SPEAKING
FREELY Success in training China's
managers By Richard Ecke
Speaking Freely is an Asia Times
Online feature that allows guest writers to have
their say. Please click hereif you are interested in
contributing.
BASEL, Switzerland -
Shortage of management talent has become a major
problem for many fast-growing industries in China,
nowhere better illustrated than in the
pharmaceutical industry.
China's
pharmaceutical industry has grown by more than 20%
over past three years. Last year, business
turnover reached 434.5
billion yuan (US$54.4
billion), up 26% from 2004. Its profits rose 18.5%
to 36.5 billion yuan. It is expected that China's
pharmaceutical industry will continue its
high-speed growth in coming years, and the Chinese
drug market could become world's largest by 2020.
Huge market potential and great
profitability have attracted investors. Now
companies compete not so much for consumers, but
for talented management personnel. How to tackle
the problem? Swiss drug maker Novartis' efforts
may provide some insights.
As the
third-largest multinational pharmaceutical
corporation operating in China, Novartis is at the
forefront of the human-resource issues that plague
employers in the region. Regional statistics
highlight a talent shortage that can be crippling
to a company of any size, and especially to
pharmaceutical companies like Novartis.
Pharmaceutical companies need highly
skilled workers and solid leaders to sustain
growth. A look at the numbers in China highlights
the problem: turnover among skilled managers at
Novartis is about 24%, and the industry average is
even higher. The average mid- and high-level
executive stays only eight to 12 months in a given
position. A continuing shortage of both mid-level
and senior-level managers poses a risk to any
company that expects to continue to grow annually
in this region.
Learning programs remain
an important tactic to bring China's workforce up
to speed in skill sets and to retain top managers,
especially when the company is planning further
investments.
"The investments in clinical
areas must be matched by a concurrent investment
in development," said the head of Novartis global
learning, Frank Waltmann. "Several challenges
remain in this area. Novartis will set the pace
for meeting them within the region by leveraging
our development strengths and connecting to our
Chinese staff in ways that will help them commit
to the company."
The paradox: Shortage
among plenty China's employee pool is
different from anywhere else in the world. On one
hand, the country produced 3.1 million university
graduates in 2005, while the United States
produced 1.3 million. However, fewer than 10% of
China's graduates have the skills to work for a
foreign company. Moreover, employers in the region
are beginning to compete more vociferously for
that 10%, especially for entry-level white-collar
workers. And, as mentioned, mid-to-senior-level
managers are scarce, and don't tend to stay on
board very long, either.
"China is one of
the countries where the number of our associates
will strongly increase in the next few years,"
said Juergen Brokatzky-Geiger, global head of
human resources with Novartis. "The challenge is
to find out how to develop and grow the best local
talent."
In the past, multinationals
relied on expatriate managers from Europe, North
America and highly developed Asian countries to
oversee their operations in China. At the same
time, 40% of these companies have difficulty
filling these roles. Local firms are now competing
for local talent as well, causing a "reverse brain
drain" in the market. And the situation will only
get worse: in 10 years, experts predict that China
will need 75,000 managers with international
experience. As of today, it only has 5,000 people
who could fulfill these roles.
Novartis
needs managers with industry-specific skills.
Therefore, business needs will dictate training
needs to a very high degree.
"Novartis has
significant investments in China for expanded
clinical trials, chemical analytical development
and production, and more," said Waltmann. "How can
we possibly hope to meet our goals there unless we
embark on an ambitious program to attract and
retain talent in China?"
Firm explores
new possibilities for talent
management Novartis already uses a
systematic approach to developing associates
worldwide. It organizes these activities in three
main categories:
Internal focus: growing leaders from within
and filling 70% of internal open positions with
internal associates.
Commitment to codified development planning:
ensuring that each associate has a development
plan.
Managing development on the front line:
ensuring that each associate has a minimum of two
career and development discussions every year.
The Novartis development structure also
allows employees to hone leadership skills while
they are fulfilling current roles. Its leadership
standards and behaviors, functional competency
models and talent-management processes are
embedded both in on-board training and during
ongoing performance development processes for each
employee.
Accelerated development
programs, mentoring options and other special
programs also help create a culture of continuous
learning. This will be very important in China
because surveys show that Chinese managers often
single out inadequate career development as one of
the key reasons for their departure. Novartis will
meet this need by focusing on internal talent
within the region in three key areas:
Develop them through traditional but
world-class training and enhanced on-the-job
training.
Deploy them in stretch assignments and provide
a clearly defined career path.
Connect them to their peers and other
professionals.
In addition, Novartis will
implement a couple of different career tracks and
offer development goals and training opportunities
in concert with these. A project management track
and a management track will fulfill the goals of
the Chinese workforce.
"Throughout, a
comprehensive awareness and communication program
will help them become aware of, and then take
advantage of, the investment we continue to make
in their development and learning. As they go from
entry level to management to leadership, we hope
this will make them much less likely to follow the
eight-to-12-month pattern of leaving," said
Waltmann.
Novartis is fulfilling these
development goals and, by extension, talent goals,
through two kinds of programs offered through a
single entity: the Novartis China Leadership
Development Center. The center encompasses these
goals using both regional and global learning
offerings.
First, the Beijing
International MBA (BiMBA) program launched to
great effect last year. It brought 46
high-potential Chinese staff members through a
mini-MBA (master of business administration)
course over 18 months. Attendees worked in English
in four-day-at-a-time modules over a four to eight
weeks. The Learning Center also offers tailored,
localized corporate programs to develop
leadership, marketing excellence, leadership of
global projects and frontline management skills.
"We were careful to adapt our global
programs and make them relevant to the challenges
Chinese managers face in their markets and the
leadership and project-specific issues they face,
as well. It's not a one-size-fits-all solution,"
Waltmann said.
Connected leaders stay
connected Novartis is also well positioned
to build talent in China because it is one of the
most localized companies. "Compared to other
multinationals, their presidents, VPs [vice
presidents] and even directors come from Europe or
America or Singapore. About 99% of Novartis' staff
is Chinese," said company official James Liu.
This situation poses issues with the
language gap, but also allows Novartis to build
another effective strategy for managing talent in
this region: communicating to connect. The team is
committed to keeping employees up to date on the
latest business developments through monthly
lunches with representatives from senior
management and staff.
This helps close the
"what's in it for me?" gaps that cause people to
jump from company to company. It invests Chinese
staff members in wider global strategies and
allows them to feel like contributing members of a
team. They are not being expected to follow
directives from a disembodied voice: They will
meet global leadership one-on-one.
All
regions and offices will be included when it comes
to strategy and building consensus behind broad
company goals. Novartis is now building an
embedded communications pipeline that will reach
each regional office.
Novartis has also
ensured that Chinese staff takes longer-term
business trips to global headquarters in Basel and
to other major sites. This will help them expand
their network and integrate more completely into
the corporate culture.
Waltmann concluded:
"We want our Chinese leaders to become more
effective in China, of course. But we also want
them to become more effective in the global
Novartis organization. This sense of community and
connectedness can be built into our culture in
China via a coherent learning strategy. We also
have cohesive development goals for every single
person who works there. In that way, we can watch
our learning goals meet talent goals that will
drive the business in a very growth-oriented
region. We're well positioned to get great
results."
Richard Ecke,
president of New Jersey-based Berry Ecke
Associates, is a communications consultant and
freelance writer specializing in corporate
communication and global learning issues.
(Copyright 2006 Richard Ecke.)
Speaking Freely is an Asia Times
Online feature that allows guest writers to have
their say. Please click hereif you are interested in
contributing.
