company culture just as concretely as ^ye performance'

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handle financial

OON MY AGENDA For Lise Kngo, who leads on HR for Novo Nordsk, reinforoing oorporate culture and a oommitment to business ethics and environmental responsibility are essential to underpin the Danish pharmaceutical giant's expanding global reaoh
Words: Tim Smedley Photography: Richard Gleed

ITEM 1

Culture is crucial
Staying close to core values as the company grows rapidly matters - to alLsiakeholders
ver the past 10 years Novo Nordisk has tripled in size, both in terms of personnel and sales. With 30,000 employees in 81 countries and half the worldwide market for insulin, the pharmaceutical firm has certainly earned its global credentials. Yet, despite such rapid grovrth, the company remains firmly committed to its local heritage. As Lise Kingo puts it. Novo Nordisk is "a global company, with very strong Danish roots". Kingo is executive vice-president, corporate relations, a position that encompasses a variety of responsibilities including HR, corporate communications, public affairs and CSR. She's part of an intimate, five-strong and 100-per-cent-Danish executive management team. And having been with the company for 23 years, she has personally seen it grow from national prominence to international dominance. Today only just under half of the company's employees are based in Denmark, where "Nordisk Insulinlaboratorium" was founded in 1923. Such growth brings an acute awareness that, "this special culture we have needs to be developed and maintained", says Kingo. "In another 10 years, we expect to have 45,000 employees with one-third of them located in Denmark, two-thirds outside. It's something employees are very concerned about too."

In 2010, this led CEO Lars Rebein Sorensen to embark on a global tour of the company, talking to employees, which included 350 separate faceto-face interviews. "He had a dialogue with employees about how they would like the company to be in the next 10 years, what they liked, what should be changed. He also met with stakeholders, patients, key opinion formers and people in the public healthcare sector to update what we call the 'Novo Nordisk Way'". The Novo Nordisk Way is a short document distributed to all employees. The company's vision is stated, followed by 10 essentials that all employees have to live by, says Kingo. It includes statements such as "our business philosophy is one of balancing financial, social and environmental considerations" (see Item 3, The 'triple bottom line', overleaf), and people management commitments such as, "we focus on personal performance and development". An internal team even audits every unit in Novo Nordisk on a three-yearly basis for how they adhere to the Novo Nordisk Way, a process Kingo's unit has just been through. "First, you undertake a self-assessment with your management team, and then two facilitators do a group session with the management team, interview a number of employees and customers and then give afinalevaluation," she says. "Every quarter, the head of facilitators reports on all the reviews that have been done that quarter, to say where we have become weaker or stronger on particular essentials." It's an exhaustive process, but one that underlines to employees and customers how important the culture is to the company. And it will be Novo's most used tool to keep a unified culture as it continues to grow. 'Tou could say that we handle company culture just as concretely as we handle financial performance," says Kingo. "It's a very soft area that we are trying to make manageable. Because you know you can only manage what you can measure." ^->

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Business ethics
Having had its tingers burnt in the past, now Novo does business ethically ornotiitaIL__
ingo arrived at the People Management interview carrying a recent copy of the magazine. One article in particular, on the introduction of the Bribery Act (see Links and Notes), had caught her eye. It's an issue that the company takes very seriously, although Kingo admits that it's been quite a journey to get to where they are today. In 2005, Novo acknowledged responsibility for improper payments to the former Iraqi government of Saddam Hussein, between 2001 and 2003, to obtain contracts to provide insulin and other medicines. As well as a hefty fine imposed by the US Department of Justice, it proved to be a necessary wake-up call. "We thought we did [business in Iraq] in a prof)er way. That was apparently not the case," says Kingo. "It was an important learning experience for us, and as management we said; 'Now we draw a line in the sand - we will never experience this again."' It would be wrong to think the company was acting without regard for ethics before the Iraq scandal. Its commitment to the triple bottom line approach to corporate responsihility dates back to the early 1990s. But, following 2005, Novo Nordisk developed specific procedures to apply to all employees across the company covering issues such as bribery and facilitation payments. A universal training programme was established, implementing a fundamental shift away from following local norms and procedures to adhering to one company-determined way. "It was a tough job, particularly for our colleagues in countries like China and Russia," admits Kingo. "Suddenly we gave them instructions that they had to work according to our business ethics guidelines, which they felt made us the only company in their countries told to act in this way. We had some turbulence until our CEO stood up and said, on several occasions, that we only want business when it lives up to our business ethics guidelines - otherwise forget about it. That was very powerful." Five years on, she feels, such resistance has all but disappeared. A combination of engagement, training and strict enforcement has made sure of that. A whistle-blower system, including a 24-hour helpline for people to anonymously report abuses, was also introduced in 2005. Kingo feels a zero-tolerance approach gives the company global advantages that far outweigh any regional disadvantages. "As I see it, American requirements on business ethics are slowly going to spread to the rest of the world. So we look to our American compliance organisation for the very highest level and we take those same elements to the rest of the organisation." The latest stage in this process has seen the creation of a global business ethics board, headed by Kingo, with five senior representatives from global regions of the business as well as the SVP for legal and business assurance. By keeping the whole company in line with the highest tidemark of ethical standards, Kingo believes it's easier to both spot upcoming trends and be prepared for the unforeseen. "It's much easier if you start when you have the time, then you can set your own pace," she says, adding that it helps that "more and more international companies have business ethics thinking in their veins".

ITEM 3

The ^triple bottom line'

Financial, social and environmental re.spnnsibilitie.s
ovo Nordisk "strives to conduct its activities in a financially, environmentally and socially responsible way". This is known as the triple bottom line (TBL), an approacb to responsible business practices first popularised in the 1990s by pioneers of corporate responsibility such as John Elkington, co-founder of consultancy SustainAbility. Indeed, it was with Novo that Elkington originally formulated many of these ideas. When Kingo joined the company in the late 1980s, genetic engineering and animal testing were top of the agenda of environmental activism. As a pharmaceutical company. Novo dealt in both - and still does. "We had NGOs fix)m across the world writing letters to us. There were some campaigns against the company," says Kingo. One of herfirstjobs was to improve Novo's reputation. She asked Elkington to conduct a full environmental review. In

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SEPTEMBER 2011 PEOPLEMANAGEMENT.CO.UK

addition, the company invited NGOs in to see for themselves how it operated and it also began environmental reporting. "We began to develop what turned into the triple bottom line," says Kingo. By the mid-1990s. Novo was already ahead of where many UK companies are now with corporate responsibility; in 2011, it's a fundamental part of the business, so much so that Kingo has even advised The Prince of Wales on sustainability. In 2009-10, Novo reduced energy consumption by 0.5 per cent, water usage by 5 per cent and consumption of raw materials by 18 per cent - yet the company grew by 1,154 staff, and net profit by 33.8 per cent, over the same period. Novo has educated more than one million healthcare professionals in diabetes care since 2002, and has a beneficial pricing policy for insulin for the 50 poorest countries in the world. "We are optimising business opportunities by balancing being financially responsible with social and environmental responsibility," says Kingo, who finds the argument that businesses should exist purely for profit very outdated. "All of our huge shareholders have applauded the TBL at our AGMs," she adds. "They can see how it makes this business thrive." But do employees understand what "triple bottom line" means? Kingo laughs: "I guarantee you could not find one that doesn't know. It's one of our essentials: everyone has to live up to the TBL. We measure it in our annual survey, and being a TBL company is consistently among the three highest rated engagement factors of all - and it's no different if it's people in China, India or Denmark, in the factory or top management." When the company signed up to the UN's "global compact" sustainability charter, it was one of only 50; now there are 8,000 signatories and rising. Yet, despite being a front-runner in this field. Novo is operating in an increasingly competitive environment. "We have to be on our toes, because there are lots of companies that have seen that this is a very healthy business approach," Kingo says. "Employees today want to work for a company that they can be proud of, a company that has an attitude towards human rights or climate change."

nnnT. Appointed executive vice UUL. president, corporate relations, assuming global responsibility for quality, HR, business assurance, corporate communications, corporate branding, public affairs and corporate social responsibility , Appointed corporate vice president, stakeholder relations , Joined Novo Nordisk's Enzymes 1 Promotion, and worked on implementing the triple bottom line , Began career In a Copenhagen advertising agency

ITEM 4
Pharmaceutical firm

Novo Nordisk, headquartered in BagsvsBrd, a north-west suburb of Copenhagen {pictured, top), is one of the world's leading companies in diabetes care

Innovation through culture

Creativity sbouid notoiiiy be tbe preserve
n 2009 Novo worked with an American consultancy, Doblin, to increase innovation in the company. "Doblin found that Novo could be stronger on articulating what an innovation culture is, and explaining to all employees what it is we want," explains Kingo. That began with the leadership team, who, the review found, weren't too sure of what it was either. The top 30 leaders entered a period of self-analysis from which they only recently emerged, having agreed on five innovation pilot projects, including a project to design the future workplace. Kingo now leads an innovation culture steering group, with five senior VPs leading one programme each. "We have a pool of money that people can apply for - wherever you are in the business." Whether international factory employees will feel intimidated by the prospect of taking an idea direct to the organisation's senior leadership team is yet to be seen. But, says Kingo, "The five projects we have now would not have survived in our previous development system. We've created a greenhouse where they have slightly different conditions for growing. ^

Novo Nordisk's 2010 company report annualreport2010. novonordisk.com Novo Nordisk and the triple bottom line blt.iy/NovoTBL UN global compact bit.ly/UNcompact > PM features The Bribery Act bitJy/BriberyActPM > US Department of Justice briefing I.usa.gov/Novo9m How practical is 'one culture fits all' for a company with global operations? Share your views on PM's new Linkedin group at peoplemanagement. co.uk/linkedin

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