Accelerated leadership development and succession: Korn/Ferry's impact at Novartis by Korn Ferry

Accelerated leadership development and succession: Korn/Ferry’s impact at Novartis by Kevin Cashman, Janet Feldman, Katie Cooney, and George Hallenbeck

December 2010 In 2002 Korn/Ferry launched an initiative called LeaderSuccession SM at Novartis, the global pharmaceutical and healthcare company, to identify, develop, and mentor its future business leaders. Our review of LeaderSuccession with Novartis executives found that the program’s positive influence extended into unanticipated areas and reached broadly across the company. This paper discusses what the program has taught us about leadership and the essential elements, commitments, and approach that are key to the program’s success.

One of the major challenges companies face is maintaining a steady pipeline of “ready now” candidates to move up into positions of greater scope and responsibility. This challenge raises two questions: How can leaders get to know their organization’s talent on a deeper level as a prelude to individual career and organizational planning decisions? Then, how can companies also develop those individuals to support their emergence as fully qualified leaders? To address these dual needs, Korn/Ferry International created LeaderSuccession, a customized program of individual assessment and feedback, group learning, and executive coaching that accelerates an organization’s ability to identify, assess, and develop its high-potential leadership talent. The program combines Korn/Ferry’s expertise in talent assessment and executive coaching with three concepts that are critical to the development of leaders: Inside-Out, Outside-In awareness; trust-based influence; and authentic contribution. In place since 2002 at Novartis, LeaderSuccession has been integral to that company’s success in developing bench strength, retaining key talent, and extending its recognition as one of the world’s most-admired companies. It has helped create a base of self-aware, influential leaders whose focus extends beyond individual results to a concern for the team and the broader organization. “This is not skills training; it’s about who you are and the impact that has,” said Mechtild Walser-Ertel, who has participated in several sessions as a talent management and organizational development leader

for Novartis Consumer Health. “This is a simple concept that resonates strongly. We are all individuals with different purpose, who lead differently.”

Involvement with Novartis “This is a simple concept that resonates strongly. We are all individuals with different purpose, who lead differently.” Mechtild Walser-Ertel, HR and organizational development leader, Novartis Consumer Health

Korn/Ferry’s involvement in Novartis’s succession planning initiatives began in 2002 when Thomas Ebeling (then CEO of Novartis Pharma), asked Senior Partner Kevin Cashman (then CEO of LeaderSource) to create a program to help Novartis identify, develop, and mentor the company’s future leaders. The issue was critical for Novartis. In 2000 the company had recruited 79 percent of its talent from outside the organization, and though that number had come down, by 2002 it was still 58 percent. Novartis needed to reduce its outside hiring costs, leverage its investment in recruitment, and develop future leaders from among its existing talent pool. Over the next eight years, more than 500 people from Novartis’s pharma, oncology, generics, OTC, and CIBA Vision business units participated in LeaderSuccession programs (called Leadership Mentoring at Novartis). Participants and organizational sponsors came from more than forty countries on five continents. By 2009, Novartis’s external hiring dropped to just 16 percent. While Korn/Ferry’s LeaderSuccession is not solely responsible for that dramatic shift, it has become a key component of Novartis’s talent development initiatives.

While these results are impressive, the impact of LeaderSuccession stretched into realms that neither Novartis nor Korn/Ferry initially anticipated. Program sponsors not only learned about the talent in their The impact of LeaderSuccession stretched into organizations; they grew in their realms that neither Novartis nor Korn/Ferry initially own capacity as leaders and became anticipated. more fully known to their people. Not only did individual participants expand their leadership capabilities they also brought the concepts back to their teams, and helped them grow as well. A new understanding of the requirements and concepts of leadership evolved across the company. “The program not only gives us a better read on emerging talent, but it also triggers a turning point in how leadership is viewed at Novartis,” said Jonathan Peacock, then a finance and administrative officer at Novartis who sponsored numerous sessions for employees in the finance function. “There is a shift from viewing leadership as a results-oriented track record to bigger questions: How do I develop as a leader? How do I develop people? How do I want to be seen?”

Earlier this year Korn/Ferry interviewed fifteen Novartis enterprise leaders, HR leaders, and program participants to better understand the source and results of these positive changes. Leadership development programs that create lasting value connect the individual’s internal motives, beliefs, talents, and intentions with the external needs of the organization and marketplace. Executives emerge as effective and inspiring leaders when they understand what they believe in and care about, how they make decisions and influence others, and how they behave and communicate in different circumstances. The best leaders can articulate their mission and values, and are transparent with those they lead. Leaders also need lucid knowledge of how they are perceived and of how they impact their organizations, customers, and marketplace. This state of self- and other-awareness is the goal of the Inside-Out, Outside-In principle of leadership development used in LeaderSuccession. “This work is so effective at creating self-awareness,” commented sponsor Jürgen Brokatsky-Geiger, Novartis Global Head, Human Resources. “We wanted to bring our talent into a reflective process that allows them to think more deeply about their career aspirations and abilities and what opportunities provide the best fit. This benefits the organization as much as it does the specific individual.”

Acknowledgments

The following individuals were contributors to the content and direction of this paper: Andrea Saia President and Chief Executive Officer, CIBA Vision

Brian McNamara Senior Vice President/General Manager Novartis OTC, North America

Christelle Beneteau Human Resources Head, Novartis Group Finance

Guido Guidi Novartis Oncology Region Europe Head

Jonathan Peacock Executive VP and Chief Financial Officer, Amgen

Jürgen Brokatzky-Geiger, Global Head of Human Resources, Novartis International AG

Kurt Graves Executive Chairman of the Board, Intarcia Therapeutics

Mark Sawyer Global Head Human Resources, Novartis Institutes for BioMedical Research

Mauro Ghilardi Global Head Human Resources/SVP, OTC, Novartis Consumer Health

The power of the off-site At the core of LeaderSuccession is an off-site session—a two- to three-day program of facilitated group learning, discussion, individual coaching, and development planning involving the CEO, business unit, or functional head who serves as the program sponsor; a human resources partner; six to eight selected participants; and a Korn/Ferry facilitator. Crucial to the success of the program is the full involvement of the organizational sponsor—the senior executive who has a vested interest in getting to know and develop talent one to three levels below his or her own level in the organization. This person’s active involvement elevates LeaderSuccession as a vehicle for identifying future leaders by providing them with first-hand experience with the high-potential talent in action.

Mechtild Walser-Ertel Global Head Talent Management and Organization Development, Novartis Consumer Health

Mike Moshier former SVP Human Resources, Novartis OTC

Neil Anthony Global Head, Human Resources, Novartis Pharma

Peter Goethuys Vice President Human Resources Global Operations, Sanofi Aventis

Praveen Tyle Senior Vice President, Global Head, Novartis Business Development & Licensing

Thomas Ebeling

The agenda is structured, yet varied and customizable in its form and content. A key component is Core Purpose work, in which the participants craft a statement of their unique intention as leaders, and discuss how this affects their contributions, roles, and assignments at Novartis. “Knowing your core talents and core values gives you power, energy, and clarity— both a north star and a rudder,” said executive sponsor Kurt Graves. This information becomes central to future career discussions and is an important element of succession planning.

Chief Executive Officer, ProSiebenSat.1 Media AG

The power of integrated learning Research has shown that classroom learning carries the most impact when it is surrounded by preparatory work that builds trust in the process, and post-session coaching that reinforces behavior change. Our fifteen interview respondents recognized the impact of each of the elements of the program. When asked what elements of the program they considered most important: > 14 mentioned off-site and post-session

coaching > 12 mentioned pre-session assessment and

feedback, as well as the usefulness of the data > 11 cited the off-site focus on authenticity,

trust-based learning, and awareness

Participants also present to the group a Leadership Challenge—a business or organizational issue that has tested their abilities as leaders—and then facilitate a discussion of how to address the situation. The format fosters discussion of real-world leadership issues, and at the same time replicates the collaborative participative decision-making needed in leaders. “It is not easy to say, ‘I need help in solving this problem,’” commented sponsor and global business development leader Praveen Tyle . “That vulnerability is really critical. Not everyone embraced that. This is a differentiator for those who did.” In another key exercise, called Four Rooms, participants reflect on their skill and comfort level relating to others in diverse settings: in a close relationship, in gregarious networking situations, as experts making a presentation, or as facilitators addressing the unforeseen. This exercise, too, is followed by observations and feedback to help the participants understand how they reacted and why. “The great value of this exercise,” said sponsor and HR executive Peter Goethuys, “is that they can relate what they were feeling in that situation to the ways others experience them. Ultimately, what emerges is a sense of the unique way the individual responds to and influences others as a leader.”

> 13 mentioned specific off-site exercises,

including (most often) Core Purpose and the Leadership Challenge Others mentioned the structured yet customized flow of the program, and the opportunities the off-site offered for reflection and connection to peers and organizational leaders. The involvement of the organizational sponsor, the skill of the facilitator and the alignment of the program with the needs of the specific sponsor were also mentioned as key.

Other components explore the concepts of personal, relational, and contribution power, and help the participants commit to changes that will have a real impact on their own performance and that of their teams and larger organizations. The off-site also includes social and/or physical activities designed to promote personal connections among participants and give the sponsor an opportunity to interact with the participants outside of the work setting. Participants have made powerful networking connections, which are especially valuable for people who work together in a virtual organization but who rarely come face-to-face.

In addition to the feedback they get from their peers during the off-site, participants also meet in one-on-one coaching sessions with the organizational sponsor, the HR sponsor, and the Korn/Ferry facilitator. These sessions may directly address career development and succession planning, or may be more broadly related to Participants have made powerful networking their development as leaders. This cycle of discovery, expression, connections, which are especially valuable for people feedback, and coaching requires who work together in a virtual organization but who openness, authenticity, vulnerability, rarely come face-to-face. and (hence) a sense of trust and safety in the room. It can be transformative, as participants move beyond “expected” behaviors to reveal their real strengths and contributions.

At the end of the off-site, participants will have completed a LeaderPlan—a one-page document that captures key themes from their participation, and includes their statement of Core Purpose as well as their development commitments.

Off-sites have sometimes produced immediate, dramatic decisions about roles, structures, and even funding levels. After one session, a division leader realized old strategies were no longer working, and told an executive participant to “tear up her plan” and start over with expanded resources.

Assessment, feedback and coaching LeaderSuccession actually gets under way a few weeks before the off-site, with assessments* and 360º inventories that are reviewed with each participant in a confidential conversation with a Korn/Ferry executive coach. In this conversation, the coach helps the individual participants focus on their own process, responses, and intentions. This self-awareness illuminates the information from the 360º tools and also helps the participants understand how they are perceived in their business interactions. This pre-session conversation gives the participants a sense of trust in the process, a common language for development, and an initial commitment to their growth. By the end, each participant identifies two or three initial development objectives to explore at the off-site. Korn/Ferry provides a written summary of assessment results and the coach’s observations to the organizational and HR sponsors for their use at the off-site. Following the off-site, participants again meet with their Korn/Ferry coach, usually for three sessions over the next four to six months. This interaction deepens and reinforces any newfound insights, and helps the participants pursue their development objectives and grow as leaders. The coaching combines deepening understanding with practical, real-life application and supports tangible change in behaviors and effectiveness. Because of the power of the coaching interaction, many participants seek out additional coaching hours or enroll in Korn/Ferry’s Executive to Leader Institute®, an intensive in-residence program for senior leadership development.

“ One individual went from being a very intelligent person with difficulty connecting to others to relating both from the head and the heart. He now takes on challenges with an unforeseen passion.” Andrea Saia CEO of CIBA Vision.

“The coaching is absolutely critical” to the success of the program, said HR leader Walser-Ertel. “Participants have taken a lot away from the coaching sessions. They really fortify the development plans and make them take things more seriously.”

Impact on development and succession Organizational sponsors at Novartis reported breakthrough learning in program participants, with significant growth in clarity, confidence, impact, and accountability. Some results were immediately visible during the off-site. “One individual went from being a very intelligent person with difficulty connecting to others to relating both from the head and the heart,” said sponsor Andrea Saia, CEO of CIBA Vision. “He now takes on challenges with an unforeseen passion.”

* Assessment tools used have included Korn/Ferry’s Decision Styles, which evaluates an individual’s thought process, leadership behaviors, emotional competencies, career motivators, potential, and ability to learn from experience. Korn/Ferry’s e-Choices, a multi-rater tool that measures learning agility—a factor used to identify high-potential talent—has also been a key part of the Novartis program. Novartis uses its own Leadership Standards 360° tool to measure performance against key leadership competencies; at other organizations, Korn/Ferry’s Voices 360° or Survey of Influence Effectiveness would be appropriate. Each of these instruments emphasizes self- and other-awareness.

In other cases, a shift in behavior is quickly revealed back in the office. “An individual who we newly recruited came in as a very hard charger and wasn’t fitting with the environment,” Saia added. “After the program he really listened and learned. The feedback he got was really impactful. This really accelerated his integration and ongoing success.” The Novartis program also served as a clarifying force in the development of succession plans. “The program helps us consider the entire picture when making critical career decisions for individuals. More than just their skills come into consideration,” commented sponsor Guido Guidi, Region Europe Head for Oncology, based in Italy. “This is particularly useful in evaluating senior talent: Do they have the motivators, values, tenacity, and courage? Can they meet challenges and lead the entire organization in the right direction?” For sponsors, there was another unexpected benefit: Thinking through the design of the program clarified their organization’s needs for Novartis’s senior leaders. “Decisions become easier when you have an aligned point of view on talent,” Saia said. “The program also confirmed and strengthened the pipeline. Some didn’t see leadership in their future, but participants expanded their notions and expanded their views.” Mark Sawyer, a global HR leader with Novartis, echoed that preparing for the program catalyzes talent planning. “Just thinking about who we are going to invite gives us a chance to do an overview of our talent and think about who might be our future leaders.”

Impact on sponsors Program sponsors—the CEOs, business unit, and functional heads whose organization is participating in LeaderSuccession—benefit immensely from this opportunity to observe and interact with the participants. Not only do they learn about the talent in their organizations they often gain insight into their own capabilities as leaders. Sponsors not only learn about the talent in their “The program forced me to reflect on some questions being asked of the organizations they also often gain insight into their participants—like watching the film own capabilities as leaders. and suddenly you are in the scene,” said Christelle Beneteau, an HR sponsor at multiple programs. “The program energized me and confirmed my career direction. It reinforced what is important in my life.” Tyle, the global business development leader, said he took away lessons in dealing with individual personalities, and discovered how much valuable feedback he could get from his staff. Ebeling, the former Pharma CEO,

found himself learning from the participants as well. “You see their external skills, what makes them tick, the huge diversity of approaches to problem-solving. You see the great courage that people have to confront their issues and to share with others,” he said. “This is always an inspiration to me as a leader.” Participants also get a better sense of their leaders, which improves trust and communication.

Lasting impact across the company LeaderSuccession is focused on the identification and development of individual talent, but its effects are felt across the organization. As participants step up into bigger roles and emerge as more powerful leaders, the effects ripple outward. “A lot of people who were individual contributors became aware that a big part of the success of the company depends on how good people are at working together,” said Peter Goethuys, the HR executive. “People advanced in their thinking on these behaviors. They see the collective, the organization, and the culture is evolving to one of collaboration.” “The program brings people together,” Ebeling said. “It creates networking benefits for the participants, and they also feel that they can connect to the CEO. I see a high level of interest in and consciousness around leadership as an issue throughout the organization.” When asked what they might do to change or build on the program, several respondents indicated a desire to build on the changes they had already seen in their organizations. Some suggested programs to help participants continue their interaction with real-time challenges, such as follow-up on how they lead in times of crisis or change. Others suggested a six-month or one-year follow-up to deepen lessons learned, renew networking connections, and keep the evolving organization and its leaders connected to the principles and practices of leadership they experienced in the program. Ebeling is among those who recommends this kind of organizational follow-though: “We held follow-up meetings six months after their participation to discuss the impact on the business,” he said. “Everyone talked about a specific issue they had handled. Most people ultimately became better performers.”

Results of LeaderSuccession at Novartis > Participants bring their learning back to

others. Concepts are pushed down through the organization. > New openness and trust spread throughout

the organization. Participants better understand the CEO/organization leaders and vice versa. > Depth of talent is identified. Organization

gains a more focused point of view on talent, enabling better decisions on whom to develop and promote. > Leaders grow in confidence, authenticity, and

comfort with who they are. They understand the value of their roles and how to create value for themselves and others. > Participants engage in teams more success-

fully and create connections that continue beyond the program. > Leaders learn to speak openly with

one another and to collaborate on decisionmaking. > Attention widens from short-term results to

vision for the future. > Program sponsors benefit as much as

participants.

This continued interest betokens the potential of Korn/Ferry to deeply integrate with and support the succession planning and leadership development initiatives of an organization. It also illuminates the long-term thinking that makes a company like Novartis successful.

Kevin Cashman is a Senior Partner, CEO and Board Services, Korn/Ferry International.

Janet Feldman is a Managing Principal with Korn/Ferry International.

Katie Cooney is a Senior Consultant with Korn/Ferry International.

George Hallenbeck is Director of Intellectual Property at Korn/Ferry Leadership and Talent Consulting.

About The Korn/Ferry Institute The Korn/Ferry Institute generates forward-thinking research and viewpoints that illuminate how talent advances business strategy. Since its founding in 2008, the institute has published scores of articles, studies, and books that explore global best practices in organizational leadership and human capital development.

About Korn/Ferry International Korn/Ferry International (NYSE:KFY), with a presence throughout the Americas, Asia Paciﬁc, Europe, the Middle East, and Africa, is a premier global provider of talent management solutions. Based in Los Angeles, the ﬁrm delivers an array of solutions that help clients to attract, develop, retain, and sustain their talent.

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