Sue Desmond-Hellmann has worn many hats over the course of her career. She's the rare executive who's spent time in private practice, worked for two major U.S. pharmaceutical corporations, served as chancellor of a top university, and now, helmed the world's largest private foundation.
As CEO of the Bill & Melinda Gates Foundation since last year, Desmond-Hellmann has added more discipline, flexibility and holistic thinking to the organization's work. She's continued to expand the foundation's direct investments into private companies that are helping the poor. And she has tried to take a manager's, rather than just a scientist's, approach to making the foundation a great place to work. To wit: the Gates Foundation announced in October it would offer employees 52 weeks of paid parental leave and an unlimited vacation policy.
On Leadership sat down with Desmond-Hellmann at the Fortune Most Powerful Women Summit in October in Washington. The former Genentech executive shared what she's learned from working with Bill Gates, Melinda Gates and Warren Buffett, how important it is for leaders to be able to express their vulnerability, and why she actually does miss quarterly earnings. The conversation has been edited for length and clarity.
Q. When you started the job, Melinda said the Gates Foundation was a little bureaucratic in places and too many people were weighing in on decisions. How have you worked to improve that?
I want the Gates Foundation to be as simple as possible for people working inside the foundation but, just as important, for people who interact with us from the outside. So simplification has been a theme of my leadership -- really asking people to move from a rule-based culture to a culture that trusts our employees and looks to them to make the right choices. We want to really make sure we’re focused on values, not processes.
I’ll give you an example. We recently talked about a vacation policy that allows employees to talk to their managers and plan their time off effectively, rather than accruing vacation days with a big business process and reporting process. That’s a trust-based environment. That really takes advantage of the fact of employees who are committed to the mission -- which ours are -- can make good choices in consultation with their manager.
Q. One of your first moves was to slash the budget for outside consultants. Why was that necessary?
Well, the Gates Foundation has grown up so fast. We’re only 15 years old. But we’ve grown enormously and we’re giving a lot of money away. The Gates Foundation had used management consultants very effectively in some cases. And in other cases, I worried that we were outsourcing our intellectual content. I want it to reside with the wonderful employees of the foundation. So the decrease in the budget [for consultants] by 50 percent enabled us to tap into what I respect most.
Q. Melinda Gates has said that her number one project is family planning, and that Bill's is polio. What’s yours? Do you have a favorite child among all the issues that the Gates Foundation works on?
I’m most passionate about something I’ve worked on for a long time, which people call precision medicine. As a cancer doctor, I was part of this new targeted therapy, getting the right medicine to the right patient. So today, I’m interested in something I’d call precision public health. Can we bring that same innovation, that speed, that ability to use big data to the problems we’re trying to solve? That is not a one-cause passion. That is my wish: To bring all of this intellectual data, understanding and tracking of diseases to bear for things that affect the poor every bit as much as we have traditionally done for the rich.
Q. One criticism that has been made in the past of the Gates Foundation has been its support of bigger institutions -- the World Health Organization, relationships with pharmaceutical companies. Are you doing things to reach out to more local organizations? What are you doing to counter that criticism?
Well I’m not embarrassed that the Gates Foundation works with big institutions -- with WHO and other U.N. agencies, with pharmaceutical companies and others. We’re very interested in making a big difference in the world. We’re very interested in scale, and to get scale, you need to have ambitions to work with large organizations.
On the other hand, the point you make about a lot of things being local or community-based is an important one. One of the things that Bill, Melinda and I and my colleagues all do is we get out in the field. There’s nothing better than listening and learning and seeing for yourself what that community, what that mom, what that child is actually experiencing in their village or community.
Q. You’re in a job where your co-chairs are Bill Gates, founder of Microsoft; his wife, Melinda Gates; and his father, Bill Sr. And Warren Buffett is a major investor. What have you learned about leadership from them? That’s quite a group to answer to.
It is. I like my bosses very much. I find them inspiring. Probably the most important thing I’ve learned working with Bill, Melinda and Warren is how important their long-term commitment is to the causes we work on. They are relentless. They call themselves “impatient optimists.” I like that. Bill Sr. says it beautifully: "Who have we helped today? Are people better off as a result of our work?"
Q. You said at the Fortune summit that you miss quarterly earnings. I don’t think there are many people who would say that. Why?
I’m actually really competitive. I like sports and I like winning, and what I liked about quarterly reporting is that I felt (and still feel -- I’m on two public company boards, Proctor & Gamble and Facebook) is that those shareholders are looking to the board of directors and management for a return on their investment. I found quarterly earnings to be my kind of thing because people were counting on us at Genentech. Shareholders were counting on us. My fellow employees were counting on us and frankly, in that role, patients and people struggling with really serious diseases were counting on us to perform.
For me, personally, I like that clarity. I often will ask people who I work with -- especially people who report to me -- are we really clear on what we’re signed up for? What does success look like?
Q. You’ve talked about the concept in a past interview of trying to avoid 'CEO disease.' How do you remain accessible to people and not allow that sense of 'she’s different from me' to seep in?
I don’t think there’s a perfect way to avoid CEO disease. For me, it starts with having a great husband, who always tells me the truth -- which I really, really appreciate. I think everyone has family or friends who help them make sure they don’t take themselves too seriously. I don’t think I’m perfect on avoiding this.
In a recent conversation at the Gates Foundation, an employee told me about a communication she thought had been done poorly. She asked me a question about whether I was aware of it and what I thought. The first thing I did when she asked me that question was to thank her for being critical in public. I think inviting hard questions, inviting feedback -- whether it’s positive or negative -- and always trying to do better is the only way I know to avoid CEO disease. But look, it’s inevitable that people often treat you differently, so awareness is probably the best tactic to avoid it. I’m still working on it.
Q. What would you say is the biggest lesson you’ve learned the hard way about leadership?
Probably the most difficult lessons that I've learned have been when something I care a lot about fails. When I was at Genentech, we were developing Avastin -- now a famous drug for cancer. The first study we did in breast cancer was a high-risk, high-speed investment, and it failed.
I remember, like it was yesterday, feeling like we had let those patients down and the company down. It was a really serious, negative outcome. And what I learned from that is that in those moments, as leaders, it’s really important to be open and honest about disappointment -- not to smooth it over, or in any way feel like you don’t face it directly.
Q. Why is that so important for leaders to do on the things they really care about?
One of the learnings I’ve had as a leader is how important vulnerability is. Particularly for women, vulnerability can seem frightening or emotional. Not how you want to show up at work. When I’ve been involved in things that involve helping people decrease suffering, pain or death, I’m all in. I so want people to have a healthy, productive life. It’s what the foundation wants. It’s what I want.
When there’s something we thought would help that doesn’t work out, I am personally crushed as I think about the people we’re trying to help. And yet, you do want to be in a position of carrying on. There's a balance of sharing with people sadness and disappointment and allowing there to be a time of regret and sadness that things didn’t work out like you wanted.
As a leader, sharing your disappointment and your sadness about those moments with your colleagues and the people you aim to lead is an important part of leadership. It’s also important to be resilient and to demonstrate that okay, this will pass. Better days will come, and for all leaders, those are moments of reflection -- and opportunity.
Q. I want to go back to a question about the Gates Foundation. You’re working on so many things. I think people are interested in knowing what the next Ebola is. What’s the next public health crisis that’s coming that we aren’t focused enough on?
I believe global health in general is an area of underinvestment, particularly in research. I recently called for a doubling of what the G-7 groups spend on R&D, as it relates to global health, from $3 billion to $6 billion.
A much greater threat to the globe is a pandemic flu. Flu is spread by respiratory method. It could spread and cause trouble far greater than Ebola, and the world clearly isn’t prepared for that. We’ve made investments in things like surveillance, and knowing where disease is spreading, and others are working with us to think about investments in vaccines and in governance so the world can respond in ways that may be more effective than what we saw with Ebola.
Q. How will you judge your success in this job?
If, when employees come to the Gates Foundation, they find the work inspiring and feel they can use all the skills and assets they have. If we can effectively collaborate with others toward ending these human struggles. If the U.S. education system improves and some of the U.N. Sustainable Development Goals are in our sight, I’ll be happy.