The proposed White Paper reforms offer pharma companies the perfect opportunity to evolve and introduce new commercial strategies. Calling upon his own experiences, Adam Knights explains how the role of Key Account Managers can help pharma change the record.
I had a smile like the Joker from Batman when I first read the White Paper. It is not every day that Government agenda falls in line with your business strategy but on July 12th that’s exactly what happened to us at 15 Healthcare. Since we started the company in 2009, my fellow directors and I have championed one fundamental maxim to enable success: the only way to manage NHS customers is by deploying key account management strategies that ensure company personnel are in front of the right person at the right time in order to broker business to business deals.
The White Paper is not so easy for the pharmaceutical industry though. How much time, effort and money has the industry spent dealing with medicine management mandarins; whose agenda has been about limiting effective branded medicine on the basis of cost? This customer cohort will likely dissipate from PCTs to compete for roles within emerging GP consortia. The question is, as customers move around amidst organisational upheaval, where should the industry focus its efforts? Who will the market access team deal with in the future? Where exactly will decisions be made? Whilst the White Paper heralds radical reform and change for the NHS, will the industry be prepared to embark upon such disruption in order to align more effectively with its customers?
A new era
The NHS has undergone many changes over the years. However the White Papers signals perhaps the most radical in the last 25-years. Whilst we await further details we know that GP consortia will form and will most likely become home to a number of functions hitherto provided by PCTs. Pharma will need to react and adapt to interact with these emerging customer groups. Imagine a consortium of 150,000 patients with the power to commission services, procure medicines and manage prescribing without any interference from a PCT? The idea of calling on individual GPs with a ‘sales aid’ and the ‘latest campaign’ will become redundant.
The industry talks a lot about Key Account Management yet most companies only tinker at the edges. Sending someone on a two-day KAM course and giving them a new title will not give them the commercial/clinical nous they will need in the new world. New skills, competencies and frameworks will have to be drawn up to deal with a variety of customers ranging from commissioning leads to finance directors. That doesn’t mean just retraining the sales force, it means every aspect of the business needs to understand the new world.
Medical departments will have to find ways to support these functions and resist becoming totally risk averse. Key Account Management is about telling your teams what they can instead of what they cannot do.
Internal training and development teams will need to raise their game too. No more cuddly marshmallow attendance courses with everyone ‘loving’ the trainer at the end. My guess is the new level of training will come externally initially until the bar is raised internally. I have seen lots of courses running that don’t resemble anything like the environment the sales force are facing. Keep it real and accept it will be painful for some.
For me the next phase of Key Account Management is alignment – both external and internal. Let’s assume that your sales force has become an effective group of account managers. Now ask yourself the question: are we aligned? Does every department understand the overall strategy? Does the strategy allow a bottom up process and, most importantly, is the strategy aligned with that of the NHS (See Figure 1).
Culture and processes is the single biggest challenge, companies that manage this well excel. Those who don’t struggle to succeed with any organisational change.
Businesses can assess their commercial effectiveness through alignment. Not being aligned costs money. Some simple and effective measures will increase productivity. I have heard mutterings from some individuals that the White Paper will allow them to go back to the old way of working and coverage and frequency models will come back into vogue. Please do not be so naive to think that this will accelerate your organisation to success. Teams comprising of capable account managers will gain ground with customers as GP commissioners seek to secure value-based clinical and commercial deals.
The case for Key Account Managers
The KAM approach works provided the individuals in role are fit for purpose. How should companies assess capability, skills and competencies? Some of the competencies 15 Healthcare look for include:
Commercial acumen: can this person deliver on a commercial deal and, more importantly, can they recognise one when it is staring them in the face.
Strategic planning: is the account plan strategic? Does it align with the local NHS? Does the account manager fully understand the business planning process?
Compelling argumentation: when challenged by a customer can the account manager deal with the issue there and then without having to refer simple questions to a medical department?
Autonomy: people used to autonomy thrive in a KAM environment. With autonomy comes responsibility however, it also means making some mistakes – you cannot build a first class account team without making errors, its normal!
Sales focused: all these competencies are fine but useless unless you can deliver on sales. Professional account managers like to be held responsible for sales.
Are account teams working the same locality successful? In my experience, no. This is because the key to KAM is to deploy an individual who becomes the centre of every activity in a specific geography. This person ideally should be accountable for the profitability of the business and report at a board level. Other support functions like medical liaison and marketing should satellite this individual and be deployed as an appropriate resource when needed.
Many companies fail to resist the temptation to establish a team of account managers on the same territory and then add insult to injury by introducing a RBM to manage them. Where is the accountability in this model? By default it is the RBM. By adding a regional boss to the mix you immediately create a further management tier that clouds effective ‘line of sight’ on the business. I was an RBM at one point in my career and, in all honesty, I got in the way. I was so concerned with delivering inputs for the senior management team that the real business did not receive the time or exposure it needed and, as a consequence, did not grow. The RBM is one of the toughest roles in the industry. Managing the business, appeasing senior management and keeping a team happy whilst getting a knife in your back every 10-minutes is no fun. It is a role that many aspire to and often regret within six months of being appointed.
The question that has to be asked by all companies is clear: amidst so many changes affecting our customer organisations, and where a move towards advanced account management seems a logical progression, are RBMs really needed? If the RBM is that capable – and many are – at business skills, coaching, mentoring, leadership and selling, why not make the RBM the Key Account Manager? After all, there is no written rule that states all sales models have to conform to traditional norms.
Adam Knights is Managing Director of 15 Healthcare – a leading healthcare broker between the NHS and pharma through holistic and strategic key account management. Adam joined the pharmaceutical industry in 1998 after a successful career in the armed forces. He applied military strategy and tactics early on to develop an account model that challenged traditional thinking and planning. He went on to pilot successfully the regional account director (RAD) in Takeda before becoming the first RAD in the UK and then sales director for the RAD team.