Do Something! - Pharmaceutical Executive


Do Something!

Pharmaceutical Executive

4. Address the Right Root Causes

Each of these performance drivers can propel or inhibit important business outcomes. By pinpointing the gaps in each sales dimension, it's possible to focus resources in that area: it is usually best to target the area in which scores are lowest as a starting point for improvement.

The key to eliminating problems is identifying the root cause(s) of low alignment, capabilities, or engagement. For example, frequent causes of low alignment are fuzzy goals, poor understanding of company or functional strategy, poor or no feedback on performance, lack of coaching, and misaligned values or rewards. In the area of capabilities, gaps are more often due to selection or training issues. And when it comes to engagement, a rep's immediate manager often causes him or her to disengage by failing to communicate, show respect and trust, or recognize the rep's accomplishments.

Linkage analysis, which statistically connects results with drivers, enables us to understand whether it's more important to improve coaching or training, rewards or recognition, communication of product priorities or communication with customers in order to bridge the gap in one of the ACE areas. For example, using linkage analysis, a key sales organization within GlaxoSmithKline found that three employee drivers were the largest contributors to growing market share: the immediate sales manager, employee engagement, and sales skills or capabilities. In terms of the sales managers, three activities proved to be major differentiators of high versus low market share within the geographies they operated: conveying company direction, helping reps build the right skills, and willingness to listen to reps (a key correlate of engagement). When the importance of the sales manager driver was recognized, manager training in the identified areas was actually increased despite major cuts in several other programs.

5. Keep the Best, Lose the Rest

At a recent speech, when audience members asked Richard Romer, former executive vice president of Sales for CIT Group, about the insights from his stellar career, he lamented the time he had wasted on poor performers. "They draw way too much of your time away from your top performers," explained Romer.

Smart executives know the importance of weeding out underperformers. In any sales force, there are likely to be sales growth opportunities in which the top quartile can grow revenue by 20 percent, while the lowest quartile will probably only be able to grow it by 5 percent, even after considerable exertion. As William Crouse, managing director of HealthCare Ventures, LLC and former leader of major healthcare businesses for Johnson & Johnson observes, "It has always been my philosophy to pare away the bottom quartile. If they are still around, management is not doing its job."

Average Annual Sales Performance per Pharmaceutical Rep
But getting rid of poor performers is just half of the equation. The real challenge is keeping your best people. One of the biggest killers of overall sales performance is the loss of top-quartile performers. The impact of such turnover can be demonstrated by taking another look at the 100-person sales organization profiled in Figure 1. If that organization lost one-fifth, or 20, of its reps annually, the company would probably lose more top performers than poor performers (since the latter generally have fewer options, and as a result stay put). If that company lost just five reps in each of the top two performance quartiles, that would put approximately $47 million in revenue at risk.

Why do top performers depart? One of the major weaknesses Metrus Group uncovered in research on sales force turnover is a lack of objective data on the causes of top performer departures. However, Allen Weisberg, former chief learning officer for Johnson & Johnson and vice president at Ethicon, has a theory: "One of the biggest factors is that many of the reps didn't know they were doing well. No one had bothered to tell them."


blog comments powered by Disqus

Source: Pharmaceutical Executive,
Click here