Originally posted in Harvard Business Review Blog
by Deirdre Connelly | 10:00 AM April 16, 2014
Why would you eliminate sales targets as a way to evaluate, motivate, and reward your sales staff?
That is perhaps the most frequent question I’ve received since 2011 when GlaxoSmithKline changed the link between the bonus pay of our pharmaceutical sales professionals in the United States and the numbers of prescription sold for a particular medicine. It is after all a well-established incentive plan used across a spectrum of industries.
But at GSK and across the pharmaceutical industry, we have a very special responsibility to patients and caregivers. They depend on us to do more, feel better, and live longer. It is that responsibility and the crucial importance of trust in our relationships that means we are judged to a higher standard than many other industries.
I have seen the good that our industry does in transforming the lives of patients living with diseases such as cancer, HIV, asthma and diabetes. But I have also heard doctor complaints that our incentive systems are not focused on the interest of the patient.
We are, of course, concerned that some see perceived conflicts of interests in the way we run our business, particularly related to incentive plans for our sales professionals and the financial links we have with health care practitioners.
So, we realized that “how” we do our job is just as important as what we do. Ultimately every leader knows that you get the behavior you reward. At GSK, we’ve decided that bonus incentives for our sales professionals should be tied to the value we bring in ensuring that patients are appropriately treated with our medicines.
This patient focus is a core value for us, along with transparency, respect, and integrity. So instead of specific prescriptions sold, we began to reward our representatives for their patient focus, understanding of their customer, problem solving, and level of scientific knowledge as measured by tests and other assessments. That approach may not seem like radical thinking, but when we changed our focus away from numbers of prescriptions sold to patients well served, it set us on a different path that, thus far, we walk alone.
Critics may say it took a settlement (http://www.gsk.com/media/press-releases/2012/glaxosmithkline-concludes-previously- announced-agreement-in-principle-to-resolve-multiple-investigations-with-us-government-and-numerous-states.html) with the U.S. Department of Justice over past sales and marketing practices to reach that conclusion. But we dropped sales targets well before the settlement, recognizing that traditional sales incentives were out of line with society’s expectations for our industry, and we had to change. Ultimately, past practices affected customer trust and satisfaction and, as a result, damaged the reputation of our industry.
As a global business with shareholders and major investments in research, sales are important to us. I watch the sales numbers and I’m concerned if they dip. But our value metrics are important to our long-term growth, and we hope they will help restore trust in our company and our industry.
Our employees quickly recognized that this change aligned with our values. But implementing a new approach without a pattern or road map to follow admittedly was painful at times. We had to identify new metrics to evaluate aspects of employee performance such as problem solving, business acumen, and demonstration of our values. It is one reason we are encouraged by the positive response of health care professionals. I accompany representatives to visit doctors and have heard their reactions firsthand. Some doctors have even reopened their doors to GSK representatives. We believe this new way of working has become a core strength for us.
That’s why we are now working to extend that practice to thousands of sales representatives in 140 countries around the world and are taking the additional step of halting payments to physicians for speaking to their peers on behalf of our medicines. That’s no small commitment, but my experience in the United States over the past two years has strengthened my belief that this is the right path for our company as well as the patients we serve, wherever they live in the world.
Renewing focus on our values by reshaping employee incentives is helping us do more to help doctors help their patients. We are not the only industry that needs to better meet society’s expectations. Every one of us in the corporate world must look at our business through the eyes of our customers and nimbly respond to their changing expectations.