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

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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

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The Journey

• About Novartis
• Background of HR Journey 2004 2010
• HR Evolvement 20042010

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About Novartis
Headquarter Basel, Switzerland Location
operate in 140 countries Employment
approximately 102,000 associates worldwide
2009 USD billion Net sales 44.3 Net
income 8.5 RD investment 7.5
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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 focus is on patients
Our purpose is to care and cure. We provide
medicines to treat and prevent diseases, ease
suffering and improve quality of life.
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Fortune Worlds Most Admired Companies
Novartis 2 in pharmaceutical industry 2009
The 10 most admired pharmaceutical companies1
2003 2004 2005 2006 2007 2008 2009 Rating 2009 Rating 2009
1 Pfizer JJ JJ JJ Novartis JJ JJ JJ
2 BMS Pfizer Novartis Novartis JJ Novartis Novartis Novartis
3 JJ Eli Lilly Eli Lilly Abbott Roche Merck Abbott Abbott
4 Merck Merck Abbott Amgen Eli Lilly Abbott Merck Merck
5 Eli Lilly Novartis Pfizer GSK GSK Eli Lilly GSK GSK
6 GSK GSK GSK Eli Lilly Amgen GSK Amgen Amgen
7 Novartis Abbott Amgen Roche Abbott Roche AstraZ AstraZ
8 Pharmacia AstraZ Roche AstraZ Wyeth Amgen Eli Lilly2 Eli Lilly2
9 Wyeth Roche AstraZ Wyeth SanofiA Wyeth Wyeth2 Wyeth2
10 Aventis Aventis Wyeth Pfizer AstraZ Astraz Boehr. Ing.2 Boehr. Ing.2
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/environmen
t, 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.
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Novartis Pharma products covers 9 therapeutic
areas in China
Oncology
Metablism
Cardia-Vascular
Infection Disease
Transplantation
Antirheumatic/Pain
Osteoporosis
Ophthalmic
Central Nervous System
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The Journey

• About Novartis
• Background of HR Journey 2004 2010
• HR Evolvement 20042010

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2004 Basics are not there for HR organization

• No long term talent management strategy
• Little impact on organization culture

• 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 CB benchmarking
• Reactive hiring

• 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

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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

2005 Top 10 USA 262 Japan 65 Germany
24 France
21 U.K. 16 Italy 15 China 14 Brazil
10 Canada 10 Spain 10
2002 Top 10 USA 196 Japan 53 Germany
20 France
19 U.K. 14 Italy 13 Spain 9 Canada
8 Mexico 8 China 6
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
bio Source BCG analysis
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With the growth ambition, the business model and
external competitive landscape also evolving

• 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
  MA
• 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......

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Three Strategic Imperatives to Capture Growth
Opportunities since 2005
Strategic Imperatives
High Level
Growth/Innovation
Productivity
Talent
? Ensuring we have the right People, Structure,
Culture and Capabilities in our in organization
? Improving efficiency of Support Functions,
having strong process / systems to increase
automation
? Investing in the right Portfolio, Customers and
Markets to Maximize Growth
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The Journey

• About Novartis
• Background of HR Journey 2004 2010
• HR Evolvement 20042010

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A journey of HR functional growth
2007Onwards Strategic Impact
20052007 Partnering
20042005 Fixing Basics

• Identify gaps in HR. Basics in
• compensation benchmarking
• benefit administration
• adding hiring function
• communication with line managers

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Establishing HR Partnering with Business
2007Onwards Strategic Impact
20052007 Partnering
20042005 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
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Overall Performance Rating for HR Function from
CEO by 2007
Strong Points
Weakness

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

• Highly Custormer Oriented

• On-boarding system/integration to the company poor

• Deep Involvement in Feildforce Operations

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

• Developed Comprehensive Local HR programs to
  Support

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

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Establishing HR Partnering with Business
2007Onwards Strategic Impact
20052007 Partnering
20042005 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

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Key Strategies
17 From Fixing basics to shaping a culture
change- HR team in motion Jennifer Jin
Victoria Wu Business Use Only
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Focus of HR-after 2007 to support more ambitious
business growth
Hiring Capability Clear EVP Clear Sourcing
Strategy Robust staffing organization, Assessment
on-boarding process.
Talent Leadership Deep follow-up required
different level developmental actions.
Key Focus Ambitious growth

• New Culture Building
• Customer Orientation,
• Performance Driven,
• Compliance and Self-responsibility
• Passion to Win

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

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

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Never Stop Growing as EVP Theme to Attract Best
Talent and Clear on Messages to Stay in Novartis
Hiring
Recruitment Manual (for Hiring Managers and HR
professional)
EVP Brochure to Candidates
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Competency based Career Progression Support
Employee -- Improve capability on current job--
Plan for next step of Career within Novartis
Talent Leadership
Bu-bu-gao ---- Career progression for Sales Reps
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Leadership Acceleration Programs to upgrade
Executives their successors
Talent Leadership
CPO Leadership of Today and Tomorrow for Hyper
Growth

• Executive Program
• Chinese Economist
• Harward Business School

CEO Director Reports (PEC)

• Leading for Success Program
• Chinese Economist
• Harward Busoiness School
• Tuck
• SKOLKOVO

High potential talents with 12 yrs readiness/
ready now

• International Management Program
• CEIBS
• IMD

High potential talents with 3-5 yrs readiness
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Leadership Acceleration Programs to Strengthen
pipeline of 1st line 2nd line managers
Talent Leadership
FF Functional Leadership for Business Hyper
Growth
PENG Program (12months)
Bench for Functional Head RDs
Talent Competence Commitment
Contribution
X
X

• Workshop
• Follow up by Experience Sharing
• Group mentoring

• Stretched Goal

• Cross Functional teamwork
• Goal Achievement

KUN Program (12 months)
Bench for 2st line sales manager
Talent Competence Commitment
Contribution
X
X

• Workshop
• Follow up by Experience Sharing
• Group coaching

• Team collaboration
• Goal Achievement

• Stretched Goal

Bench for 1st line sales manager
Mini OTR program (integrated with Talent
management) assessment for self-awareness,
e-learning, Learn by doing, classroom training
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Compliance culture building- External challenges
in Pharma industry- 2007
Culture

• 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.

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Drug safety Issue , RDPAC Certification for new
Medical Reps, Government Anti-corruption Action
in 2007
Culture
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Building a High Performance High Compliance
Organization
Culture

• 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

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HRs role in Changing of culture
Culture
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New material and tools for sales force to easily
access compliance policies
Culture
Employee Compliance handbook for every employee
Promotional guides for Sales and Marketing people
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Communication Examples -Presentations/Speeches
Culture
Seminar
Website
Publication
E-Learning
Method Time Organizer Audience Contents
Management meeting XXX, 2007 HR, SPBDL Over 100 manager level above associates Different measurement A story of eel
Management meeting XXX, 2007 HR, SP BDL As above Reinforce training communication on SOP, TCC, Dos Donts
orientation XXX, 2007 Sales Training new employees Novartis as the most admired company to keep high compliance standard
Staff Meeting with global leaders XXX, 2007 CEO Office Marketing sales associates A global compliance presentation QA session to answer associates concern/questions
Opening for sales meeting XXX, 2007 Sales Mgt. Sales team Change the Mindset of Sales Management Team to Meet the Requirement of Transparency, Control, Compliance
Closing for line manager training XXX, 2007 Sales Training New sales managers High performance, high compliance
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Comprehensive compliance training available on
e-learning
Culture
Novartis China Online Learning Center
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Novartis SunFlower Program ----Employee
Assistance Program(EAP)
Culture
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Novartis is among the most ethical company
Culture
Least strict
Compliance examples
Most strict
Item 1
G
C
D
B
A
F
E
Item 2
G
C
D
B
F
E
A
Item 3
G
C
D
B
A
F
E
G
C
D
B
A
F
E
Item 4
Similar policy

Most strict
Major MNCs

Least strict
Source external consultant
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Highly Engaged Workforce - 2009 Engagement Survey
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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 welcomed!

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Novartis Pharma China has been upgraded to
Regional level as Greater China Region(GCR) in
2010
2
GCPO BJ HQ
GCPO SH HQ
GCPO GZ HQ
GCPO CD HQ
GCPO HQ
BEIJING
SHANGHAI
CHENGDU
GUANGZHOU
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Continue on the road of having strategic impact
HR skills, talents, structure, processes upgrades
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Strong,
Winning
HR team!
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Thanks!