In Conversation with Rajiv Gulati, Board member, Startup mentor, previously President – Global Business, Ranbaxy and CEO at Eli Lilly & Co. in a candid chat with Co-Founder Anant. Sharing his deeply held value of people first, why some managers succeed and how technology can help sales managers empower their sales teams rather than just supervise them. [This is a two-part series. You can read part 2 here.]
Anant: Could you give us an overview on the changes pharma sales teams have been seeing over the past few years?
Rajiv: The biggest change I’ve seen is that employee turnover has increased significantly. When I started my career, sales rep attrition was 3% per annum. Now it is 26%. Thirty years ago, we never saw these things. Outside India the attrition is not that high.
Many companies have taken employee turnover as a fact of life and they have put initiatives in place to manage it.
Second, there’s been a reduction in span of control. Earlier a supervisor would manage seven or eight people. Today it’s down to five on an average, and sometimes even one or two.
And third, the use of electronic media also is increasing. Some companies have done a great job of it, others are also catching up with it big time.
A: You’ve been known to say, “If you look after your people, results will look after themselves.” How do you think managing sales teams is changing and how must it change to suit the current realities?
R: When 90% of employees are in sales, the company lives on the field, not the head office. (see snippet of interview below)
Invert the pyramid
So I inverted the pyramid. I said the sales rep is the boss and we are all serving him because he brings my salary. So I created a document called health of the organization where sales reps would evaluate the service of distribution (whether they’re getting samples and products on time) the service of HR (whether the policies, leaves, etc are working on time), brand management (how do they view the promotional material which they are getting). The performance of the director of marketing, head of distribution and the CFO would be judged by how sales reps evaluated them.
You can treat them [sales reps] as foot soldiers and direct them or you can say he’s my boss and motivate them, retain them and serve them – that’s the difference in approach.
I’m proud to say that Lily was a small company but probably the most respected pharmaceutical company in India in those days because a core value was respect.
When I was Director of Sales and Marketing we created two trophies – one for sales performance and one for people performance. Positive marking was given for retaining reps, double positive marks if the sales rep gets promoted. And a negative mark for each sales rep you lose. A computer scientist built the algorithm and we just input the data. At the end of the year, absolutely no surprise, the same person won both the trophies.
Here is empirical evidence that you look after people, results look after themselves.
Focus on Development
Once you put the focus of the supervisors sharply on recruitment, retention, motivation and getting them promoted – that is all the development.
I have my own saying, “You can fool your boss, you can never fool your subordinate.”
(see snippet of interview below)
Subordinates know if you have his best interest at heart or if you’re taking credit for his performance.
In fact, I almost published a paper with Professor Charles from the Kelly School of Business, called Unequally Yoked – about how the management styles needs to completely change. New graduates are tech savvy and they’ll only respect you if you deserve it. They have other options and my survival is in retaining and developing them.
A huge change is required in how we supervise.
A: Given there’s a lot of technology coming in, in pharma specifically, that helps people to self manage. In this context, do you think that the manager’s role will become obsolete or taken over by technology?
R: Never. It cannot happen. You know we just talked about development. So how do you train on the job, how do you develop on the job?
It’s like saying I just bought Rafales, so I’ll have only pilots. No, you will have the boss who will take the pilot through the simulator, who will improve the computer skills or technical skills and develop and enable it. Two countries can have the same Rafale and one country could fight better than the other because the general is better or the Air Marshall is better. He is able to motivate his people better.
A: So the manager you’re saying is now more about getting people to become better? Rather than being an aggregator and being a reviewer in some sense.
A: Do you see technology play a significant role to enhance frontline team ability rather than replacing them?
R: Yes, absolutely I do.
I was an independent Director on the board of Eris [Lifesciences] when they brought their 9000 crore IPO three years ago. Eris has mapped all the territories of their sales teams electronically. Each doctor is in the database – the telephone number, name, address, location and how to have an effective territory is all in the database.
So when the attrition is high, the territory is predetermined, predesigned ready for the sales rep. A new sales rep knows who his customers are, when and where he can meet them and in what order he is to meet with them.
The second thing is earlier everybody reported their daily calls on paper. Now that has moved totally across the industry to smartphones.
And if we go one step further – a Derma company called Brinton have given their sales reps tablets. Which means, first, daily calls are managed through GPS. Second, you’re able to change the promotional material, you’re able to put videos there, you’re able to put scientific references there. More importantly brand management sitting in their head office is able to get insights on what doctors are listening to and what doctors are not listening to. So they can design promotional programs better and support the sales reps much better.
Some companies have created electronic portals where the latest medical journals are uploaded. It’s all paid for and doctors are given free subscriptions.
The use of electronic media from company image, scientific dissemination, promotion and monitoring across the board is immense. And it’s catching on big time.
You see the single biggest expense in your marketing is your sales rep – salary, incentives, travel, right? So how do you make money? Higher the productivity, higher the profitability. So your entire focus has to be on that.
This is the end of part one. You can read part 2 here – where Rajiv talks about the essential skills sales rep need and how to empower your sales teams.