Hourglass Selling® Blog

Yesterday’s Pittsburgh Post-Gazette and Wall Street Journal (June 29) published interesting articles about insurer Highmark’s deal to acquire the hospital operator West Penn Allegheny Health System.

From the WSJ article: “(Highmark) would pay salaries to doctors, offering them incentives to achieve quality and efficiency goals. The integrated model would also rely on primary-care doctors to coordinate patients’ care and focus on preventive efforts.” The articles continues: “With spending on health care spiraling, insurers and health-care providers are increasingly seeking ways to cut costs, creating a range of different relationships in an effort to become more efficient.”

Although the deal requires regulatory approval, this is a bold move that doesn’t carry any of the associated baggage of being called an HMO.

The landscape is changing in this healthcare environment with payors, hospitals, providers, and patients all jockeying for position.

Interestingly, healthcare suppliers continue to be conspicuously missing-in-action as new models set like wet concrete.

Time will tell if Highmark’s move will set trends in the industry, but it is certainly indicative of strategic thinking on their part. They see the writing on the wall: healthcare stakeholders that address our nation’s core challenges, decreasing costs while increasing value, will be winners in this new healthcare environment.

Healthcare suppliers, it’s time to take your rightful seat at the table.

This development puts an interesting twist on a blog piece I wrote back in April – Healthcare Suppliers – Do You Know Your Customer’s Boss?

Here’s the link to the Pittsburg Post-Gazette article. The WSJ article is subscriber content but if you do a net-search on “Insurer’s Cost-Cut Plan: Buy Hospitals,” it should appear in the search results.

Your thoughts, please.

Chuck

To be clear, this post isn’t to knock healthcare reform. Nor am I here to lobby on its behalf.

At the core of our healthcare challenges is the need for treatments and cures that increase quality and decrease costs.

I’m sure we can all agree that the healthcare system in this country is broken and the winds of change have been blowing for nearly two decades. The signal that reform was on the horizon came in 2008 when all of the presidential candidates, Republican and Democrat, introduced comprehensive reform plans.

Truth be told, new treatments, robust R&D, and cures will come from the healthcare supplier/vendor community, not Congress, the CDC, or HHS.

So as a vendor, how are you positioning yourself to deliver in terms of technology, innovation, and research in collaboration with hospitals and providers as this new healthcare environment is being ushered in?

Or is your strategy still based on figuring out how to sell more than you did last year?

Your thoughts?

Chuck

According to the Medical Group Management Association’s recent report, “Physician Placement Starting Salary Survey,” hospital-owned practices were the most successful in attracting physicians.

While suppliers have traditionally recognized that their primary customer has been the physician, most would admit that they don’t really know their customer’s new boss.

I’ve discussed this issue in passing with upper management and execs at various pharma and device firms. They say this has happened before – in the 1990’s hospitals were buying physician practices only to turn around and divest those practices.

With the competition always seeking an edge, I have to question whether this line reasoning justifies a “wait-and-see” approach.

When coupling this trend with the fact that many sales reps can’t get past a hospital’s front door, why isn’t pro-active C-suite engagement at the core of strategic planning for every supplier?

Your thoughts?

Chuck

Last week, I began a discussion about the role culture plays in driving performance.

One reason this connection is ignored is because culture without results isn’t newsworthy. This type of news wouldn’t get any attention. Why would culture be news at all unless it was inextricably tied to an extraordinary success story?

But isn’t this where the real story begins?

Want to be the next Apple? GE? Intuitive Surgical? Southwest Airlines? Don’t start with a shortcut to end results. You had better study the plot, cast of characters, and entire novel before you jump to the last paragraph at the end of the book.

There are no shortcuts to success and yet, senior executives try to import results by copying snippets from companies with extraordinary results in an attempt to make a string of paper dolls look like a sculpture. You want to be the next Starbucks? Look behind the curtain. More importantly, look behind your own.

Chuck

How often do companies attempt to emulate the outcome of an admirable organization without considering the cultural foundation that drives performance? Culture is a powerful albeit often ignored force as an element of strategic planning.  But when ambition and culture don’t match you could end up with an unproductive mutant atmosphere.

When companies look across the spectrum of performance comparisons they tend to examine end results – not the road taken to get there. General Electric is an example of a company that many others want to emulate. Intuitive Surgical is still a Wall Street darling boasting impressive results and a sales organization that delivers. Apple is on the news every day as Sony reminisces about when they were the apple of the eye of consumer electronics.

We read about these best in class companies with filtered vision. While some business publications include glimpses of corporate culture many focus on newsworthy results rather than the foundational culture upon which the results are built.

What do C.O.R.E.© Leadership Skills look like between the regional manager and district manager? I contend that this is the “core” of the issue which I have been discussing over the last few weeks. While there is absolute clarity that defines field activity between a sales rep and district manager this clarity does not exist for the RM-DM relationship. Ask any RM to describe what a field ride-along with a DM should look like. Their response is like embracing a cloud. Not a lot to hang on to.

Show me a district that has performance or personnel issues and I’ll show you a district with a 1st line manager who is struggling.

Show me a senior manager who avoids working in the field with 1st line managers and I’ll show you a senior manager who is leading by hearsay.

I invite every senior sales director with 1st line sales manager direct reports to get out in the field to coach, observe, redirect, and evaluate your managers. While I can’t guarantee every field ride-a-long will be easy, I can guarantee the outcome of your involvement will be extraordinary. Prepare to be surprised. Very surprised – guaranteed!

Chuck – Cogency Group

Coach-Observe-Redirect-Evaluate

Field activity that occurs between a district manager and a sales representative during a ride-along is a well established practice. From pre-visit planning to post-visit review each sales call is pre-reviewed, pre-planned, observed, and specific skill feedback is promptly delivered verbally and in writing.

We know why it is crucial for district managers to work with sales reps. Sales rep development is critical to any organization dependent on direct sales for success. So, if 1st line managers are the most important conduit to the salesforce then shouldn’t we dedicate time in the field helping them become better at what they do? Wouldn’t that be better than just asking questions as they tell us what happened in the ring last week, last month, or last quarter in a so-called 1 on 1?

The best among senior sales leaders “inspect what they expect”. Just as 1st line managers are expected to do ride-alongs, senior sales directors must conduct ride-alongs with 1st line sales managers for the same reasons.

It is common for senior sales managers to schedule regular “1 on 1” meetings with 1st line managers to “drill down” into metrics. In this case, senior sales managers must be ready to accept whatever they are told unless they have had the leadership courage to conduct field ride-alongs with 1st line managers. I submit that district managers are often lost to seemingly poor metrics while others flourish buoyed by numbers that are not reflective of their inability to lead.

To be continued..,

Chuck – Cogency Group

Last week I discussed the issue of why many senior managers opt for occasional meetings with their first line managers over regular field visits. I coined this practice as leadership by hearsay.

Now, I’d like to discuss the importance of leading by observation.

If leading from the front is axiomatic, then why does this argument fall upon deaf ears when it comes to the most important link in the sales chain; the 1st line manager? 1st line managers are critical to corporate success for many reasons. Among those reasons is that 1st line managers are very close to and respected by sales representatives as well as customers. They are the inextricable link between senior management and sales reps. They are the final source of interpretation for communications that flow from the executive team.

Whether senior executives care to admit it or not, 1st line managers often temper the tone of executive communication to the salesforce as they see fit. And when senior execs decide to communicate directly with the salesforce, reps invariably turn to – you guessed it – their 1st line manager for interpretation. A simple nod of the head, eye roll, or head shake, provides indication of the validity of the message from upon high.

Indeed, there is an abundance of research that argues that 1st line sales managers are critical to the success of any field sales organization. These managers are trained as much as practical in workshops and meetings before they are turned loose to bring home the bacon, eggs, toast, and the plate upon which it is served.

1st line managers are expected to use their training to leverage ride-alongs as the most effective platform for sales rep development. Through direct observation, coaching, and redirection, 1st line managers help reps hone skills to increase sales. While some senior managers shrug off 1st line management stress as a fact of life, I would offer that the challenge is more complex. They are almost universally denied hands-on senior leadership attention.

More to come..,

Chuck – Cogency Group

Hearsay is defined as information received from other people that one cannot adequately substantiate; a rumor. Senior managers seldom, if ever, work with 1st line managers in the field for the sole purpose of professional development. Rather, many regional managers prefer to hold occasional meetings to “see” how 1st line managers are doing.

The Missing Link…

Quarterly 1 on 1 meetings that senior sales management schedule with 1st line managers are analogous to a boxing coach training a prize fighter how to punch a bag and then promptly disappearing when that fighter steps into the ring. After the fight, imagine that fighter sitting down with his coach explaining, as best he could recall, how the fight went. He would describe how he counter-punched or delivered an uppercut that the coach had told him about in training. The coach, trying to keep his status as an up and comer, would then evaluate his fighter solely on whether he had won or lost the fight. As ridiculous as this sounds this is how many 1st line managers are led. I call it leadership by hearsay.

Ambition is the mother of transition. From sales representative to district sales manager to regional sales manager, to area director, to VP, senior VP, and so on. Of these transitions I would argue that none is more traumatic than the transition from sales rep (individual contributor) to sales manager.

In this transition, the sales rep often feels as if shot from a cannon. This opportunity catapults an ambitious sales rep from a job where ride-alongs are conducted with military precision to the 1st line management position where his or her success is left to the interpretation of someone who, in all likelihood, has never spent a single minute coaching a manager in the field.

Sticking with our analogy, senior sales managers cannot lead 1st line managers by avoiding the ring. Customers are more often flattered by the attention and impressed with the apparent commitment to professional development when a senior sales manager accompanies a district manager on a sales call. Through past and recent experience I can confirm that the reluctance for a three person sales call seldom emanates from the customer. Rather, it is grounded in fear that a customer might not be receptive. More profound is that many senior sales managers don’t know how to conduct field ride alongs with district managers.

More to come..,

Chuck – Cogency Group

Premise:
Professional gatekeepers are doing a good job in limiting access to end users and decision makers. With so many sales reps focused on changing the way their customers do business it is no wonder that these gate keepers have to act boldly to prevent total chaos. But if you and your solution provide value then you will quickly learn that access rules are designed to limit marginal representatives who do not bring value to the equation.

Story:
I recently witnessed a sales representative call on a major medical facility and get turned away. The rep was selling a solution that she felt was entirely appropriate. When I asked her what happened she told me that her call the previous day also came up empty. It became clear that afternoon during another call what the problem was.

In terms of understanding the product’s features, this rep was one of the best. She understood the product top-to-bottom. She had a strong grasp of all pricing and delivery options. What stuck out like a sore thumb was her spiel was exactly the same for everyone. She get’s an A for feature dumping and a D for probing the needs of the prospect.

Where were her questions about patient volume? Why didn’t she ask about the difference between her product and her competitor’s product and its affect on the institution’s users? What was she doing to identify the prospect’s pain points? What was her plan to exploit that pain to her advantage to eventually close the deal?

I don’t want to give you the wrong idea – reps must cover features. But features must be mixed with questions about customer needs. The rep should also do a little homework before the call to better understand the prospect. Scanning health journals, the prospect’s web site, the business section of the local newspaper, or a comprehensive Google search, could turn up all sorts of intelligence about your prospect – intelligence that makes you look prepared, confident, and on your way to new business.

As a sales rep, you have to do more than write reports that prove to your superiors you met with x-potential user. To get past that gatekeeper onto first base, you have to be more than just an expert on your product; you have to be an expert about your prospect!