As a change management consultancy that works in the pharma sector, we recognise the challenges the industry faces when it comes to the purchasing and prescribing of medicines.
It is a different landscape to what was experienced 20 years ago. It used to be that individual prescribers made choices for individual patients based on clinical data and strong sales and marketing efforts. Marginal differentiators were often enough and there was budgetary and clinical space for many medicines from the same class. Cost was rarely considered by those making the prescribing decisions.
Now, and in our work as a change management consultancy we witness first-hand the pain that the healthcare and pharmaceutical sectors face. Today, budgets are beyond tight and cost is right up there with clinical benefits and safety. As a result, payers hold (most of) the power – they recognise they are running a business, not just providing a service. Purchasing is therefore increasingly professional and centralised. With clinical differentiation being seen as insignificant and a class quickly becoming commoditised with price erosion accelerating. Choices are made whole-scale for big populations of patients and switches are driven centrally.
Critically, decisions on medicines are no longer the remit of one or two clinicians. Instead they are influenced and implemented by a mix of people with differing priorities, pressures and needs. Decisions on medicine purchasing are now the result of lengthy, complex, networked processes that make the traditional way of selling frustrating, inefficient and ultimately ineffective.
Feeling the pain of these external shifts, many pharmaceutical companies watched with interest on how other sectors were implementing Key Account Management and started to experiment with the same principles. As a change management consultancy we’ve witnessed the initiation of these programmes that seek to re-configure sales structures, create new ‘super KAM’ roles, prioritise accounts differently, make connections at all levels in the health economy and build new capabilities for customer-facing teams.
The aspiration was, and is, Key Account Excellence - an ‘ideal’ where a mix of expertise from across the core account team and beyond is applied to enable stronger, long-term and more meaningful relationships with a wider range of customers. This sees a medicine provider shift up the value chain to ‘business partner’ status (see Fig.1), where the focus is on value not price. The belief being that by creating a different level of relationship with customers, companies are able to stay competitive and sustainable while also creating greater benefits for the health systems they operate in.
The hard reality, though, is that the pharmaceutical industry is not there yet. The Key Account Excellence ‘ideal’ has now been pursued for many years but the jury is out on how close organisations have got to attaining true ‘business partner’ status.
As a change management consultancy, we have spent two decades working alongside and within pharmaceuticals companies (and those from other industries), to support the evolution to a new way of working with customers. Through repeated practice we’ve learned a lot about what helps and hinders organisations in their mission for Key Account Excellence and to be sustainably fit for the external environment.
In our work as a change management consultancy, and for those companies who’ve been most successful with making in-roads to become a business partner, the most important aspect they’ve realised is to view the change as one that encompasses and considers all areas of the organisation. These companies appreciate that becoming ‘excellent’ in creating value for both themselves and the customer requires a partnership and focus on long term, mutually beneficial goals. To attain this, a holistic review of the way the organisation works and thinks is required.
If this view isn’t recognised, and a commitment to becoming a Key Account Organisation doesn’t exist, the ideal of Key Account Excellence, or even effective Key Account Management, is unattainable – something we’ve witnessed first-hand as a change management consultancy.
Building a Key Account Organisation (KAO) sees the whole organisation mobilise and combine forces around key accounts so ongoing, well-informed and value-adding conversations are had with customers. It is a significant transformation that can take months or even years, and it starts with an understanding that everything in an organisation is interconnected – one area will impact another.
Changing the way we’ve operated for years is important but hard. It’s challenging because we are often trying to create a ‘new way’ of working while maintaining in-year delivery using the ‘old way’ – this just isn’t possible. It’s not so much building the plane while flying it, it’s re-defining air travel while doing air traffic control on 1000s of flights a day.
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The KAO model (Fig 2), based on the Galbraith’s STAR model, gives a helpful frame to think about the inter-related areas where the organisation may need to be different for sustainable success.
Many organisations have recognised the need to approach the relationship with customers differently to remain competitive, create a new platform for future performance and deliver for patients. In our work as a change management consultancy , we have recognised that the organisations who take time to answer these five ‘power questions’ before starting a change programme significantly increase the likelihood that their ambition of a new way of operating will be realised and sustained:
Change can be painful. It takes more work than doing what we know and causes discomfort as we form new habits and have to learn different skills. We are not likely to provoke it (or join in) if we think it’s an optional extra rather than an imperative. So, if people at all levels in your organisation aren’t agitating for things to be different and talking compellingly about why, there is work to be done. Getting as many of your team answering yes to this question up front will rapidly accelerate the creation of a Key Account Organisation.
This is a tough one to tackle because of our natural predisposition to favour the security of the status quo. It’s easy to talk ourselves out of urgency (and effort) when external environmental change is incremental and inconsistent – we can always find ‘proof’ that our old ways are still effective, even when we can see the future trajectory clearly. It’s often only when strategically important accounts start substituting wholesale to competitor brands, generics or biosimilars and locking legacy brands out for up to 3 years that the pain feels urgent enough to cause action.
In our work as a change management consultancy we’ve recognised that a good place to start is:
Becoming a Key Account Organisation is a transformation of almost every aspect of how we work and what we do. To be effective, it needs to be seen as more than a commercial ‘project’, albeit an important and high profile one. A good indicator of future success is that there is a commitment to reviewing each and every area of the organisation and challenging whether it is fit for purpose to deliver for the customer.
The scope and style of the plan that is developed needs to reflect this. If the plan is limited to specific areas of the business (e.g. just customer facing teams) or intends to make existing approaches better rather than do things differently (e.g. selling excellence), the change programme is likely to become stuck once it’s in implementation. This is because regardless of how effectively customer-facing teams are re-configured or have their capability enhanced, if the back office, the finance team, the insights group and the HR processes are not aligned behind the same single-minded intent, the new way of working will flounder.
The KAO model (Fig 2) is a useful sense check on whether all the aspects of how the organisation works, and the potential de-railers for implementation, are being considered as part of the plan.
Every organisation has a finite amount of effort and headspace to deploy – a truth that’s often ignored when planning a change of this scale. In our work as a change management consultancy we often witness organisations trying to ‘add in’ new ways of working, resulting in a feeling of being overloaded and overwhelmed. In turn this encourages people to stick with what they know (their day jobs) and de-prioritise the parts that are new or different.
Avoiding this requires courageous and conscious choices about what the organisation will no longer do in order to create space for the new things that need to happen. It’s courageous because it will often involve stopping things that have made the business successful in the past, but are not in line with where you want and need to be in the future. And it’s conscious because the natural temptation will be to go for ‘AND’ rather than ‘OR’ – to twin-track old and new.
Fig. 3 illustrates how easy and common it is for organisations to hold on to elements of different selling approaches simultaneously - ‘hedging their bets’ in the belief that what worked in the past will continue to drive sustainable results. This could be fine if it’s a strategic decision, made with full awareness and a good understanding of the risks of spreading the organisations attention and capability too thinly. But it is dangerous when it’s a default position because it feels too uncomfortable to let go of familiar thinking and ‘standard’ success criteria.
Any organisation with activities, effort and resourcing across all three of the columns outlined in Fig.3 has the challenge of making a considered decision of whether to: (i) play to win by doing ‘smarter’ versions of traditional or key account excellence, or (ii) firmly place bets that resourcing and leadership effort should be focussed on the transformation and innovation demanded to operate as a business partner in the most important accounts.
To make this conscious choice happen, plan in plenty of provocative, challenging and multi-functional debate at the start of the programme e.g. running workshops that specifically look at this question. Develop your own version of the table in Fig.3 and see what it reveals and the questions it raises. When choices are then made, work hard to ensure everyone in the business knows the specifics of what they have permission to stop doing and why. And when building the transformation plan, use someone who is skilled in agile planning (like an agile coach) to help you prioritise ruthlessly, whilst thinking about what’s in the ‘day job’ as well as what you are expecting to add in.
The organisation’s mindset, or collective attitude is formed by people’s underlying beliefs and drives consistent behaviours i.e. the ‘normal’ way of working. It’s rarely addressed as part of the change planning process and yet is often the biggest sole contributor to change failing to get traction and the business bouncing back to ‘what worked before’. When thinking about how we mobilise people around a new way of operating, we need to go beyond competency models, capability programmes and HR processes and uncover the underlying beliefs that are commonly held – those that will subconsciously cause this ‘bounce back’ if left unaddressed.
Some common examples of stuck mindsets in this context are:
Understanding existing mindsets can be done in a number of ways. In our work as a change management consultancy we often use a methodology called appreciative inquiry, supplemented by analysis of qualitative data such as verbatims from engagement surveys, video interviews and observation of team conversations. We also have a culture diagnostic that can be useful in getting insight from a broader population within the organisation. We then apply our organisational development, culture and agile planning expertise to help the change team identify the beliefs that most need to be enhanced and those to address, before building a pragmatic engagement plan to support this.
Ultimately, by just paying attention to mindset, noticing and acknowledging the beliefs that are present in the business and factoring this into the plan, it can be enough to increase the chances of the change sticking.
Fundamentally, change relies on people behaving differently over a consistent period of time. Processes, structures, incentives and compelling stories can support this but the most effective enabler is the visible example of those who hold influence in the organisation. This is often leaders, because of their inherent power in the hierarchy, but can be others in the business who are respected and copied. In our work as a change management consultancy, we call these people ‘beacons’ because of their ability to act as a guiding light for others to follow and their role in starting a chain reaction of new ‘norms’. Within the Key Account Organisation, ‘beacons’ are often employee or manager level, and are instrumental in pushing for the resource and permission to deliver change at a local level by trying out new approaches to address either pathway inefficiencies or deliver health outcomes.
Usually the place to start is by ensuring full and deep alignment of the leadership team on the change story along with specific contracting with senior leaders and other ‘beacons’ that they will actively sponsor the change and will personally act differently, including taking on different leadership roles to those that might be considered usually.
An example may arise when looking to put the highest strategic capability into the highest priority customer account. That capability may well sit with the general manager or another senior commercial leader – who has the experience and decision-making scope to have the necessary consulting conversation – and may not yet exist in any other part of the organisation. When that leader takes on the account personally and puts in place a mentoring scheme where KAMs can shadow and learn with them it is a powerful signal of what is expected and the importance attributed to a new way of operating.
Our work as a change management consultancy has tested ways to change the dynamics of customer relationships for many years. The successes and failures that have emerged from this, has given valuable insight about what works and what doesn’t. We know with a reasonable degree of clarity what needs to happen and why. The point of differentiation for companies that successfully redefine what it means to be a valued partner will be: (i) those who act on insight fully and, (ii) accept that it is as uncomfortable and challenging to let go of old success strategies as it is to embrace new ones. How this is done, may eventually determine the businesses that sustain performance and those who need to resign themselves to being stuck in a commoditised, price based interaction.