“Future of HR” dialogue series - Interview with Simone Berger, CPO of STADA

By Beate Rosenthal and Constanze Schweinsteiger

In our "Future of HR" interview with Simone, we talked particularly about a performance driven culture, how such a culture can drive growth and what the role of the management team is in this approach.

Beate Rosenthal: You spent most of your career in HR roles in various industries and countries before joining STADA in 2019. Since then, STADA has changed tremendously. How does your specific experience benefit STADA's transformation journey?

Simone Berger: I had the opportunity to spend half of my career abroad; I have lived and worked in the US, China and Singapore. This is something that has shaped me as a person and as a leader. First and foremost, it taught me the value of diversity and uniqueness, but also enriched my growth mindset, which is an especially important topic here at STADA. When I joined STADA in 2019, I was attracted by its long heritage and tremendous sense of purpose… and the great potential I recognized in building a new culture to accelerate growth. I was also inspired by the passion and focus of STADA's CEO Peter Goldschmidt for culture and people.

Beate Rosenthal: Coming from this heritage, where does STADA stand today?

Simone Berger: The company has enjoyed double-digit growth every year since I joined. We are experiencing a very successful growth trajectory with a mix of organic and inorganic expansion, predominantly in the field of Consumer Healthcare, but our two other segments Generics and Specialty have also developed successfully. We started out as a German mid-sized company with a decentralized culture and many silos, and we have upgraded a lot from the perspective of processes, governance, and especially culture. In other words, we have switched our focus to culture and embedded the idea of a growth mindset throughout the organization. Early on in 2019 we defined our strategic framework, which lays out our purpose, vision, values and five strategic priorities. One of those strategic priorities is growth culture. A lot of companies talk about that, but to really embed it in the strategic framework, I would say we are one of the few who have actually done it. This was a conscious choice we made with the CEO Peter Goldschmidt, but also in discussion with our private equity investors and the STADA Executive Committee. We conducted value workshops around the whole organization, including in the different functions and countries, to understand what values and behaviors have been part of the success of STADA in the past, but also which ones are needed in addition to fulfill our future growth ambition. This is how we came up with our four corporate values: Integrity, Entrepreneurship, Agility and OneSTADA. Most important was not to come up with those values but to develop them together with our people, and… bring them to life in the organization and translate them day to day into behaviors and tangible actions, which I believe we achieved very successfully.

Constanze Schweinsteiger: When you hire new leaders, a person’s value-driven profile plays a crucial role.

Simone Berger: Exactly. You can learn technical capabilities, but it's hard to change your mindset and attitude. So that's what we spend a lot of time on during the hiring phase. At the executive level, we also run assessments with a provider that knows us extremely well and has a very close understanding of our culture journey. Personal growth leads to team growth, and team growth leads to the growth of the organization – that's part of the growth mindset we are talking about. If one of the three is not given, growth will not happen from my point of view.

Beate Rosenthal: Behavioral change is clearly a big topic for you and is strongly linked to performance. Let’s talk a bit more about performance culture, as something unique to STADA. How do you connect culture and performance?

Simone Berger: Our credo is that "culture drives performance." First, we believe that if people are engaged, the success of the business is ultimately a logical consequence. That's why we have this strong focus on culture at an early stage. We believe culture is the foundation; we ensure that the values are embedded in everything that we do! One example is that 25% of our employees' bonus is based on how they live out our values. That's also what integrity means to me: if we say that we give importance to the corporate culture, then this must also be reflected in the compensation.

Second, when we analyze our engagement data, we see a statistically relevant proof point that culture drives performance. Twice a year, we do an employee engagement survey that is very successful in terms of participation rates, but also in terms of engagement level. Interestingly, we see a positive correlation between high engagement scores and higher net sales 12 months later. Again, if there is engagement and the right culture, better performance is a logical consequence. This is key for me as I want to ensure that HR has an impact on the success of our organization.

Constanze Schweinsteiger: To make it measurable, do you have a set of KPIs that you report?

Simone Berger: We have developed a culture scorecard to make our progress in building our corporate culture visible. We are a private equity-owned company and it was crucial for me to make these "soft topics" quantifiable. We introduced Culture Performance Indicators (CPIs), which enable us to actually measure our culture and values. Those are now firmly established and we report the CPIs to our investors in the same way as all other KPIs.

Constanze Schweinsteiger: With these CPIs in mind, how many years are you looking at when you talk about transformation?

Simone Berger: In general, I believe that the moment you start talking about a culture transformation program, you have already lost. For me, it's much more about doing it and embedding it as a normal part of the business rather than making a project out of it. It is about walking the talk and doing little behavior changes every day, inch by inch, instead of making it a big program. In addition, the word transformation means a change from…to, which implies a beginning and an end, and this is what we purposely do not want to foster. For us, change is a journey and acknowledging this continuous opportunity to improve is key in building a growth culture.

In order to be able to focus on building and accelerating the culture, a prerequisite is that HR as a function has the right technology in place to "fix the basics" and is able to allocate enough resources to culture topics that really matter. When I started in 2019, a pilot for the introduction of SAP Success Factors had already been running for several years. The momentum was actually gone after this long period of time. We were faced with the decision of whether or not to introduce the system at all. We then decided to speed things up and introduced the various modules in all 45 countries within 18 months. SAP recently granted us the Adoption Excellence Award, recognizing our fantastic agility – which brings us back to one of the company values. Even though it was a challenging 18 months, for both my HR team and for the organization, everything worked out well in the end and I would do it again in a similar situation in the future. It is better to go through such a technological change quickly all at once instead of prolonging it with pilots.

Beate Rosenthal: What role did your HR organization play, and how did you get your HR business partners and colleagues to drive that culture change?

Simone Berger: First, I would like to say that I'm very much aligned with our CEO in terms of our core beliefs around culture and people. And I can only recommend to any CPO or HR Leader that they check on this alignment, as otherwise, at least from my point of view, it will be hard to make a real impact in any organization. Second, I need colleagues in my team who also have the same philosophy on our growth culture. We need to ensure consistency: Whatever initiatives my team do on a global or a local level, we ensure a clear link to either purpose, vision or values. If you cannot link it back, it is not the right initiative! And that also means we don't jump on each and every HR trend – instead, we stopped certain things on the HR agenda. For example, we have eliminated job descriptions wherever they are not required by law, because there is no value creation and they are outdated whenever you need them. We try to eliminate everything that is unnecessary, so that the team can focus on what creates value for the business.

Beate Rosenthal: That said, what is the strategic outlook for HR? What is the future HR operating model at STADA?

Simone Berger: We call ourselves a business function and renamed HR "Culture and People" – not just for the sake of renaming it but because it represents our strategic focus and value add. To keep it that way, we have three strategic goals: First, a 200% growth mindset. I want each and every individual to have the ambition to be the best at his or her job. I believe this is a strong competitive advantage. Second, 100% STADA as the place to be. This is about the topic of talent acquisition and employer branding, where we have already improved a lot. And lastly, 0% organizational silo. We have developed from a decentralized structure into a light matrix organization, but we have a vision to become an entrepreneurial network organization. Those are the three high-level topics where my team is working on concrete actions in each area of responsibility and in each country, as this will be very crucial to support STADA's future growth.

Beate Rosenthal: In this overall process of change, how has the current ownership structure helped or been in the way?

Simone Berger: I personally very much enjoy working under the private equity ownership, as they are very supportive on the growth journey and also on all culture and people topics. This is something that is not taken for granted. I've been working for a few years now with our PE investors Bain Capital and Cinven and find that they have a lot of appreciation for the importance of a great culture and engaged team.

Beate Rosenthal: Thank you. Just one last question: If you were to start this culture journey again, what would you do differently?

Simone Berger: Some things worked very well, others did not. Looking at what did not work, in general these were initiatives or programs where we tried to compromise to fit them into our culture and strategy. In addition, I would do some things even faster. We thought it was too much change for the organization at one time, but in hindsight I learned for myself that a faster approach is always better than a staggered one.

Beate Rosenthal / Constanze Schweinsteiger: Thank you for this inspiring interview, Simone!