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Business First

November 8, 2006
Related Topics: Change Management, Strategic Planning, Featured Article
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Kaye Foster-Cheek was upfront with Chuck Dombeck, vice president of corporate HR, when she interviewed with him at pharmaceutical giant Pfizer. It was the summer before her second year of business school at Columbia University, and Foster-Cheek was hoping to land an internship.

    "I told him that I really didn't have any HR skills," she says. "And he said, 'If you understand how businesses make money and how to put organizations together and enable them to deal with transformational change, then I can yteach you the HR stuff.'"

    Almost 20 years later, it's Foster-Cheek's unrelenting focus on the business and the bottom line that defines the workforce management strategy at Johnson & Johnson, where she is vice president of human resources.

   As a member of the company’s executive committee, reporting directly to chairman and CEO Bill Weldon, Foster-Cheek, 47, is spending much of her time these days planning the integration of the two workforces as Johnson & Johnson takes over Pfizer’s consumer health care business—its biggest acquisition ever.

    Foster-Cheek also has spent the past 10 months overseeing due diligence as Johnson & Johnson plans to outsource various global HR processes to enable her workforce managers to be more focused on the business. The company expects to choose a provider by the end of the year.

    But Foster-Cheek’s drive and focus on business performance don’t detract from her desire to nurture individuals—a key trait of Johnson & Johnson. A native of Barbados, she moved to New York when she was 22 and spent the first few years there working for her uncle, a physician by training who was running an ambulance service in Harlem. Blind as a result of diabetes, he relied on Foster-Cheek to help organize the business.

    "That left me with this profound need for improving access to health care to underserved populations," she says. "On a subconscious level, it’s probably why I’m so committed to health care."

    After receiving her MBA, Foster-Cheek spent 13 years working at Pfizer in various roles, ending up as head of HR for Japan, Asia, Africa, the Middle East and Latin America. In that role, she traveled the globe overseeing the workforce management strategy of the pharmaceutical businesses.

    "The most profound thing I gained from working globally is a real appreciation for difference," she says. "In the U.S., when we think of difference we think of race and gender because that has been our social history. But the more time I spent globally, the more I became aware of how powerful difference is and how beneficial it is when you have a common mission and can bring people who are different together."

    That understanding helps Foster-Cheek as she manages Johnson & Johnson’s decentralized workforce, which numbers more than 116,000 employees in 230 business units worldwide.

    Foster-Cheek recently met with Workforce Management staff writer Jessica Marquez at Johnson & Johnson’s New Brunswick, New Jersey, headquarters.

    Workforce Management: How do you define the role of a workforce management leader?

    Kaye Foster-Cheek: What we have spent a lot of time in HR doing is being business partners. We don’t just say that as jargon. That means we need to understand how our business makes money. The first thing I ask my HR professionals is, "Do you know how your business makes money? What are the levers that your business leaders can pull to really affect those outcomes? Do you understand how that all works?" Because if you do, then as a person who is working on maximizing human capital, you understand how that actually affects the business outcome. If you don’t understand how the business makes money, then you can’t be relevant.

    And I think that’s the big challenge for us. It’s not just "Think business partner." It’s "What does that mean?" That starts with a clear understanding of how the business makes money. That starts with understanding the external environment. So, as an HR professional, I should be able to talk with you about the external forces—political, social and demographic—that are affecting our business. Then I should be able to understand, given all of those factors, where are the big opportunities for growth that exist within our business. And given all of those things, how are we going to make money? Once we are clear about our business model, then we can understand the implications for our workforce and what we need to do to make sure our employees are engaged and productive to deliver on those outcomes.

    WM: Are you planning to outsource some of your HR processes to enable managers to be more strategic?

    Foster-Cheek: Right now we are working on a significant transformation of the HR function. That’s on two fronts. One side is just about efficiency, which is about the automation and integration of our systems, offshoring and outsourcing. These actions will get us to be much more efficient than we are right now. So in terms of the HR function, there are pure HR professionals; there are finance professionals that do HR and payroll. And then there are professionals who run our HR systems. Right now we are undergoing a significant evaluation of what the future model should look like. We are in the midst of evaluating HRO providers right now—that’s part of our transformation.

    If you think about what I just said in terms of my expectations of our HR leaders, those capabilities are not necessarily resident within the function now, because that has not been the expectation of the past. We have to get HR to be more effective and skilled. There is the opportunity for us to resize the function in an appropriate way that meets the needs not just today, but the future needs of the business.

    WM: Sharon Taylor, the senior VP of corporate human resources at Prudential Financial, has spoken to us about the challenge of getting HR managers to be more strategically focused after outsourcing. Are you concerned about that?

    Foster-Cheek: I fundamentally do not believe that people transform and become strategic overnight. So what we have as part of this is a skill assessment and development process. I’m personally committed to the assessment and development of the HR professionals in the function. And again, we can’t do that for every single person. There are going to be people who are either unwilling [to stay on] or, at this point in their career, [are] ready for a transition. But I feel personally accountable, as do the HR and business leaders here, for at least assessing and giving people an opportunity for development.

    It’s not instantaneous. You can’t go from doing one particular set of functions to changing the way they think. I have to first be clear about what the expectations are, and then give them the opportunity to operate differently.

    WM: How do you teach those skills?

    Foster-Cheek: Some of it is inherent. Some of it you can’t teach. Our HR model isn’t different than most HR models. We focus on business-based HR. We want to have some HR outsourcing; some centers of expertise, which offer best practices and tools for our managers; and then some service center capabilities, which handle more administrative, routine HR matters. That model is reflective of most of the current thinking about the HR service delivery model.

    In a service center or at an outsourcing provider, there is still going to be opportunity for HR professionals. Not every HR professional is going to be a business partner. The needs of our business won’t require that. Service center leaders or customer contact individuals are critical jobs. And what we have to do is make sure that we don’t inadvertently send the message that those jobs are not just as important.

    I think a lot of HR managers would tell you that they inadvertently created this tiered approach to HR, where people feel the only job worth having is the business-based HR professional. And I want to make it clear that the standards for people who work in a service center are just as important because we are touching a global workforce.

    WM: Heads of HR often lament that their staff is too "touchy-feely" and not business-oriented enough. How do you handle that with your own staff?'

    Foster-Cheek: For me, it’s the balance. There is something endemic in the culture of Johnson & Johnson that has people think of us as the company that puts the needs of others first. And I think that requires us within HR not to be touchy-feely, but certainly to be sensitive to the implications of business decisions on the workforce.

    Whether we are going through a major restructuring or going through a major acquisition, as we are right now with the acquisition of Pfizer’s consumer health care business, I want my HR professionals to understand the business implications. Does it have implications for plant closings? Does it give us access to growth to markets we are not currently in? But at the end of the day, these are 7,300 colleagues from the Pfizer business that are coming in, and you’d better be front and center in understanding how they are probably feeling because of the uncertainty of the change. When we think about future-state organizational design, what are the implications for people having a larger scope of responsibility or smaller scope of responsibility? It isn’t one or the other; it’s how you blend both of those.

    I think what has happened in HR is that we are so scared of being perceived as touchy-feely that we probably swung the pendulum completely to the other side, to be hard-core business professionals. At the end of the day, I want both things: I want hard-core business professionals who understand the implications for the workforce.

    WM: CEO Bill Weldon has put a lot of emphasis on leadership development during the past few years. What caused the company to take a closer look at what it was doing in this area?

    Foster-Cheek: As our business has grown dramatically over the past couple of years, we said that we needed to not just accelerate the development of our leaders, but we actually needed a new leadership model because the nature of the business was changing. Given the increasing impact of globalization and the demand we are placing on our leaders—particularly in the pharmaceutical and medical device and diagnostics divisions, because they are such highly regulated environments—we thought about what would be required of leaders from a skill, experience and attributes perspective. It was different than what would have been required five years ago.

    Some things are the same, like commitment to values, respect and dignity. But when you think about the external environment—the media, the impact of regulations—even first-level managers have to deal with all of those things.

    WM: What did you do about it?

    Foster-Cheek: When we talked about how we would grow the company over the next decade, we looked at it from a workforce planning perspective. We realized we needed a new leadership model and an acceleration of the development of leaders. This is a critical priority for not just the chairman, but for the executive team. And that’s why I was late today. I was talking to my boss about talent. Every month, the executive team meets and discusses various issues, including talent. In two weeks we have a five-day meeting, and two of those days are dedicated to talent.

    WM: How does Johnson & Johnson define leadership?

    Foster-Cheek: Johnson & Johnson has had a leadership profile in place for years, but three years ago—as part of our recognition that we needed to redefine what our leaders do—we were asked to create a simplified leadership model. We took the existing model, and through research, focus groups and surveys we defined 10 competencies that make up a Johnson & Johnson leader. We use it now in all of our assessments and development.

    Once we close the Pfizer deal, we will use it as an assessment for future leaders joining Johnson & Johnson. The executive committee does this work, and each member has it cascade down their organizations.

    WM: How do you make sure that potential leaders make it onto the radar screen given the decentralized nature of the company?

    Foster-Cheek: Every single leader within Johnson & Johnson is held accountable for this. People development is a stated goal for each HR professional on my leadership team as well as for all of the professionals throughout the organization. Our chairman also is measured on people development as part of his assessment.

    WM: Is compensation tied to talent development?

    Foster-Cheek: We have that as one of the measures of performance. It is not the only factor. I think a more accurate way of saying it is that compensation is tied to performance. One of the ways that leaders are assessed is the development of their teams. Because we are decentralized, we don’t have a firm percentage.

    WM: How do you get managers to let go of their best talent?

    Foster-Cheek: It’s hard. And some of that is about what we call "dual citizenship." We really enforce that, as a leader within Johnson & Johnson, you are not just a citizen to your operating company but to all of Johnson & Johnson. One of the strongest ways we can do this is by starting at the top. Over the past year, we have moved a dozen business leaders across sectors. And one could argue that these were people that we really needed to keep in their current positions for business continuity.

    But that’s where succession and development planning comes in. You create an expectation that part of your success is all about the development of your successor. If you are good at developing your successor, it gives us the ability to move you across sectors. Given the breadth of our company and our continued growth, the ability for business leaders to understand how to navigate across the different sectors is very valuable.

    WM: What other metrics do you use to gauge how you are doing from a workforce management perspective?

    Foster-Cheek: Each of the different businesses do their own pulse surveys. We do town hall meetings. We really try to communicate with our workforce. We track turnover. Our turnover is significantly below industry average. We also look at voluntary versus involuntary turnover because that’s really telling; and we look at retention of high performers.

    A couple of years ago we ran a regrettable-loss survey where we went out to people we had identified as regrettable losses from the organization. We interviewed them to get insight as to why they left their jobs. And you can imagine that once a period of time has passed from leaving an organization, people felt much freer. We rehired a lot of those individuals as a result of those discussions.

    We learned from that again the importance of communications. Many of those employees were not getting the feedback and communication loop with their supervisor to understand how valued they were within the organization.

    WM: What’s your biggest challenge today?

    Foster-Cheek: Ensuring that our workforce has relevant skills moving forward. And that our business leaders are equipped to manage the dramatic changes every day.

Workforce Management, October 23, 2006, p. 23 -- Subscribe Now!

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