Schering-Plough CIO on Employee TrainingBy Brian P. Watson | Posted 08-04-2009
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.
Building the Program
How did the program itself come together?
Salnoske: When we looked at what demand managers need to be good at, we realized we needed to build on three areas of competency (in addition to building the business knowledge, which was a given): project management, customer relationship management and business process management. So we put programs in place to build skills in each of those areas.
Obviously we don't expect everybody to be an expert in everything. So we divided up people based on their training needs, depending on their job description, scope, [and so on].
The first focus was on project management. Two years ago we made a big push not just around training, but around getting a governance model in place and introducing tools that helped us improve how we managed the portfolio of projects we had in place at any given time. We didn't require people to get Project Management Institute-certified, but a lot did.
Last year we started down the customer relationship path. We tested a few different programs, including a pilot program with Ouellette & Associates, which ultimately met our needs. This year we had a broad rollout.
We identified about 100 people around the world for the program. They go through three-day classes. We assign people to a "cohort." They start the first class together and go together to all subsequent classes. Then, in between the classes, which are spread out every couple of months, they take what they learn and practice it--they apply it to real projects or situations that they're working on.
The cohort is always available, and they have a set of tools, like SharePoint, that let them collaborate with each other. If someone tries something and it doesn't quite work the way they thought it would from class, they'll get together and jointly problem-solve on it.
Do the members of the "cohort" come from different specialties or backgrounds?
Salnoske: We mix them up based on areas they work in, years of experience, in some cases on geographic diversity or diversity of the business units they support. We try to set up the cohorts to have that diversity within them.
The European program will start later this year. Right now in the [United States] we have three simultaneous cohorts going, with each cohort including about 20 people.
Then there's the third leg--process management. What's the plan for that?
Salnoske: We have a training proposal we're considering. But it's not just training--there are tools and methodologies that go along with it. We're looking at the investment dollars for it now and expect to ramp that up later this year.
What results have you seen so far?
Salnoske: We ran a couple of pilot groups last year with a smaller number of people--six or so in one program, and about 10 in the other. The initial feedback, from the participants as well as their managers and customers, was all extremely positive.
The participants went in with some skepticism but came out impressed. There's always 'I like this' and 'I don't like that' feedback, but on the whole, they felt it was time well-spent, that the material was relevant, and that they could go and apply it immediately.
Managers were also positive. They also probably went into it not quite knowing what to expect but were happy with what they saw.
The most positive results came from the customers--the business. They saw a change in style, communications and overall capability.
Initially we didn't really communicate with the business about what we were doing. When we did, it put everything in context for them. We actually decided coming out of that, that we'd communicate in advance that people are about to go through this program and what they should expect to see coming out of it, so we'll do a better job of setting expectations and explaining what we're doing.
Why not communicate up front?
Salnoske: We just didn't really think of it. It wasn't the kind of thing where we said, 'Let's not tell the users.'
We viewed it as an internal program; we don't typically tell the business if we're sending someone out for a week's worth of technical training. But we learned our lesson, so now we're proactively communicating.
Now you have to deal with the planned Merck merger and integration. Will the training continue after the deal closes?
Salnoske: It's too early to say for sure. We've certainly had discussions with our counterparts at Merck. They're aware of the program, but in terms of how much of it gets picked up and adopted by the combined company after the closing of the merger, it's too early to say.
Feedback from Trainees
Are you getting any feedback from trainees that they're worried they'll have to go through more or different training once the integration is completed?
Salnoske: It's just the opposite. People are more appreciative for the opportunity to sharpen their skills because they see this as something that will 1) make them better suited for a position within the new combined company or 2) make them more attractive to a potential employer, if they have to go that route.
Training is an integral part of retaining top talent. Were you looking at the training program as a retention tool?
Salnoske: We've never had a big problem with retention or high turnover rates, so we didn't look at it from that perspective. It was really much more about putting these people in new roles--we had to give them the training, tools and methodologies to help them succeed.
You talk about the training program being a strategic initiative. How did the recession affect your overall IT strategy?
Salnoske: We've had two significant transactions in the last two years. In 2007, we acquired Organon BioSciences, so immediately planning for and executing the integration of that business became our No. 1, 2 and 3 priorities. Then we went through 2008 with that as our top priority.
Going into 2009, we went back to some of our strategic priorities, and a few months in, the Merck deal was announced, so we went right back to planning for integration again. Both transactions have to an extent disrupted some of our IT strategic plans.
But at the same time, IT is here to support the business. If the business strategy changes, we have to be flexible and adapt our IT strategy to the change.
One thing I've always said about any strategy--business, IT or anything else--it's not something you write, put on a shelf and pull it off three years later. It's something that has to live with the business and be modified as the business and the economic environment changes. So, we've been in a constant state of refining and modifying our strategy over the last couple of years.