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Andy Kach
Principal
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Brian Chapman
Principal
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All Aboard the KAM Train: Key Account Management Isn’t a program; It’s an Organizational Transformation

Posted by Brian Chapman on March 1, 2016



shutterstock_205548598Everyone seems to be talking about key account management. It’s simple, really: We know that we can’t get away with the old model of clinical promotion in today’s world. This gives rise to the need to create a team of key account managers. Hence, the unstoppable “KAM Train.” Time to get on board.

But thinking about KAM only as a program is really incorrect. Those who fail to see it as a transformation of the entire organization will fail to deliver on the promise of key account management. It’s clear that this isn’t a passing fad. Nobody claims that, at some point in the future, hospitals will no longer care about economics. It doesn’t appear that companies are going to pause their M&A activities or that portfolios will stop growing. And we can be pretty sure that the Centers for Medicare & Medicaid Services isn’t going to suddenly halt its relentless search for efficiencies, improved outcomes or metrics in service of improved value for money. So why would key account management just be a program? It isn’t. It’s a transformation.

Thinking of key account management as a program also tends to rush it. A program has a beginning and an end, a static set of goals and a point at which we can pat ourselves on the back, say, “Job well done,” and move on to the next thing. Calling it a program can cause impatience, overinvestment and unrealistic expectations.

Instead, at ZS we believe that the goals, investment levels and metrics of success for a key account transformation need to constantly evolve. Today, one of the most consequential limiting factors is the readiness of the customer to work with the organization in a new way. Not all customers (IDNs or accounts) can drive programs, reward success with share, or measure and recognize the value of key account efforts effectively. Some customers are organized in a manner that makes a coordinated effort wasted on them because they, themselves, are unorganized. One major IDN once told a key account organization, “We will start dealing with you as a combined company only after we have extracted all of the value out of each of your individual products.” Commoditize the products, then commoditize the suppliers. Perhaps that IDN isn’t yet ready for a KAM transformation.

Yet these things evolve and so, too, must the account management efforts. Customers evolve, products and lifecycles evolve, and portfolios evolve, sometimes dramatically with new acquisitions. And the more success that an organization has, the more emboldened it is to try new things, replicate programs and successes elsewhere, and increase overall investment. While I often encourage my clients to keep their list of partners short and relatively unchanging from year to year, that list still needs to constantly evolve, lengthen and be challenged.

I will make only a passing reference to this here, but of critical importance is full organizational alignment on a value proposition. You can’t bring your chief executive to HCA and wonder what he’s going to say. It’s essential that everyone, from senior leadership to sales reps, is fully aligned with how the broad organization proposes to help customers, and that everyone is crystal clear about what value the organization brings to a hospital system.

So in the end, everyone needs to get into the game. Leadership needs to define and support. KAMs need to shape and demonstrate. Marketers need to learn and replicate. Sales managers need to facilitate and cooperate. And reps need to communicate, internally and externally. Clearly, this isn’t a program that only impacts a few individuals in an obscure department. This is an organizational transformation.

The unstoppable KAM train is leaving the station and it really needs the entire organization on board.


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Topics: KAM, medical devices, medtech, Brian Chapman, key account management, transformation

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AUTHORS
Brian_Chapman_thumbnail
Brian Chapman
Principal,
ZS Associates
Tobi_Laczkowski_thumbnail
Tobi Laczkowski
Principal,
ZS Associates
Will_Randall_thumbnail
Will Randall
Manager,
ZS Associates
Matt-Scheitlin-London_thumbnail
Matt Scheitlin
Associate Principal,
ZS Associates
Andy-kach_thumbnail
Andy Kach
Associate Principal,
ZS Associates
Bhargav_Mantha_thumbnail
Bhargav Mantha
Associate Principal,
ZS Associates
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