting valuable energy and resources to ensure it succeeds at every level.
What bottlenecks, if any, do you foresee in the desire to build an extra-ordinary company? How do you plan to tackle these?
I strongly agree with and believe in the statement that “Great people build great organizations”. We are now at a transformational stage in our evolution where we require the leadership bench strength to take us to the next level of growth and performance. Very frankly I see no other serious constraint other than this. We would like each of our employees to view his or her job as a platform to achieve greater things in life. Going forward, we are deeply committed to developing and empowering high potential leaders and in creating a distinctive culture of leadership in our organization, to sustain our development well into the future.
What does the “People, Purpose and Planet” approach mean for Dr. Reddy’s?
To arrive at our key focus areas it’s important to consider issues that are of significance to our stakeholders as well as to the Organization. Through engaging with our stakeholders and internal debate amongst senior management of the organization, we have arrived at 6 key focus areas. These are: Providing affordable and innovative medicines, Being an employer of choice, Environment management and climate change, Caring for communities, Sustainable sourcing and Product responsibility.
In a relative sense, in which of these areas would you say, has Dr. Reddy’s moved ahead, so far?
Based purely on external feedback & recognitions received, I would say that we have covered more ground in the focus areas of Providing affordable and innovative medicines, Being an employer of choice and Caring for communities. Being in the generic Pharma space has enabled us to do quite a bit over the years, in making medicine affordable and available to a large section of the population. We have also won many recognitions and awards recognizing us amongst the best employers to work for. Our social impact through our LABS program has won us national acclaim and the program is now almost self-sustaining, with the Government and other Corporates partnering with us to take this model forward.
Should initiatives regarding Environmental Management and Climate Change be mainly driven by compliance?
There are some countries, like Sweden, where complying with the framework of environmental compliance goes a long way in combating Climate Change. In Sweden, economic instruments like taxes, fees and subsidies are used to influence people to act in a more environmentally friendly and sustainable manner. Examples include Carbon dioxide tax, Nitrogen Oxide tax, recycling fee, Electricity Certificates, etc. In India though, we see a modest beginning being made in this direction; there is still a long way to go, and Corporates need to take proactive measures and go beyond compliance. Climate change is a recent conversation within our organization and we hope to build greater momentum on it in the coming years. A suitable blend of energy conservation, use of renewable sources of energy, water conservation, control on generation and disposal of hazardous waste and green chemistry is required to take care of our short-term and long-term responsibilities. For example, a great sense of passionate involvement accompanies the creation of our upcoming SEZ projects (one each in the API and Generics space) wherein we will strive to develop world-class facilities that show-case these aspects and be in the forefront of our fight against Climate Change.
Why is Sustainable Sourcing becoming increasingly important to Dr. Reddy’s?
The rapidly changing business environment we operate in, often blurs the boundary in the value chain. The challenge now, is to decide how far behind and how far ahead in our value chain that we choose to influence; but the days are gone when we could narrowly focus on only our internal practices and impacts. Outsourcing can provide us with operational flexibility and a cost advantage to some extent. However, we are ultimately responsible for social, economic and environmental impacts of our entire value chain and have to take responsibility for the manner in which our vendors carry out these outsourced activities. We have begun to examine these aspects over the past few years and have begun in a small way, by trying to influence the quality and safety related systems of some of our strategic business partners from whom we source some of our key starting material.
What is the reason Product Responsibility feature in the list of key focus areas for Sustainability?
We may excel in all the aspects mentioned above, but are bound to face severe consequences if the life-saving drug ends up endangering the life or well-being of a person. Any lapses in product responsibility in terms of quality and regulatory norms can mean the end of the basic trust that a patient or a Doctor has in us. In the recent past, several Pharma players have faced this challenge. At Dr. Reddy’s, we believe in following stringent quality control and quality assurance systems, as specified by regulatory requirements wherever the Company operates. We have appointed independent teams to ensure multi-stage quality compliance, while various procedures are in place to see that the safety, efficacy and quality of products are maintained.
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