By restructuring and focusing on disease states, Johnson and Johnson will sustain its position as a leader in the industry. Using a robust regional model, disease states strategy and identifying key geographies, Johnson and Johnson needs a holistic human resource strategy to support future growth. To restructure smoothly, MD needs to make sure its Critical Tasks, Culture, People, and Formal Structure align with its current growth drivers.

1. 1
Caring For the World, Putting Patients, Doctors and Nurses First
Livia Liu Sebastian Moreno
Steven Oakley Catarina Levita Schallenbach
Amelia Tsui Julia Zhu Sylvia Zureic

2. 2
Johnson and Johnson Medical Devices will complete restructure smoothly through
aligning Critical Tasks, Culture, People and Formal Structure with growth drivers
JnJ MD is the #1 global leader in
surgery and orthopaedics and #1
leader in China and emerging markets
 2015 sales achieved $21B and benchmark levels of profitability
 50% of sales generated OUS and 20% of sales in emerging markets
 Current pipeline of product filling by 2018 have sales potential > $6B
 Expanding new product freshness index from 25% to >30% by 2020
Rapidly changing demographics,
increasingly unmet customer needs,
and new commercial models
challenge JnJ MD’s profitability
 Increasingly aging population and majority “minority” require more
customized healthcare products and services
 New commercial models need more collaborative and cross-functional work
to accelerate growth and innovation
How can JnJ MD ensure sustainable competitive performance?
Culture
Align the restructuring with
Johnson & Johnson’s Credo
by implementing change
management plan
People
Identify key employee groups
to retain employees and
upgrade information system
Formal Structure
Transform from a Top-down
structure to Matrix
Management and design
open work space
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations

3. 3
By restructuring and focusing on disease states, Johnson and Johnson will sustain
its position as a leader in the industry
Using robust regional model, disease states strategy and identified key geographies, Johnson and
Johnson needs a holistic human resource strategy to support future growth
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations
Regional Model Disease State Strategy
Nine Key Geographies

4. 4
Diagnosis / photo
Dissecting the Brain’s Anatomy
Framework

5. 5
Critical
Tasks
People Culture
Formal
Structure
To restructure smoothly, MD needs to make sure its Critical Tasks, Culture, People,
and Formal Structure align with its current growth drivers
With new internal and external challenges, MD needs to first identify critical tasks then adjust other
three elements
Congruence Model
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations

6. 6
Finding the Vital Rhythm
Critical Tasks

7. 7
Keeping best talent, encouraging innovation, and sustaining core culture are critical
tasks for MD
We will now analyze the congruence of the three components with the critical tasks, and ultimately recommend how they
can achieve and accomplish these goals
Retain talent and
cultivate leaders
Adopt to new
structure at the same
time as aligning with
credo
Encourage
innovation while
transitioning from a
decentralized to a
regional centralized
model
Create a pipeline
for leadership
development
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations
Maximize Business
performance
Support Growth
Drivers
Align with Culture,
Formal Structure,
and People

8. 8
Our recommendations are closely congruence with critical tasks, then support
Johnson & Johnson business growth
Adopt to new
structure at the
same time as
aligning with credo
Encourage
innovation while
transitioning from a
decentralized to a
regional centralized
model
Retain talent and
cultivate leaders
Create a pipeline
for leadership
development
People
• Restructure Sales
Team with Tailored
Compensation Plan
• Upgrade Information
System to Enhance
HR Analytics
Formal Structure
• Transform From a
Top-down Structure to
Matrix Management
• Design Open
Workspace Office
Culture
• Align Restructuring
With Credo
• Implement Change
Management Plan to
Strengthen Three
Priority Areas
Focusing on improving key employee groups’ performance, adjust physical and management structure as well as align
restructuring with credo will address challenges during transition period
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations

9. 9
Growing the Muscle
People

10. 10
By restructuring sales team and upgrading information system, Johnson and Johnson
can retain talents and encourage innovation as well as boost business performance
Sales Team
Restructure
Expected Increase in Revenue
(in billions)
• Identify key employee group to retain talents
• Lay a foundation for further implementations
• Automation of certain
services in different
departments
• Provide information for
sales department and other
supportive functions
Identify Key Talents UpdateInformation
System
Three Key Steps
• To deliver unique and tailored services
• Incentivize Sales team to achieve better performance
+0.564%
$25.16
Without
Implement
After
Implement
$25
After identify key employee groups, Johnson and Johnson should focus on sales team restructure as well as upgrade
information system since it will encourage innovation and facilitate business growth
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations

11. 11
Analyze talent pool to determine range in employee impact and performance variability
Employee
Group
Impact
Required Knowledge, Skills,
and Abilities
Range in
Employee
Impact
Performance
Variability
Sales
Introduce
customers to
devices across
disease states
Detailed product knowledge,
relationship management with
customer, collaboration across
departments
Research &
Development
Create new
products, drive
innovation
Research, creative problem
solving, teamwork
Human
Resources
Talent
management
HR strategies, change
management
Marketing
Product
awareness
Understanding of market
trends and customer needs,
product knowledge
Operations Quality control
Knowledge of R&D,
manufacturing process, and
supply chain
Identify key employee groups to retain employees who provide firm-specific knowledge, skills, and
abilities. These invaluable employees will help spearhead the implementation of the proposed changes
Executive Summary | Framework | Critical Tasks | Recommendations | Mitigations
LowMediumHigh

12. 12
• Introduce change to key
talents first
• Update compensation
system
• Improve communications
between different functions
• Utilize diverse knowledges
• Reevaluate talents with
updated criteria
• Encourage cross-reginal
work
Adopt to new
Structure and Align
with Credo
Encourage
innovation
Retain talent and
cultivate great leaders
Identify key talent to address the critical tasks through a new sales structure
Restructure Sales Team
• Only one sales interface with the
hospital
• New technical consultants to lead with
practitioners
• R&D team focused on innovation
through disease states
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations

13. 13
Sales team structure proposal
Business Development Role
• Develop hospital relationships,
procurement/purchasing
• Sell products, negotiate bundles
Technical Consultant Role
• Support Sales team ”level 1” tech
instructions
• Relays feedback and engages in
productive dialogue with R&D Dept.
to help encourage innovation
R&D Department
• Incorporate feedback from Tech
Consultants into MDs
• Focus on innovative product
development into disease states
Supply Chain
Hospital
Director
Technical
Consultants
R&D
Department
Doctors/
Practitioners
Sales team as business developers, focused on hospital relationship. Technical team as product
application, relationship with Surgeons. R&D scientist team focused on research and development of
new MD solutions
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations
Business
Development
Hospital Johnson and Johnson

14. 14
By restructuring sales team, we can increase employee engagement as well as
productivity which will lead to an increase of 2.9% of ROI
111.26
+31.84%
Cost
Bonus
163.25
Turnover
Revenue
ROI Analysis (in millions)
Current ROI
31.84%
2.9%
Increased
Amount
Expected ROI
28.94%
ROI Comparison
V
• Revenue is expected to
increase $163.25
millions
• Return on Investment
will be 31.84%
• ROI will increase 2.9%
compare with the current
28.94% ROI
ROI Analysis
Based on our assumption of 25% of employees are highly engaged, 60% are neutral 15% are lowly
engaged, after rebalancing the compensation system, employee engagement will increase which will
lead to a higher company growth rate. Higher company growth rate will eventually lead to an increase of
revenue and higher ROI
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations

15. 15
Upgrading Information System to provide data for HR and other supporting functions
Sales team given higher degrees of autonomy, so Information Management System should be tweaked to address
changes. HRMS and CRM to be integrated, to promote cross-departmental collaboration and optimize operations.
• Re-organize platform to meet the matrix management
system and the new sales structure
• Consolidate HRMS with CRM system to promote cross-
departmental information sharing
• Increase input requirements of external facing employees to
help HR identify key skills and performance
Upgrade HRMS to fit with new disease state structure
Benefit
• Short Term
- Performance Management
- Governance Risk Compliance
- HR Analytics
• Long Term
- Data Automation
- Marketing Automation
- Sales Automation
Cost
• Indirect Costs
- Lost productivity of
implementation
- Training & Support
• Hard Costs
- Software/Hardware
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations

16. 16
Formal Structure
Adjusting the Bone

17. 17
Transform from a top-down structure to matrix management would accelerate
innovation & growth
Johnson and Johnson should adopt a matrix structure for its key product projects to unleash employee
potential, support innovation, and maximize business impact
Top-down Matrix
Leadership
Functional
Managers
Functional
Managers
Functional
Managers
Assigned WorkersAssigned Workers Assigned Workers
Project Managers
Leadership Leadership
Project
Managers
Functional
Managers
Functional
Managers
Functional
Managers
Engineering Marketing
Advantages
• Facilitate cross-function collaboration
• Delegate responsibility and hold
everyone accountable
• Accelerate communication process
• Reward teams that provide solutions to
disease states and hospital relationship
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations

18. 18
Johnson and Johnson should convert to an open workspace plan in order to align the physical work
environment with the critical tasks
Design open workspace office to foster open communication and collaboration
%
Who Report it being Worse
(Scores 1 or 2)
%
Who Report it being Better
(Scores 4 or 5)
Better
Inclusion?
Better
Collaboration?
Better
Innovation?
Better Decision-
Making?
Better
Engagement?
9%
9%
11%
6%
10%
39%
70%
54%
59%
Core
Characteristics
Traditional vs Open Space
59%
Focus Group Information from one Fortune 500 pharmaceutical
company in the states. Data from 3 different campus across
southwest, east and west regions (n=69)
Participants all came from a traditional workplace and were
presently working in an open space. They were asked to
rate and discuss differences between the two.
• Align with the overall restructuring
• Cultivate transparent and timely communication in the
working environment
• Build physical foundation to foster cross-functional
collaboration
• Provide broader platform to generate new ideas
• Save big money on real estate such as reducing
number of desks and altering the desk-to-employee
ratio
Align with Critical Tasks and Lower Cost
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations

19. 19
Strengthening the Spine
Culture

20. 20
Aligning restructuring with Johnson & Johnson’s Culture
Leverage Johnson & Johnson’s Credo as the guiding principle to ensure the restructuring aligns with culture
• Following the credo, necessary for
business success
• Innovation culture generates optimal
value for the organization
Assumptions
• Support autonomy in job roles
• Procedural justice: involving
employees in restructuring
• Incentivize innovation
Norms
• Serve customers first
• Treat employees with respect
• Empower employees
Values
• Collaboration and innovation
• Employee retention
• Championing new structure
• Greater quality products and customer
satisfaction
Artifacts
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations

21. 21
- Serve customers first
- Treat employees with respect
- Empower employees
Values:
“CREDO”
- Incentivize innovation
- Employee autonomy
- Procedural justice
Norms
- Incentivize innovation
- Employee autonomy
- Procedural justice
Norms
1st Part of Credo
2nd Part of Credo
- Collaboration and innovation
- Championing new structure
- Employee retention
Artifacts
Rewards
Perception &
Confidence
Culture: How these elements align
All of norms can be found in our recommendations which bring credo into new disease states strategy
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations

22. 22
Incentivize Innovation
Maintain Employee
Autonomy
Empower Employees
Create Change Agents Group – Empower Employees
Culture Survey – before, during, & after changes
Map impacts of changes & build action plans
Training to align restructuring to organizational values &
Credo
Compensation –
Reward
Intrinsically &
Extrinsically
Collaboration &
Innovation
Employee Retention
Championing New Structure
Recommendations
Critical
Tasks
Change
Management -
Culture
Norms
Culture: Foundation for our Recommendations
Implement
Matrix
Management
Restructure
Sales Team
Upgrade
Information
System
Create Open
Workspace
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations

23. 23
Preventing Infection
Implementation and Mitigation

24. 24
After evaluating implementation difficulty and time/cost, we suggest Johnson and
Johnson execute recommendations below
Johnson and Johnson should mitigate relevant risks by creating quick win and strategic communication
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations
Cost Time Length
Implementation
Difficulty
Change
Management Plan
Restructure Sales
Team
Upgrade Info
System
Implement Matrix
Structure
Increase Open
Office Space
Potential Risks Process or Not





LowMediumHigh
Recommendations

25. 25
Risks and mitigation plan
Johnson and Johnson should mitigate relevant risks by creating quick win and strategic communication
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations
• Prioritize current resources and communicate effectively
• Select low-risks teams as pilot to create quick win
• Calculate ROI and provide alternative solutions based on sensitivity
analysis
Mitigate Potential Risks
Risk Level Mitigation Level
Majority of employees resist
change
• Be aware of the difference between those employees who are
more willing to change and those that resist change
• Customized communication strategies with different groups of
employees
Find suitable candidates to the
technical consultants and business
development positions
• Make sure recruiters and leaders understand the new roles and
have the ability to recruit them
• Use the new career paths to find internal candidates in specific
areas
Handover of sales team
• Guarantee that all clients (hospital and practitioners) are aware
of the change to minimize their resistance
• Assure that all sales information are inputted on the system
before the changes happens
• Make sure after implementation that technical consultants and
business development team utilize the system properly
LowMediumHigh

26. 26
Johnson and Johnson MD should implement the strategic plan in next two years
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations
(months)
Change Management Plan
• Culture Survey
• Create Change Agents Group
• Map Impacts and provide culture training
• Communicate Clients of change
Restructure Sales Team
• Define Roles and Responsibilities
• Development plan and training program
• Assess employees and choose the team
• Align compensation
• Communicate and train
• Implement the new structure
Upgrading Information System
• Define data and metrics to be analyzed
• Structure the system
• Train and implement
Implement Matrix Structure and Open
Workspace
• Survey to identify Pilot Groups
• Implement and Collect Feedbacks
• Analysis and Implement broadly
Milestone

27. 27

28. 28
Appendix

29. 29
Low UNIQUE high
Low VALUE high
LowPerformanceVariabilityhigh
Sales
R&D
Operations
Human
Resources
Marketing
Appendix 1– People: Impact & Variability

30. 30
Appendix 2 - Restructuring Sales Department
Sales team as business developers, focused on hospital relationship. Technical team as product application, building
relationships with surgeons. R&D scientist team focused on research and development of new MD solutions.
- Streamline Sales Team
- responsible to sell all MD products to one or more hospitals
- only one sales interface with the hospital
- focus on hospital relationship and business development
- New structure positions
- Business Development (Sales)
- Technical Consultants (Technical Product Application)
- R&D Scientists
Define new roles
and responsibilities.
Define career paths.
Analyze talent pool
to determine
employee impact
and performance
variability.
Assign employees
to new positions.
Build training and
development plan.
Implement and
communicate
changes to all
interfaces.
Initiate training and
development

31. 31
Appendix 3-Data Source: Rebalancing Compensation System

32. 32
Appendix 4-Data Source: ROI Calculation

33. 33
Source: https://www.shrm.org/about/foundation/research/documents/retaining%20talent-%20final.pdf
Source: http://www.kenan-flagler.unc.edu/~/media/Files/documents/executive-development/powering-your-bottom-
line.pdf
Source: http://www.gurufocus.com/term/wacc/JNJ/Weighted-Average-Cost-Of-Capital-WACC/Johnson--Johnson
Source: https://www.shrm.org/ResourcesAndTools/business-solutions/Documents/shrm_ansi_cph_standard.pdf
Appendix 5-Data Source

34. 34
• Define new roles and
responsibilities
• Implement matrix structure
to improve communication
through disease state
• Assess the new roles and
reevaluate job impact and
compensation
• Change bonus program to
reward matrix/disease state
and business development
(hospital) solutions
• Assess employees to new
job requirements
• Analyze talent pool to keep
them in the organization
• Build new career paths
Talent ManagementCompensationOrganization Design
Appendix 6-HR challenges to bolster J&J MD new strategy
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations
• Build development plan,
based on the assessment
• Train different skill sets for
different disease states
• Hire new technical team
• Internal and external hires
• Build onboarding program
aligned with new structure
• Utilize upgraded information
system to determine who to
target and how
• Analyze information and
relate to performance,
training, and compensation
HR Data AnalyticsRecruitmentTraining and
Development

35. 35
• Define new roles and responsibilities
• Implement matrix structure to improve communication through disease state
Organization Design
HR challenges to bolster J&J MD new strategy
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations
1. Identify key sales leaders to create the job descriptions
2. Job description of new BD position
- at least 5 yrs experience in MD, disease states knowledge, knowledge on business strategy, ability to
work independently, etc.

36. 36
• Assess the new roles and reevaluate job impact and compensation
• Change bonus program to reward matrix/disease state and business development (hospital) solutions
Compensation
HR challenges to bolster J&J MD new strategy
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations
1. Take into consideration additional requirements for new BD position and technical consultants, to create
revised comp/ben plan to ensure retention.
2. Increase salary base, include bonus, adjust commission
3. Bonus suggestions:
- Bonus related to ROI of projects created between technical experts and R&D teams
- Bonus related to the amount of projects in a year that Business Development (sales) creates to
hospitals.
4. Performance management:
- The employees would create a set of goals to achieve in one year (examples above)
- The upgraded info system will later give goals information back to HR. HR will be able to predict bonus
amount and budget it.

37. 37
• Assess employees to new job requirements
• Analyze talent pool to keep them in the organization
• Build new career paths
Talent Management
HR challenges to bolster J&J MD new strategy
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations
1. Use current assessment tool to identify key employees that fit new structure
2. Input data points from previous talent management system (HRMS) into new upgrade information
system
3. From this assessment, the leaders will have a deep comparison between people and will be able to
decide which ones will continue in the new roles
4. With the new info system, HR will also be able to analyze performance of commercial team

38. 38
• Hire new technical team
• Internal and external hires
• Build onboarding program aligned with new structure
Recruitment
HR challenges to bolster J&J MD new strategy
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations
1. Identify internally who are the employees in R&D or sales that fit in technical consultant role. Follow
current internal recruitment practice.
2. Recruit outside technical candidates aligned with JnJ culture and with MD technical expertise. Follow
current external recruitment practice.
3. Develop onboarding program, focused on product and disease state training, and on systems training.
The training length will be 1 year. New tech team will have both technical training and market training.
4. A final transition will be the sales team introducing to the tech consulting the practitioners (surgeons,
nurses) they will deal with from now on.

39. 39
• Merge HRMS and CRM to create shared platform for necessary departments, promoting cross-
departmental collaboration
• Utilize upgraded information system to determine who to target and how
• Analyze information and relate to performance, training, and compensation
HR Data Analytics
HR challenges to bolster J&J MD new strategy
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations
1. Identify internally who are the employees in R&D or sales that fit in technical consultant role. Follow
current internal recruitment practice.
2. Recruit outside technical candidates aligned with JnJ culture and with MD technical expertise. Follow
current external recruitment practice.
3. Develop onboarding program, focused on product and disease state training, and on systems training.
The training length will be 1 year. New tech team will have both technical training and market training.
4. A final transition will be the sales team introducing to the tech consulting the practitioners (surgeons,
nurses) they will deal with from now on.

40. 40
• Build development plan, based on the assessment
• Train different skill sets for different disease states
Training and
Development
HR challenges to bolster J&J MD new strategy
Executive Summary | Background | Framework | Critical Tasks | Recommendations | Mitigations
1. Build training programs for each disease state
2. Start training employees on the products that they haven't sold before
3. Train to use new system
4. Use data from Information system upgrade to create new training programs