Success and continued growth in Novartis is attributable to two HR-driven factors: employee engagement and a warm, collaborative and participative work culture. Sarah O’Carroll speaks to Charlie Hough and Makarand Tare about winning HR strategies at Novartis
“Three days ago we had a meeting for our budget next year. When we get to the point where we allocate the budget I really rely on the advice of HR.”
For Hough, a critical business skill for HR is knowing the people within the business and their capabilities. They need to be able to advise strategy-makers and planners about which employees are capable of undertaking each task and who is capable of overseeing which project.
“Within Novartis, HR can tell me, for example, that someone is stressed and won’t be able to deliver what we’re asking from them,” says Hough. “Some people are conservative and quiet achievers. There are others who will sign up for anything but won’t deliver. HR needs to be able to give us this information.”
This is only one of the ways the HR team within Novartis contribute to the bottom line results. The OTC business unit of Novartis Consumer Health is a member of the Novartis Group Companies. With its global headquarters in Parsippany New Jersey, OTC employs more than 4700 associates worldwide,with revenue of about $US3 billion ($4.6 billion). Novartis OTC is the fastest-growing among the top five industry leaders in the OTC market and now ranks number four in the world.
Much of Novartis OTC’s success and continued growth in Australasia is attributable to two HR-driven factors: employee engagement and a warm, collaborative and participative work culture.
According to Hough, in Novartis the HR function is viewed as an integral and valued business partner, consistently ensuring that all HR activities and interventions are aligned with other stakeholders and with the business agenda and goals.
Fine dining principle
Engagement levels of Novartis employees jumped from 71 per cent in 2006 to 78 per cent in 2007 and 80 per cent in 2008 and these trends have a direct correlation to bottom line results.
“Driving employee engagement has been a key driver in helping business achieving business goals,” says Makarand Tare, head of organisation performance. “The speed and quality of execution improved with engagement.”
One way this was done was through treating employees like internal customers. This is done through a strong and committed employee value proposition and a culture of generosity and not looking at employees as an expense. They apply what is called a “fine dining principle” where there is no cost-cutting when it comes to dealing with staff.
“We have built a ‘play hard and work hard’ culture, and HR takes responsibility to continue the momentum by satisfying internal customers and looking for ways to share success with employees,” he says.
Another successful strategy according to Tare is “Focus Five” initiatives which engage employees at all levels in rolling out the employee benefit program.
“Every effort is made to gauge what the employee really wants versus what senior management wants.”
More indispensable principles
While partnering with the business effectively and treating employees as customers there are three other indispensable principles within Novartis HR strategy: business-savvy HR, building and managing relationships with key stakeholders and marketing HR internally.
The focus five group is one of the examples of the business-savvy HR intervention applied in resolving business issues and building engagement. The group is charged with reviewing and modifying (if required) all new communications and policies that management wishes to launch.
Culture fit is another integral part of the recruitment and retention strategy with Novartis. According to Hough, employees are not just employed based on their skills, but also whether they will fit into Novartis’s culture or not. They have a set of 10 values and behaviours which they believe are critical for someone to be successful within the company. These include values and behaviours such as: results-driven, competent, leadership, self discipline,integrity and open communication. Employees are then judged at the end of the year not just on their specific numerical or financial objectives, but on whether they lived the Novartis values and behaviours throughout the year. Both of these ratings are equally as important in determining their incentive payment and salary increase for the next year
“If you’re a salesperson and you do super well in your territory but you’re a jerk and nobody wants to work with you, you’re going to get penalised and you’re not going to do well in your end-of-year rating,” says Hough.
Therefore, he says, screening is important,because if you take someone on who is the wrong cultural fit then it can be difficult for them and the company and can ultimately be a painful experience for all involved.
Another critical component of the HR function is to market it effectively internally. Tare says that because the perception of doing a good job is as important as the undertaking of it, it is essential to market HR internally and ensure that the contribution to the business is highlighted and well communicated.
“HR has to move from managing documents and personal files to being a key business driver and to be perceived as one by other functions,” says Tare. (see sidebox “Tips to market HR internally”)
2009 – HR’s biggest challenge
Because Novartis is a public company they are expected to achieve reasonably high rates of growth in both sales and profit, says Hough, and predicts that 2009 will be a challenge.
“We’re facing a pretty uncertain economic period – not only in Australia but in other companies I’m responsible for, so it’s going to be a challenging business environment,” he says.
“One of the areas I will need a lot of help from HR in is to make sure that we maintain a high level of motivation, even if we are facing difficult times versus our budget.”
He believes that, no matter what the challenges are, it is imperative to maintain a motivated and focussed workforce and this will be one of HR’s biggest challenges next year.
“If people give up and get demotivated, our business will spiral downwards. It’s really key that I work closely with Makarand and the HR group.”