Pharmaceutical Executive Europe - June 2008 - (Page 22)

22 Sales Force Incentives June 2008 Pharmaceutical Executive Europe The Goal: Setting Goals In the third and final article on precision compensation schemes, Frank Wartenberg looks at best practice in goal setting for the sales force. “When a man does not know what harbour he is making for, no wind is the right wind,” — Seneca that take account of the various growth opportunities and risks perceived for different territories: the goals of sales reps in more challenging territories may be set lower than the goals of sales reps in a region known to be rich in opportunity. Similarly, a newly hired team member may be given a lower target than a more experienced member of the same team. The benefits to be derived from setting goals can, however, be put at risk if the objectives set are not defined and communicated in a SMART way: that is, specific; measurable; achievable (given the current and foreseen business, economic, legal and regulatory environment); realistic (given the skills and experience of the particular employee); and time-bound. The pharma industry devotes a considerable amount of time and money to the goal setting process. Despite this there appears to be an ongoing concern about whether goal setting is being done in the right way. Many company processes have been around a long while, gradually evolving and being subjected to multiple quick or short-term ‘fixes’ or changes. Consequently, some may now be out of shape and fail to do the job they were designed for. In particular, they may be perceived as unfair by the reps, they may fail to distinguish the high achievers from the low performers, they may reward the wrong behaviours, or, more fundamentally, they may lead to the achievement of goals that are no longer appropriate or achievable because of changes in the local or national market. Masakazu Watanabe / Aflo/Getty Images Why is goal setting important? Seneca, Rome’s leading intellectual 2000 years ago, clearly understood the value of having a goal. Modern research has found little to challenge the core idea that working towards a goal is motivational in personal, sporting as well as in business contexts. A goal — particularly one that is accepted and believed in — appears to be a simple but effective tool capable of driving personal and organisational performance to the next level. As well as enhancing organisational performance, goal setting enables companies to align their people objectives with their business strategy and then to reward individuals and/or teams for their specific, measurable and quantifiable contribution to these objectives. Indeed some 95% of pharma companies have variable pay schemes that reinforce the beneficial impact of the goal setting process. Goal setting also serves to focus people’s minds, behaviours and activities across the organisation. This focusing of collective effort can itself achieve a great deal — particularly when it also leads to shared or common objectives for groups or individuals. Furthermore, through the goal setting process, people get to know which territories, products and behaviours are deemed to be the most important to the business. In this way the most ‘important’ things should receive the most attention, and less time should be wasted on activities generating outcomes perceived to be of lesser value. In short, through goal setting, people and teams get to know exactly what is expected of them when they need to — before the beginning of the financial year. The process of goal setting also encourages companies to adopt planning processes whereby strategy is translated into a set of desired outcomes, which are specified in measurable and comparable ways. Through the process sale reps can be allocated different goals The goal setting framework IMS’s approach to goal setting is featured in Figure 1. Step One typically involves a series of stakeholder workshops and discussions. From these events, and arising out of the company’s marketing and sales strategy, the key brands that are to be driven forward will be identified and highlighted within the goal setting framework. Weightings, determined by the relative strategic importance of each brand, will also be proposed. These will then be

Table of Contents for the Digital Edition of Pharmaceutical Executive Europe - June 2008

Pharmaceutical Executive Europe - June 2008
Contents
From the Editor
News and Analysis
Calendar
Brussels Report - Tell Us Something We Didn’t Know
BioFutures - Friends, Acquaintances and Strangers
IT Matters - The High Cost of Swimming Upstream
Strategy Fundamentals - Hidden in Books
Corporate Strategy - New Dimensions for New Business Models
Special Report: Making the Leap
Sales Force Incentives - The Goal: Setting Goals
Last Word

Pharmaceutical Executive Europe - June 2008