A Sturdy Framework

With the healthcare environment continuing to change, sales managers and sales representatives must understand what drives both their customers' and their own company's profitability and strategic decisions. In response to this change, many pharmaceutical companies are asking field employees to run their sales territories as a business. This requires greater appreciation of costs and the effective management of resources. Thus, there is a need to create business plans that are aligned with corporate and therapeutic area goals.

For a sales manager to become more of a business manager and leader, the company needs to design blended learning solutions that continuously focus on improving decision making, understanding customers' business needs, resource allocation, financial analysis, and strategic thinking. All of these capabilities underscore the business planning process. Additionally, sales managers need the skills to coach and support their direct reports on how to create and execute an effective business plan.

Drawing a Roadmap

Most people realize that effective business planning is critical to achieving results, but implementing a consistent, disciplined process in pharma field organizations is always a challenge. For many field organizations, there is great deal of variability in business plan existence and quality. For other organizations, business planning is viewed as a "check-the-box" activity that yields little insight into opportunities with targeted initiatives.

Another challenge is that few organizations leverage planning as an opportunity to evaluate and allocate the vast array of resources available to sales reps (e.g., samples, leave-behinds, marketing-sponsored programs, field medical time, and senior leadership involvement with key customers). Ideally, the business plan should become the roadmap for success—but often it is filed away with no additional review throughout the year.

Wendy L. Heckelman

Even with these challenges, sales leaders are eager to develop a Business Planning and Resource Allocation Framework to support disciplined planning throughout the field organization. Making business planning a priority:

» Ensures alignment with broader strategic directions and objectives

» Creates greater understanding and appreciation of the "why" behind tactical activities and day-to-day actions

»Allows for appropriate roll-up and review of plans at each level

» Includes steps for ongoing reassessment and fosters necessary adaptation in a changing business environment

» Improves decision making by considering, applying, and deploying the entire resource mix when executing strategies and tactics

» Evidence suggests that sales managers and reps who effectively translate broader strategic initiatives into actionable plans that reflect local market conditions typically outperform their peers. In turn, these individuals should be rewarded for the results achieved by their plans, not just overall sales numbers.

Overview of an Effective Framework

The use of a disciplined and consistent Business Planning and Resource Allocation Framework will provide field employees with a step-by-step process that requires both top-down and bottom-up communication and alignment. To do so, employees at each level of the organization must fulfill their respective leadership roles. Senior leaders must set and communicate a clear vision and direction; sales leaders need to translate these goals and provide clear direction on strategic imperatives; sales managers need to create plans aligned with broader goals while also making appropriate adjustments for local market opportunities, customer variables, and human capital assets; and sales reps must leverage their understanding of individual customers and their unique needs to develop an aligned business plan that achieves targeted performance and business objectives. Throughout the process, everyone in the organization is responsible for ensuring alignment and providing the appropriate feedback that reflects their understanding of market conditions and customer needs.

The framework has four phases: two that the sales manager completes and two that the sales representative completes with manager support and direction. Each phase has specific steps and questions to consider, and pharmaceutical companies could easily customize the process to incorporate specific databases and financial reports. Business plan templates are used to capture the overall assessment, outline action plans with milestones and metrics, and list resources required. These action plans become the roadmap for creating specific monthly, weekly, and even daily plans that "operationalize" the broader strategy.

1. Align business strategies with local assessment of your business. During this phase, the sales manager is asked to assess sales history, and translate that into an understanding of broader business goals. By leveraging internal reports, the sales manager can evaluate what is driving sales performance and determine if the business is trending up, trending down, or staying the same.

Additionally, the sales manager should ask questions to encourage an evidence-based analysis of what drives sales performance: Is there variation in growth across the territories? What factors contributed to the district meeting, exceeding, or falling short of performance goals? Equally important is analysis of resource allocation decisions. What type of investments yielded the greatest results? What are the financial implications of operational decisions? How can costs be reduced to increase profitability?

The sales manager has to not only engage in a thorough assessment of sales history, but also review both team and individual performances against business goals. Any district plan must include specific objectives related to improving representatives' knowledge, skills, and ability to achieve results.

2. Develop a district plan with resource allocations in alignment with the business strategy. During this phase, sales managers identify a few critical priorities and establish district performance targets by territory or brand. This is also the time to assess how to best allocate the district's entire array of resources. A district manager's area plan should not treat all territories as equal; growth targets and resource allocation must be proportional to sales history—and, more importantly, sales opportunities.

3. Develop territory action plans aligned with strategy and goals. This phase requires partnership between district managers and their direct reports. Sales representatives need to:

» Assess territory sales history, review account performance, and identify targets

»Establish milestones and timing as appropriate for business

»Determine the necessary level of collaboration, coordination, and communication among team members to execute the plan

» Consider, apply, and deploy the resource mix (rep involvement, sales leadership, samples, marketing sponsored programs, etc.) when developing strategies and tactics

» Explain how to evaluate progress.

Once again, specific questions and considerations must be provided to guide assessment and development of each representative's business plan. Such templates allow a consistent and disciplined method for recording and evaluating plans. The sales manager is expected to provide coaching and support to create the plan. More importantly, the business plan becomes the roadmap for execution throughout the year.

4. Execute, monitor, and recalibrate plans. This phase shows that the process is ongoing and that a high level of interaction between the sales manager and direct reports is required to monitor established objectives. Additionally, the use of pre-scheduled business review meetings throughout the year allows for transparent assessment of what is expected and what has been achieved.

Dialogue keeps sales managers and representatives engaged in the ongoing review of the "territory as a business." The use of dashboard and other designated reports is critical to determining whether adjustments are needed based on marketplace forces, lessons learned, and shifting priorities. The end result is that each representative can translate broader objectives into specific monthly, weekly, and daily call plans and activities.

Implementation Roadmap

A Business Planning and Resource Allocation Framework will not achieve desired results on its own. The commitment to planning must also include:

» Assessment of the current level and quality of business planning

» Commitment from senior leaders for a Business Planning and Resource Allocation Framework

» Communication of expectations for using a consistent process

» Specific skill-building efforts to develop managers' business acumen, financial analysis, strategic thinking, and decision-making capabilities.

» Guidance on how to leverage the CRM and reports in an evidence-based manner

» Insurance that processes are in place for monitoring, evaluating, and recalibrating plans throughout the year

Additionally, tools need to be developed for sales managers to provide ongoing coaching to achieve execution excellence. To sustain and improve planning processes from year to year, it will be important to ask the right questions. Were plans put in place that yielded the desired results? Could the overall planning process be improved? Is there a consistent and disciplined process in place to support management review and oversight?

Taking the time to clarify, review, and communicate a planning process can help pharma field organizations prepare for and adapt to the changing healthcare environment. But improving business planning skills and effectiveness will require an organized rollout plan that focuses on skill development and coaching.

Wendy L. Heckelman is president of WLH Consulting. She can be reached at wendy@wlhconsulting.com

Sheryl M. Unger, senior consultant for WLH Consulting, contributed to this article.