Creating Customer Value: New Horizons on the Managed Markets Journey - Pharmaceutical Executive

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Creating Customer Value: New Horizons on the Managed Markets Journey


Pharmaceutical Executive


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Among the myriad of actions a company can take to reinvent its managed care organization, here are three starting points that you should consider:

1) Align Resources for Solving Customer Problems. It is true that account managers must possess critical competencies around business savvy and relationship building. But, even the strongest account manager cannot solve payer and provider problems through individual force of will. Successfully creating value for customers requires a team effort. Account management can identify problems and confirm customer commitment for collaboration, but execution demands additional horsepower.

For example, a company may decide to focus on improving the healthcare ecosystem for elderly patients, as Sanofi-Aventis has done. Collaboration with willing payers may lead to smoothing reimbursement practices, while work with providers may focus on treatment protocols and medical staff training. All of this may come together with cobranded marketing campaigns, supply chain improvements, and performance metrics, which include measures in each partners' business. This effort will take time, but will not get off the ground if the proper resources are not first aligned and committed.

2) Create a Learning Process to Capture Value. By design, customer-focused account management creates value for customers. The challenge is to create value for the sponsoring company. In the short-term, value for managed markets and their companies may be conceived as improved customer influence or patient outcomes. However, if success does not lead to improved sales, share, or profitability, commitment to proactive problem solving will wane. Robust performance metrics are essential, but an actively managed learning process is also critical.

Actions that may be included in a well-designed learning process include: regular internal and client account reviews to provide oversight and track progress, customer listening programs that include individual contributors up to senior management, and rotation of high-potential employees through account management and other managed market organizations. This last action will infuse new ideas from new team members, and also carry the learning back to other functions when they rotate back to their primary career track.

3) Plot a Strategic Repositioning. Truth be told, the legacy reputation of managed market organizations is not one of the strategic capabilities for driving critical business results. This will need to change as problem-solving cultures take root and as the opportunity to create higher levels of value grows. Success will require cross-functional commitment of companywide resources, and also increased coordination among other market-facing functions including field sales, marketing, and medical affairs. On this trajectory, account managers will become widely respected and influential with customers and within their company. Support teams aligned with strong customer partnerships will have increasing accountability for driving measurable results, whether they have fixed or dotted-line report arrangements.

All of this will result in strategic repositioning of the managed market organization, by evolution, or in some cases, by actions taken now by the actions of visionary leadership. Actions that can be taken today include adjusting talent programs to staff-managed markets and placing proven individuals in positions of increasing responsibility. Perhaps more importantly, the effectiveness of senior leadership teams across the organization must be judged by their track record of supporting—not impeding—problem-solving and value-creation initiatives. Organizations tend to reject change, and without a successful repositioning of managed markets, the journey may end sooner than desired—far short of its intended destination.

Fostering Creativity

There is a danger in a linear extension of research into business planning. In seeking to align actions with insights, creativity can be stifled and opportunities overlooked. Life sciences cultures tend to be focused on the dual disciplines of science-based R&D and the quantitative modeling of sales force sizing, deployment, and messaging. A diligent effort to surface creative, game-changing ideas may provide excitement, a sense of ownership, and new paths through the industry's current troubles.

One approach is to incubate ideas through internal competitions. This is a common tactic among technology developers, and is based on throwing down a challenge on a difficult, seemingly insurmountable problem. For managed markets, this might involve designing a comarketing program with a powerful player that offers the least potential for collaborative problem solving. Another challenge might be to work with a large healthcare provider to suggest physician compensation and training plans that achieve improved patient outcomes.

The key to these programs is to require that ideas come from self-selected teams and then to reward participants and act on the best ideas. In so doing, barriers will come down as old assumptions about possibilities and constraints are challenged.

Mark Dancer is Hay Group's Sales Effectiveness Practice Leader. He can be reached at

Carrie Fisher is a Principal at Hay Group and project director of the study. Carrie can be reached at
.

Ian Wilcox is Global Leader of Hay's Life Sciences Sector and can be reached at
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