ADP Case Study - harvardbusiness.org · In this case study, we: ... —Kim Lamoureux, Lead Analyst, Bersin by Deloitte Deloitte Consulting LLP ... industry studies and case studies

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IN THIS CASE STUDYIn an effort to position itself for future growth, Merck & Co., Inc., has been expanding its presence in four emerging markets—China; Eastern Europe, Middle East, and Africa (EEMEA); Latin America (LA); and Asia Pacific (AP). Merck’s expansion presents unique challenges to quickly develop leaders who need to move the company’s global business strategy forward by taking advantage of local market opportunities.

The Emerging Markets Future Leader (EMFL) program was designed to provide a rigorous learning experience to a cohort of 56 high-potential leaders in order to build high-level leadership skills and grow participants’ social networks. Working with Harvard Business Publishing and leveraging this group’s Leadership Direct program, Merck's talent development leaders created a blended curriculum, which combines face-to-face, action, and virtual learning content to support Merck’s vision of improving health and wellness of the world's population by expanding access to its medicines and vaccines.

In this case study, we:

• DiscusshowtheEMFLprogramdesignsupportsMerck’stalentdevelopment and retention goals

• DescribehowMerckselectedandpartneredwitharecognized,effective external development partner

• Determinewhichleadingpracticesforimplementingavirtual leadership development program are appropriate for emerging markets e

FOCUS:

Cultivating a Global Leadership Pipeline

Merck Accelerates Development of Leaders in Emerging Markets

—Kim Lamoureux, Lead Analyst, Bersin by DeloitteDeloitte Consulting LLP | August 2013

LEADERSHIP DEVELOPMENT

LEADERSHIP STRATEGY

LEADERSHIP ORGANIZATION &

GOVERNANCE

LEADERSHIP COMPETENCIES

LEADERSHIP DEVELOPMENT

SOLUTIONS

EXECUTIVE DEVELOPMENT

HIGH-POTENTIAL DEVELOPMENT

LEADERSHIP DEVELOPMENT EVALUATION

Copyright © 2013 Deloitte Development LLC. All rights reserved. This Material Is Licensed to Harvard Business School Publishing for Distribution Only.

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CULTIVATING A GLOBAL LEADERSHIP PIPELINE


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Contents

Company Overview 4

Business Environment and Challenges 4

Leadership Development and Talent Retention

in Emerging Markets 5

Learning Organization 6

Designing the EMFL Program 7

Content Design 7

Program Structure 9

Partner Selection and Program Design 14

Program Implementation 16

Metrics and Evaluation 16

Leading Practices 18

Next Steps and Lesson Learned 20

Conclusion 21

Appendix I: Topics for Discussion and Learning 22

Key Learnings 22

Ideas for Action 22

Questions to Consider 23

Appendix II: Table of Figures 24

About Us 25

4



Company Overview

Merck & Co., Inc. (“Merck”), with corporate headquarters in Whitehouse Station, New Jersey, is a global healthcare company that provides health solutions through prescription medicines, vaccines, biologic therapies, animal health, and consumer care products1. Known as Merck in the United States and Canada and MSD in the other 138 countries in which it operates, the company not only introduced the first measles and mumps vaccines but was also instrumental in the development of products such as synthetic cortisone and prednisone.

Business Environment and Challenges

As part of the highly regulated and extremely competitive pharmaceutical sector, Merck is constantly challenged to find ways to remain an industry leader. Significant competition exists both with similarly large worldwide healthcare suppliers and with smaller niche companies and makers of generics. For example, in 2011, Merck faced the expiration of the patent and exclusivity rights of one of their biggest products, an asthma preventative, which opened the market to other companies and generics offering similar products.

One of Merck’s strategies for addressing patent expirations, accelerating revenue growth, and achieving future success within this business environment involved making strategic investments in emerging markets. This meant refining a companywide, overarching strategy for penetrating and maintaining emerging markets such as China and India.

Although emerging markets present significant opportunities for growth, they also present unique challenges. Market conditions and the competitive

1 Source: 2012 Merck Annual Report, Merck & Co., Inc., February 28, 2013. Available

at http://www.merck.com/investors/financials/annual-reports/home.html.

Figure 1: Merck at a Glance

• YearFounded:1891

• AnnualRevenue: $47 billion in fiscal year 2012

• Employees:83,000 worldwide (32,000 in United States)

• Operations:United States, Canada, Europe, Latin America, Middle East, Africa, and Asia Pacific

• Headquarters:Whitehouse Station, New Jersey

Source: Merck & Co., Inc., 2012.

http://www.merck.com/investors/financials/annual-reports/home.html

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landscape tend to be particularly volatile, especially in countries where individuals,organizations,andevengovernmentshavelimitedresourcesto spend on healthcare. Further, the regulatory environment in emerging markets can differ significantly from that of the United States or Europe and, in some cases, is still evolving.

These factors place an additional burden on leaders in emerging markets, who must be able to adapt to changing conditions and identify potential growth opportunities while supporting the goals, values, and ethics of Merck.

Leadership Development and Talent Retention in Emerging Markets

Similartomanyotherglobalorganizations,Mercktraditionallyplacedexpatriates as leaders in global markets. However, because of the complexities of local emerging markets (e.g., regulations, language), the company’s leaders decided to put a greater focus on growing local talent into leadership positions. Although Merck had success filling middle management positions using local talent, the company found that these leaders often didn’t have the experience or background to assume higher-level, senior leadership positions. This created a talent pipeline issue for the company—compounded by the trend in many emerging markets for significant churn in talent. Therefore, Merck needed a leadership development solution that would not only accelerate the cultivation of senior-level leadership skills but also build loyalty. The goal was a cadre of engaged, strong local leaders who would remain with Merck and influence the next generation of rising talent.

For this reason, Merck invested in the Emerging Markets Future Leader (EMFL) program, a first-of-its-kind initiative that would:

• Focusonidentifiedhighpotentialswithinallcountries,includingemerging markets

• Quicklydevelophigher-orderleadershipskills

• Buildcompanyunderstandingandloyalty

• Expandleaders’networksoutsidetheirfunctionalandgeographicboundaries

• Increaseleaders’contactwith,andvisibilityamong,importantseniorcompany leaders

In addition, because the learning participants were geographically dispersed, program founders decided to include a virtual solution to help foster the kind of collaborative culture achieved in face-to-face programs.

Although

emerging markets

present significant

opportunities for

growth, they also

present unique

challenges.

KEY POINT

A senior expat

leader should

begin identifying

and grooming local

successors at the

start of his or her

assignment so as to

build skills among

midlevel leaders

and provide a

smooth transition

at the end.

KEY POINT

6



The resulting EMFL program grew out of Harvard Business Publishing’s customizedLeadershipDirectprogram.The10-month,cohort-basedprogram includes two in-person sessions, seven virtual learning modules, and an in-depth action learning project. The program balances the need for collaborative and interactive learning with the constraints of a geographically dispersed audience through the use of face-to-face and virtual classrooms, augmented by a learning portal that provides access to resources at the learners’ convenience.

Learning Organization

ThestructureofMerck’senterpriselearningorganizationreflectsthecompany’s understanding that individual markets have different talent development needs. As shown in Figure 2, each global market—China; Eastern Europe, Middle East, and Africa (EEMEA); Latin America (LA); and Asia Pacific (AP)—has dedicated resources that work to support the needs of the region. The EMFL program is the outgrowth of this structure, but with a twist—it is directly sponsored by the president of emerging markets and supported by the global talent development area. MSD University2 sits inside this group and supports the EMFL program.

2 MSDUniversityisthecompany’semergingmarketslearningorganization.

Enterprise Learning

Executive/ Management Development

Project Managers

Executive Development

Professional Competencies/

Teaming

Learning Technologies

Project Lead – Learning

Management System

Learning & Social Technology

Learning Management

System Support

Management Development

Portfolio Integration & Operations

Project Managers

Learning Coordinators

Global Talent Development

Enterprise Learning Global Talent Management

CHINA

EEMEA

LA Japan

Strategy Executive/SIGMA

India

AP EUCAN

Figure 2 Figure 2: MerckEnterpriseLearningOrganization


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Designing the EMFL Program

The EMFL program has several high-level objectives:

• Develop emerging market executives who have the knowledge, skills, and mind-sets to lead the business in achieving significant growth targets for Merck

• Create an emerging market culture in which leaders are characterizedby:

o An entrepreneurial and innovative mind-set that allows for the execution of decisions with calculated risk

o A sense of urgency that allows emerging market country organizationstomovequickly

o Respect for, and adherence to, the core mission and values of Merck

• Support the development of an effective cross-regional and cross-divisional peer network among emerging market leaders to support collaboration, understanding of challenges and solutions, and accelerated business success

• Provide top talent with a highly valued development experience

Content Design

To design the EMFL program, Merck and Harvard Business Publishing leaders first interviewed the emerging markets leadership team to identify its unique challenges. These senior emerging market leaders indicated, for example, that they need local leaders who are able to not only innovate within the norms of their culture but also understand the strategic goals of the company and the strict compliance guidelines that govern the pharmaceutical industry. The output of these conversations became the core components of the EMFL curriculum (see Figure 3).

The discussions also contributed to the key messages about the program that were subsequently developed and delivered to participants and to the rest of the company in articles about the program. They reinforced the significance of these competencies to the business. The program invitation sent out by senior leaders in emerging market functional areas, for example, stated that “topics align to the needs of our strategic goals, and expanding our capabilities in these areas will be critical to succeeding in our markets in the years to come.”

The EMFL program

is designed to

foster networking

and collaboration

among cross-

regional and cross-

divisional emerging

market leaders.

KEY POINT

Interviews with

Merck’s emerging

markets leadership

team helped

to identify the

company’s unique

challenges and

develop key

messages about

the EMFL program

that reinforced its

significance to the

business.

KEY POINT

8



EMFL leaders designed the content areas to help the participants shift from serving as transactional managerial contributors to guiding as strategic transformational leaders. They achieved this by approaching the content in several different ways and providing participants with:

• Lecturesandself-studyresourcesofferingatheoreticaloverviewofthetopic from a strategic/global context

• Casestudiestoshowthetopicsinaction

• ContentspecifictotheMerckandMSDbusiness

• Activitiesdesignedtoplacethecontentintoaspecificemergingmarketcontext, including action learning projects

This design created an intellectual bridge between the theoretical and the participants’ experiences, and encouraged them to think creatively. The strategic use of Merck leaders and experience also helped ground conversations in the business issues that are most important to the company.

Figure 4 shows how one content area included in the program blends academic research and Merck business experience and demonstrates how Merck enriched the material by aligning a traditional leadership topic with the specific needs of emerging markets.

Figure 3: EMFL Program Content Areas

Implementing Strategy

Customer-Centricity

Winning in Emerging Markets

Building Talent

Entrepreneurial Mind-Set

Relationship-Building and Influence

Leadership: Driving Transformational Change


9



Regardless of the type of learning activity, the sessions are designed to be highly interactive. These interactive components, whether synchronous or asynchronous, help participants develop their cultural intelligence by hearing about other emerging markets and their communication and influencing skills by giving them a safe place to try out their ideas.

Program Structure

The 10-month program’s design is based on a cohort model. The cohort design and length of the program enable participants to develop networks that can be used as future resources (see Figure 5).

Figure 4: Content Example from EMFL Program

Module 7—Leadership: Driving Transformational Change

Themes Addressed: Creating an entrepreneurial culture, innovating how you do business, leading change, effective decision-making

Learning Objectives: Develop leadership traits and approaches that support organizational transformation and employee engagement, effectively influence and lead change initiatives, gain buy-in to company strategies and priorities, manage the tensions created by change processes, and lead transformational efforts on a department- and systemwide basis

• Session 1: Expert Lecture—Oct 9, 2012, 7.30 AM EST, Prof. Amy Edmondson, Book Chapter: Chapter 8 of Teaming (Jossey-Bass, 2012)

• Session 2: Foundational Readings and Merck Senior Leader (Michel Vounatsos)—Oct 16, 2012, 7.30 AM EST; HBR Articles: “Leading Change: Why Change Efforts Fail,” J. Kotter; “Have You Restructured for Global Success?,” N. Kumar, P. Puranam; “Accelerating Corporate Transformations (Don’t Lose Your Nerve!),” R. Miles

• Session 3: Case Discussion—Oct 23, 2012, 7.30 AM EST; HBS Case: HCL Technologies, L. Hill, T. Khanna, E. A. Stecker

• Session 4: Application Exercise—Oct 30, 2012, 7.30 AM EST, Leading Change Simulation (HBP Higher Ed)

Source: Harvard Business Publishing, 2012.

Interactive

program

components

help participants

to develop

their cultural

intelligence,

communication,

and influencing

skills by hearing

about other

emerging markets.

KEY POINT

10



The program has three primary elements—two in-person sessions, seven virtual modules, and action learning. Each element is described in more detail as follows.

In-Person Sessions

The two in-person sessions at the beginning and close of the program help participants build relationships with peers outside their markets.

• Thefirstthree-daysessionheldatHarvardBusinessSchoolinCambridge,Massachusetts, focuses on strategic thinking, collaboration, and teamwork. During this time, the participants also form “action learning teams” (described later in the “Action Learning” section).

Figure 5 Strategy Intro External Perspective Organizational Effectiveness Personal Effectiveness

February March April May June July August September October November

Virtual program begins

In-person program

Virtual program

continues Virtual

program ends In-person

closing event

Orientation

Module 1: Implementing

Strategy

Kickoff discussion

In-person, three-day program

(Cambridge, MA)

• Global strategy • Innovation • Execution and learning • Mission

Module 2: Customer-Centricity

Module 3: Winning in Emerging Markets

Module 4: Building Talent

Module 5: Entrepreneurial

Mind-Set

Summer Break

Module 6: Relationship Building and

Influence

Module 7: Leadership:

Driving Transformational

Change

In-person, two-day closing

(Johannesburg, South Africa)

© 2011 Harvard Business Publishing. Harvard Business Publishing is an affiliate of Harvard Business School. All rights reserved.

Action Learning Projects

Figure 5: EMFL Program—10-Month Program Flow


11



• Thesecondsession,heldattheendoftheprograminJohannesburg,South Africa, allows participants to present the results of their action learning team projects to their colleagues and other business leaders. (Again, see the “Action Learning” section for more details.)

Virtual Modules

In addition to the in-person sessions, participants engage in seven virtual thematic learning modules. They complete one prior to the first in-person session and one every month until the final face-to-face session. Each module has four components (see Figure 6):

• Executive-ledsession

• CasediscussionmoderatedbyHarvardBusinessSchoolprofessors

• Facultyorexpertlecture

• Exerciseormoduledebrief

3 Source: Leadership Development Factbook 2012: Benchmarks and Trends in U.S.

Leadership Development, Bersin & Associates / Karen O’Leonard and Laci Loew, July

2012. Available to research members at www.bersin.com/library.

Learning solutions

for high potentials

are heavily oriented

toward experiential

and collaborative

components—

nearly one-fourth

of the typical

solution is designed

around experiential

activities—the

highest of any

leader level.3

KEY POINT

Figure 6 - Sample Module

© 2010 Harvard Business School Publishing. Harvard Business Publishing is an affiliate of Harvard Business School. All rights reserved.

Week 1 Week 2 Week 3 Week 4 Context Setting

Expert Lecture

Case Discussion

Application Activity

3 hours

Read 2-3 handpicked articles (e.g., Harvard Business Review)

Webinar co-led by senior leader module champion … “Why this topic is important to us and our point of view?”

2-3 hours

Preread 1-2 short articles

Webinar and Q&A with Harvard Business Services or similar faculty or Harvard Business Publishing author/expert

Company co-moderator(s) lead follow-up discussion Board activity

3 hours

Prepare Harvard Business Publishing or other case study on topic

Case study discussion facilitated by Harvard Business Publishing expert moderator via webinar or online discussion board

3-4 hours

Custom-created individual or small-group application exercise, business simulation, or miniaction learning project

Figure 6: Sample Virtual Module of EMFL Program


12



Participants have access to resources related to the topic of each module on the EMFL portal. They include recordings of live sessions for those who are unable to attend.

Action Learning

The action learning projects allow participants to work together to propose solutions to key issues impacting emerging markets (see Figure 7). These action learning projects are submitted by sponsors in the emerging market areas and are selected because they present relevant challenges to the region/function. Examples of action learning topics include:

• Recommendationsonpotentialallianceswiththeemergingmarket

• A5-to10-yearroadmapforestablishinganewbusinessinan emerging market

• Portfoliorecommendationsfornewpotentialcustomersegments

• Talentstrategiesforrecruiting,retaining,anddevelopinglocalleaders

Action learning

projects are

submitted by

sponsors in the

emerging market

areas and are

selected because

they present

relevant challenges

to the region/

function.

KEY POINT

Figure 7: EMFL Action Learning Project Process

The Business Challenge• Aregional/countrybusinesschallengethat:

º Is real and significant, with a large-scale impact

º Connects to strategic priorities, key levers forgrowth,and/oroperatingplansofhighimportance to the organization and, therefore, of high relevance to the group

º Has no easily identifiable solution • Experimentationandtakingrisksareacceptable• Cross-divisionalapproachisrequired• Itisexpectedtoadvancedevelopmentofthecore

emerging markets capabilities, as targeted in the EMFL program

The Groups56 EMFL participants divided into 10 groups by their home region or country:• EasternEurope,MiddleEast,andAfrica(EEMEA)• AsiaPacific• India• China• LatinAmerica• UnitedStates-basedteamsupportingemerging

markets

Support for Each GroupRegional president sponsors the group and the projectGroup coaches:• Executivedevelopmentgraduate• MSDUniversityregionalleader• EMFLmoderatorandresources

Process• Projectdefinition:regionalpresidentswithMSD

Universityleads(includesdefiningthechallengeand confirming group composition—participants and coaches)

• Projectkickoff:atHarvardclassroomsession;evening dinner with groups

• Ongoingprojectdevelopment• Projectreport-outs:atfinalin-personsession


13



Each of the 10 groups works collaboratively to develop recommendations for the challenge. At the final in-person session, the teams present the highlights of their findings to their program colleagues, emerging markets leaders, and other leaders attending the program. Prior to this session, teams share the full results with their respective regional/country sponsors.

At the conclusion of the presentations, an informal space is set up with a designated table for each team. For 40 to 60 minutes, all participants (EMFL and leaders) are encouraged to visit the team tables to ask questions and better understand the projects.

Following are two examples of the types of business problems EMFL program participants were asked to address as part of their action learning assignments:

• Business strategy for healthcare transformation—To devise a road map for the transformation of the MSD India business so that it is well positioned to take advantage of the transformation of the Indian healthcare landscape in both private and public sectors.

• Access to innovation—The external environment of the Latin American region is growing more complex and sophisticated in matters such as intellectual property, pricing, quality standards, local manufacturing, ethical practices, and market access. With a strong lobby from local industry and the implementation of cost-containment strategies from government and payers, access to innovation is becoming more challenging. MSD must ensure enabling conditions to guarantee its growth and future sustainability. One team was charged with creating a target and a realistic plan to achieve it.

Other Program Features

In addition to the core content and delivery approaches used in the program, three other features play a significant role in the overall effectiveness of the program. Learning professionals and program participants made particular note of the effective use of:

• Harvardfaculty—Harvard faculty contribute to the rigor and prestige of the program and help provide a strategic view of Merck within a larger industry context. Participants valued the “eye-opening” perspectives of academic instructors.

• Leaders as teachers—Participants also commented on the “real life experiences from senior leaders of the company that have been able to succeed and overcome self-imposed hurdles.” These “leader teachers” selected from within Merck help build participants’ “social capital” by connecting them with key decision-makers. The president of the emergingmarketsorganizationhelpedchoosethemforthefirst

Companies such as

Merck are showing

an increasing

commitment

to replace low-

value, event-

driven programs

with iconic

solutions that

integrate personal

development with

the business.

KEY POINT

“Leader teachers”

selected from

within Merck help

to build EMFL

participants’

“social capital”

by connecting

them with key

decision-makers.

KEY POINT

14



program. This showed the importance of the idea to the program’s structure and had the additional benefit of rewarding guest leaders bypublicallyrecognizingtheircontributionstothecompany.Oneofthe results of the collaboration between the design team, the Harvard faculty, and the leader teachers was that sections of each module, often led by different instructors, were complementary to each other while also reinforcing the program’s overall learning objectives.

• Program moderator—Another important aspect of the instructional model was the use of a single moderator for the entire program. The moderator, who served as a linchpin or “homeroom teacher” for the program, guided discussions within each module and helped participants integrate content across the modules. The role of the moderator required a variety of skills, including a deep understanding of global strategy, the capability to quickly learn and communicate Merck strategy, and the ability to facilitate virtually across a variety of platforms and tools.Asoneparticipantwrote,“Iwanttorecognizetheworkofourmoderator. She ensures that we engage in rich discussions where we can get the best out of the cases we study.”

Partner Selection and Program Design

Because the program was designed to accelerate the leadership transitions of local leaders, it was important to the EMFL design team that the program be perceived as rigorous and esteemed. This would help ensure that participants and leader teachers fully participated in the activities despite their already heavy workloads. Therefore, the program team decided to outsource content development to specialists with global name recognition—the Harvard Business Publishing’s Leadership Direct program. This program was selected after reviewing the executive development content at two universities, internal focus groups, and external benchmarking.HarvardBusinessPublishingprovidescustomizableoff-the-shelf content not only geared toward cohort-based learning but also containing leader-led components. The program also includes interactive learning platforms, including WebEx, Telepresence technology, and an online forum (see Figure 8).

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Members of Merck’s global team development area worked closely with the Leadership Direct team to identify key themes, develop additional content, and identify the appropriate faculty, case studies, and internal company leaders for each module. As part of this process, the Harvard Business Publishing program director worked with Merck leaders to understand the business context and make sure each piece of content supported the program goals.

The two face-to-face sessions that bookended the program were additional customizations.ThesesessionsdrewbothMerckleadershipandHarvardfaculty. A participant captured their value by reporting: “Group interactions at Harvard were excellent … I think I got significant interaction time with 80 percent of the cohort.” The participant gave an example of immediate business impact: “We are linked to Australia on regulatory issues, I met the head of Australia Market Access so I can now make easy contact with him to handle a real business issue—very important.”

Figure 8: EMFL Portal

Source: Merck & Co., Inc., and Harvard Business Publishing, 2012.

Figure 8 - Sample Module

The Harvard

Business Publishing

program director

worked with

Merck leaders to

understand the

business context

and make sure

each piece of

content supported

the program goals.

KEY POINT

16



EvenwiththecustomizationoftheLeadershipDirectcontentandtheadditional design of the face-to-face components, the design process only took about three months to complete.

Program Implementation

The project team launched the first EMFL cohort in early 2012. Leaders nominated participants based on their performance and potential to be senior leaders in the company, as defined by Merck’s five factors of potential:

1. Strategic thinking

2. Interpersonal effectiveness

3. Learning orientation

4. Drive and commitment

5. Versatility

Through an extensive calibration process, conducted in partnership with thebusinessandtheorganization’sHRteam,theinitialpoolofmorethan 70 candidates was further vetted to identify the 56 participants who showed the greatest potential. Although the selection team tried to balance representation across markets and functional areas, it did not set quotas. In the end, the first cohort represented 25 countries and 10 functional areas.

Personal invitations from senior leaders showed the company’s commitment to the program and helped reinforce its significance.

To set the expectations for the virtual nature of the program, the first session was a virtual event. The subsequent face-to-face session in Boston focused on global strategy, teamwork, and networking. For the remainder of the program, participants used virtual tools such as WebEx and the EMFL portal to attend module sessions and work together on their action learning projects. At the end of the 10 months, the cohort regrouped in South Africa.

Metrics and Evaluation

The two primary goals of the EMFL program were to (1) accelerate the development of qualified leaders for senior positions within emerging markets and (2) retain top talent. Initial data on the first cohort of EMFL participants suggests that the first goal was fully met and that the second was partially met (see Figure 9). Twenty-eight percent of participants assumed new, broader responsibilities at the end of the program, compared to the program target goal of 25 percent within 18 months. The cohort had a lower turnover rate than a comparable leadership group. Qualitatively,

Personal invitations

from senior

leaders to EMFL

participants

showed the

company’s

commitment to

the program and

helped to reinforce

its significance.

KEY POINT

The two primary

goals of the EMFL

program were to

(1) accelerate the

development of

qualified leaders

for senior positions

within emerging

markets and (2)

retain top talent.

KEY POINT

17



participants believe that the program will significantly influence their careers. For example, one participant wrote, “It gives me empowerment andshowsmethattheorganizationtrustsmeandvaluesmycontributions,whichenergizesmeandgivesmeevengreatermotivationandthewillingness to overachieve, it gives me a certain amount of freedom to innovate and think.”

Because the dispersed nature of the audiences played such a critical role in the program’s design, the team also measured the success of the virtual components and found:

• Thevastmajority(97.8percent)ofparticipantsratedthevirtualdeliveryas excellent or good.

• Satisfactionratingsforin-personsessionswereonlyslightlyhigherthanfor virtual sessions.

*Emerging markets high performing, high potential.

Figure 9: EMFL Success Metrics

Objective Targeted Outcome Actual Outcome

High levels of program participation

Average attendance rates at WebEx sessions total 80% of participants (including those who play back the WebEx recordings).

85%

Strong participant ratings from session

Average ratings scores total 4.2 out of 5 on WebEx and in-person session ratings.

4.45 WebEx

4.8 in-person sessions

Increased peer networking across functional and geographic boundaries

In end-of-program survey, 70% of participants report substantive interaction with other EMFL participants.

97%

Increased participant retention

Retention rates are higher among EMFL participants relative to comparable Merck group (EM HPHP*) 6 months after program completes.

Currently, five regretted turnover from the cohort

Career progression of talent from among the EMFL cohort

After program completion, 25% of the cohort moved into a role of greater size or complexity within 18 months.

28% already at program close


18



• WebExsessionswerebetterattendedthananticipated(85percentattendance vs. 80 percent target).

All action learning projects also received positive ratings and are still moving forward.

These results show that the blended approach was an effective solution for the participants and helped overcome the challenges of distance. This is further reinforced by the finding that 97.7 percent of the participants reported making substantive connections with others outside their current network because of the program. Given that virtual learning solutions are oftencriticizedashavinglimitedabilitytobuildsocialcapital,thissuggeststhat the careful use of blended content and virtual learning technologies can mitigate the issue. As one participant commented, “The cross-divisional nature is extremely powerful ... we should find a way to continue to stay connected as an ‘emerging market brigade’ to propel MSD forward in this area.”

The success of the program can also be seen in changes in behaviors and attitudes of participants who, even at the midpoint in the program, were actively using what they learned to influence transformational changes in their markets in regard to how talent is talked about and valued. For example, another participant noted, “I’m pushing the local committee to enhance the dialogue about talent and do it in a more structured way. This is an area of the business where I’d like to change the way we operate today.”

Leading Practices

Many of the features that make Merck’s EMFL program so successful are hallmarks of any good leadership development program, including:

• Activeandaggressivesponsorshipbyleaders

• Alignmentofprogramcontentandobjectivestostrategicgoals

• Actionlearningprojectswithclearbusinessimpactaspartoftheproject,as well as subsequent implementation of these projects

• Useof“leadersasteachers”

Given that virtual

learning solutions

areoftencriticized

as having limited

ability to build

social capital, the

careful use of

blended content

and virtual learning

technologies for the

EMFL program can

mitigate the issue.

KEY POINT

19



However, Merck/MSD made its program distinctive by including the following four practices:

1. Targetingofuniqueleadershipcapabilitiesrequiredwithinemergingmarkets—According to our research on emerging markets4, four key capabilities are particularly important for developing leaders and are fully flexed in the Merck program. These capabilities are as follows:

• Improving communication skills—This capability includes not only overcoming language barriers but also gaining the confidence to reachoutacrossfunctions,borders,andorganizationalhierarchyto get things done. Interactions between participants and peers, senior leaders, and seminal thinkers from Harvard helped build that confidence.

• Developing cross-cultural intelligence—Some local leaders in emerging markets have little experience outside their cultures. They may have limited intuition about the similarities and differences between markets and, thus, how products or business processes will function or perform. The EMFL cohort structure allows leaders to build that intuition without having to uproot from the local markets in which their experience is most valued.

• Building strategic thinking skills and capabilities—Similar to the preceding issue, some local leaders do not have the background or experience that promotes effective strategic thinking. Because developing strategic thinking skills was one of the core business goals of the initiative, the program focused on this goal explicitly as a topic and implicitly through case studies.

• Coaching and developing talent—In some emerging markets, local leaders have difficulty with coaching and developing talent because of cultural norms about hierarchy, honor, or conflict. In addition to discussing how to balance talent development with cultural constraints, the program itself served as an example of effective talent development by providing access to different learning modalities and encouraging participants to provide feedback to each other throughout the program. Several participants reflected the success of this aspect of the program when they repurposed content from the program to use with their teams in their countries.

4 Source: Leadership Development in China: Building Bench Strength in the

World’s Largest Marketplace, Bersin by Deloitte / Katherine Jones, Ph.D. and Karen

O’Leonard, 2013. Available to research members at www.bersin.com/library.

Improving

communication

skills includes not

only overcoming

language barriers

but also gaining

the confidence to

reach out across

functions, borders,

andorganizational

hierarchy to get

things done.

KEY POINT

20



2. Use of a single moderator throughout the program—As discussed previously, the EMFL moderator served as a linchpin for the program. The role required that the moderator, who was a Harvard Business Publishing staff member, was highly familiar with Merck, as well as its global business strategy, its unique leadership needs, and those of emerging markets.

3. Identification of a diverse dispersed audience for participation—The EMFL participants represented 25 countries and 10 functional areas. The diverse and global nature of the cohort provided participants with a real-world experience in working with global teams and solving business problems virtually.

4. CollaborationofleaderteacherswithHarvardfaculty—Although leader teachers are not unique, what is different in this instance is the collaboration between Merck’s business leaders and participating Harvard faculty. To be successful, the program had to integrate academic intelligence with the company’s specific business values, processes, strategy, and vision. In the end, the discussions and activities were directly relevant to Merck leaders and participants, as well as to the Harvard faculty. They all were able to respond to inquiries within a business-specific context.

Next Steps and Lesson Learned

The EMFL program is designed to run every other year. This lag between cohorts gives the design team a chance to evaluate the applicability of the content and the needs of the next cohort. Given that the markets are so volatile, new themes and issues will probably emerge from year to year. Similarly, because the participants in the program are current leaders, it is hoped that some of the issues will change because these leaders will develop their own staff using what they have learned. In fact, some cohort members have already started reusing the recorded webinars with their own teams.

The project team will also incorporate feedback from the first cohort into the design of the next wave of the program. Some of the lessons learned include:

• Usingacalibrationprocesstoidentifytalentisimportant,buttherewill still be people in the program who are not a good fit in the end. Calibration occurs at a point in time. Changing business demands can impact individual performance such that there will likely always be misfits and missed opportunities.

• Evenwiththerightvirtualtechnology,timedifferencesandtravelwill be a challenge.

The diverse and

global nature

of each EMFL

cohort provided

participants with

a real-world

experience in

working with

global teams and

solving business

problems virtually.

KEY POINT

Given that the

markets are so

volatile and that

new themes and

issues will emerge,

running the EMFL

program every

other year allows

the design team

to evaluate the

applicability of the

content and needs

of the business.

KEY POINT

21



• Workloadfortheprogramwasheavierthananticipated,andsomeparticipants found it difficult to balance this with their day-to-day work. The design called for participants to spend two to four hours per week on assignments and the equivalent of seven business days off the job for the face-to-face sessions. However, many participants found that the activities took longer than expected because of the richness and rigor of the material. The challenge for the design team will be to make the material less demanding without compromising its effectiveness.

Conclusion

TheMerckEMFLprogramisanexcellentexampleofhoworganizationscanbuild high-impact leadership development programs that can accelerate the development of leaders in emerging markets. By starting with a clear understanding of both the unique challenges of emerging markets and the unique leadership capabilities required in those areas, Merck was able to create a rigorous program that goes far beyond a traditional competency-based leadership development program.

Also critical to the success of the program was the strong partnership between Merck and Harvard Business Publishing. This partnership allowed the Harvard team to better understand the business goals driving the projectsothatthefinalsolutionwashighlycustomizedwithoutanexcessive design timeline.

22



The following sections will provide you with considerations for sharing and implementing the leading practices highlighted in this report.

Key Learnings

Below is a list of key learnings from this case study:

1. Global companies should balance the need for collaborative and interactive learning with the constraints of a geographically dispersed audience through the use of face-to-face and virtual classrooms, augmented by a learning portal that provides access to resources at the learners’ convenience.

2. The EMFL program has high-level business sponsorship from each regional emerging markets leader to champion the action learning projects at the local level and ensure strategic alignment.

3. The EMFL moderator served as a linchpin for the program. The moderator, who was a Harvard Business Publishing staff member, was highly familiar with Merck, as well as its global business strategy, its unique leadership needs, and those of emerging markets.

4. “Leader teachers” were selected by the president of the emerging marketsorganization.Theseleaderteachershelpbuildparticipants’“social capital” by connecting them with key decision makers and bringing real life experiences as to how they succeeded and overcame self-imposed hurdles.

5. Merck and Harvard Business Publishing leaders first interviewed the emerging markets leadership team to identify its unique challenges. The output of these conversations became the core components of the EMFL curriculum. The discussions also contributed to the key messages about the program, which were subsequently developed and delivered to participants and to the rest of the company in articles about the program.

Ideas for Action

Following is a list of actions that you can take in order to apply or implement the leading practices highlighted in this report. We highly recommend that some foundational elements be in place inside your company in order to execute such a plan, process, or program.

Appendix I: Topics for Discussion and Learning

23



1. Consider your company’s business strategy, its demand on leadership capability,andthecurrentstateofleadershipintheorganization.Isthere a gap? If so, what are you doing to fill this gap so that the pipeline is sufficient for enabling the company to meets its business goals (i.e., growth, new product development, transformation)?

2. Examine your current leadership competency model. How does this competency model apply to leaders who require global leadership acumen or who are located in different parts of the world?

3. Assess your current leadership solutions. Are these solutions focused on the right things? Do they offer the ideal learning approaches? Are you partnered with the right solution providers?

Questions to Consider

Below is a list of discussion questions that you can ask your team, colleagues, and business leaders to help you take the next steps:

1. How often do you speak with your business leaders about their business needs and subsequent talent challenges?

2. From where are you finding talent to fill senior-level positions in emerging markets, and what are you doing to build a pipeline of leaders in these markets?

3. How can you improve the development of people who must work and collaborate across different regions and cultures?

24



Appendix II: Table of Figures

Figure 1: Merck at a Glance 4

Figure 2: MerckEnterpriseLearningOrganization 6

Figure 3: EMFL Program Content Areas 8

Figure 5: EMFL Program—10-Month Program Flow 10

Figure 6: Sample Virtual Module of EMFL Program 11

Figure 7: EMFL Action Learning Project Process 12

Figure 8: EMFL Portal 15

Figure 9: EMFL Success Metrics 17

25



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