An Interview with Roxanne Lagano of Zoetis

CHRO Roxanne Lagano had two main challenges when her company spun off from Pfizer: Easing the transition and handling a big layoff.

When Zoetis, the world leader in animal health, spun off from Pfizer, they had the third-largest IPO of 2013. Although the company had more than 60 years of experience delivering a diverse portfolio of products and services to veterinarians and livestock producers as a division of Pfizer, becoming a separate, independent company was a whole new ballgame. And HR was an important part of it.

CHRO Roxanne Lagano explains that, when the dust settled, they knew they had to establish Zoetis’ own unique culture as a standalone company.

“We knew we couldn’t be a mini-Pfizer,” she says. “We had to change people’s mindsets and ways of working.”

The vision was that they would create their own culture separate from their former mothership.

 “We had to implement new processes, procedures, and systems to be able to build and sustain our new company,” she says. “My goal was to create an HR function that not only supported the needs of the business, but also modeled the behaviors and characteristics that we wanted to see in our colleagues.”

 But, as exciting as it was to be on the ground floor of building a new company, all of the changes came with challenges for HR.

 The first one was managing the change itself. And make no mistake, it was a wholesale change in becoming an independent company.

 “While some people were excited about this change, others were concerned,” Lagano says. “They saw leaving a well-established corporation like Pfizer as a risk. They loved the stability of Pfizer and wondered how we would do as an independent company.”

 It was a challenge for Lagano and the Executive Team to keep colleagues motivated and confident during this time of transition. Transparency and open communication were essential.

 As part of creating their own, unique culture, Lagano, with the rest of the executive team, developed a set of Core Beliefs specifically for Zoetis, which include: Our Colleagues Make the Difference, Always Do the Right Thing, Customer Obsessed, Run It Like You Own It, and We Are One Zoetis.

 “These Core Beliefs have served as the foundation of the commitment we make to our colleagues, customers, and other stakeholders every day.”

Two years after the IPO, another significant challenge was on the horizon that HR would play a key part in managing. The company announced a comprehensive plan to simplify its operations, improve its cost structure, and better allocate its resources. It meant becoming a leaner organization and reducing management layers and complexity.

“It was a huge undertaking and no department was exempt, including HR,” she says. 

 The goal of this initiative, which they successfully completed, was to generate a cost savings of approximately $300 million over the course of two years. This included a 20% reduction in their workforce, an undertaking for which, as Lagano said, HR played a big role.

 “While many people understood that this initiative was necessary in order to secure the future success of Zoetis, others saw it as a breach of trust, resulting in low morale across some areas of the business,” she explains. “It was a group effort on the part of the Zoetis Executive Team, senior leaders  and HR to keep colleagues motivated and on course during this transformation.”

How we handled those layoffs mattered, Lagano says. “We knew that people were watching how we handled this, and if we treated people well, we’d build credibility as a leadership team. And we did. Today, the company is thriving and remains the world leader in animal health. Our colleague engagement scores are best-in-class and we have grown our sales every year thanks to the commitment and innovations from our colleagues.”

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