As a high-tech pioneer in the manufacture of X-ray imaging technology as well as medical devices and software for treating cancer, Varian Medical Systems has never struggled to find talented employees with the like-minded goal of harnessing technology to help save lives. In business since 1953, with its headquarters located in Palo Alto, California, Varian was the first company to occupy Stanford Research Park, which is recognized as the birthplace of Silicon Valley.
In those early days, when it was a much smaller company and its employees were all in one location working toward the same goal, or even on the same project, a dedicated talent management system wasn’t seen as a necessity. Over the years, however, consistent growth, expansion to all corners of the globe, and diverse business operations made talent management more of a priority. Varian’s mission of harnessing the power of X-rays to treat cancer and save lives never changed, but with 6,500 employees now spread around the world, it became far more challenging to ensure that everyone’s goals were aligned with the higher business plans.
“As we continued to grow, we realized that what was missing was more fundamental than adding a product line, and that was making sure we were bridging the gap between our people and the technology and strategy,” says Charlotte Woo, Varian’s Enterprise Applications Manager. “While we did have talent management in mind, we wanted to find the right way to ensure we were getting the right people to do the right things in the right way.”
“As we continued to grow, we realized that what was missing was more fundamental than adding a product line, and that was making sure we were bridging the gap between our people and the technology and strategy.”
— Charlotte Woo, Enterprise Applications Manager, Varian Medical Systems
Linking Goals to Business Strategy
The timing of another human resources (HR) initiative helped talent management come to the forefront of Varian’s vision. In 2010, the company finished a global implementation of SAP ERP Human Capital Management (SAP ERP HCM) to consolidate personnel records. This rollout led to Varian’s decision to explore an HR project that would deliver additional value by aligning employees and business strategy. And with SAP ERP HCM already storing employee data, it seemed a logical decision for Varian to turn to SuccessFactors for its natural integration with the existing SAP software.
SuccessFactors also shared Varian’s progressive views toward performance management, which is a big reason why Varian began its SuccessFactors cloud solutions for HR roadmap by implementing SuccessFactors Performance & Goals. While many companies use performance management primarily as a tool to determine compensation or for rating purposes, Varian saw it more as an opportunity to set goals and directions for each employee, with a heavy tilt toward self-assessment where employees would help develop their own goals and track their own progress. The prevailing thought was that focusing on performance management as a tool for empowerment rather than as an administrative function would help drive leadership and bridge that gap between people and business strategy.
“One of our biggest goals was to link the people to the business. And making sure that everyone is heading in the same direction starts with the top, with the C-level executives,” Woo says. “That’s what started us out on this company-wide project of goal-setting.”
Designing New Processes
With 6,500 employees, including about 900 managers, spread over 32 countries, this project was no small feat. This was especially true because, at the outset, Varian didn’t have uniform employee review policies or procedures in place. There was no standard for meeting with a manager to set and review goals and no consolidated documentation, with performance records commonly stored locally in Microsoft Word. Employees without a set pathway to reach individual goals had no indication whether their efforts were in line with higher business goals.
“One challenge we had was getting our employees to believe in the importance of this effort,” says Woo. “We wondered: Will they help design goals? Will they set aside time to meet with their managers? Will they believe that this project is intended to help them?”
To meet this struggle head-on, Varian adopted a top-down goal-cascading approach, where employees would design goals in accordance with those of their supervisor so that everyone could see how they fit into the overall business strategy — kind of an assembly line for goals that would fall apart with one missing piece.
While this method helped solve the buy-in challenge, it created another endeavor for Varian, namely that this individual goal-setting exercise and process design was more time-consuming than the standard SuccessFactors implementation timeline. Exacerbating this issue was SuccessFactors’ traditional iterative and agile development method; while flexibility is usually welcome, in this case, it allowed for a lengthy internal debate over process design.
“That was a big lesson learned,” says Woo. “If our internal processes were better defined when we kicked off the SuccessFactors project, we would have been better prepared for the rapid implementation timeline, which is the selling point for a lot of cloud-based solutions.”
Goal Ownership Reaps Rewards
Varian went live with SuccessFactors Performance & Goals in October 2012. A year prior to the go-live, key executives were engaged in a goal-setting exercise to understand how critical it is to align and cascade goals throughout the organization, and how that can be achieved through implementation of a global platform that facilitates, tracks, and reports on this process. “This exercise was valuable in getting the buy-in from the executive team in supporting the performance and goals process across the organization,” Woo says.
Prior to the implementation, Varian had set adoption benchmarks, and the business has since met or surpassed all of them. Nearly, everyone in the company has designed and set work goals, with a majority having discussed their strategy for meeting these goals with a manager. Woo says that IT, where she works, set and reached an objective to have 99% of its employees set work goals. This has led to ancillary benefits.
“People are more engaged and are taking more ownership of their work because they now own their goals,” says Woo. “That was the intention for designing the quality review process to have employees take the initiative to update their goals based on what they feel their accomplishments are. The managers then review it to see if they agree or not.”
Previously, without well-defined talent management processes, the prevailing workflow was almost the reverse; managers would set job descriptions and hold employees to adherence. “Unless a manager told a direct report to do something, it probably wasn’t done. Now the mindset has completely changed and employees are a lot more proactive in helping to manage their own careers,” Woo says.
A Path Forward with SuccessFactors
Following the successful Performance & Goals rollout, Varian continued implementing SuccessFactors cloud solutions for HR with a 2012 rollout of SuccessFactors Compensation and then SuccessFactors Succession & Development in 2013. In 2015, the company plans to implement SuccessFactors Recruiting.
With the SuccessFactors and SAP ERP HCM integration packages, Varian will have its employee records tied to each of the cloud solutions. Because the SAP ERP HCM system is the record for how Varian organizes its direct report hierarchy — defining how managers and their direct reports are grouped — this data can automatically flow into Performance & Goals for visibility into goal-setting progress.
That visibility is really at the heart of what Varian accomplished with SuccessFactors, making 6,500 employees all feel as if they’re part of a single team by showing how individual goals contribute to the bottom line.
“Our CEO addresses the company every year and reminds us that the end mission is to cure cancer, improve imaging, and help save lives, but sometimes it was hard to see how that relates to what you do every day,” Woo says. “Now I think that everyone truly understands, because there is a clear mission and a meaning to coming to work for Varian.”