Schering-Plough CIO on Employee Training

In this economic environment, CIOs walk a tightrope in balancing long-term priorities with the pressing concerns of the business. Karl Salnoske is no exception.

The Schering-Plough CIO joined the health care giant in 2004 as part of a management shakeup. His first 18 months were dominated by stabilizing the business and its IT. Then he spent a couple of years boosting his IT organization’s business and governance acumen. And in the last two years, he’s been busy integrating two major transactions: first, Schering-Plough’s $14 billion acquisition of Organon BioSciences and, this year, his company’s $41 billion merger with Merck.

But Salnoske also has had to set priorities for an entirely different initiative—an extensive training program designed to develop key skill sets within his IT organization. The objective, he says, was to transform Schering-Plough’s IT shop from a historically “passive, order-taker mentality” to one that thinks business first.

Salnoske, a former software industry executive and strategic IT consultant with McKinsey, spoke recently with CIO Insight Editor in Chief Brian P. Watson. This is an edited version of their discussion.

CIO Insight: You’re in the middle of a big training program. What was the big idea behind launching it?

Salnoske: This was part of our strategy—to transform the IT organization from what historically had a passive, order-taker mentality to become a real strategic partner with the business.

There were multiple things we needed to do to make that happen. One of those things was creating a “supply and demand” organization. We have teams of employees that are focused on our business units or the functions—like manufacturing, finance or research and development-—that support those business units. The teams’ job is to get close to those businesses, look at their needs, priorities and strategies, and figure out how IT can bring the most value to them.

How were supply and demand roles assigned?

Salnoske: We took our most technical colleagues and placed them in a delivery organization divided into application delivery and infrastructure delivery. Once the customer-facing people—we call them “demand managers”—identify a need, then the delivery organization gets involved to decide the best way to satisfy that need. Then the demand and supply teams work together to deliver a solution that meets the needs of the customer.

As we made that change, we found we had enough people—the technologists and people with deep technical skills—to fill the supply-side role because, historically, that’s where most IT people came from. What we didn’t have was the capability or enough good people with the right skills on the demand management side—people excellent at communicating, building customer relationships, negotiating, analyzing business processes and all the skills that people on the customer-facing side need to have. We realized we had to make an investment to build skills within our organization to make that strategy work.

This wasn’t a training investment; it was an investment we needed to implement our strategy. So it was much more strategic for us than the typical IT view of training. That’s why, even in these tough economic times, we’ve protected that investment.

So you didn’t have any pushback on the program once the economy turned downward?

Salnoske:Everybody realized that while we need to find ways to cut costs in many areas, this was strategic and we wouldn’t be successful unless we succeeded in further developing and upgrading the skills of our people. There really was no difference of opinions on the need to keep going.