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Blackdot White Paper - Sales Force Effectiveness is Dead or is it


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Blackdot White Paper - Sales Force Effectiveness is Dead or is it

  1. 1. Sales Force Effectiveness is Dead... or is It? Five Opportunities for Pharma to Get ‘Back to Basics’ and Immediately Lift Sales Performance © Blackdot 2015 Many pharma sales leaders believe that the new pharma landscape represents the inevitable demise of Sales Force Effectiveness. Inevitably, a wave of ‘quick-fix’ solutions have hit the market claiming to be the silver bullet of sales performance. Despite such claims, these initiatives frequently represent ‘point solutions’ that fail to appreciate the holistic nature of the sales engine, and remain unable to deliver repeatable and sustainable sales outcomes in isolation. After having benchmarked more than 50,000 frontline sales people, 7,500 Sales Managers and 650 independent sales teams, blackdot have isolated the statistically-significant drivers of pharma sales performance. In this paper, we outline five pharma-specific, immediately-actionable Sales Force Effectiveness fundamentals required for driving repeatable sales performance within your organisation.
  2. 2. © Blackdot 2015 2 SALES FORCE EFFECTIVENESS IS DEAD… OR IS IT? The rumours of my death have been greatly exaggerated. — Mark Twain Sales Force Effectiveness (SFE) is Dead! For many pharma sales leaders, this phrase has become an industry mantra over the last few years. For believers of this mantra, the era of blockbuster drugs, which represents the space in which SFE was originally born, has run its natural course and has now come to an inevitable end. Enter the generics. How best to respond? Shift towards quick-fix solutions in the search for more efficient ways to engage HCPs (Health Care Professionals). At this year’s leading conference on pharma SFE, participants were presented with two session options for the afternoon agenda. The first session focused on how the digital age has changed the pharma-doctor relationship. It promised attendees an understanding of how to best use digital channels and tools (think iPads and Closed Loop Marketing) to optimise HCP engagement. The session was delivered to a full-house, with not an empty seat to be found in the room. Next door, was the alternative afternoon session—a panel discussion on what five doctors most valued and benefited from the pharma-doctor relationship. The consensus takeaway across all of the doctors was that the myopic focus on tablet devices and social media was simply a distraction that stood between them and their ultimate concern: Patient outcomes. These doctors all agreed that all of this ‘noise’ did nothing to enhance or support the integral role pharma can play in assisting themselves to drive true patient outcomes. The session was delivered to a near-empty room. Conference attendees were too busy next door listening to the technologists, to take the time to listen to their most important stakeholder—the customer. In contrast, high performing sales organisations both within and outside pharma have come to recognise the significant upside opportunity in eliminating as much noise as possible. They have elevated the focus on core principles of SFE to address business challenges that persist across economic and product lifecycles. So what are the fundamentals of SFE that high performing pharma companies simply need to get right? Let’s begin by defining what we actually mean by getting it right. DO THE RIGHT THINGS Go-to-Market Readiness DO THINGS RIGHT Sales Force Effectiveness These organisations are effective at sizing the prize, ruthlessly prioritizing organic growth opportunities, and getting organised for success through the appropriate allocation of resources. These organisations possess a fit-for-purpose how we sell around here framework complimented by exception-free sales management disciplines. When it comes to capability building and talent management, these organisations are incredibly effective at minimising new-hire ramp up, maximizing the employee ‘sweet spot’ and eliminating performance decline. Core strategic marketing and sales leadership capabilities Highly-functional integrated marketing and sales ’engine’ supported by high-impact sales management and a critical mass of capable sales people
  4. 4. © Blackdot 2015 4 What truly defines these high performing sales organisations however, is their refusal to think of these elements in isolation. By viewing the ‘sales engine’ holistically—as an ecosystem of component parts that work interdependently to impact sales results—they have been able to accurately conceptualise what SFE is all about, and identify the root cause of what’s inhibiting and enabling their current performance. High performing pharma organisations have steered clear of quick-fix solutions that consider things like multichannel marketing as the panacea to their industry sales execution woes. They similarly reject CRM (Customer Relationship Management) and CLM (Closed Loop Marketing) strategies as the be-all-and-end-all silver bullet for achieving true HCP engagement. Instead, these companies have a tempered and holistic appreciation of what Sales Force Effectiveness is actually all about. These organisations develop an explicit go-to-market strategy. They all activate an effective sales enablement function. They run to an integrated management rhythm, and they possess a strong execution spine. Unfortunately, these are (as yet) not features to be found on the latest iPad. Over the last six years Blackdot have benchmarked more than 50,000 frontline sales representatives  7,500 Sales Managers and 650 independent sales teams; spanning more than a dozen industries  across more than 142 countries to build an independent fact-base of what a high performing sales organisation actually looks like. Through this process, we’ve been able to understand the relative strengths and weaknesses of the pharmaceutical industry across a hollistic sales framework. We’ve identified five pharma-specific, immediately-actionable opportunities that represent a return to core SFE fundamentals required to drive more predictable and repeatable performance: SFE is far from dead for pharma. For many, the failure to recognise the benefits to be gained in getting back to basics represents a significant missed opportunity. For high performing pharma companies, these universal, enduring and proven principles bridge the gap between hoping and knowing they’re going to hit their sales targets. Adopting these high-impact and immediately-actionable opportunities will differentiate your organisation through its response to the unique challenges of pharma and HCP expectations, and enable you to take advantage of the opportunity that this industry fluidity actually represents. SALES FORCE EFFECTIVENESS IS DEAD… OR IS IT? 1. Understand What Really Defines Sales Performance ... in the absence of prescribing data 2. Optimise the Call Coverage Model ... based on product maturity 4. Manage Your Teams’ Performance Dynamically ... vs. a one-size-fits-all approach 3. Fix Broken Linear Sales Model ... in favour of a dynamic buyer-centric dialogue 5. Incentivise to Drive Behaviour Change ... and acquire a true performance culture
  5. 5. © Blackdot 2015 5 Across all industries, On-Target-Performance is by-and-large the most significant outcome-based KPI (Key Performance Indicator) of any sales team. Pharma is an exception. The lack of doctor prescribing data is the root cause of this dynamic. This is a non-issue in transactional sales organisations such as banks, where the ability to focus on pipeline or other deal metrics is present. Furthermore, relative to other industries, underlying product demand is highly predictable. This scenario has left pharma companies largely in the dark and in search of another method to meaningfully define sales performance. Why is this an Opportunity? OPPORTUNITY #1: UNDERSTAND WHAT REALLY DEFINES SALES PERFORMANCE A comparison of distribution of On-Target-Performance for Pharma vs. the External Benchmark. In the pharma space, this seemingly leaves pharma with two methods for measuring sales performance: TARGET ACHIEVEMENT: PHARMA VS. NON-PHARMA 0% 25% 50% Pharma Benchmark External Benchmark 0%0% 100% 200% METHOD 1 METHOD 2 Method one is to focus exclusively on On-Target-Performance as the ultimate measure of performance. However, this fails to illuminate performance variance across your sales teams, and thus prevents you from objectively identifying who your high performers are or what they do differently to the core. A singular focus on On-Target- Performance as your sole KPI offers little insight beyond simply validating the effectiveness of your company’s abilities to forecast. Method two is to utilise alternative, input and activity-biased compensatory data sources. When this method is elected, it results in creating an environment of goal diffusion for pharma reps who are left unclear on what their ultimate goals and measures of success actually are.
  6. 6. © Blackdot 2015 6 OPPORTUNITY #1: UNDERSTAND WHAT REALLY DEFINES SALES PERFORMANCE At any point in time, a salesperson’s financial performance should be evaluated across two key dimensions: By considering sales performance in this way, high performing pharma companies have gained a more accurate and insightful perspective on what actually defines high performance in pharma sales. Assessing performance in this way enables you to gain an early indicator of later performance, and thus categorise each salesperson into one of four Performance Profiles: Current Performance vs. Target Improving Declining Below Above EMERGING Below Target; Performance Improving DEVELOPING Below Target; Performance Declining Above Target; Performance Improving EXCELLING Above Target; Performance Declining PLATEAUING PerformanceTrajectory THE TIGHT-LOOSE ‘PERFORMANCE PROFILES’ Measuring a rep’s Compound Annual Growth Rate addresses the limitations and shortcomings of alternative methods of sales performance measurement without creating goal diffusion or impacting perceptions of role clarity. CURRENT PERFORMANCE Are they above or below their sales target? The typical metric used is Year-To-Date On-Target-Performance PERFORMANCE TRAJECTORY Is overall sales performance improving or declining? The typical metric is CAGR (Compound Annual Growth Rate) or any growth rate measure over successive time periods What Do High-Performers Do Differently?
  7. 7. © Blackdot 2015 7 OPPORTUNITY #1: UNDERSTAND WHAT REALLY DEFINES SALES PERFORMANCE Introducing Compound Annual Growth Rate as a proxy for performance trajectory illuminates the performance variability otherwise hidden within pharma when only On-Target-Performance is considered. In introducing this second dimension of performance trajectory, companies are able to determine which Performance Profile each of their reps fall into, and thus objectively segment their high performers from the core. On-Target-Performance becomes a highly effective measure of performance when combined with Compound Annual Growth Rate. From here, these companies are then able to analyse and understand what their high performers are actually doing differently. When sales performance was considered using this two-dimensional approach, many benchmarked pharma clients that had historically only utilised On-Target-Performance were frequently surprised by what they saw: not only had the performance variance snapshot changed dramatically, but reps previously considered to be high or even core performers were in many instances challenged. Scatterplot of Territory On-Target- Performance and Compound Annual Growth Rate for benchmarked Primary and Specialty Care Pharma representatives of a leading global pharma company. CASE STUDY PercentageVolumeGrowth (Median=1%) EMERGING DEVELOPING EXCELLING PLATEAUING 25% On-Target-Performance -19% 90% 100% 110% 0% ˜ ˜ ˜ ˜ ˜˜ ˜ ˜ ˜˜
  8. 8. © Blackdot 2015 8 What Can You Action Immediately? Build a sales culture that elevates Compound Annual Growth Rate to being a joint Key Performance indicator that stands alongside On-Target-Performance .1 Integrate consideration of your reps’ performance trajectory into performance management processes and Business as Usual coaching conversations.2 3 Utilise Compound Annual Growth Rate as a key mechanism for identifying performance variance across your teams and reward, recognise and incentivise appropriately. OPPORTUNITY #1: UNDERSTAND WHAT REALLY DEFINES SALES PERFORMANCE In many cases, reps that were previously thought to be high performers emerged as being in a plateauing state, with little indication that their on-target-performance would continue to rise. In other instances, the fact that core performers were demonstrably on the up had been totally overlooked throughout previous sales quarters: Yesterday’s laggards were tomorrow’s leaders! Clarity around who your high performers are is a prerequisite to ensuring all other SFE priorities are set for success. Whether it’s shaping your sales models to high performer best practices (See page 13), dynamically performance managing to the identified bespoke strengths and weaknesses of your reps (See page 16) or driving the desired behaviour changes by rewarding higher performance with higher pay (See page 19)—none of this is possible until you’ve identified who your high performers actually are. Using the right metrics to correctly define sales performance is imperative, given the breadth of decision-making and business implications that flow from accurately defining sales performance.
  9. 9. © Blackdot 2015 9 OPPORTUNITY #2: OPTIMISE THE CALL COVERAGE MODEL A goal without a plan is just a wish. High performing sales organisations operationalise their call coverage models off a clearly defined plan that begins with clarity on customer segmentation and targeting. This is not a new concept or management construct for pharma. Pharma organisations have long done this by defining and articulating the company segmentation and targeting process they expect their reps to use. The assumption is that this segmentation and targeting process manifests in the planned call coverage model, which is then executed by the rep. Below we list the three stages required to execute a Call Coverage Model that reflects an organisation’s defined HCP segmentation and targeting process. Building an army of True Believers™—those that follow the defined segmentation and targeting process and see it as enabling—is your path of least resistance to guaranteeing predictable, repeatable and sustainable performance. The recipe includes not just adherence, but also buy-in to the process to ensure that the fruits of those processes are institutionalised within and across your organisation. What is interesting is that as an industry, pharma has more True Believers™ than the high-performing External Benchmark (62% vs. 56%)—on the face of it, a great situation. True Believers™CompliantsMavericksSelf-Reliants Follow the defined segmentation and targeting process, and see it as enabling Follow the defined segmentation and targeting process, but don’t see it as enabling Defy the defined segmentation and targeting process and do their own thing Don’t know a segmentation and targeting process exists, and work it out for themselves Clueless Don’t follow any process yet recognise the lack of processes hinders them This however, does not always play out as intended, with varying levels of adherence to both the process and belief in its ultimate utility. These issues are best illustrated by thinking about your sales team as being made up of the five tribes of segmentation and targeting process adherence below: 1 2 3 ACTUAL CALL COVERAGE AND FREQUENCY CALL COVERAGE AND FREQUENCY PLAN HCP SEGMENTATION AND TARGETING Which doctors represent the largest opportunities with the greatest probability of success? What call coverage and frequency best aligns with our strategic objectives? Which doctors will we actually visit and with what intensity? CRITICAL ELEMENTS IN DEVELOPING A CALL COVERAGE MODEL Want to learn more about True Believers™? Click here or scan the QR Code Why is this an Opportunity?
  10. 10. © Blackdot 2015 10 However before we pat ourselves on the back, it’s important to recognise that pharma also have twice the number of Mavericks (20% vs. 10%) than the External Benchmark, plus a not insignificant (15%) Compliant population. This represents an enormous missed opportunity, especially when we remember that relative to other B2B industries, the pharma prescribing universe is relatively static and well known. Operationalising the call coverage plan into the call coverage model your reps actually run to requires them to understand the underlying HCP segmentation and targeting methodology that gave shape to the plan in the first instance. It also requires them to hold the belief that the plan will actually enable them to hit their numbers. More than any other benchmarked industry, it should be possible for pharma to convert their Mavericks and Compliants into segmentation and targeting True Believers™. Remember—this army of True Believers™ is your ticket to guaranteeing predictable, repeatable and sustainable sales outcomes. Over one-third of pharma reps and Managers do not see the segmentation and targeting process as enabling. OPPORTUNITY #2: OPTIMISE THE CALL COVERAGE MODEL To build this Army of True Believers™, you need to have your sales reps not only understand the defined segmentation and targeting process, but actually see it as enabling. They need to truly believe. High performing pharma companies not only make these processes known, but ensure that their reps perceive the utility in adhering to them. To do so, reps need to see how following the process will translate into real results. What Do High-Performers Do Differently? TRUE BELIEVER™ MAVERICK ‘SALES TRIBE’ COMPOSITION 20% Maverick 10% Maverick 62% TRUEBELIEV ER TM 56%TRUEB ELIEVERTM Pharma External Benchmark OTHER O THER
  11. 11. © Blackdot 2015 11 In addition to better aligning their call coverage plans and models, high performing pharma companies also begin with better HCP segmentation and targeting. Across any industry, prioritisation of customers fundamentally comes down to three principal questions: OPPORTUNITY #2: OPTIMISE THE CALL COVERAGE MODEL In one pharma company that undertook the Blackdot Benchmark™, the stated strategic goal was to grow market share with high prescribing doctors that typically favoured competitor products. Vision and practice however, were fundamentally misaligned. 58% of all call activity was in practice directed to visiting Health Care Professionals where call objectives were to defend CASE STUDY existing prescribing habits and market share. In contrast, only 34% of call activity was directed towards visiting Health Care Professionals that aligned with the stated goal of growing market share. Is it any surprise that the number of True Believers were at sub-benchmark levels when there existed a variance of 24% between who reps were being told to visit compared to who they felt they really needed to visit? Prescribing Preference *Percentages allude to the percentage of total sales calls made throughout the quarter. Large Small Client Competitor ACTUAL EXECUTION: 5% 3% Size DEFEND GROW 34%*58%* ARE THEY BIG? DO WE WANT THEM? CAN WE WIN THEM? When it comes to... GROWING MARKET SHARE When it comes to... DEFENDING MARKET SHARE PRIORITIES: High-performing pharma reps will over- weight prioritising the upside potential and probability of conversion with HCPs within their territories. this means they will often go after mid-level prescribing doctors with a strong competitor prescribing predisposition, so long as they believe the potential for changing prescribing preferences exists. High-performers shift their priorities to focus on the size of the opportunity being defended, coupled with the attractiveness of the opportunity (the Health Care Professional’s prescribing predisposition towards their company’s drugs.) PRIORITIES: STATED GOAL:
  12. 12. © Blackdot 2015 12 What Can You Action Immediately? Build your army of True Believers™ by ensuring that the call coverage model activated by your sales teams reflects the call coverage plan that correctly prioritises HCPs against the right segmentation and targeting criteria. Ensure your call coverage plan remains the dynamic and adaptive tool it is intended to be—ruthlessly disqualify HCPs based on the probability of success determined throughout the sales quarters and reflect this back in future call coverage and frequency of visits. Prioritise the upside potential and probability of conversion to grow market share. To defend market share, prioritise the size and attractiveness of the opportunity. OPPORTUNITY #2: OPTIMISE THE CALL COVERAGE MODEL 1 2 3
  13. 13. © Blackdot 2015 13 OPPORTUNITY #3: FIX BROKEN LINEAR SALES MODELS Are Mavericks part of your sales model problem or solution? Click here or scan the QR Code Mavericks are those who know there is a sales model, yet choose to defy it and do their own thing instead, based on the conviction that their way is better. Whilst a small number of Mavericks provide a healthy agitation across any organisation, too large a number of these folk indicate there is something materially wrong with the defined sales model, or signal negative perceptions of its utility. Undertaking this process is truly the recipe for converting the remaining four tribes and begin to build out your army of high performing True Believers™ (your ticket to the predictable, repeatable and sustainable results game). We’ve just reflected on the five tribes of segmentation and targeting process adherence, and the criticality of building an army of True Believers™ to drive predictable, repeatable and sustainable performance. Within pharma, the role of Mavericks also tells a very interesting and important story—though this time with respect to your sales model (i.e., the methodology organisations expect reps to follow when face-to-face with HCPs). Mavericks defy the defined sales model and do their own thing. Pharma possess 2.5x more Mavericks than the External Benchmark, possess revenue contribution that materially exceeds that of any other sales tribe by a minimum of 4%, and are also the tribe most likely to hit their targets. Understanding what your high-performing Mavericks are doing is the first step to building your army of high-performing True Believers™. The message coming from the industry’s highest contributors is clear: we get these results by defying the model you’ve been training and embedding. So where exactly is the opportunity? 1 2 3 Embed. Embed. Embed.Get everybody on-board to systematise and replicate their success. Understand what your high-performing Mavericks are doing differently. Why is this an Opportunity?
  14. 14. © Blackdot 2015 14 OPPORTUNITY #3: FIX BROKEN LINEAR SALES MODELS It should come as no great surprise to learn that high performing pharma companies have started to shift away from traditional and linear ‘selling-focused’ models towards more fluid and buyer-centric sales models. These sales models are further underpinned by new capabilities and a culture that dynamically prioritises the HCP universe. They do so through continual and active (dis)qualification of HCPs based on upside potential and probability. They also increase or decrease their call coverage and frequency based on the perceived return on effort (See page 9). The Blackdot Benchmark has also revealed key insights into what individual high performing reps are doing differently during their sales calls. Here are a few headline high-performer differentiators: • Value long calls above all other interactions • Maintains continuity of dialogue between calls • Creates and seizes access and education opportunities • Consistently turns short calls into long calls • Consistently builds relationship momentum • Educate and proactively challenges HCP’s thinking • Persuade rationally and factually • Prepared to argue and put forward alternative viewpoints • Focused on adding value • Inquisitive • Gains an explicit and current understanding of each HCP’s prescribing habits and rationale • Does not accept information at face-value • Consciously qualify targets • Assertively disqualify based on low growth potential, competitor loyalty or low probability of prescribing uplift (at any time) • Commercial focus • Patient centric • High level of disease state, product and competitor knowledge • Rapidly and credibly engage HCPs on treatment opportunities and challenges • Outcome (prescribing), not input (activity) driven • Consistently closes (i.e., clarifies and makes explicit agreed commitments and timelines) • Owns next steps and follows through • Understand competitive positioning • Concisely and appropriately differentiates with both loyal and new prescribers • Articulate points-of-difference in patient efficacy, safety and cost CREATE RELEVANCE ESTABLISH HOW CLIENTS BUY CHALLENGE CLIENTS’ THINKING OWN AND CONTROL THE PROCESS MAXIMIZE MEANINGFUL CONTACT RUTHLESSLY QUALIFY DIFFERENTIATE DIFFERENTIATING HIGH-PERFORMING REP SALES BEHAVIOURS What Do High-Performers Do Differently?
  15. 15. © Blackdot 2015 15 Understanding what your high-performing Mavericks are doing is the first step to building your army of high-performing True Believers™. OPPORTUNITY #3: FIX BROKEN LINEAR SALES MODELS What Can You Action Immediately? Identify the mix of sales people across each of the five tribes within your organisation. Determine where amongst these tribes your high performers are concentrated. Diagnose what this is telling you about the effectiveness of your organisation-wide sales model. Have you got a critical mass of True BelieversTM in your sales model? Click here or scan the QR Code 1 2 3
  16. 16. © Blackdot 2015 16 OPPORTUNITY #4: MANAGE YOUR TEAMS’ PERFORMANCE DYNAMICALLY Performance management is challenging at the best of times. Within pharma, it is amplified by unique industry dynamics such as the lack of prescribing data and resultant goal diffusion. A salesperson’s performance should be evaluated as a function of both their current performance (i.e.,. whether they are above or below their targets), and their performance trajectory (i.e., whether their overall sales performance is improving or declining). The ultimate goal of a Sales Manager when managing performance should be to unlock the potential of each salesperson and support their team to continually improve performance. With that in mind, the Tight-Loose™ performance management framework outlines the optimal approach to coaching and managing salespeople to achieve higher performance. The Tight-Loose™ framework acknowledges that performance management in mature B2B sales organisations is supported by a mix of organisational ‘non-negotiables’ (driven top-down by the business and enabled by HR) as well as manger-determined processes and practices. Ultimately, armed with this knowledge, Managers can adopt the management style that best suits each individual salesperson’s development needs and performance management requirements. They do so across the three stages of performance management, by applying a ‘tight’ or ‘loose’ approach within each respective stage. The Manager’s Tight-Loose™ adaptation of their management style across these three stages will influence the frequency and intensity of the coaching and performance management each individual rep should receive. For each of the four Performance Profiles, there’s both a right and wrong Tight-Loose™ mix, determined by the current performance versus performance trajectory balance. SET OBJECTIVES PROVIDE SUPPORT, GUIDANCE AND COACHING EVALUATE PERFORMANCE Communicate and agree on SMART objectives that detail the right mix of individual activity, pipeline, behavioural, learning and performance goals The approach used to provide feedback and optimise the focus, formality, frequency and depth of coaching provided (with the salesperson’s input) Periodic review against the defined SMART objectives and agreed activity, pipeline, behavioural, learning and performance goals For each rep, Sales Managers can elect to take a ‘loose’ or ‘tight’ approach to optimise performance management, with the optimal approach dependant upon the individual salesperson’s Performance Profile. Why is this an Opportunity? THE PERFORMANCE MANAGEMENT ‘LIFECYCLE’
  17. 17. © Blackdot 2015 17 OPPORTUNITY #4: MANAGE YOUR TEAMS’ PERFORMANCE DYNAMICALLY THE TIGHT-LOOSE™ PERFORMANCE MANAGEMENT FRAMEWORK OPTIMAL MIX OF TIGHT-LOOSE™ IN PHARMA Improving Declining Below Above EMERGING DEVELOPING “Keep them focussed” “Expand their horizons” “Reign them in” “Let them go for it” EXCELLING PLATEAUING Current Performance vs. Target PerformanceTrajectory At each stage of the Performance Lifecycle, there is an optimum mix of Tight-Loose™ that can be used to manage performance. If people are managed in this way, individual rep performance is able to be optimised. As an industry however, pharma are getting the mix wrong. As can be seen in the graph below, in 79% of cases, pharma have deviated from the optimal mix of Tight-Loose™ and have failed to manage their reps in the way they should be managed based on their Performance Profile. The performance management style utilised within pharma is wrong in 79% of all instances. 79%WRONG 21% RIGHT LOOSETIGHT TIGHT LOOSETIGHT LOOSE TIGHTTIGHT TIGHT TIGHTTIGHT LOOSE
  18. 18. © Blackdot 2015 18 OPPORTUNITY #4: MANAGE YOUR TEAMS’ PERFORMANCE DYNAMICALLY High performing managers (across all industries) consider the current performance trajectory of each of their frontline reps in addition to their On-Target-Performance. As discussed in Opportunity #1 (understanding what really defines sales performance), it is essential to gain clarity on the KPIs that truly demonstrate performance within pharma. This requires thinking beyond just On-Target-Performance to consider KPIs like CAGR as a relevant measure of performance trajectory. In doing so, high performing managers are able to effectively categorise their frontline reps into the Performance Profile (Developing, Emerging, Plateauing and Excelling) that is relevant to them. These managers then embark on the journey of transitioning each and every one of their reps up the curve. They do this by setting the right Tight-Loose™ objectives across each of the three stages of performance management (setting objectives, supporting and guiding progress, evaluating performance). So, what does right look like across each of the stages? What Do High-Performers Do Differently? What Can You Action Immediately? Identify whether each of your reps are developing, emerging, plateauing or excelling by considering their current performance as well as performance trajectory. Based on the Performance Profile each rep falls into, understand what the correct Tight-Loose™ mix is across all three stages (setting objectives, supporting and guiding progress, and evaluating performance) of performance management. Provide your reps with individually-relevant performance management and coaching with the correct focus, frequency and intensity based on their profile needs. SET OBJECTIVES PROVIDE SUPPORT, GUIDANCE AND COACHING EVALUATE PERFORMANCE • Salespeople should always have clearly defined goals and objectives. • Setting objectives should always be ‘tight’. • If performance trajectory is declining, a tight (hands-on, high-touch) approach to supporting and guiding progress is required. • If performance trajectory is improving, a loose (hands-off, low-touch) approach to supporting and guiding progress will be more appropriate. • If current performance is below target, a tight (consistent and specific) approach to evaluating performance will be required • If current performance is above target, a loose (ad-hoc and general) approach to evaluating performance will be more appropriate 1 2 3
  19. 19. © Blackdot 2015 19 OPPORTUNITY #5: INCENTIVISE TO DRIVE BEHAVIOUR CHANGE Across our entire Blackdot Benchmark™ database, the number one motivator for sales reps is financial incentives. They are a critical building block in ensuring you possess an effective, high-performing sales culture that drives the right sales behaviours. Yet the average pharma reps’ incentive scheme is significantly smaller than those of non-pharma reps in absolute dollars. A pharma rep stands to gain only 3-12% of their base salary, compared to 11-32% of the base salary of a rep in a non-pharma industry. Even more puzzling is that within pharma companies, when compared to non-pharma industries, higher performance is not rewarded with higher pay. This has significant repercussions. For your high performers there is no incentive (or positive consequences) to outperform. These individuals will consequently often seek out organisations that do reward and recognise their high performing attributes through various discretionary bonus and incentive schemes. These flight risk consequences have the potential to materially impact future top and bottom line results. For your core performers, it simply reinforces the perception that there are no consequences for mediocre or poor performance (See Case Study below). Why is this an Opportunity? The average pharma rep’s at-risk incentive scheme is on average 14% smaller than that of a non-pharma rep. You cannot have a performance culture without positive and negative consequences of over and under performance A comparison of bonuses as a percentage of the total rep’s compensation PHARMA VS. NON-PHARMA BONUS COMPARISON 10th 50th 100th Pharma Non-Pharma On Target-Performance Deciles Bonusasa%ofTotal Compensation 0% 20% 40%
  20. 20. © Blackdot 2015 20 OPPORTUNITY #5: INCENTIVISE TO DRIVE BEHAVIOUR CHANGE One major pharmaceutical company that benchmarked with Blackdot illustrated the risk posed by an incentive compensation scheme that was poorly aligned to performance. CASE STUDY When it came to perceptions of whether the incentive compensation scheme was considered fair and equitable, the vast majority disagreed. When asked if it was based on merit, that same number now strongly disagreed. Finally, when asked whether it drove the right focus and behaviours, each and every high performer disagreed. These numbers are in resounding contrast to the company’s poorest performers, all of whom believed the incentive compensation scheme was fair and equitable, based on merit and drove the right focus and behaviours. ... FAIR AND EQUITABLE? … BASED ON MERIT? IS THE INCENTIVE COMPENSATION SCHEME … … DRIVING THE RIGHT FOCUS AND BEHAVIOURS? Core Performers High- Performers Core Performers High- Performers Core Performers High- Performers Agree33% Agree100% Disagree33% Strongly Disagree 33% Agree33% Agree100% Strongly Disagree 67% Disagree33% Agree100% Strongly Disagree 67%
  21. 21. © Blackdot 2015 21 OPPORTUNITY #5: INCENTIVISE TO DRIVE BEHAVIOUR CHANGE High performing pharma companies recognise that to have a market-competitive incentive compensation scheme that is perceived as fair and equitable, based on merit, and drives the right focus and behaviours is an absolute non-negotiable to being the high-performing sales organisations they aspire to be. These companies know they cannot expect to have a true performance culture unless there are known consequences for both under-performance and over-achievement, and reflect this understanding through the incentive schemes applied throughout their organisations. As evidenced by the External Benchmark, high performing companies implement incentive compensation schemes that are larger in both absolute dollar terms and the relative extent to which they reward higher performers with higher pay from the pool of available discretionary incentive dollars. Whilst some operating environments are more regulated than others, and result in an institutionalised cap on the absolute amount able to be invested in the pool of available discretionary funds, the principle of rewarding higher performance with higher pay remains unchanged. What Do High-Performers Do Differently? What Can You Action Immediately? Determine the extent to which your company has an ‘at risk’ incentive scheme that reflects cross-industry levels of performance pay. Ensure your performance management framework is able to effectively reward over-achievement and incorporate mechanisms for dis-incentivising under-performance. Communicate new BAU (Business As Usual) incentive scheme principles and performance management frameworks to gain frontline buy-in and promote an organisation-wide performance culture. 1 2 3
  22. 22. BLACKDOT EXISTS TO ASSIST OUR CLIENTS ACHIEVE MORE REPEATABLE AND PREDICTABLE SALES PERFORMANCE CONSULTING SOLUTIONS BENCHMARKING DIAGNOSTICS CAPABILITY SOLUTIONS Through our suite of benchmarking, consulting and capability offerings we are able to provide specific solutions which enable our clients to gain control and consistency over sales outcomes and growth. WHY BLACKDOT? We’re deep subject matter experts on sales force optimisation and effectiveness Technology-enabled benchmarking and diagnostic, consulting and capability uplift solutions We deliver actionable insights, tools and learning that drives uplift We know what good looks like and have the casual data to prove it
  23. 23. Tokyo MH Yoyogi-Uehara 3F. 3-6-5 Nishihara, Shibuya-ku Tokyo 151-0066, Japan +81 03 5465 0367 North America 347 5th Avenue New York, NY 10016 United States +44 (0) 20 3551 6894 Europe / Africa The Broadgate Tower 20 Primrise St London, EC2A 2EW, UK +44 (0) 20 3551 6894 Asia Pacific Suite 1, 185 Gloucester St The Rocks, NSW 2000 Australia +61 2 8246 7300 What makes us unique is our total fixation on the use of data-driven, evidence-based techniques to understand what does (and does not) drive sales performance. By viewing the ‘sales engine’ holistically, as an ecosystem of component parts that work interdependently to impact sales results, we’re able to identify the root cause of what’s inhibiting and enabling your current performance, including quantifying the payoff in actually getting it right. Armed with this knowledge, we stand alongside our clients who engage us to define, implement and embed change programs that bridge the gap between ‘hoping’ and ‘knowing’ you’ll deliver top and bottom line performance improvement. CLIENT PORTFOLIO OUR MISSION Blackdot have completed more than 400 sales performance improvement projects, across 12 industries and 142 countries. We’ve additionally benchmarked more than 50,000 salespeople, 7,500 Sales Managers and 650 independent sales teams. CORE INDUSTRY EXPERTISE We engaged Blackdot to overhaul our core sales disciplines and enable our front-liners to best capitalise on their limited selling time. Blackdot designed and implemented a holistic sales framework and sales management solution which consists of a bespoke sales process, pipeline methodology and sales management rhythm all tailored to our unique sales environment and global business model. As a result of this more consistent and repeatable approach to proactive business development we’ve already seen double-digit year-on-year revenue growth in the first 12 months. - Andrew Stuart Head of Futures, Macquarie Group FINANCIAL SERVICES PHARMACEUTICALS, BIOTECH LIFE SCIENCE TELECOMMUNICATIONS TRANSPORT LOGISTICS GOVERNMENT HEALTHCARE INDUSTRIAL PRODUCTS IT SOFTWARE MEDIA COMMUNICATIONS RETAIL CONSUMER PRODUCTS