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It's management makeover time-and micromanaging is so last year.
What's the most frustrating thing about being a sales rep? Micromanagement. Take the common pharmaceutical sales manager: he or she knows the situation on the ground, but isn't allowed to manage. This causes increasing frustration, especially when managers are given specific revenue targets but not the necessary information and flexibility to achieve their goals.
Typical refrains such as "Why does the home office think they know which doctors to call and how to detail them better than me?" and "I know the doctors in my territory and the tactics my competitors are using in the field" are becoming all too common. Thus, it may be time to move forward with decentralization of the decision-making process—an old idea that's ready for a serious reassessment given the competitive environment and the state of technology today. The stakes are higher than ever, with a need to use every resource in the sales arsenal more efficiently.
A few organizations have already made the switch to decentralization, and have reaped benefits. For example, one biotech company recently enabled its specialty representatives to identify and follow up on triaged patient cases in its payer database. This led to a decrease in turnaround time by the payers in resolving patient cases, more revenue, and a shorter cash cycle for the company. The field managers were also equipped to analyze their representative's performance, and were given visibility into specific cases to redirect or mentor the representative, as necessary.
At both levels, the technology encapsulated a business decision-making framework used by representatives and district managers to get answers to their specific questions. Such a system not only reduces the workload for the home analysts, but also helps build loyalty, efficiency, and a "can-do" spirit among the field force. In the long run, such a culture will give rise to pharmaceutical sales teams that are more responsive to new opportunities and adaptable to the market challenges they face.
Today, pharma sales managers are deluged by sales reports that only manage to confuse an already challenging job. It is no wonder most of these "reports" go unread or even unopened. Unfortunately, sales representatives, our real foot soldiers, are required to provide details about every call so someone can publish these unread reports. This is neither a good use of the representative's time nor valuable for the field manager. If anything, these reports tend to be a distraction for many in the field and are only used by a few analytically savvy managers. The irony is that even these savvy managers export the data to Excel to do the necessary manipulations and understand the meaning of the reports.
So the central challenge is to figure out a model that allows for decentralization while keeping the field managers and the representatives focused on the end goal. In fact, it is imperative that reporting challenges and administrative overhead be substantially reduced for a decentralized model to work. Here are some top-line ideas on a few elements of a decentralized model and how it might be understood, supported, and measured.
In the last decade, pharmaceutical sales forces have rapidly expanded, resulting in field managers and new representatives being instructed to strictly execute the "Headquarters Plan." These plans and updates are so detailed that they don't allow a representative to use their local knowledge and change tactics if necessary. The field is asked to provide extensive data, but managers are provided very little actionable information to help them become more productive.
A more effective sales model is one that allows field managers to take the reins and become more or less the "CEO" of their region. Thus, to support our future leaders, a change in the current systems for hiring, training, and providing feedback would benefit industry.
Clear, objective metrics that measure reps and managers are important for a successful decentralized sales force. Today, many companies produce a scorecard that typically reveals no clear information about performance. A scorecard with the following elements will be simple and consistent across the entire sales organization, allowing a VP of sales and his or her managers to be measured the same.
Revenue Goal Focused: Every metric on the scorecard should be tied to the company's revenue goals and its product strategy. For example, if senior leadership believes that Product A is a growth product, and its target audience should be neurologists, then it can set a goal to attain at least 20 percent share among neurologists this year. In this case, the only metric that should show up for Product A should be the YTD neurologists' share.
Clarity: The goal-oriented focus described above removes the need to have the historical comparisons that one finds in abundance today. Change or growth measurements benchmarked to the previous year or the prior quarter are only relevant for the metric we wish to measure.
Stability: The chosen metrics have to stabilize over the performance period. Stability is a function of the metric as well as the time period over which it is measured. Share metrics are always better as they are less volatile than volume, and remove the effect of market growth. Further, reporting for the entire performance period in aggregate mutes the weekly or monthly variations. Most variations are random noise that obfuscate the underlying performance, thus reporting weekly share or volume changes is futile.
Given the variation in the business environment, questions asked will take different forms based on position and geography. What's going wrong at the national sales level will reveal national trends and issues—identifying weak regions (for example) and potentially identifying weak teams and managers, poorly performing promotions, and/or competitors' strengths. On the other hand, what's going wrong at the sales manager level might reveal specific physicians or hospitals that are changing their behavior. Different levels of field management yield different questions, and each individual's interests are based on the resources they can influence. A sales vice president has no reason to know which physician is dropping share. This information would be more relevant for a newly empowered "CEO" district manager.
The questions will also be different for managers in different areas. A certain product could be doing well in the Southeast, but dropping share in the Great Lakes region due to demographic or business reasons. Under these circumstances, an ineffective dashboard would distribute the same reports to all these managers. A more appropriate reporting would provide pertinent business information for the different levels of field managers, and let them answer their own business questions in a controlled framework. But this requires considerable thought. Ultimately, these frameworks should be simple, flexible, and intuitive, allowing managers to make decisions. Moreover, a number of new technologies can help implement such frameworks.
In particular, next generation business intelligence—with its ease of use and end-user orientation—and Web 2.0 technologies make it possible to go from vision to implementation in time frames unimaginable only a few years ago.
Changing the status quo is a challenge. The success of a decentralized sales force will hinge in large part on the quality of its field managers. Budget responsibilities of field managers should be expanded, and the critical support roles like HR, training, and compliance should be regionalized to support this model. Other areas like analytics and reporting groups can be redeployed or outsourced. With these changes, one should stay true to the spirit of giving field managers what they need to succeed in their business, and nothing more.
Greater responsibility delegated to field managers and simplifying performance measurement can result in better leaders, as well as a leaner, more sustainable, and more effective sales establishment. To make it happen, the next generation of sales managers and sales representatives need to be equipped with actionable information about their business; and that information needs to be delivered in a way that is clear, stable, and empowering. When each individual of an organization combines what they know about their territory with key sales performance data, then that organization not only achieves real competitive advantage but also success.
Christian Marcazzo is the senior director, Industry Solutions Life Sciences for TIBCO Spotfire. He can be reached at firstname.lastname@example.org