Leveraging
Knowledge in the Sales Force of a Pharmaceutical Company
Dan Fenton, James A. Albers, Pacific Lutheran University
ABSTRACT:
The sales force of any organization is a critical component to the overall success of that company’s goals and objectives. Knowledge management is a key factor that, if implemented correctly, can act as catalyst to synergizing the efforts of a sales force leading to many positive outcomes including a more effective sales force, an overall smarter organization, and employees who have a high sense of moral because of their involvement in the decision making process. This paper explores a systematic approach to creating a knowledge management program generated at the sales force level and then pushed out and up rather than the more traditional top down approach often seen in corporate America .
Keywords: Knowledge management, Pharmaceutical company,
Sales force, Best practices, Communities of practice, Knowledge directory
1. Introduction
KM technologies are just starting to make their way into the pharmaceutical industry (Britt, 2007). This research has shown there are only a few real enterprise-wide KM activities. Most KM activities have arisen from the enthusiasm of small groups of people in specific areas, often in response to the corporate vision of the organization, but not as part of a defined company strategy. In another study of 44 pharmaceutical companies (Ward & Abell, 2001), indicated that many firms have adopted KM, but few actually use the KM label. Critical success factors in implementing a knowledge management system for the pharmaceutical industry is given in Hung et al (2005). Most KM activities concentrate on the Discovery and R& D functions (Smith, 2000; Schweizer, 2005). Other KM activities focus on improving the drug R&D cycle (Studt, 2003).
The focus of this paper is on the use of knowledge management by the sales force of a large pharmaceutical company. Knowledge management practiced by the sales force can enhance the selling capabilities of individuals, strengthen customer relationships, provide competitive intelligence, and mitigate the potential damage left behind when experienced sales representatives leave the territory. In addition, knowledge management can provide other areas of the organization with information that could have an impact on what drugs to pursue, could reduce the R&D cycle, and could improve marketing strategies. This paper also highlights the challenges, obstacles, approach and benefits of implementing a knowledge management program in a division of the sales force of a large pharmaceutical company.
2. Organization Profile And Overall Framework
The subject of this article is large pharmaceutical company with more than
40,000 employees and markets its products in all areas of the world. The
company technically has a Knowledge Management program but has chosen not to
implement the program across all areas of its organization. This paper will
focus on this company’s business
sales operations in the
Currently, the company has some tools in place that are designed to capture information and share it across different parts of the organization. However, these tools are generally not used by very many people and have become more of task rather than a way to enhance knowledge sharing. Identifying these shortcomings is critical before the company can move forward. Another challenge for the organization is for the sales managers to develop a business case (Yelden & Albers, 2004) for their KM project within the company.
The incentive structure with this company is such that all members of a POD are evaluated exactly the same with regards to their sales performance vs. sales objectives. Within the district, PODs technically compete against each other for the top spot on the ladder, but generally speaking it is the district as a whole that competes against different districts within the region. A district manager who can successfully implement a knowledge management program throughout his district could develop an advantage not only within the organization, but also could develop a completive advantage in the market place.
A number of papers describe the various elements necessary for implementation of knowledge management projects. Examples are given in Dalkir (2005), Gillingham & Roberts, (2006), Albers & Barnowe (2003) and Albers (2003). Key success factors and failure factors for implementing knowledge management is given in Chong & Choi (2005) and Akhavan et al (2005). The framework used in this paper to develop a plan to leverage knowledge of the sales force of a large pharmaceutical company is given in Albers (2003). It is a nine-step framework (Figure 1) providing a detailed and sequential process for implementing a knowledge management program in any organization.
Figure
1: Framework for Implementing Knowledge Management (Albers, 2003)
3. Strategic Assessment
The major strategic focus for
pharmaceutical companies is the following:
¨
Increase sales of existing drugs.
¨
Decrease the time to market to drugs in development.
¨
To establish new drugs.
The key knowledge that can be
leveraged from the sales force to achieve these objectives are; sales
techniques, collaboration techniques, resource optimization, utilization of
previous experience, competitive intelligence, and analytical tools including
sales spread sheets, data base utilization, and performance status.
4. Knowledge Audit
The knowledge audit identifies what
knowledge exist in the organization and what is the
knowledge shortfalls needed to support the strategic objectives of the
organization. A more detailed discussion of knowledge audits is given in Fai et
al (2005) and Tong (2005).
For the sales force of this company much of the knowledge is held as tacit knowledge in the minds, know how, and sales skills of the employees. In this company, PODs are organized to have multiple representatives selling the same products to the same people. Collaboration between representatives needs to be supported in order to mitigate issues and shortfalls of information that may arise when members of the sales force leave the territory to pursue other avenues and opportunities.
In addition, the flow of information between the sales forces and marketing department is critical for success. If the information between these two departments flows better the more effective the overall strategy will be.
The major knowledge shortfalls from the sales force are:
¨ Current and accurate information about the prescription habits of current customers.
¨ True understanding about how the competition is positioning itself; including sales messaging, tactics, tools, and resources.
¨ Clearly defined goals that can be objectively measured and tracked against current progress.
¨ Information and feedback regarding current resources and how they are being perceived by the customers.
What this company has done is mistaken information as knowledge. The company has gotten so used to doing things a certain way that it are stuck in a rut that is preventing it from developing the strategies needed to move forward. There is a lot of information available, but unfortunately that information is inaccurate, often times contradicts itself, it is outdated and it is difficult to update current customer profiles. There is a lack of communication between the sales force and marketing team impeding the development and execution of the company’s strategy.
5. Aligning Knowledge
Strategy With Business Strategy
The next step of this process identifies the knowledge strategy and to align this strategy to the business strategy (Hansen et al, 1999; Zack, 1999). It takes what we know as a company and compares this information to what must be known in order to reach our goals and objectives. These knowledge gaps prevent individuals from obtaining the goals and objective that have been established. To overcome these knowledge gaps between the company, managers, and the sales force all parties need to be brought into developing a solution in order to gain buy in and to develop knowledge sharing culture rather than a culture developed from compliance.
If the strategic direction of the company is focused around maximizing market share by increasing the perception and thus utilization of the products then the company must ensure that it has accurate information on the current targets in order to determine a baseline on which to measure success. The information must be accurate, up to date, easy to interpret by everyone, and readily available.
Understanding what the competition is doing is important. The company needs to incorporate a method of collecting and disseminating competitive intelligence. Information needs to be passed up the chain from the sales people in the field, to the home office and the marketing team. The information needs to then be analyzed for trends and combined with the marketing team’s market research and disseminated back out to the sales representatives in order to determine the necessary tactics to offset this competitive activity.
For a sales person to be successful they must understand what their goals are and have confidence that what they are doing is moving them closer to obtaining those goals. The company needs to redefine the current way it looks at sales goals and sales goal attainment. Developing a structure that allows for a consistent accurate status in regards to performance will motivate the sales force to develop new and continually evolving tactics based on current performance. In other words, the company will know if what they are doing is working or if they need to start over and develop new tactics.
The marketing department and the sales force needs to break down the current silos that they operate in. The company needs to develop a way to broaden the amount of input that they obtain from the sales force when developing new sales aids. For example district or regional teams could be developed to provide input to the marketing department or the marketing department could provide the visual aid online to all employees and allow for anonymous input and suggestions. Either way more input needs to be harnessed from the individuals who are going to be required to use the sales aid on a daily basis.
Overall, the knowledge gaps will need to be establish at the POD level but managers need to give their employees time to think through these issues in order to develop new techniques and strategies. Once best practices have been established the manager needs to implement them across the entire district in order to realize their fullest impact. Enhanced communication between representatives as to the amount of samples being left with key providers in the territory is currently being worked on with a focus on the information being readily available and limiting the amount of extra work need to develop the report. In addition, the company has identified who the top prescribers in the territory are based on dollar volume but needs to extend this out to encompass all prescribers in ones territory. Managers need to forget the old way of looking at market share data and adopt a new approach of looking at the dollar volume growth since this is the way everyone is actually being evaluated.
6. Selecting The Knowledge Management Team
Selection of the knowledge management team requires having an individual as a knowledge champion and ideally will have support from top management concerning any knowledge management initiative. This individual should act as an advocate for KM, oversee the infrastructure, continually scan the environment for KM issues, set the context and measurement of the value of KM, and work to develop the overall KM leaders within the organization.
For this company the district manager should serve as the knowledge management champion. This makes sense not just because of the chain of command but because it is the district manager who sets the tempo and overall attitude of the individual district members. This is mainly due to the organization structure and decentralized reality of most major pharmaceutical companies. District managers are the only ones who have constant face to face interactions with all members of the district; they are responsible for hiring new members and have a real understanding of the capabilities of their subordinates. This understanding affords them the ability to harness the strengths and mitigate weakness across their sales team.
District managers are also in constant contact with their regional managers. In this company nothing gets influence below the regional manager level. If a manager implements a knowledge management system that leads to sustained success in regards to sales objectives it is likely that the regional manager will look to leverage that success across the entire region. If a regional manager adopts this strategy and develops all district managers into knowledge champions for their individual districts and realizes regional success it is more than likely that other regional manager would look to adopt similar strategies leading to a national shift towards the utilization of KM techniques.
7. IT Assessment And IT Change Management Strategies
Currently,
the IT shortfall that exists in this organization has to do with the lack of
collaboration tools available for the sales force, the level at which available
tools are authorized for use, and the apparent lack of consideration by key
decision makers regarding what the sales force needs in order to be successful.
There is also a lack of incentive structure to maintain and update the current
customer database with accurate up to date information and too much data that
is available in different formats that is adding to confusion and the
duplication of efforts and analysis.
IT management should consist of accurately updating the customer database we use to manage our day-to-day operations on a regular basis. Managers need to determine the reports that are important for developing strategy and eliminate the reports that are unnecessary. Explanation on how to use the information in the reports that are disseminated falls under the manager’s responsibility and they should not take for granted an employees understanding of the reports, as this understanding is critical for directing the strategy of the district.
The two main areas that need to be examined in the IT area include content management and collaborative tools. The sales force can affect the content of the available information in several areas. First, they need to ensure that prescriber information is up to date and accurate. Next, they need to collect competitive activity in a way that can be share across the POD and District. Then, realistic strategies associated with sharing new information uncovered during each sales representative daily calls will allow POD mates to be better prepared on subsequent calls.
With the most commonly used tools being voice mail and email, managers need to determine how to best utilize these tools. Email capabilities across the district very immensely. Taking the time to train everyone in the district how to best utilize the current email system will enhance the use and decrease the time required to execute basic tasks. Video and voice teleconferences need to be available for use without having regional approval. Delegate the approval process down to the district level. Having software available that allows for a common calendar that can be updated without an internet connection and then synced with other POD mates will enhance the communication between POD mates and will ensure for a more effective utilization of available resources.
9. Organizational Change
Management Strategies
Key organizational factors that
influence knowledge management projects are discussed in Albers & Jerke (2004). District managers are in the critical
position of influencing organizational change. This sounds like a big task but
in reality, it is not. The change in this situation needs to start with the
culture existing at the POD level. Harnessing the strength of employees to
mitigate the weakness of others will allow all members to enhance their own
capabilities. Overtime this tactic will
collectively strengthen the capabilities of the District. This level of
collaboration, which is stated and supported by the companies “Core
Behaviors” could lead to significant sharing of information across
district lines and start to shift the competitive culture that is experienced
through the region and nation to one that is more inline with the sharing of
information for the benefit of all.
It is clear that this organization can benefit from the use of KM. However, with such a decentralized structure the main obstacle in place is gaining the buy in from the district members as to the usefulness of KM. Connecting the dots between the work required to implement KM and how KM will benefit the individual while at the same time contributing to the overall district success is the key component to success.
With growing competition and a need to maximize sales growth the sales force needs to enhance the overall perception and utilization of its products and to execute and obtain sales objectives. The district manager needs to have a sense of urgency around developing new strategies to reach these objectives and needs to look to his subordinates for the information needed to develop these new ideas. This would provide a baseline to quickly implement successful POD tactics through out his entire district. Specific actions needed include the following:
¨ More time needs to be allocated to PODs for planning after quarterly goals and call plans have been established and disseminated.
¨ Sales representatives need to take ownership in planning and managing territory objectives to ensure they are aligned with the companies overall goals and mission. Managers should ensure that this takes place.
¨ With current products being in the middle of their life cycle, its important the resources allocated to the territory are being utilized properly as it is a natural trend to receive less and less resources as a drug moves closer to losing patent protection. These are the main resources that need to be monitored closely to ensure success include: drug samples, marketing and promotional budgets, patient information brochures, and clinical reprints
Once successful at the district level the framework and best practices established can easily be rolled out at the regional level. Once success is realized at the regional level it can spread easily across the nation because of the level of collaboration that exists between regional managers. In order to enhance this roll out across regional and national levels the key initiatives to enhance the rollout include establishing COPs (McDermott, 2004; Saint-Onge & Wallace, 2003; Wenger et al, 2002) between the districts of the sales force and development of knowledge directories (Dooley et al, 2002).
The development of COPs for this sales force would significantly increase the interaction and sharing of information between the members of the sales force. The key benefits would include; the development and dissemination of best practices across the sales force, the development of new strategy, quick solutions to new problems, new approaches to old problems, an enhanced connection between the marketing department and the sales force, and new networking opportunities facilitating mentorship.
In order to develop COPs that are effective and successful, they need to be supported and participation needs to be encouraged. Members of the knowledge management team need to act as champions to this process. Clearly defined goals and objectives need to be established while at the same time participation needs to remain informal and voluntary. Making incentives for participation available early in the process will enhance the level of participation. Employees who feel they are contributing to solving problems and to the development of best practices will experience more job satisfaction. Once a manager and appropriate IT personnel have successfully trained the district in the overall capabilities of COPs, members of the COP can network out and recruit appropriate personnel from adjacent districts to participate when appropriate. This action results in increasing the credibility of solutions to the problems within the district because of the additional input from others outside the district. This step also prepares other districts for the larger scale roll out that will take place once success has been established on this smaller format.
The development of a knowledge
directory goes hand in hand with development of COPs.
The knowledge directory is designed to enable and encourage knowledge sharing
at every level of the organization. It allows individual employees to find
others who can provide information or help accomplish a specific job-related
task. The directory enables work groups and teams to identify, locate, and
contact colleagues to bring additional expertise to bear on their projects and
to encourage business units to share “best practices” and
“lessons learned” from past project in order save time, money and
resources to future projects.
The overall strategy of the
knowledge directory should include the technology for identifying expertise in
the different areas of the sales force, and tools to enable knowledge sharing.
Resources and information will need to be provided to communicate knowledge
sharing activities along with facilitation of knowledge sharing programs and
processes. A taxonomy (Choksy, 2006) or classification scheme will need to be
developed which could be along major categories of drug expertise. The
knowledge directory should include an expertise profile linking
employee’s specific skills and specific categories of expertise. It is
important to encourage advocacy of the knowledge directory by publicizing
actual stories detailing knowledge directory successes.
10. Deployment Of KM Systems
The most important part of deploying a KM system by a district manager in this company will be maintaining perspective. Understanding the current workload of employees and developing a true understanding of how this KM initiative is affecting the day to day activities of the sales representatives will allow for more support as the manager attempts to expand the scope of the KM initiative. A manager can also gain credibility by eliminating non needed tasking prior to implementing new useful tasks associated with KM.
In order to provide guidance to others who are considering implementing KM in their sales organizations we have defined as an example specific objectives, deliverables, roles and responsibilities, schedule, communication plan, and measurements systems.
The overall objective would be to enhance the sharing of true best practices across the POD and district with the overall goal of enhancing the utilization of products by customers across district. The specific objectives include the following:
¨ Streamline the usage of currently available resources through peer to peer training and constant feedback.
¨ Established buy in and ownership in KM initiative by appointing subject matter experts and implementing a rewards system that encourage the development of new strategies, techniques, and continuous process improvement.
¨ Establish a culture of that encourage the sharing of information.
¨ Develop a samples management tool that is easily updated and understood by all representatives in a territory.
¨ Formalized process of developing and posting best practices for future utilization.
Examples
of deliverables could be increased sales, elimination of non critical
tasking, more effective use of available resources, personal development
of all district members, enhance RX through consistent appropriate use of
samples by prescribers, more resources available due
to proper utilization, book and repository of best practices that can be shared
throughout the organization.
The key
roles and responsibilities in the KM implementation include the KM champion and
point persons that the district manager appoints to support the KM project. The
KM champion needs to be the district manager. Point persons should be
established for the following areas: technology, competitive activity, state
and local policies, internal policies, and best practice.
In order to expedite the schedule the manager should incorporate the roles assigned above into the formal performance evaluation that all employees undergo during the course of the year. Therefore, the beginning of the year would be the ideal time to incorporate the required changes. However, the manager should start discussing these changes approximately three months prior to the beginning of the year to allow individuals the time to prepare for new roles and to allow time for the idea of KM to resonate in all employees minds.
The following steps are recommended for the communication plan:
¨ Initially the district manager should hold teleconferences with all members weekly allowing the point people to take the lead. Teleconferences should be limited to 30 minutes and the focus should rotate based on who is presenting. Once the point people have had the opportunity to present several times the manager should rethink the frequency of the teleconference based on available information and usefulness of the presentations. Teleconference should not be held for the sake of holding a meeting.
¨ The manager should work with the point people to develop criteria around what is critical information that needs to be disseminated immediately and what can wait until their next teleconference rotation.
¨ In conjunction with presenting information to the rest of the district
the point people need to pass their presentation note to the manager in order
to create a quarterly report that can be disseminated to the district and
passed on to other district managers at the discretion of the regional manager.
This calls for a standard format that is simple and easy to read.
To obtain continued support for the KM project, the managers will need to establish quantifiable metrics for the organization (Bontis, 2001; Albers & Dimitrijevic, 2005). Initially, this is fairly easy because the deliverables are relatively concrete such as better utilization of samples, enhancing teleconferences communication, and improved knowledge sharing with the quarterly report. The long term determination of success should be based on enhanced sales. So it is critical to ensure that the manager develops a realistic baseline in regards to sales metrics. In order to maintain objectivity concerning the success of the KM initiative the manager needs to keep his eye on all factors outside the KM initiate that could potentially influence the level success both in a negative and positive way.
11. Closing Remarks
The goal of any sales organization
is to sell product. Without sales and profit, resources are not available to
fund the R&D projects that bring new products to market, which ultimately
enhances the lives of consumers. With a continued increase in competition, more
and more scrutiny of the pharmaceutical industry, and the rapid decrease in the
average length of tenure a sales representative has with one organization,
companies need to ensure that they maximize their impact on every sales call
and capture the knowledge of the sales force in order to leverage this
knowledge into a competitive advantage.
A systematic approach to deploying a
knowledge management program, as proposed in this paper, can add value and
enhance the capabilities of the entire sales force. By starting at the bottom
level in the organization to create the template for the KM activities through COPs and a knowledge directory companies will get a
realistic program deployed that will have instant by in and participation by
members of the sales force because ultimately the content generated is for
them and by them. Overall, the outcome
is a better sales force that has access to more information that will make them
better prepared and more effective. In addition, the company will have a
knowledge management system that allows it to continue to move forward, to make
better decisions, and to improve its competitive position.
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About the Authors:
Dan Fenton spent five years in the pharmaceutical industry as Territory
Business Manager for a large pharmaceutical company. He will receive his MBA
degree with an emphasis in technology and innovation management from
Dr. James A. Albers is a Faculty Fellow in Technology & Innovation
Management in the