Building a corporate culture is often considered optional for business leaders, but not for José Almeida, the chief executive of Baxter International (BAX).
“Culture is what makes a company tick. It’s the pulse, the soul of a company,” Almeida tells Fortune. He adds, “you cannot hire a consultant to do it for you. The culture has to come from the top.” He ranks the importance of culture ahead of strategic planning and execution. Without it, he warns, “you’re done.”
Since Almeida was tapped to be CEO of the healthcare giant two years ago, the cornerstone of his turnaround strategy has been to create a strong corporate culture. He has cut out layers of bureaucracy so employees have the authority and freedom to make more decisions on their own and “to connect with the folks across the company.” Those connections have also created a comfort level with risk-taking and looking for opportunities to innovate. “Never disassociate innovation and culture,” explains Almeida. “They are almost one and the same.”
So far, the strategy seems to be paying off. Baxter’s stock has surged nearly 70% since Almeida took charge and earnings and revenues have been beating Wall Street estimates. Now, Almeida says the company is in good shape and poised to shop for acquisitions. Baxter bought a medicine-injection supplier in July of 2017, and Almeida says there could be more buying activity in 2018.
Watch the video above for more of our conversation with Almeida.