9-708-486
REV: NOVEMBER 14, 2008

JORDAN SIEGEL

Global Talent Management at Novartis
Introduction
Novartis CEO Daniel Vasella, M.D., was sitting in his first-floor office in 2007 in Basel, Switzerland, reflecting to an outside researcher about the path that had led to his becoming CEO, and the origins of his (and his company’s) philosophy around global talent management. In presentations Vasella gave to Novartis employees around the world, he continually emphasized that talent identification, the use of systematic talent development, and strong pay-for-performance were central tasks and responsibilities for the company and every manager. With regard to his and the company’s philosophy on accountability and incentive pay-for-performance, Vasella noted: “The best time to form views about management is before you come to the top. You see how the real world works and how bureaucracy works, and what people believe and never dare to challenge.” Vasella had spent five years in the U.S. as a manager for one of the predecessor companies to Novartis, and during that time he had learned about and embraced new models of incentive pay-for-performance that were being pioneered at General Electric: I was listening to what Jack Welch had to say in 1988/89 and I saw that they had a far better human resource and incentive system than we did in my company. I transferred back to home base in Switzerland in 1992, just after we had introduced variable incentive compensation in my U.S. operation. Coming back to Switzerland, my pay was cut by 40 percent to fit with local market levels, and there was no variable component. Of course this was not exactly motivating to me. I felt unfairly treated, and I thought, ‘What do you want?’ At our first Group Leadership Meeting after I assumed the position of CEO, I asked my colleagues to show, by raising their hands, how many had regular