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(Bloomberg) — Belen Garijo took charge of German drug-to-semiconductor group Merck KGaA with the tailwind of the Covid pandemic, propelling the stock to an all-time high in 2021. Since then, the shares have tumbled about 30%, but Garijo is staying the course with her strategy to reposition the Darmstadt-based company as a global player in oncology and immunology.

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With three distinct business units — life science, health care and electronics — she expanded investment in China and strengthened local supply chains at the group, which traces its roots back to the 17th century. It’s unrelated to US-based Merck & Co.

Garijo sat down with Bloomberg to discuss her growth obsession, navigating geopolitical risk, the benefits of diversity and the risk of chasing trends like obesity drugs. The transcript has been edited for brevity.

Bloomberg: You want to be a pioneer in science and technology for the 21st century. What’s the key to get there? 

Garijo: We have to be obsessed with growth. Growth driven by innovation is going to be the lifeblood of our business, and what is going to take this company to the future is people. I frequently say there is no business plan without a people plan. So growth and people are going to be the most important ingredients. 

The world is changing a lot, and therefore we need to have a great balance, a unique balance between dealing with the crisis of the week and at the same time making sure that we don’t lose sight of the longer term. This is the biggest challenge.

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Q: German conglomerates have struggled to appeal to investors recently, and Merck has three distinct businesses — health care, life sciences and electronics. Does that structure make sense?

A: I don’t like to be called a conglomerate, because we’re not. We are more than the sum of the parts. 

There are very important synergies across our sectors. The science that we have and the ability to cross-fertilize is immense. So Merck is a unique, globally diversified company, not a conglomerate. 

We go through a very deep portfolio assessment every year. We are super highly diversified. Below life sciences, for example, we have process solutions, life science services, and science and lab solutions. It’s the same for electronics. Portfolio management goes beyond acquisitions. We do it every year. And more often than necessary.

Q: Obesity drugs are a big trend in pharma. Are you concerned about missing out?

A: Our strategy is global specialty innovation, and our focus is oncology and potential adjacencies — neuroscience and immunology. We are here to stay regardless of the hype. We always have hypes. 

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Q: Do you see China as a potential source of innovation, also for Merck? 

A: Definitely, I see China with an increasing importance in innovation. De facto, the market is already shifting toward being driven more by innovation. So definitely an opportunity for us across the three sectors, not only pharma.

It’s a key country for us. It’s a country in which the market dynamics are changing. We are a local player in terms of partnering with academic institutions, health care professionals, the government. And of course, we have to also manage our risks and make sure that we are well-positioned to pivot in any direction in relation to potential geopolitical challenges. 

Q: Is it a tradeoff? Does more China mean less Europe? 

A: I have been a strong advocate of European competitiveness, and today, to a certain extent, we are missing out versus other global powers, because of not being united and using the strengths of the European Union. 

The countries have to really step forward and contribute to European strengths — mostly in terms of supporting innovation, ensuring free trade, and most importantly, progressing on our sustainability efforts in order to be able to get that profile that we need to compete and are not left behind.

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Q: Given the challenges the world faces, what are the skills needed to succeed?

A: Data science, digital but also more traditional topics like leadership. The leaders that we need for tomorrow are different from the leaders of the past. So we are really doubling down on training our leaders to live and operate successfully in a completely different world, in a completely different environment. 

People who are able to combine their knowledge in molecular biology with a deep knowledge of data analytics and how to use this to maximize success. So that’s why, if you integrate, it’s not only technical skills, but that holistic view that would allow people to perform better.

Read More of Bloomberg’s Discussions with Business Leaders:

• The Health Tech Boss Putting AI in Every Single Product
• The Energy Boss Overhauling the Grid for AI and Net Zero
• AstraZeneca’s CEO Isn’t Distracted by the Race to Tackle Obesity
• The Doctor-Turned-CEO Aiming to Beat Obesity — and Ozempic

Q: In the context of your “people plans,” how do you think about succession and gender balance? 

A: We have really become a best-in-class when it comes to diversity and inclusion efforts. I continue to champion diversity and inclusion, with a shift toward inclusion. Because only diversity is thinking “I need more females.” But I need more females who are able to perform in an inclusive organization where they can really thrive. Operating on the two fronts is my vision on the way of delivering gender parity by 2030.

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You lead the organization to make sure there is no discrimination, not only on gender, but also in other underrepresented populations. That you have a succession-plan discussion that is not discriminating.

Q: And finally…what are you reading, watching or listening to that has left an impression?

I wouldn’t like to mention anything specific, because I really get a lot of benefit from different perspectives. My most recent trip to Italy — if I have to highlight one — it really impressed me a lot on the passion of the teams. Anytime I visit my teams in the field, I really, I really enjoy and get a lot of inspiration from our people.

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