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Amgen's Latest Discovery

February 1, 1996
Related Topics: Managing International Operations, Expatriate Management, Featured Article
Centuries ago, discoveries were made by explorers the likes of Vasco da Gama and Ponce de Leon. These adventurers sailed the high seas and roamed the earth's continents. Today, discoveries can occur in research laboratories, such as those of Amgen Inc., a global biotechnology firm based in Thousand Oaks, California.

Last fall, one of Amgen's scientists, FuKuen Lin, received the 1995 Discoverers Award from Pharmaceutical Research and Manufacturers of America. PhRMA presents the award each year to scientists whose research and development of pharmaceuticals has improved the quality of life. Lin, a native of Taiwan, was the leader of the Amgen team that discovered and developed EPOGEN®—a drug that stimulates and regulates the production of red blood cells. Over the last six years, it has been used for the treatment of anemia associated with chronic renal failure among 320,000 kidney dialysis patients in the United States. Its approval by the FDA made it the first Amgen drug to reach the American market in 1989—eight years after the company was founded on the cusp of the biotechnology revolution.

Since its inception, Amgen has grown from a few hundred employees at its Thousand Oaks headquarters, to a company employing 3,900 people spanning the globe. Amgen discovers, develops, manufactures and markets human therapeutics based on advanced cellular and molecular biology. It's annual revenue currently is $1.4 billion. This means that HR at the company not only faces the challenge of rapid growth, but also a growth that's on a global scale.

Create a global mindset—one that transcends boundaries.
Just as Amgen's Lin discovered a valuable therapeutic drug that will help people worldwide, Ed Garnett, the company's vice president of human resources, discovered what it really means to become a global company. "It's an organization with a mindset of the world without boundaries," says Garnett.

Garnett has been with the company since 1986 and has served in several positions, from purchasing manager to director of sales and marketing. He has watched the company grow internationally. Soon after the company was founded, it opened an office in Boulder, Colorado. "It wasn't global, but it was the first step moving out of one site," he explains. The company selected the Boulder site because of its proximity to the University of Colorado, where scientists were conducting compatible biotechnology research. As the company got closer to launching its first product, Epogen, Amgen executives decided to establish a global presence. Amgen opened a facility in Cambridge, England; began clinical development in Australia and Canada; and also set up European headquarters in Lucerne, Switzerland.

As a science-driven organization, Amgen goes wherever the desired research is conducted. In the pharmaceutical and biotechnology industries, Garnett explains, you have to pursue clinical studies in the countries with the research and market potential. "Then the regulatory agencies will acknowledge your legitimacy," he says. Amgen plans to penetrate Latin America and more countries in Asia and the Middle East because of these reasons. But the foundation for setting up shop overseas must be laid correctly.

Years ago, when Amgen first began its distribution abroad, it typically would send an American manager to scout a location. The individual would collect data and make an analysis based on a map. These days, the company relies on the expertise and knowledge of locals in the host country. When Amgen wanted to build a facility in the Netherlands, for example, it was advised by locals to build it closer to the main airport in Amsterdam—instead of locating it too close to the German border. "When you talk to people, you begin to understand the cultural [and political] issues there. So we decided to build it somewhere other than the original planned site," says Garnett.

Another factor that determines where Amgen sets up shop is where it can form the best academic and medical collaborations. For example, Amgen has formed collaborations with Massachusetts Institute of Technology and the University of Toronto because of its parallel research in biotechnology. Amgen also has joint ventures with Johnson & Johnson to promote Epogen, and with Japan's Kirin Brewery to distribute Amgen products in China.

As the company expanded internationally, Garnett says he started attending more professional HR conferences and reading more literature about globalization. Over the years, he's learned that a global mindset transcends operating like a traditional multinational company. "If you're a multinational, you'll have an expatriate program. If you're global, you'll only provide one-way tickets," he says.

Indeed, traditional multinational companies normally send Americans over-seas for two- to three-year stints. HR usually monitors and assists in the cycle: recruitment, training, relocation, compensation, acculturation and repatriation. But according to Cynthia Barnum, president and founder of Fairfield, Connecticut-based Global Management Development Services, "A global company is ready and able to do business anytime, anywhere, with anybody. You can't just have Americans talking about what's a global company. If you have a unicultural management group, you're not even asking the right questions."

Enhance your staffing with foreign nationals and host-country locals.
Amgen's HR strategy reflects the multicultural management philosophy required for true globalization. Nowhere is that more clear than in its staffing strategy. The company expects to double its population within the next five years. To gain a competitive edge, the company's recruitment strategy will continue to include hiring the top international scientists, medical information and marketing representatives, and global managers who are either natives from or who are familiar with Amgen's worldwide locations. "As our foreign national population increases, we're getting more global answers and different perspectives in the decisions we're making," says Garnett. Approximately 15% of Amgen's employees in Thousand Oaks are foreign nationals, he says. With the exception of one worker in Asia, an American expatriate temporarily setting up operations, all of Amgen's remaining foreign-based managers and executives—located in nine European countries—are locals or foreign nationals. "We'll hire locals for management. But we send expats to help with the integration of processes and special projects," says Garnett, who's responsible for staffing and recruiting, staff relations, compensation, benefits, organizational development and training. "The expat in China is working hard at developing a successor—in a year or two he'll be coming back." Amgen, Garnett explains, has a very limited expat program—only six placements throughout the world. "Most employees are locals. We've been very successful in having local nationals run and operate our facilities."

Ask Michael Bentley. As Amgen's first director of HR in Europe (he's based in Lucerne, Switzerland), the native of Great Britain is responsible for approximately 330 employees in 12 of the 15 European Community nations. Assisting him are 70 HR staff members, including 30 temps. His global department provides the full range of HR Services, such as recruitment, training and development, compensation and communication.

The largest category of employees, he says, are scientific representatives who visit hospitals and clinics—explaining the merits of Amgen therapeutics to physicians, pharmacists and biochemists. The next largest group of employees is white-collar professionals who monitor clinical trials. Almost without exception, all of the employees are local nationals, he says. There are currently only three Americans in Europe. One of them manages a project for a new distribution system. Another works in marketing; and the third provides financial liaison with Amgen's American financial reporting and accounting executives.

Most European employees have been recruited from unsolicited applications. "We get a lot of people writing in. Amgen's [public image] is very strong." HR also works with local search consultants and [uses] advertisements, says Bentley.

What type of people does Amgen look for? Individuals who are global-minded. "[Global companies] need people who've experienced many different business environments," he says. This requirement, he adds, goes beyond speaking the language and growing up in the country. "Someone who's aware of different cultures can execute our objectives in any of the countries we operate in," he says.

One example is Homa Yeganagi, a native of Iran who's the global manager of International Professional Services—an educational and information services arm for 50 marketing and medical information managers located in Europe, Australia, Canada, Japan and China. Yeganagi, an Amgen employee since 1987, was recently promoted to her current position and is based in Thousand Oaks. She previously worked in clinical development for five and a half years and also served as one of Amgen's project managers. Both she and Bentley contribute to Amgen's success in an industry driven by genome economics and expanding global markets. These global managers are the keys to Amgen's future—the types of leaders that HR must increasingly recruit and promote worldwide. "What's needed are more interchanges of people across different countries and continents so they accumulate a wider variety of work experience," says Bentley.

According to Barnum, people who are adept at global management often want to stay overseas anyway. Says she: "The global-minded want to keep roaming." The problem is that their employers often don't share the same vision. The traditional multinational company sends their expats abroad with the expectation they'll return in a few years. Of course, part of the reason is financial. U.S. expats still are taxed while living abroad, so their assignments are costly in the long run. Also, moving people creates more HR problems in terms of compensation and benefits.

Says Bentley: "Each country has different requirements and different issues. [We have to consider] which benefits are the most attractive; and what perks can we offer?"

When recruiting new employees, Amgen offers a competitive European compensation package. "They want to be paid like Europeans, not Californians. Every country is different, and each has its own compensation practice," he says. The challenge is to make sure Amgen keeps abreast of the going rates and offers a tax-effective package. For example, in the United Kingdom, the salaries are competitive for the UK market. But they're not as attractive if compared with other European countries' gross salaries. "So HR has to do a good selling job and talk about the quality of life, rather than the actual economics," says Bentley. "The emphasis on any move should not be primarily on the financial side, but on the career and personal development opportunities [the transfer] offers."

Provide your global staff with leadership training.
With its staffing strategy in place, Amgen's HR plans to beef up the company's executive development program. Garnett says it's still in the early stages of evolution, but eventually the curriculum will include more information about different countries' cultures and business practices. In addition, much of the training will encompass leadership skills, such as communication, performance appraisals and decision making.

Amgen recently held a meeting in California with 182 of its senior managers from all over the world. "It was the most remarkable meeting as far as communications go," says Garnett. The purpose was to talk about this year's challenges: How Amgen will grow into a multiproduct company and manage a work force of 8,000 within the next five years. "The real challenges aren't only HR issues. These are senior management issues on how to conduct your day-to-day activities. If there's any overriding theme, it's change."

The executive development program is one piece of the company's continuous training. Another piece is teambuilding, especially for across-border teams. Very often, Amgen will launch a new marketing endeavor, a distribution project or a new financial accounting system. These operational teams may include medical directors, product managers and marketing managers. Depending on the project, the teams may meet one time or on a monthly basis. "Our teams cross countries, and in the case of product development, they may cross continents," says Bentley.

HR trains the team leaders to manage team dynamics. Within the last few years, it has focused on communications skills. "[The training program is] very effective because it brings together different nationalities and different functions. That, in itself, adds value to the whole program—regardless of the content," Bentley explains. Most training is conducted in English, although some courses have offered translations.

But when the 50 medical information and marketing managers have questions about the products or the competition, they require scientific research and educational material. That bridge of information is provided by Yeganagi in Thousand Oaks. When Yeganagi started working for Amgen in 1987, she was hired as a research assistant. Her earlier studies of neurophysiology in Australia already had led her toward the path of scientific discovery and global living. Even as a child in Iran, she would listen to Casey Kasem and Dick Clark over the radio. "I love the English language. I've studied it since I was 6, and I was very much at home with those [radio] programs."

Language was never a problem. It was the details of American culture that baffled her. In Iran, for example, a party host would never expect his or her guests to bring a bottle of wine or a gift. In Australia and the United States, social customs are more reciprocal and informal. That informality, she says, translates into Amgen's corporate culture. One of her most surprising discoveries was her colleagues' openness and friendliness. "People get to know each other. There's a sense of family," she says.

And as manager of International Professional Services, Yeganagi is mindful of keeping Amgen's global family informed and connected to its American-based siblings. For example, whenever the overseas medical information and marketing managers need product information, Yeganagi works with internal experts and outside consultants. Together, they create the booklets, slide shows or video material to explain Amgen's products to a specific market. Sometimes the overseas requests require more research to answer questions or claims leveled by competitors and medical experts. "Our job is to do searches and find out what's going on in the industry and [also] make sure that what I hear is important to them is communicated overseas. I'm basically their link," she says.

On one occasion, an overseas representative analyzed the local European market and suggested a booklet that would explain how NEUPOGEN® works on neutrophil functions in different settings—with AIDS, chemotherapy and osteomyelitis. Neupogen is the company's second key product that received FDA approval in 1991 and is the main product sold in Europe. Creating a new paradigm in cancer care, it helps reduce the incidence of infection in patients who receive chemotherapy. When used in conjunction with chemotherapy, Neupogen selectively stimulates the bone marrow to produce neutrophils—accelerating the return of a patient's primary antibacterial defense system. In the future, other patients who may benefit from its use are patients with severe chronic neutropenia, AIDS, pneumonia and other infectious diseases. Yeganagi helped create a colorful and informative booklet in English that was distributed to physicians, pharmacists and others in the European medical community. "One of the major areas of our work is [creating] different products to support education."

Although Yeganagi's position is part of the marketing department, she benefits from Amgen's HR department as well. Because she communicates with nearly 50 global employees all over the world, she has attended several training seminars: effective listening techniques; how to manage conflicts; performance appraisals; and cultural diversity.

Asked whether her background has given her an edge as a global manager, she replies: "I've been told it does. Differences don't bother me. I can handle them in a way that doesn't disempower people.... That's really the bottom line of knowing how to work internationally," she says.

Yeganagi has learned that another key to working internationally is being able to translate the company's values and still respect the various cultures. Since its inception, Amgen has had a commitment to excellence in science. Says Gordon Binder, CEO: "We believe that to foster commitment, all staff members, regardless of position or departmental affiliation, should be as informed as possible about Amgen's operations, including our fundamental technology."

When Binder talks about technology, he's not referring to computers. He's referring to the advancements in cellular and molecular biology—the sciences that will provide lifesaving therapeutics and products to enhance our quality of life. That's why the company's values of openness, diversity, risk taking and scientific collaboration have led to its growing success abroad. But Binder would be the first to agree that Amgen still has a long way to go. Translating a company mission into a vision takes years.

In fact, global consultant Barnum says the biggest challenge for growing companies such as Amgen is to retain its global talent. What's to keep managers like Bentley and Yeganagi or its other global employees from jumping ship?

"I think HR should drive the globalization efforts. If you don't have top management who've lived in each other's countries, you won't know how to reward, recognize and make things happen," says Barnum. "Just because something's done one way in Thousand Oaks, doesn't mean that's how it's done in France. Nationalism can be a glass ceiling."

Personnel Journal, February 1996, Vol. 75, No. 2, pp. 38-45.

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