The People LEAD

Although the business investments outlined above are an important indicator of strategy in emerging markets, Novartis is placing its ace card around another factor: human resources—'people power.' The core unifying element in the Novartis game plan, it comes from the recognition that the best strategy is little more than a paper weight without the internal capacity to motivate and change the organizations responsible for executing it. This view is bolstered by a new CEO issue survey conducted by PricewaterhouseCoopers, which found a high level of concern about the ability to recruit—and retain—capable managers in the emerging markets. While its rivals also stress the importance of building a strong local talent base, Novartis is unique in leading this process from the very top, with a specialized management training and exchange program that Jimenez himself has personally driven the creation of and actively participates in.

Called "LEAD," the program singles out 25 of the most promising executives from each of the business segments in the four emerging markets where Novartis wants to extend its footprint—Brazil, Russia, India, and China. The group meets twice a year for a weeklong session consisting of leadership course work and coaching based on individualized skill development plans; lectures by a mix of local and outside experts; and consultations with members of the HQ Executive Committee around an ongoing set of "country action" projects designed to implement LEAD learnings under actual market conditions, in real time. These include:

» Setting targets to improve regulatory compliance standards for the Russian business, sponsored by Jeff George, division head of Sandoz, the company's generics business;

» Building a locally appropriate strategy to market and distribute medicines in rural China, sponsored by David Epstein, division head of Novartis pharmaceuticals; and

» Leveraging India's leadership in traditional medicines and other areas to create innovative marketing campaigns for the Novartis portfolio, sponsored by George Gunn, division head of the Novartis animal health business, who also leads the company's corporate social responsibility.

The emphasis here is on practicality in solving a business problem. For example, the Brazil project is responding to a specific challenge: the ability to find qualified staff and management talent to run the new vaccine manufacturing plant Novartis has built in the distant and impoverished state of Pernambuco. Although the investment is a huge boost to the local economy, it will not succeed without the right people, so the project is drafting a plan to create a talent pool from scratch, with training programs and other outreach activities conducted in cooperation with local academic institutions. "The spillover from this effort in terms of local development is immense," says Joshi Venugopal, assistant to the chairman and administrator of the LEAD program.

At the most recent LEAD session, held in Kerala, India, in November 2011, the group focused on understanding how culture and environment affect the practice of management in different countries; responding effectively to these forces requires a capacity to interpret, adapt, and integrate on the spot—there is no lesson book for success. Practical exposure to this learning was provided through visits to local hospitals and healthcare management facilities, where the group was assigned to evaluate and then recommend ways for Novartis to adjust its business model with product and service offerings that fill an unmet need—not only in Kerala but in other locations as well.

But the highlight of the meeting was the full day Jimenez spent with this small group, where the exchange was frank and informal. As I observed firsthand, no intermediaries or "handlers" were present to interfere with the provocative question Jimenez posed to each country participant: "If you were in charge, what would you do differently?"