Global Talent Management at Novartis

Group 3:

Aasma Bhasin

Atithi Rath

Sanchari Majumdar

Shilpi Hota

Sunil R Prasad

Q1. Critique the idea of internal sourcing of talent.

The most important factor is to select the right candidate for the job. Internal sourcing may be cost effective in short run but it can also be risky in the long run. The internal candidate is already familiar with the organization’s culture, reporting structure, policies etc. Also the

organization has invested a lot to groom the candidate in line with the business requirement. Hence the cost of on- boarding and orientation will be nullified and time will be saved. Also with internal sourcing the remaining employees are also motivated to perform better so as to be in the same place. Internal sourcing is a part of succession planning which is driven by performance oriented organization.

There are also disadvantages and risks associated with the internal sourcing of talent. The position of the person who is promoted will again have to be filled; hence it can be a longer process to execute. The chances of external candidates bringing fresh perspectives and industry best practices to the organization diminish leading to stagnant point of views. Unlike internal candidates, external candidates bring innovative ideas and creative skills to improve business standards.

Though the right selection process depends upon the urgency of sourcing, available talent pool, strategic importance and various other factors, hence both internal and external talent must be scrutinized before making the right choice.

Q2. What is a TM creed and how did Vasella apply it?

Talent Creed is a set of core principles of the organization, its values and mutual expectations that guide the behavior of an institution and its people. These principles depict the type of culture an organization strives to create and achieve its USP. These principles are embedded in the strategy of the organization and drive every aspect of business in the organization.

Vasella created a TM creed which was based on High Performance. Everything (compensation, training, etc.) was based purely on performance.

It was carried out through the following:

1. A completely pay-for-performance model where compensation is based only on performance.

2. Manager Training Programs to equip them to be able to shape the talent of their teams so as to enhance performance.

3. Global sourcing of talent to ensure a good exposure and to stress the fact that performance will be rewarded.

4. Competitive salaries and perquisites which are of global standards.5. Taking into account the potential rating of a person along with his normal review.

Q3. High performers try the hardest things and tend to fail. If so, how will you insulate your TM plan against this danger?

To ensure that high performers continue trying the hardest things and not be afraid to fail, the TM plan should incorporate the following:

1. Milestones can be created in the lifecycle of the project. So in cases where only the final product is needed and the project fails at the last moment, though the final output cannot be taken further, the effort put in can be quantified by the number of milestones achieved in the course of the project. (This is especially true in the case of pharmaceutical industry)

2. The intention/breakthrough being pursued should be evaluated (only for extra positives for the employee and not whether it worked or not). So in case it’s a paradigm shifting intent/discovery, it should be actively encouraged and not be made a part of the review process. Complete freedom is the key and it must be provided.

3. The ability to innovate should be actively identified in employees and must be fast-tracked in order to identify potential high performers and insulate them from normal review processes. (a separate review process for them can also be formulated)

Q4. How did Vasella face the talent crunch and turnover challenges in China?

A. Talented applicants were often young with little experience in multinationals. Also when they joined Novartis, they would learn their best and leave the organization within a year or so for better profiles and pay grades by using the brand name of the multinational Novartis. This would cost the company as its time and money gets spent in training them before utilizing their productivity. Even at the lower rank of R&D, the salary was rising over 10% per year which became difficult for Novartis to find and retain the talent. The already existing talent at company was also draining to outside offers with higher salaries. There was also 20% turnover in sales and other departments.

Vasella faced the challenge of turnover for scientists and senior managers by negotiating salary and stock grant programs with multi-year vesting periods as well as offering long term educational support and flex time for those who stayed at the company. They sent 48 Chinese employees to part-time programs at Beijing University’s business school. This education benefited as one of the most promising mechanisms for reducing turnover and developing talent.

The company structured one companywide salary band for both returnees and local hires and to pay educational and transitional assistance to returnees in one lump sum payment.

Ultimately all these practices reduced the turnover from 20.1 % in 2006 to 17.6 % in 2007.