Episode Transcript
[00:00:01] Speaker A: Hi everyone. Ani Huang here from HR Policy Association. And we are back with another episode of Lessons from the Field where we chat with experts with decades in their chosen field and hopefully learn what it took them many years to learn in less time than it took them to learn it. So today our topic is transformation. And I have with me Steve Fry, former chro of Eli Lilly and current partner and advisor to HR Policy association, to talk about the lesson, lessons he learned over a career of transformation. So, Steve, thank you so much for being here today. Pleasure, Ani And I just want to start by asking you, you've seen a lot of change in your many decades career and especially the last 12 years with Lily. How would you characterize the transformation that Lily went through your tenure?
[00:00:55] Speaker B: Well, first of all, I think it's important. Thanks first of all for having me on and hopefully this is helpful to your, to your membership.
Look, first of all, I think it's important to even define transformation in my mind because I think transformation, the word sometimes, is overused.
There's all sorts of change that happens all the time in an organization and in a company.
And probably if you stop changing, it's probably when you start to lose.
So things are always changing and always transforming. And I think the word transformation probably to me best is characterized by just some large scale change effort within an organization that is so meaningful to your survival that we use the word transformation.
In my time at Lilly, there were so many things that were changing all the time.
I was 12 years as the CHRO at Lilly and in that 12 years it felt like probably four or five different jobs just because of the things that were happening in the business from times when, you know, I first took the job and we were losing patents on some of our largest products and our new portfolio was not yet ready for the market to times then when we were launching new products and we had to reskill because there were new, new kind of products, new medicines that took a very different capability as a company than what our previous medicines did. So in those 12 years, it felt like honestly constant change and something new every day.
So it was, it was a lot of, it was a lot of fun.
[00:02:32] Speaker A: Wow. And how would you characterize the role of the chro, I mean, your role and just generally the role of the chro in that type of significant, just overreaching business transformation?
[00:02:44] Speaker B: Well, I think HR is a very, very strong partner in any change that happens in a company.
If you think about change happening, we talk about organizational change, but organizations don't really change. I Mean, people change, and you change things about how you work, and you change things about how you lead, you implement new technology. But all those require changes within the workforce, and that's how companies really change.
I think the role of the chro.
I often have heard many people say, oh, the chro needs to be like, the front and center of change.
I'm not sure that's always true. I think there are times when the chro is the leader, is the sort of the captain of the change.
But there are other times when you have to be all the time. You have to be sitting at the table with your agenda, with your people agenda, your workforce agenda, making sure that it is aligned to the outcomes that your business strategy is trying to achieve.
And I think that if the HR function and the chro is not there, the likelihood of success is much less.
Anyway, that's my take on the role that we play. I think that we have got to be front and center with the business right there and driving a people agenda that is just absolutely consistent with what the company's trying to achieve.
[00:04:12] Speaker A: And, Steve, I've heard you say that if somebody came to your executive committee meeting and saw you participating, contributing, you didn't want them to actually come away thinking, oh, that must be the HR person. You kind of wanted them to just see you as any other business partner. Can you tell more about that?
[00:04:29] Speaker B: Yeah, that's right. I think that I've always had this vision that the ideal executive leadership team, any team that you're on, everybody should be contributing and be able to contribute to every aspect of the business.
And I always wanted, if there was a stranger who came in and sort of watched our executive team for a couple of days, I didn't want them to know that the CFO was a cfo, that I was the HR person, that, you know, the leader of R and D was the leader of R and D.
I wanted everybody to be able to contribute, no matter the topic, to what the discussions were.
So an outsider would be confused and not know exactly who was in what job. I think that's a really high bar for any team. And I can't say that either I or any team I was on ever really achieved that.
But I think that Chros and anybody else on an executive leadership team should have a goal that they're not identifiable in their job because they are contributing in such a broad way to what's happening in the organization.
Like I say, I think that's true of every person on the lead team. And that's like a dream for me that I didn't achieve. And I don't think there was ever a team, but that's what we always strove for.
[00:05:48] Speaker A: Love that.
So I think most successful companies do recognize the importance of the chro's involvement, but I think there are still companies where they may not think to bring in the chro as early as they should be. They're thinking of them more as towards the end of the process on transformation. So what's your advice to chros who may need to sort of make the case for the importance of their early involvement in all types of transformation?
[00:06:18] Speaker B: Yeah, it's a great question, Ani, and one that I talk to a lot of new Chros about. And, you know, even in the the new Chro collaboration networks, we talked a little bit about this.
I think first, as a chro, you have to really understand the business you're supporting. It's not good enough just to know HR or to be an HR expert, if you know you want to use that term. You've got to really understand what your company, what your business is trying to achieve first and foremost.
So you can align an HR strategy or a people strategy and organizational strategy to that business.
And if you approach the job that way and you work really hard and understanding what your business is trying to achieve, then I think you're welcomed at the table and you're seen as a strong partner in what the business is trying to get done.
Of course, then you have to like, fulfill your part of the commitment. Right? I mean, once you understand the business strategy, you understand what kind of change needs there are, if you then can build a people or an organizational strategy aligned to that work and to those outcomes, then I think you're set for success and you'll be welcomed and requested to be at the table very early.
And I think that if you're not, you need to find a way to, through the right conversations with your CEO, with your other executive committee members, to show the kind of value that HR can add.
In my time at Lilly, I don't remember one major change effort, not one that did not have an enormous element of a people strategy or organizational strategy or HR was not involved if it was of any consequence to the company.
Like, we were there because you just couldn't do it without the people in the company.
And that was a great point of pride. I mean, we sort of talked about it all the time saying that it's great to be in the mix, but of course, then you had to deliver.
I'm not saying that we Always got it right. I'm not saying that we always got it perfect, but we were always there because I think there was a great recognition that we could not achieve the outcomes we wanted without our workforce being completely aligned to those changes.
[00:08:46] Speaker A: Steve, can you give us an example of that? A situation where if HR hadn't been there as a partner, the change would not have been as successful?
[00:08:55] Speaker B: Yeah, I think there was a. Well, yeah, of course I can. I could probably give many.
One that comes to my mind is, you know, probably a decade or more go just a couple years into my tenure. Chro.
We felt like we were behind in sort of what I would call state of the art delivery devices for our medicines.
And our competitors were better than us at that, and probably a lot of reasons for it. You know, it doesn't matter, but we were behind and we said we needed to get ahead.
It was probably an example where, you know, just through technology and some other things that we could have. You know, maybe people thought maybe we could have caught up or gotten ahead, but it really started with making sure we had the right people, the right organization, of course, using the right technology and all those sorts of things.
But we sort of adopted this mantra in our HR team that there were certain capabilities or certain things the company was trying to achieve where we needed to have what we call tailored solutions in hr. Like we would do anything to get the right people in the company, sort of break all the traditional rules, all those sorts of things, do special things to make sure we could attract, retain, develop and build a culture where these people could thrive.
And we did that in places where it was really important, in this case in how we were thinking about delivery technology for our medicines.
But everywhere else in the company, we tried to push standardization. And we didn't do special things because we didn't need them there.
And that sort of distinction of knowing. With our executive committee, we went through an exercise every year as a part of our strategic plan of what are those things where we need, like that special capability where we can tailor solutions and just do everything possible. And in that case, we did. And after a few years, it took some time, of course, because these things take time. But after a few years, we felt like we were leaders in this space in medical devices. HR did not take the lead on this by any stretch. It was our R and D teams who did that. But we were right there building and implementing solutions to help them build that capability and that muscle to make sure we could leapfrog the competition.
[00:11:19] Speaker A: Amazing. So speaking of the HR Team.
Given the magnitude of organizational change in some circumstances, how do you make sure the whole team is on board? I mean, is that always the case, that everybody in HR is automatically on board?
[00:11:36] Speaker B: No, I don't think it's always the case. But, you know, we read a lot about sort of first principles, make sure you have the right people on the bus.
And I think that's important in all parts of the company.
And I think often HR is maybe pretty quick to point out deficiencies in other parts of the company where we need to make changes in people or leadership, and maybe sometimes accused, rightly so, of being a little too slow in making sure we have the right people on our own teams.
But I think anytime that you're doing a change, you've got, you know, to kind of conduct this, what I call would call a stakeholder analysis, to say, where's everybody at?
Are they. Are they willing and able to make the change? Are they capable?
Some people are already there. Some may never get there. And of course, some you can, you can help train and coach, coach along.
And you've just got to be willing to make changes that, that you need to make on your team if they're not able to sort of come along with you on, on the journey that I, I think that's pivotal. And, you know, in my case, I was blessed with a pretty strong team. I think, you know, there were changes that we made over time, but we, we made sure that we had the right people on the bus who were connected to the business, who understood the business, and who could bring those kinds of solutions to their business partners.
[00:13:02] Speaker A: Yeah. Yeah. So don't wait. I mean, you've got to really take a critical eye to your own team if you're, if you're expecting others to also make those types of talent changes.
[00:13:12] Speaker B: That's right, Ani. And it's interesting, you know, in my entire career at Lilly, I never, ever remember a business leader saying to me, I wish I would have waited six months to make that change.
And certainly in my time, I never ever once said, boy, I wish I would have waited six months to make that change.
I only ever heard, I wish I would have acted earlier when a change was obvious and, and done it earlier.
[00:13:39] Speaker A: Yeah.
Okay, so here's a question that I've been asking everybody that I interview on our Lessons from the Field series. Let's talk about failure points. What are the key watch outs for chros in your experience when it comes to transformation points that could, you know, lead to failure on the part of the chro?
[00:14:01] Speaker B: Yes. Another great question.
I think the most important thing for a CHRO or for the HR team in total is to make sure they are completely aligned with the business leaders on what they're trying to achieve.
If you do not have that kind of an alignment and an understanding of what is trying to be achieved, failure is, is probably more likely than success.
So the. That's. That's the first thing to make sure you're there early and that you understand and you are aligned.
The second thing, I think, is to make sure that you're communicating transparently to all stakeholders everything you know, when you know it, and you're honest about what you don't yet know.
Because people, you know, if you don't fill communication holes, they fill themselves. People make up their own story.
So I think probably alignment and communication are the two most important, important things. And the third that I would say is to make sure that the definition of success is clear, like that you really know what you're trying to achieve and what success looks like. Because then you know when you get there and it's not sort of a moving. A moving target.
Those are some of the lessons that I have had.
And probably when things didn't go as well is when we didn't do one of those things or maybe multiple of those things very well.
[00:15:33] Speaker A: Okay, great.
Well, last question. This is sort of a future focused question. Part of your role here at the association has been leading our new CHRO collaboration cohorts, where you're mentoring new chros from a variety of industries and organizational size and facilitating their peer collaboration, which has been fantastic. What are you hearing in those conversations about the next wave of transformation? I mean, does it sound different what you're hearing from them than versus when you started as chro?
[00:16:05] Speaker B: Well, first of all, I must say first that it has been a ton of fun working with so many new chros and talking to them about their issues, listening to sort of the things they're struggling with, what they're doing about it and how they're tackling. So it has been a lot of fun to maybe offer just a little bit of help here and there.
Yeah, I think the, you know, the, the challenges are. Are different. You know, the biggest one that I hear now, of course, is all about AI.
And, you know, when I retired, you know, sort of AI was just starting, I guess. You know, we were talking a lot about data and decision making and data democratization, but AI was only really just starting.
But boy, has it made, like a big change for companies and how we work, and even in my own personal life, how I'm utilizing AI, it's unbelievable.
I think what I would call the change with AI is different than the change I might have been working on back when.
But I think the approach is not that dissimilar in the work to actually make sure it's successful, because, you know, at the enterprise level, you know, it's important to know what are we trying to achieve with AI? What is our strategy, what's our governance, what are our guardrails like, you know, what's the organ, what are the organizational implications of this and the people implications of this, and then aligning a people strategy, you know, to upskill all these kinds of things with the inevitable onset of. Of AI. So I think the approach to the work is probably the same, but the context and the content is different than the examples that I had in. In my career.
It's been a ton of fun talking to Chros about AI and their approach and both at the enterprise level and, of course, how they're utilizing AI within their own HR teams to, you know, to change the way that we work and to create, hopefully, a new and better experience for.
For the workforce. So it's been fun.
[00:18:12] Speaker A: Yeah, that's great. Do you think that AI will change the pace of transformation that's expected? So maybe, you know, previously the CEO might have said, I expect this, you know, this change to take place within the next two years. Now they're going to be saying, well, I think we could do it in three months.
[00:18:29] Speaker B: I think. Absolutely. I think AI will impact that. But I think even, like, honestly, the pace of the world is increasing all the time. I mean, even in my tenure at Lilly and certainly my tenure as a Chro, you know, the pace only quickened.
It never got slower. And I think AI now brings us also a set of tools and, you know, the help to drive change quicker than what we've ever seen before.
And I think it's going to require a different dynamic from people to show an agility that we've probably never witnessed before.
So, absolutely, I think AI is going to help Chros be better business partners to their executive teams.
[00:19:17] Speaker A: Love that you are AI positive, Steve.
[00:19:20] Speaker B: I am definitely sold.
[00:19:24] Speaker A: All right, well, thank you so much to Steve Fry for being here. Thank you. Thank you to all the listeners and viewers. And stay tuned for our next episode, which will be with Roger King on the future of labor. Until then, bye.
