A Conversation with Lucy Hughes, Novartis
Employee Engagement

Author: Roderick Millar, Editor, IEDP.
First published: 2006

Novartis is one of the world's leading healthcare companies. Created in 1996 through the merger of Ciba-Geigy and Sandoz its name is an amalgam of the latin words for "new skills". This could also be a neat summary of what the Global Talent team at Novartis Pharma are also looking for.

Lucy Hughes is Director of Global Talent Management at Novartis Pharma, the largest division of the group that accounts for 50% of Novartis's employees and over 2/3rds of total group profit. She joined the company six years ago from a New York consultancy and is the longest serving Novartis member of her team. Although based in the US her remit is global and takes her to the Swiss group headquarters frequently.

Fast-growing companies are faced with many challenges not least of which is the necessity to find, acquire and retain talent to both manage the growth and keep pushing it forward. For Novartis Pharma that had annual sales of over $20 billion in the last financial year representing a growth rate of over 10% this is big growth on a big scale – and that is the root of the challenge that the Global Talent team are facing. There is a constant need for people who can manage new product launches, global distribution issues, R&D projects and all the other elements that make a vibrant organisation.

Lucy Hughes is clear that the "talent agenda is front and centre" of the challenges the company faces in responding to its rapid growth. When she joined the business she says "there was a perception that the whole pharmaceutical industry lacked enough talented individuals. It was not a problem specific to Novartis but to all the leading companies in the sector".

The Global Talent team necessarily are always in search of new employees who will build-out the business and leverage that potential. However, the current central concern for them is to focus on how to get "employees and particularly leaders to be more engaged with their work". This is not a simplistic attempt to make people more work-focused but rather a more profound project that is looking at "trying to better understand how employees operate; what motivates them; what makes them committed to Novartis and ensuring that the organization reflects these drivers in the way it functions".

"It used to be 'job satisfaction' that was monitored" says Lucy, but now the focus is much more clearly defined as the "concept of engagement". They are certainly looking at what are the things that make people want to join Novartis in the first place, but just as critical from a retention standpoint is understanding what makes people want to continue their careers with the company. In a business where skills and experience are at a premium, fully engaged associates will be more likely to continue to grow their careers internally. Where engagement is less strong, associates are more likely to view external job opportunities favourably

Employee engagement is part of the new zeitgeist of progressive HR and Talent Management departments. The last year has seen a range of reports produced by leading edge human resource consultancies and academics on the concept. Kevin Sheridan, the CEO of leading US consultancy, HR Solutions, said recently "Research shows that engaged employees: perform better, put in extra efforts to help get the job done, show a strong level of commitment to the organization, and are more motivated and optimistic about their work goals. Employers with engaged employees tend to experience low employee turnover and more impressive business outcomes." He identified seven elements involved with encouraging greater employee engagement: proper training and development; sufficient resources both of time and finance to invest in each employee; fostering pride in the work and organisation; establishing real co-worker/team-mate satisfaction; effective teamwork; leadership; and finally rewards and recognition. None of these elements, by themselves is anything new, it is in creating a system that can draw all of them together in an effective manner that is the new skill required.

Lucy Hughes does not divulge the detail of how Novartis Pharma are going to construct a workable system of employee engagement. It is a process that they are committed to but would rather build on the back of the best available data they can acquire.

As you might expect of a medical science based organisation such as Novartis their approach to better understanding the "engagement" issue is an empirically diagnostic one. They have used a leading HR research consultancy, ISR Insight, to conduct a global employee survey to build a fuller picture of the motivators, inhibitors and other factors that make Novartis employees more or less committed to the company and their jobs. The survey is designed to identify a variety of different aspects of the employee make-up, from tracking the demographic trend of the organisation"s workforce, through discovering exactly how employees operate to better understanding what they value in terms of the work experience. From this the Global Talent team expect to gain a good picture of what Novartis"s value proposition is to the employee, a notion taken from the product side of business and being applied to the HR side.

While they acknowledge they are just starting out on this journey a foundation of a systemised process is evolving. "It is a kind of market research" says Hughes of the survey "we have been a highly successful organization and continuing to drive that success is paramount so we are always looking to the future and trying to better anticipate and address the challenges we will face – particularly from a talent perspective. Taking the pulse of the organization, even when there doesn"t appear to be a major problem is important if we are to remain healthy. By asking our associates" opinions and providing opportunities for feedback, we have learned a great deal and know that while we have been very successful, there are still some important areas for where we can improve further". This message has gone to the top of the organisation and the process is very much endorsed by the top level of management who understand the challenge and importance of needing to recruit and retain the best talent available in the field. Hughes is aware that the concept of engagement is not a familiar one to the senior management in the way that brand strategy or pricing policy might be and "that they (the senior leadership) are not as fluent in the language and issues of the organisational development and talent management functions. However, business people understand business drivers and the link between engagement and business performance is becoming clearer all the time".

The diagnostic approach helps in two ways. It provides a depth of data that allows for real analysis to be conducted and different ideas to be tested and the results also can act as a useful tool in helping other members of the organisation better understand the engagement issue itself. Support from the top down is always crucial in such wide-ranging projects as this. The potential outcomes and changes to work practices could be far-reaching and so recognition from the top is a necessary prerequisite if the process is to be implemented. Hughes and the Global Talent team are confident that this recognition is there and that the engagement process is integral to the company"s future and no mere exercise.

The implications of the project are to an extent unlikely ones for the Novartis group. Although Lucy Hughes made clear that she does not like using the term "culture", "it is so nebulous" she and the team are well aware that Novartis is "a very performance driven organisation. It is not soft, not fuzzy"; but that the hard, results focus of the company needs to be carefully harnessed so it does not become "in conflict with a sustainable culture – and that the engagement idea is a way of redressing the balance.

There is an appreciation that the talented individuals the company is keen on finding and keeping have many opportunities available to them. They are not primarily motivated by money nor even hierarchical advancement; they have a sense that is now supported by the findings from the global survey that less measurable concepts are what binds employees to the business. The ability to make a difference, achievement in setting and reaching goals are vital but these have to be set within a sensible work/life balance. This last crucial element is going to be the critical one in making the changes work. Hughes quoted a recent survey that identified that 70% of working women would leave their jobs for another if it offered more flexibility. How exactly they can formulate a process that allows sufficient flexibility to their leaders to be appealing to the work/life balance side of the equation while still maintaining the performance driven ethos of Novartis is going to be the next challenge of the process.

"The behaviour of leaders is important" says Hughes, as it shapes the responses of everyone else. The implementation of new practices is going to be a significant challenge to make them "fit with a highly complex, team-based matrix". The team"s fascination with the concept of fostering greater engagement is perhaps twofold. On the one-hand it has the potential to make radical differences to the long-term success of the business through altering perceptions and practices and so creating a more cohesive and sustainable work environment, and secondly it is an exciting exploration of the collective mind of the organisation. Lucy Hughes was careful to state that they don't want to get too caught up in the psychology of it all, but understanding some collective responses to work and what managers and employees value is clearly crucial to the engagement issue.

The newness of the journey is part of that excitement. "There is some good external research on this, but it needs to be carefully applied to Novartis's particular situation. The greatest obstacles will be people's behaviour and thinking and that will take time to change – it will require a comprehensive, integrated and systematic approach". As the company"s name suggests, the Global Talent team are truly seeking "new skills".