From Fixing basics to shaping a culture change- HR team in motion

From Fixing basics to shaping a culture change- HR team in motion

Jennifer Jin Victoria Wu

Head of Human Resources Head of Talent Management & Organization Development

Novartis Pharma China Novartis Pharma China

The Journey

About Novartis

Background of HR Journey 2004 ~ 2010

HR Evolvement 2004~2010

2| From Fixing basics to shaping a culture change- HR team in motion| Jennifer Jin & Victoria Wu| Business Use Only

About Novartis

Headquarter: Basel, SwitzerlandLocation: operate in 140 countriesEmployment: approximately 102,000 associates worldwide

2009

USD billion

Net sales:

44.3

Net income:

8.5

R&D investment:

7.5


Our mission

We want to discover, develop and successfully market innovative products to prevent and cure diseases, to ease suffering, and to enhance quality of life.

We also want to provide a shareholder return that reflects outstanding performance and to adequately reward those who invest ideas and work in our company.

Our purpose is to care and cure. We provide medicines to treat and prevent diseases, ease suffering and improve quality of life.

Our focus is on patients


Fortune: “World’s Most Admired Companies” Novartis #2 in pharmaceutical industry 2009

The 10 most admired pharmaceutical companies1

1 Based on the evaluation of senior pharmaceutical industry executives and financial analysts on a scale from 0 (poor) to 10 (excellent) on nine criteria: community/environment, financial soundness, globality, long-term investment, innovation, management quality, people management, products/service quality and use of assets.

In 2009, Fortune merged the US and international versions of this ranking. The 2009 results of non-US-based companies therefore include ratings from US executives for the first time.

2 The print version of the article contains only the top seven companies in pharmaceutical industry list.

2003 2004 2005 2006 2007 2008 2009 Rating 2009

1 Pfizer J&J J&J J&J Novartis J&J J&J

2 BMS Pfizer Novartis Novartis J&J Novartis Novartis

3 J&J Eli Lilly Eli Lilly Abbott Roche Merck Abbott

4 Merck Merck Abbott Amgen Eli Lilly Abbott Merck

5 Eli Lilly Novartis Pfizer GSK GSK Eli Lilly GSK

6 GSK GSK GSK Eli Lilly Amgen GSK Amgen

7 Novartis Abbott Amgen Roche Abbott Roche AstraZ

8 Pharmacia AstraZ Roche AstraZ Wyeth Amgen Eli Lilly2

9 Wyeth Roche AstraZ Wyeth SanofiA Wyeth Wyeth2

10 Aventis Aventis Wyeth Pfizer AstraZ Astraz Boehr. Ing.2

7.31

6.78

6.67

6.48

6.47

6.18

6.03

5.89

5.68

7.05


Novartis Pharma products covers 9 therapeutic areas in China

OncologyMetablismCardio-Vascular

Infection Disease Transplantation Antirheumatic/Pain

Osteoporosis Ophthalmic Central Nervous System


The Journey

About Novartis




2004 Basics are not there for HR organization

No long term talent management strategy Little impact on organization culture

Employees are still concerned about how their payroll is processed and benefit is managed at very administrative level, not yet raising questions on career progression

Very low-tech process handling payroll, employee data management, no formal change status process, lack of consistency


No business partner concept, small HR team Limited regional HR to be closer to customers No exit interview to understand what is the reason of

turnover (pharma industry historically has high turnover)

Customer does not trust C&B benchmarking Reactive hiring

HR Basics(payroll,

employee benefits, data management,

processes, systems)

Business Partnering

Strategic Impact

Business ambitions for Pharma companies, including Novartis

The market growth (IMS data) shows the market will grow into the number 5 market in the world following US, Japan, Germany and France

Novartis, among other MNC big pharma companies, strives to become one of the top companies within 5 years, which has embarked ambitious growth target since 2005


2002 Top 10

USA 196

Japan 53

Germany 20

France 19

U.K. 14

Italy 13

Spain 9

Canada 8

Mexico 8

China 6

2005 Top 10

USA 262

Japan 65

Germany 24

France 21

U.K. 16

Italy 15

China 14

Brazil 10

Canada 10

Spain 10

2010 Top 10

USA 466

Japan 81

Germany 37

France 28

China 24

U.K. 24

Italy 23

Canada 17

Spain 16

Brazil 15

Estimated Market Size for Ethical & OTC Drugs in $ bioSource: BCG analysis

With the growth ambition, the business model and external competitive landscape also evolving

Field Force (Core Selling Model)Field Force (Core Selling Model)

Marketing and Medical Marketing (Integrated Selling)

Marketing and Medical Marketing (Integrated Selling)

Stkholders Mgmnt

Stkholders Mgmnt

11

22

33

80’s 90’s 00’s

Complexity and cost

Continued industry focus on Emerging Growth Markets from all MNCs

Changing of selling model

Continued increased regulatory scrutiny on safety issues, delays in approvals of new drugs

Increasingly competitive deal environment for M&A

Growing competition for Top Talent

Implications to how HR shall be organized• Tier 3 & 4 cities • New skills in Medical and central Marketing, KAM, new product launch skills• Number of managers/leaders• Communication and coaching skills of line managers• Change management skills• Building high performing teams• and more......


Three Strategic Imperatives to Capture Growth Opportunities since 2005

Strategic Imperatives

Growth/Innovation Productivity Talent

Investing in the right Portfolio, Customers and Markets to Maximize Growth

Improving efficiency of Support Functions, having strong process / systems to increase automation

Ensuring we have the right People, Structure, Culture and Capabilities in our in organization

High Level


The Journey

About Novartis




2007~Onwards

Strategic Impact

A journey of HR functional growth


2005~2007

Partnering

2004~2005

Fixing Basics

Identify gaps in HR. Basics in:

compensation benchmarking

benefit administration

adding hiring function

communication with line managers

Establishing HR Partnering with Business

2007~Onwards

Strategic Impact

2005~2007

Partnering

2004~2005

Fixing Basics

Adding Regional HR manager role as HR business partner

Upgrading HR functions by self-assessing capabilities in all areas: Road to

Excellence

Adding more efforts in talent development (BiMBA programs, e-learning platform),

strategic staffing and sourcing programs (Sailing program), etc.

Growing FCT with business models and organization changes


Wherever you go, whatever you do, e-Learning will be

right here waiting for you……

HR Head

Regional HR Mgr

Regional HR Mgr

Regional HR Mgr

Regional HR Mgr

Functional HR Mgr

Functional HR Mgr

Functional HR Mgr

Overall Performance Rating for HR Function from CEO by 2007

•Highly Custormer Oriented

Strong Points:

•Hiring capability- Need to be more consistant, in effective sourcing pool, lack of assessment tools

Weakness

•Deep Involvement in Feildforce Operations

•Developed Comprehensive Local HR programs to Support

•On-boarding system/integration to the company poor

•Talent management with deep business impact (normal things are due, but not very engaged in business and follow ups)

•Strategic planning on HR structural process , people capability etc.


Establishing HR Partnering with Business

2007~Onwards

Strategic Impact

2005~2007

Partnering

2004~2005

Fixing Basics

Strengthen staffing capability to hire 1000+ people with consistent process, a

clear EVP

Drive change of culture for ambitious growth,Add OD function

System upgrades to SAP platform and web-based processes

More dedicated HR support in regions/cities

Strengthen all functions, driving strategic projects:

retention project, Leadership acceleration programs, employee engagement

surveys, outsourcing of payroll and benefit, shared service center

transformation, etc


Key Strategies

Talent Management

Developing and Retaining Key Talent and Capabilities

Acquiring Top TalentStaffing

Shaping the ClimateOrganizationDevelopment

Synchronizing Capabilities and Increasing EfficiencyHR BusinessExcellence


Focus of HR-after 2007 to support more ambitious business growth

Key Focus

Ambitious growth

Hiring Capability: Clear EVPClear Sourcing StrategyRobust staffing organization, Assessment & on-boarding process.

Talent & Leadership:

Deep follow-up required different level developmental actions.

New Culture Building • Customer Orientation, • Performance Driven,

• Compliance and Self-responsibility• Passion to Win

18 | From Fixing basics to shaping a culture change- HR team in motion| Jennifer Jin & Victoria Wu| Business Use Only

Compliance culture building- External challenges in Pharma industry- 2007

Since 2007, Pharma industry under big challenge from government. Sign of no-Medical Reps in hospitals and drug safety issue surfaced requires pharma company to rebuilt their reputation.

MNC Pharma companies have been implementing strict professional promotional code.

Novartis has been always very strict in terms of compliance, but yet, the doubt coming from multiple sources pushes company to state even more clearly and consistently. Internal audit also surfaced some areas of improvement in terms of compliance.

New code was developed by RDPAC that all Reps working in associated MNC companies will go through RDPAC certification process within 6 months of employment.


Culture


Culture

Drug safety Issue , RDPAC Certification for new Medical Reps, Government Anti-corruption Action in 2007

Building a High Performance High Compliance Organization

“tone from the top”- making it clear to everyone that non-compliance will not be tolerated.

Review and build SOPs to clarify processes, train and communicate broadly to the organization.

Promoted necessary tools (promotional catalog), on-line tools, website created for compliance

Massive training to the entire organization, especially for sales and marketing professionals

Cases of violations were shared and addressed


Culture

HR’s role in Changing of culture


Culture

New material and tools for sales force to easily access compliance policies

Employees need to sign to confirm acceptance of the handbook

Employee Compliance handbook for every employee

Promotional guides for Sales and Marketing people


Culture

Publication SeminarMethod Time Organizer Audience Contents

Management meeting XXX, 2007

HR, SP&BDL

Over 100 manager level above associates

Different measurementA story of eel

Management meeting XXX, 2007

HR, SP& BDL

As aboveReinforce training & communication on SOP, TCC, Dos & Don’ts

orientation XXX, 2007Sales Training

new employees

Novartis as the most admired company to keep high compliance standard

Staff Meeting with global leaders

XXX, 2007 CEO OfficeMarketing & sales associates

A global compliance presentationQ&A session to answer associates’ concern/questions

Opening for sales meeting

XXX, 2007 Sales Mgt. Sales teamChange the Mindset of Sales Management Team to Meet the Requirement of Transparency, Control, Compliance

Closing for line manager training

XXX, 2007Sales Training

New sales managers

High performance, high compliance

E-LearningWebsite

Communication Examples -Presentations/Speeches


Culture

Novartis China Online Learning Center


Culture

Comprehensive compliance training available on e-learning


Culture

Novartis SunFlower Program ----Employee Assistance Program(EAP)

Express about occupational psychological health

1

Telephone/face to face consulting 3

2Online “Caring” Website

Novartis is among the most ethical company


Item 1

Item 3

Item 2

Item 4

Similar policy

Least strict Most strict

G CDB A FE

GCDBA F E

GCDB A FE

G CDBA F E

Compliance examples

Major MNCs Most strict

Least strict Source: external consultant

Culture

Never Stop Growing as EVP Theme to Attract Best Talent and Clear on Messages to Stay in Novartis

1. Extraordinary growth – Novartis China is transforming, be a part of the journey

2. Innovative products – Novartis has the strongest product pipeline in the industry

3. Passion to win – Novartis offers challenges and rewards great performance

4. Commitment towards patients, society and China – Novartis cares

5. Development and advancement – Novartis is committed to invest in talent development and our growth results in great career opportunities

6. A dynamic work environment with encouraging and caring leaders – Novartis is a great place to work

Hiring


Never Stop Growing as EVP Theme to Attract Best Talent and Clear on Messages to Stay in Novartis

Recruitment Manual(for Hiring Managers and HR professional)

EVP Brochure to Candidates

Hiring



TalentLeadership

Competency based Career Progression Support Employee -- Improve capability on current job-- Plan for next step of Career within Novartis

Bu-bu-gao

---- Career progression for Sales Reps

TalentLeadership

Leadership Acceleration Programs to upgrade Executives & their successors

High potential talents with 3-5 yrs readiness

High potential talents with 1~2 yrs

readiness/ ready now

GCR Chairman & Direct Reports

(PEC)

International Management Program CEIBS IMD

Leading for Success Program Chinese Economist Harward Busoiness School Tuck SKOLKOVO

CPO Leadership of Today and Tomorrow for Hyper Growth

Executive Program Chinese Economist Harward Business School


TalentLeadership

Bench for 1st line sales manager

Bench for 2st line sales manager

Bench for Functional Head

& RDs

Mini OTR program (integrated with Talent management): assessment for self-awareness, e-learning, Learn by doing, classroom training

KUN Program (12 months):

PENG Program (12months):

FF & Functional Leadership for Business Hyper Growth

Talent = Competence Commitment ContributionWorkshopFollow up by Experience SharingGroup coaching

Stretched Goal Team collaborationGoal Achievement

Talent = Competence Commitment ContributionWorkshopFollow up by Experience SharingGroup mentoring

Stretched Goal Cross Functional teamworkGoal Achievement

X X

X X

Leadership Acceleration Programs to Strengthen pipeline of 1st line & 2nd line managers


Categories Ranked By Difference Favorable Scores

Training & Career Development

Empowerment & Involvement

Management

Senior Leadership

Communication Channels

Innovation & Change

Retention

Performance Management

Integrity & Social Responsibility

Communication Effectiveness

Immediate Management

Diversity & Inclusion

Engagement

Work-life Balance/Work Satisfaction

External Orientation/Customer Focus

Life Work Integration Supplement

Internal Processes

Pay & Benefits

Red / Green Difference Bars are statistically significant

Differences From Benchmark

NovartisEGM: COUNTRY: CHINA 2009 (1915)

vs. NOVARTIS OVERALL 2009 (86682)

84

88

81

80

82

79

86

78

90

89

86

83

89

81

80

64

52

54

23

22

22

21

19

15

14

14

11

11

10

8

6

6

6

5

5

4

-30 -15 0 15 300 25 50 75 100

Highly Engaged Workforce - 2009 Engagement Survey


Lessons learned

Always join business table and talk about business, not HR languages

Be open minded, nothing is static

Be bold to champion some business projects-yes, HR can do it! (although this is a tough road)

Always with clear data supporting people discussion and a long term view (eg. Sourcing strategy, assessment tools, talent development programs)

Build a strong HR team, hire people who has passion to grow with the business, not only qualifying for current job

Asking each member of your team:

• Are you happy working here?

• Are you learning at your work?

Create an environment where creativeness and openness are always welcome!


Novartis Pharma China has been upgraded to Regional level as Greater China Region(GCR) in 2010

GCPO BJ HQGCPO SH HQ

GCPO CD HQGCPO GZ HQ

GCPO HQ

SHANGHAISHANGHAI

CHENGDUCHENGDU

GUANGZHOUGUANGZHOU

BEIJINGBEIJING

Hainan

Heilongjiang

Sichuan

Jilin

Liaoning

Shandong

Fujian

Jiangxi

AnhuiHubei

Hunan

GuangdongGuangxi

Henan

Shanxi

Inner

Mongolia

Shaanxi

Ningxia

GansuQinghai

Guizhou

Yunnan

Xinjiang

Jiangsu

ZhejiangChongqing

Tibet

HebeiTianjin

Taiwan


Continue on the road of having strategic impact

HR skills, talents, structure, processes upgrades36 | From Fixing basics to shaping a culture change- HR team in motion| Jennifer Jin & Victoria Wu| Business Use Only


Winning

HR team!

Strong,

From Fixing basics to shaping a culture change- HR team in motion

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