Karan Dhundia co-wrote this blog post with Jude Konzelmann.In the first and second parts of our blog series, we discussed two steps for adapting to the evolving healthcare landscape, which has seen massive shifts when it comes to delivering care, assessing value and reaching customers. Here’s the third step.
Structure: Moving From a Fixed Reporting Structure to a More Agile Operating Structure
With new field roles being introduced, a new challenge emerges: How will all of these roles report up into the organization? In a uniform commercial model, there isn’t much to figure out. Once an organization lands on an acceptable span of control for sales managers, a straightforward hierarchy can be established. Generalist representatives can report up into first-line sales managers, who can report into second-line sales managers, and so on. In fact, in many organizations, that lineage is a well-trodden career path, save for some stops in other posts within the organization to round out business acumen. It works well when the roles are general enough because the skills and aspirations are naturally quite common. When we start to introduce different roles into the mix, this picture becomes less clear. Should a very specialized representative—for example, a specialist in reimbursement issues—be reporting into the same first-line manager as the institutional sales reps? How will they both get the coaching that they need to be successful? On the other hand, if they don’t have common reporting, how will they coordinate?
The answer lies not in the reporting structure, which tends to be more static, but in more of an operating structure or operating model that can work in a far more agile way. To become more agile, you must first break the role of a manager into a few components and challenge whether or not all of those components need to be executed by the same person. This is quite similar to what you did when determining the field roles in step two, which we outlined in our last post.
Most sales managers focus their time on three key activities. The first and foremost expectation is to drive demand along with and through team effectiveness. The second expectation for most managers is to develop their people. Some of this overlaps with the first objective, but much of it is far more tailored to the individual and focused on the development of specific skills and capabilities in the individual rather than focusing on the outcomes that we’d like to achieve with the customer. The final objective for most managers is the administrative and HR-related component to the role. For example, managers need to oversee and approve expenses and time off. On the HR side, managers are participating in performance reviews, administering performance improvement plans for reps who might be behind, and participating in the hiring process. All of these objectives are handled by a single individual in a lot of organizations today.
The operating structure approach asks, “What if we separated these objectives and had different individuals execute them?” This can give your organization the flexibility you desire to coordinate appropriately while maintaining the coaching and administrative support that you need, as well. Let’s imagine again that the manager role is broken into three roles. First, a demand generation and effectiveness team oversees the day-to-day activities with a particular customer or group of customers. This individual would focus much more on account planning, achieving certain outcomes and getting a somewhat cross-functional team to work well together. Second, a role or skills coach can be involved from a competency development viewpoint, mainly focused on the longer-term evolution of the people they manage, rather than getting involved in the day-to-day application of those skills for a particular customer. Finally, imagine a third individual who can play the administrative or HR type of role in supporting a large group of reports. With all three of these manager types working in concert, the organization is freed up to employ different field roles, and even employ different roles in different geographies with a structure that’s flexible enough to handle the variations and thrive.
No doubt, this is a very large change to undertake because it challenges the coaching and career path models that have been in place for decades. Of course, if we are going to ask the customer-facing individuals to be more flexible and customized to the needs of the market, we need to make sure that the management teams are equally flexible, too.
Stay tuned for the fourth—and final—part of this blog series, in which we’ll outline the last step for adapting to the new biopharmaceutical environment.