Adapting to change

Winning and retaining customers in the rapidly changing NHS means rethinking the whole salesforce model – and a new set of skills for those involved, says Brian Jarrett, national business manager at Lundbeck.

That the NHS is changing is not in dispute; it has been changing constantly for many years now. But whereas the pharma industry has been able to cope with previous changes by evolving the way it maintains contact with its customers, we are now facing a situation where the only way forward is to jettison the traditional model and think again.

Our market is becoming ever more complex, with an increasing number of stakeholders and decision-makers at local level. Tougher barriers to entry and slow uptake of medicines in the UK have had a big impact and until now, companies have generally responded by trying to create higher levels of marketing noise.

Driver for change
So what has changed to make that approach no longer valid? Largely, the change has been driven by the White Paper, Equity and Excellence: Liberating The NHS, which proposes the most significant changes in the NHS since its inception. In such a rapidly changing environment, if we are to be successful as a company, and continue to be profitable, we have to change along with our customer. And when those changes are so fundamental, evolving the current model is no longer enough.

Actually, even before the White Paper, the traditional salesforce model, sending teams of sales reps out to meet GPs, was losing impact. The evolution of the payer customer, changes in decision-making processes and the way in which funds moved through the NHS, meant that the effectiveness of the whole model was dwindling.

This model was more about delivering what the pharma company wanted than necessarily giving the customers what they wanted. We had views of what our needs were in terms of generating sales for our brands, and we geared our teams up to deliver that. But as our customers become more empowered to make more decisions at a local level, meeting their needs – individually and locally – becomes ever more important.

So even without the White Paper, it was becoming clear that the older, traditional high-activity, high-noise structure wasn't going to be sustainable as time went on.

I'm quite sure that Lundbeck has not been the only pharma company to realise this and to try to get to grips with the problem. But we have been through an exhaustive process and devised a completely new model, which we believe could form the blueprint for what pharma sales structures might look like in the future. It is an innovative plan which requires a change in mindset and a change in the kind of people and skills sets we deploy in maintaining contact with customers.

Many in more traditional sales set-ups will be watching closely, as well they might.

We haven't just introduced a new model blind; this is the result of a major review carried out with multiple stakeholders and third-party support, and which we called the 'Pursuit of Excellence Project'. This looked at our whole go-to-market approach, and included both internal and external (ie, customer) consultation, so that we had a clear understanding of what our customers wanted to see.

One of the key gripes was that the traditional model does not allow for true local devolved decision making, mirroring what is happening in the NHS itself. Coupled with this, busy clinicians have decreasing amounts of time to see multiple reps from each pharma company, and are looking for a single – knowledgeable and empowered – point of contact.

What is clear from this is that the way to engage them is via a locally-accountable salesforce that has the autonomy to make local decisions and has full local budget responsibility. This calls for a complete redesign of the salesforce model – and also a step-change in the skill sets of the people populating it.

An obvious concern with this approach would be that giving autonomy on a local basis could lead to a loss of consistency in terms of quality; that's a fair challenge. But this fear can be allayed by a structure which builds on robust business planning and strong management processes.

Although the new salesforce model gives individuals local accountability to develop the plan, that plan must be scrutinised and challenged to ensure there is a consistency of quality right through the process.

From the pharma company's point of view, of equal importance is that local autonomy doesn't lead to inconsistency in the brand itself. Your brands must have a national strategy – but implementation can be agreed and adapted at local level, to meet specific local needs.

Breaking with tradition
We believe our model will address the challenges of the UK market and give us the capability we need to achieve our aims. Our solution is to appoint 21 directors of healthcare development (DHDs), who will be customer facing, and hold responsibility for all payer customers – and any other customer – contact.

This may sound a bit like key account managers, but the role of the DHDs will go much further. For a start, they will create local business plans, in line with local needs. What's more, they will have the autonomy to allocate resources to achieve those business plans. Perhaps most radical of all, while they will be held highly accountable, and will need to deliver on the specifics of their plans, they will not be measured on simple sales figures; they will have responsibility for full profit and loss for their respective areas of responsibility.

That last point is critical, because it mirrors how the business itself is measured. Like many, during my nearly two decades in the industry, I have never been measured in this way. It is something a traditional salesforce doesn't even consider, despite it being the single most important metric in any business.

The final important point about the new model is that the DHD becomes the single point of contact for the payer customer. No longer will customers be irritated by seeing several different people from one company, each with different brand responsibility. And because they will build a relationship with someone with true autonomous decision-making power, they will be able to work together to create solutions. I believe that this is a significant reason why customers will buy into our model.

Right people, right time
Of course, this will work well for Lundbeck because it operates exclusively in one therapy area, CNS. Could it work for bigger companies with more diverse portfolios? I don't see why not; although it would depend on the quality and the calibre of the individuals in the role. The more products you have across disparate therapy areas, the more knowledge you have to retain.

This new model depends on the right people filling these vital roles. You have to view them – and reward them – as very senior people within your sales organisation. They need several different capabilities: sales person, account manager, business manager and people manager, because they will be supported by very small specialist teams, which they will be managing and leading from a true business perspective.

And, of course, they will need to have superb clinical, therapy area understanding, coupled with understanding of the NHS and how it is evolving. I would expect them to come from a mixture of backgrounds, both high achievers in sales organisations and senior people from NHS roles.

Change is a constant
Of course, no-one expects the White Paper to be the last word on change within the NHS, and so whatever model pharma creates right now to meet the needs of the customer has to be flexible enough to evolve over the coming years as further change happens. But while there may be subtle organisational changes, it seems certain that meeting local need will continue to be the focus of the NHS for the foreseeable future, and the industry has to mirror that to succeed. It is about specialist, local teams, very close to local need, with a true understanding of what the customer need locally. If these basics are there, the new model will be able to adapt and evolve as those needs change over time.

What is happening at Lundbeck may be leading the way, but this is a path which others in the pharma industry are going to have to follow as the traditional salesforce model becomes still more unsuitable in the modern marketplace. Many are already taking a long, hard look at what they are doing currently, and what returns they are getting for that effort.

It is inconceivable that more pharma companies will not realise that mirroring the customer in terms of local empowerment is the key to success. That is going to mean some big changes for many who are currently part of the traditional salesforce model.

For the best, it will mean significant opportunities to forge a career with more autonomy, a better opportunity to meet customer need, and a direct influence over how successful, in business terms, their efforts are. In these early days of change, the first to fill these roles will be true pioneers in a way which has not been possible within our industry for a generation. And that is truly exciting.

The Author
Brian Jarrett is national business manager at Lundbeck

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