Eli Lilly (industrialist) - Business Career

Business Career

According to his biographer, James H. Madison, "Lilly was modest, unassuming, and quiet, yet under his placid exterior was an inquiring mind and abundant physical energy" and a man who "believed in hard work, all his life." As a boy, Lilly worked during school vacations at the family's pharmaceutical plant on McCarty Street in Indianapolis, where he washed bottles and did other tasks. He never thought of working anywhere else.

After receiving a college degree in 1907, Lilly joined the family firm as the head and the only employee of the newly-created Economic Department, where his job was to explore cost effective and more efficient ways to operate the business. In addition to studying the company's manufacturing processes, Lilly loved mechanical gadgets and introduced new manufacturing equipment to increase production, reduce waste, and improve quality. In 1909 Lilly was promoted to superintendent of the manufacturing division. Within two years he had brought new principles of scientific management to the company to improve efficiency and reward workers for meeting and exceeding production requirements. As the business expanded and modernized in the years preceding World War I, Lilly and his brother, Josiah K. Lilly Jr., continued to work in managerial positions, while their father remained as head of the growing company.

In the 1920s and 1930s, Eli Lilly and Company experienced significant growth and financial success as it expanded research and product development efforts. Lilly was actively involved in major projects that brought the Indianapolis company to the forefront as a top research-based pharmaceutical manufacturer. Insulin, which the company produced and sold under the trade name of Iletin, was the result of a pioneering collaboration with University of Toronto research scientists. In May 1922 Lilly and the company's director of biochemical research, George Henry Alexander Clowes, met in Toronto with J. J. R. Macleod, Frederick G. Banting, and Charles H. Best, the scientists who had discovered insulin as an effective treatment for diabetes. The meeting resulted in an agreement between the university and the Indianapolis manufacturer to mass produce and distribute the drug. Iletin became the most important drug in the company's history and Banting and Macleod earned the Nobel Prize in 1923 for their groundbreaking work.

Lilly's other significant achievements included contributions to improved production and research. He devoted hours to developing a straight-line production system for the company's new Building 22, which was completed in 1926 and improved the company's manufacturing processes. As research expanded and the company introduced new products, including the sedative Amytal, the antiseptic Merthiolate, and other drugs such as ephedrine, Lilly strengthened ties with university scientists by establishing research fellowships at American and European universities. Another successful collaboration, this one with researchers at Harvard University and the University of Rochester for drugs to treat anemia, built on the lessons learned from the insulin project and earned the university scientists, George R. Minot, William P. Murphy, and George Whipple, the Nobel Prize for medicine in 1934.

Eli Lilly became president of Eli Lilly and Company on January 26, 1932, and remained at its head until 1948. Lilly showed great management skill and concern for the welfare of his employees. During his tenure as president, the company grew to include 6,912 employees and had sales of $115 million in 1948. While the company expanded operations in Indianapolis and overseas, it established a reputation as a good place to work by providing employee assistance, sound wages, maintaining a positive oulook, and desegregating its workforce. As increased governmental regulations challenged the industry, the U.S. Justice Department investigated Eli Lilly and Company and two other pharmaceutical firms for violation of the Sherman Antitrust Act, charging them with fixing insulin prices. Legal council advised Lilly to avoid the high costs and negative publicity from an extended lawsuit by pleading nolo contendere, which he did, so the company could move forward.

Under Lilly's leadership during World War II, the company supported the war effort by producing blood plasma in conjunction with the American Red Cross. It also manufactured encephalitis vaccine, antitoxin for gas poisoning, vaccines for flu and typhus as well as insulin, Merthiolate, and other drugs. Lilly was especially proud of the company's collaboration with the U.S. government and others on large-scale production of penicillin. In the renovated Curtiss-Wright complex on Kentucky Avenue in Indianapolis, Lilly employees were producing more than 250,000 ampules of penicillin per day by the late 1940s.

In the postwar years, Lilly remained active in company business as it expanded overseas with the construction of a new plant in Basingstoke, England, and supporting research on new drugs. He also reorganized the company, appointing non-family members to top management positions and began the transition to non-family management of the company. Lilly was president of the company from 1932 to 1947. Following the death of his father in 1948, Lilly served as chairman of the board from 1948 to 1961, while his brother, J. K. Lilly Jr., was the company's president, and from 1966 to 1969, when Eugene N. Beesley was elected president. Lilly was honorary chairman from 1961 to 1966 and from 1969 to 1977.