Transforming a drab office building with offices of the corporate elite lining the periphery may not be the obvious move for a big pharma company looking for a new headquarters. But not only did this work for Novo Nordisk, it fit the company’s triple bottom line philosophy, which demands that all decisions be based on financial soundness, environmental awareness, and social responsibility.
The 1984 building at 800 Scudders Mill Road in Plainsboro, previously occupied by Merrill Lynch, had become functionally obsolete, with old heating and air conditioning systems and a wasteful 50-foot wide aisle down the center. But that all changed once Novo Nordisk decided to reclaim the facility as its North American headquarters.
The building was stripped down to its structural steel, with approximately 93 percent of materials in the core and shell and 77 percent in the interior recycled in the process, and it was redesigned to encourage employees to work together.
“We designed the building to accommodate the way we want to work, which is in a very collaborative, fast-paced way,” says Jeffrey Frazier, Novo Nordisk’s vice president of human resources. “The value chain of a pharmaceutical company is very complicated, with lots of interaction among medical, regulatory, clients, marketing, and sales — all staff functions — if we are going to bring an innovative product to the marketplace.”
Placing collaboration at the center means open workspaces, with lots of common areas and huddle spaces. “You can grab a handful of people to address whatever the business problem,” says Frazier. “We thought consciously about who are the groups that frequently interact so that they are in proximity or co-located in the same wing or the same pod.” Hence medical teams are close to marketing and regulatory. Similarly people representing 15 to 20 functions may be placed in a product launch suite to effectively launch a new product.
Employees are in fact moved around a lot as the company tries to stay reactive to business needs, says Michael Wade, senior manager of facilities, who notes that employees may even be moved en masse to facilitate working with another group.
Novo Nordisk has also made it possible for employees to redesign space dynamically, with walls that move and desks that come apart, so that people easily can move to a corner to work together. But along with common spaces, individuals also need private space. “We want people to have their own workspaces because there is identity and engagement that comes from that,” says Frazier.
The company’s triple bottom line guided the process of creating a new headquarters. For the company’s financial bottom line, it made sense to refurbish an existing building rather than start from scratch. “Developers were able to take advantage of an infrastructure that would have to have been created in a green field site,” says Frazier. “Utilities, a hard surface parking lot, roads, sewage, electric, and gas already existed.” The total investment required to redevelop the building was $225 million.
Having in mind both finances and its responsibility to serve its community, Novo Nordisk also approached local labor unions on the suggestion of the building’s owner, proposing that they work together with the company to create jobs for their members. The company offered the idea of investing in the site through the union pension funds so that they could also receive a return on investment. The developer committed to creating more than 500 jobs for the 18-month duration of the project as well as to a financial return to investors, says Frazier. With ongoing New Jersey workforce expansion, the company was able to request certain incentives based upon this growth.
The company’s environmental bottom line dictated the decision to refurbish an older building, recycle materials from the old site, and seek LEED certification — which is actually silver not gold, in accordance with the financial bottom line, says Ted Bielicky, senior director of facilities.
Everything except the concrete floors, columns, stairs, and elevators was removed and, where possible, recycled, including acres of old carpet chopped up and used in new carpet tiles. “The commitment to the environment and recycling is something we live and breathe here,” says Wade. The company also tries to use recycled content in the fabric, stuffing, and foam of furniture. “This is part of the buying decision,” he adds.
Where feasible materials were sourced as locally as possible, such as sheetrock made from ash generated at a nearby coal plant, minimizing transportation costs and the carbon footprint.
The new headquarters also incorporates water and energy conservation systems, and the roof is made of reflective material that lowers climate-control expenses and reduces the heat island effect typically generated by conventional roofing materials.
About two-thirds of the building is over underground, access-controlled parking, which also reduces the building’s footprint.
The power for the site is provided by 100 percent wind-powered electrical sources, purchased from a third -arty provider.
The third leg of the triple bottom line, social responsibility, involves, first of all, the company’s commitment to its own employees, which fed the decision to remain in New Jersey as well as to build a “super-high-quality” workspace.
The company has become an important part of its community and is active in the Boys and Girls Clubs, HomeFront, and the township of Plainsboro, says Frazier. The company makes philanthropic donations, and its employees engage in social activism in the community.
Whereas social and environmental awareness have become very much in vogue in recent years, says Frazier, Novo Nordisk has been doing it for decades. “It is part of our sustainable business strategy that other companies are just starting to figure out,” he says.
The sunlit lobby offers a window into what Novo Nordisk had in mind for its new headquarters in Plainsboro, which opened for business on April 19. What was once a one-floor reception area is now a two-story entrance and workspace flooded with light and highlighted with live trees. “We have 200 guests a day, and the building is a quarter mile long, so it made sense to entertain in the lobby,” says Bielicky.
Even the design of the lobby supports collaboration, with both desk-height and counter-height tables and conversation nooks. At the same time, there is a sense of privacy, with live trees dividing the large space and nooks, created with four-and-a-half-foot-high Alcove Highback Sofas by Vitra, that feel very private. “As soon as you sit and talk, it become very quiet and very intimate,” he says.
“We are trying to gain back space that is typically wasted,” explains Wade, who adds that the lobby space is no longer transitional, but multipurpose. Besides saving employees a long walk and receiving visitors, the new lobby has become a workspace, and in particular the kind of space that works well for a new generation of employees who are comfortable with a Starbucks, multi-tracking mode of interaction.
The reasoning behind the two very different types of meeting spaces in the lobby reflects the thought behind varied spaces throughout the building. “Being in a different space, you think differently,” says Bielicky.
The varied spaces of the reclaimed building also reflect the nature of Novo Nordisk’s employees and efforts to accommodate them. “This is the first time there are three generations in the workforce,” says Wade. These include baby boomers who are used to a more formal space and want to sit in an office and set times for meetings as well as younger employees who are less attached to a desk, more mobile, and like to bump into people and hold informal meetings.
The newest generation of workers, says Bielicky, will have six different careers during their lifetimes and want to be challenged and excited. The flexible new environment helps Novo Nordisk compete for key talent.
The building’s design uses clean, simple lines in the Danish tradition and employs natural materials where it can, mostly avoiding frills, says Wade. Often design elements are multipurpose. The attractive backdrops on either side of the lobby, formed of long thin, multi-leveled oak slats interspersed with felt, also have a function. “The slats are not flat, but textured, so it breaks up and diffuses sound,” he explains.
The trees in the lobby, says Wade, go back to Novo Nordisk’s Danish roots of bringing the outside in, and Bielicky adds, “We’re trying to promote life.” At the same time, the trees serve to break up sound.
Similarly the windows, formerly four feet high and brown tinted, were replaced by 10-foot-high windows that do more than bring brilliant sunlight into the lobby. The window glass is covered with an E-film that reflects heat in the summer and reduces cold transfer in the winter. “It is as good as a wall, but the beauty of it is that it lets a lot of daylight in,” says Wade. Elsewhere in the building, glass was replaced by 10-foot-high windows where possible and otherwise window space was maximized based on existing building conditions.
The financial and environmental sides of the triple bottom line are also attested in the lobby and throughout. Wade observes, “It was built but not in an extravagant way — the carpet is recycled.” And, Bielicky adds, “We are trying to find a balance between the functions we are trying to accomplish and environmental impact and cost.”
The building is arranged to create a teaming environment, and includes the flexibility to move entire departments when necessary so that teams working together are close to one another. A building tour revealed many different types of spaces, varying in size, type of furniture, configuration, and equipment.
During a walk through the building, Wade points out the hallway that runs through the facility, known as Main Street, which used to be twice as wide. “It was a tiled boulevard, with clocks every once in a while,” he says.
Today Main Street is lined with the larger, reservable conference rooms. In one that seats 24, Wade points to the trapezoidal furniture and the rolling white boards, with configurations that can easily be changed. On the other side of the cafeteria, he notes, is an identical room with different types of furniture. Chairs, he notes, are purchased based on durability, reparability, and looks, and all are ergonomic. “We provide Aeron chairs for employees in their offices,” he says, adding that those in a conference room must be more durable and mobile.
In a 16-person conference room, with a glass wall that makes the inside more visible, the chairs are a little nicer, Wade notes, adding that lots of glass throughout the building bolsters honest conversation. “We’re not hiding anything,” he says.
The cafeteria allows employees to eat in. The food is provided by Lifeworks, a division of Aramark that focuses on healthy food, sustainable food options, and is locally sourced. Not only does the cafeteria take into account employee health and environmental concerns, but it also increases productivity. “It helps foster people bumping into each other and having conversations, and it is easy to track people down at lunch,” says Wade.
Currently Novo Nordisk occupies 500,000 square feet out of a total of 731,000. The three-story building is so large that it is divided into three zones. They are color coordinated and each has its own employee entrance. That space also is multi-use: backed in acoustic panels, they include a padded nook and general seating for impromptu meetings as well as a kitchenette.
The office space in the building is not configured as cubes surrounded by perimeter offices, although some offices in the building do have windows. “The idea is to have cubes clustered into ‘neighborhoods,’” says Wade. “You take the offices off the windows and that allows everybody to enjoy the light — from 90 percent of the space you have a direct view to the outside.”
Every inch of space has been cultivated to encourage impromptu meetings and sharing. For example, on the short entryway into a neighborhood of offices are three portable Vitra Tom Vac chairs, in a “calamari”-style of intersecting oblongs, with smart-looking Fritz Hansen tables, of Danish design, where people can sit for a quick chat.
In a wide hallway on the way out of a neighborhood is a collaborative area designed to foster project work, or as Wade says, “a relaxed space for creative brainstorming.” It has white boards on both sides, made of durable glass, with tall tables and chairs along one side and smaller ones along the other, to suit diverse sensibilities and purposes.
Smaller collaboration rooms are furnished with couch, speakerphone, and a couple of chairs, with tables that adjust in size so that they can be used with laptops. In the neighborhoods are also quiet “focus areas” where employees can work away from ringing phones and other distractions.
In tiny “hotel rooms,” which all have phones, field employees and vendors and employees can make personal phone calls.
The gym on site has 30 cardio machines and outside is a one-mile jogging and walking trail. The company also has partnerships with the hospital and adjacent hotel offering employees access to different fitness options. On the rooftop terrace employees can enjoy the weather, work outside, and have departmental cookouts.
Frazier, the HR vice president, grew up in Wauseon, Ohio. His father was a schoolteacher and football coach, and his mother ran a carpeting and decor store. Frazier earned a bachelor of business administration at Kent State University.
Through the woman who became his wife he met someone who hired him to work in a small Italian pharmaceutical, which was acquired by Pfizer in 2003. Then he came to Novo Nordisk. “I found out about this little Danish pharmaceutical eight or nine years ago,” he says. “It has taken off and grown phenomenally and maintained itself as a great place to work.” His jobs have taken him to Sweden, the United Kingdom, and finally New Jersey, where he has been for 16 years.
Bielicky, facilities director, graduated from the University of New Hampshire with a bachelor of science in business management, and started at Novo Nordisk in 2002.
Wade, senior manager of facilities, graduated from Lafayette College with a bachelor of arts in engineering and construction management, and started at Novo Nordisk in 2005.
Globally Novo Nordisk has grown dramatically over the last 10 years, says Frazier, with growth in the United States most acute. Pushing the growth are sales, which have increased on a compounded growth basis of more than 20 percent a year. Over the eight years since it opened its office in the United States, sales have grown from $1 to $5 billion, and the number of employees has increased from 1,000 to 5,100, with about 1,500 in two New Jersey buildings. The future also looks good. Says Frazier: “It will continue to grow for the foreseeable future.”
What is driving Novo Nordisk’s growth in the United States is the pandemic of diabetes, says Frazier. More than 1 million people living in New Jersey have diabetes today, and by 2025, it is projected that 15 percent of the state population will have diabetes. “The CDC projects that one out of three children born after 2000 will get diabetes sometime in their lifetime,” he says, adding, “Children have a huge risk if as a country and a healthcare system we don’t do something.”
About 80 percent of Novo Nordisk’s business is in the diabetes market, but the company also offers a growth hormone, hemophilia medication, and drugs for post-menopausal women. “We have multiple blockbusters,” says Frazier, citing two drugs that lower blood sugar, Victoza and Novolog, as well as one for treatment of bleeding in hemophilia patients, NovoSeven. “We are very fortunate as a company,” he says. “We don’t have significant sales that are exposed to patents expiring, and we have a strong pipeline of new products that we continue to bring into the marketplace.”
In the new building, about half the employees are in the medical, clinical, and regulatory teams, and the rest in standard corporate functions like finance, marketing, information technology, human resources, and legal. An additional facility at 1100 Campus Road, which has a lease that runs to 2023, houses a training center as well as portions of clinical and regulatory.
The company also has sites in Toronto for the Canadian market; a discovery research site for immunology and diabetes in Seattle, Washington; and a manufacturing plant in Clayton, North Carolina.
For all its successes, Novo Nordisk, like other pharmaceutical companies faces challenges. “The healthcare landscape and marketplace is changing dramatically as our country struggles with how do we continue to ensure access, the cost of innovation, and dealing with the implications of the Affordable Care Act,” says Frazier.
The pharmaceutical marketplace is under a lot of pressure. “We need to bring safe and efficacious medicines to the marketplace and get a return for that,” he says. “It costs more than a billion dollars to bring a drug to the marketplace, and there can be 15 to 20 years of time invested.”
Frazier emphasizes that, given the high risk of pharmaceutical products and the cost pressures in the healthcare, a fair return is essential. “If it is not there, the risk to society is great — there is a disincentive to innovation,” he says. “How to balance risk, reward, and incentive to innovate is a big challenge, and we try to make the right decisions in terms of the molecules we bring forward.”
Ensuring product safety is also critical at Novo Nordisk. Frazier says, “Although John Grisham may want to think otherwise, no pharmaceutical wants to bring a drug into marketplace that is not safe.” Adding that nothing is more devastating to the name of a pharmaceutical company than having a product withdrawn because it is not safe, he continues, “That is why we run multi-thousands of patient clinical trials to make sure a product is safe. It is the most important thing we do and why such a large percentage of our employees are part of clinical and regulatory.
Once a product is put through all the hoops, then the company has to demonstrate that the innovation is significant enough to justify the cost in the marketplace. “We negotiate with federal and state government, managed care, and other payers, and ultimately with the individual using the medication,” says Frazier. “It is a complex issue and we do our best to bring information and understanding of what is innovative. If you don’t reward innovation, it slows down or stops.”
Novo Nordisk decided to stay in New Jersey, most importantly in order not to disrupt the lives of its employees. Having access to the community of scientists that exists in New Jersey, both as a business and an employer is also an important consideration, suggests Frazier, who adds, “We have been part of the social fabric here for more than 20 years. Once you become part of the social fabric of the place we live and work and call home, you don’t give that up lightly.”
At its very best a corporate headquarters might also be home, first of all, for the business. “This building is designed for the way that Novo Nordisk works. It works for us and our culture,” says Bielicky. But in some sense the building is also home for the company’s employees who are enabled to function as a community of collaborators. “It is a way to support our employees to allow them to do the best they can,” he says.
Novo Nordisk Inc. (NVO), 800 Scudders Mill Road, Princeton 08540-6213; 609-987-5800; fax, 609-919-7801. Jerzy Gruhn, president. www.novonordisk-us.com.