Improving revenue: Finding the right talent (part 2)
Posted: 18 November 2013 | | 1 comment
The response to a lack of skilled managers is often to take a ‘sticking plaster’ approach to the problem by deciding to take on one or two pricing managers and have them report into the commercial or finance team. Experience to date shows that this will have limited success, for a number of reasons…
A bolder stance
The response to a lack of skilled managers is often to take a ‘sticking plaster’ approach to the problem by deciding to take on one or two pricing managers and have them report into the commercial or finance team. Experience to date shows that this will have limited success, for a number of reasons. Alex Rumble comments: “Without ownership at a senior level and a mandate to drive cross-functional change, the pricing organisation will not have the authority to create and implement sustainable operational enhancement throughout a business which remains essentially siloed in its approach to pricing and profit optimisation.”
Organisations that have successfully put in place revenue lifecycle management initiatives delivering sustainable revenue and profit performance improvements have recognised the highly transformational nature of breaking down functional and other organisational silos. As a result, they have made the CFO and CEO directly responsible for sponsoring the required steps, so very visibly prioritising pricing within the business as a strategic, cross-functional and urgent initiative.
The role of training: In a fast-evolving revenue lifecycle management environment, training has a key role to play in developing the skills required, at several levels. At the point at which the seller meets the buyer, the emergence of tender management, for example, has resulted in major industry wide change. “The days when the representative of a pharmaceutical company would act primarily in an advisory capacity with physicians, supported by a distributor network handling order placement are disappearing fast. These have been replaced by a much more structured and remote tendering process in which the power seems to sit firmly in the hands of the procuring organization,” says Alex.
Providers have quickly recognised the major long-term impact that losing tenders can have on regional market share. Some have responded to this by outsourcing their tendering process, but the majority are looking to sales training organisations to help them develop the selling/negotiation skills and support processes to maximise their chances of success at each point of the multistage process. Once again, however, issues around maximising price and profit performance sit within a much broader context of taking full corporate control of revenue management. As a result, many companies are working with specialist consultancies to develop appropriate revenue strategies that look to define the most effective balance between centralised and local control of the sales process.
“Here,” adds Alex, “improvement is best achieved when viewed as a seamless end-to-end process rather than a series of individual elements of a pricing and sales strategy. An initial diagnostic approach of existing price and profit performance will establish where the main problems and challenges lie. This provides the essential visibility and clarity to create a recommended framework for improvement, involving skills, processes and technologies. Critically, it also forms the basis of a pragmatic step-by-step roadmap towards building sustainable competitive advantage based effective price and profit management, together with identifying — and delivering — what constitutes meaningful value in the eyes of the customer.”
Everyone throughout the business is responsible for optimising revenues. As the best-performing companies have shown, by adopting this shared vision and with the right training, an appropriately skilled pricing team can be transformed from a departmental admin function to one that provides strategic commercial support at the heart of the business. It may well be that Life sciences companies will need to look outside the industry to boost the existing talent pool. Yet with the right vision and leadership, this is a practical and achievable goal.
Two years ago I explored the possibilities of going oversees with my pharmaceutical company. I was mainly interested in the possibilities of the European market. Since my company is located in the US it was difficult to understand the European market and it was hard to identify the potential pitfalls. The regulation is hard to understand, therefore I needed advise how to set foot on the European market. A friend of mine pointed me on Seuss Consulting, so I contacted them. They quickly came up with a customized proposition for my company to penetrate the European market. They found the right talent for me to do succesfull business. Since the coöperation with Seuss Consulting was very succesfull, I would like to recommend Seuss Consulting to other companies which are struggling to set foot on the European market: http://www.consultseuss.com