Cabot Pharmaceuticals Company - Case Study Example

Cabot Pharmaceuticals Inc. Cabot Pharmaceuticals Inc. Cabot Pharmaceuticals Inc. (CPI) sells prescription drugs to drug stores, drug wholesalers, or to physicians and hospitals. Drug stores and drug wholesalers often resale these drugs to the public by prescription. Their prescription drugs are mainly for the medical and dental professions. Cabot Pharmaceuticals established two primary sales forces to enable it serve the target groups more efficiently (Cespedes & John, 2009). The first sales force is team-based and focused on managing care organization. Secondly, the direct sales force consists of 500 individual detailers, targeting doctors, dentists and hospital personnel. Generally, Cabot executives expect the direct sales force to make at least hospital or doctor calls in a day. Apparently, the primary goal of initiating these calls is to schedule personal meetings with one of the physicians and to strengthen or nurture the relationship. The company’s executives value members of the direct sales force (detailers) than the team-based sales force. Sage Consultants, my sales and marketing consultancy firm, seeks to conduct a detailed analysis and recommend a comprehensive plan of action to the CPI President (Cespedes & John, 2009). The analysis and recommendations will not only focus on the crises at hand related to Bob Marsh but also constructively assess the company’s sales management system and policies so that CPI is best positioned for the future. Analysis and recommendations about the crisis created by Bob Marsh dismissal Bob Marsh had a successful 12-year career at Cabot Pharmaceuticals until he was eventually asked to resign. Bob faced frequent conflicts, especially with regard to providing exceptional services to his customer, and at the same time having to satisfy the management team. However, his termination from Cabot did not go down well with most of his dedicated customers (Cespedes & John, 2009). As a result, the vice president of sales at CPI was asked to conduct investigations to establish the rationale for the termination and make an ultimate decision to end the standoff. In general, the case attempts to address issues to do with aligning strategy and sales efforts, on-going performance management in field selling, and evaluation criteria of performance (Cespedes & John, 2009). Bob’s case raises a number of issues especially in regard to aligning sales and strategy systems, the criteria for performance evaluation, and various performance management processes. The constant changes in the district managers that Marsh reported to could have been the primary issue with his performance. Each district manager has a duty to determine what works well for each salesperson and what does not work for them. In addition, salespeople may not be motivated by same things. What works well for a particular salesperson may prove devastating, frustrating or even demeaning to another salesperson (Cespedes & John, 2009). In my view, it is unfair and baseless for a salesperson to keep reporting to report to a different manager every time they are replaced. Such trend will only impede consistency in training from the management side and commitment of the salesperson to balance both management and customers. CPI should acknowledge the fact that district managers have wide-ranging expectations particularly in the way salespeople should perform during sales call (Cespedes & John, 2009). Hence, each manager could have had different records concerning Marsh’s performance in the reports. Lastly, it was unreasonable and illogical to have Marsh include the reading assignment of both promotional and technical literature in his program. Cabot Pharmaceuticals Inc. should invest more time and resources in improving the relationship between the customers and salespeople in both settings. For instance, the executives should identify and analyze factors which could potentially hamper the efforts to build excellent rapport between the direct sales force and doctors or hospital personnel (Cespedes & John, 2009). Also, CIP should examine the professional qualifications and abilities of the members of each sales force. They should further establish the inherent attributes of the members in line with the policies and core values of the company. Similarly, Cabot executives should draw the attention of new members to the potential challenges as they progress and advance their career in the organization and helping it attain its goals (Cespedes & John, 2009). The executives should particularly emphasize the short term and long term challenges as this will help prepare the members physically and psychologically to tackle the pending issues related to their career or territory. How Cabot’s Sales Management System could/should be changed to prevent situations like Bob Marsh Affair The Sales Management System (SMS) should be improved through establishing effective systems for managing performance. The performance management system can significantly reduce conflicting interests between meeting the needs of a loyal customer and satisfying the management. The system will lay the foundation and threshold for performance and determine the level of an employee or a salesperson in offering services to the customers. Also, the performance management system could set the benchmark beyond which a salesperson would be considered redundant. Additionally, sales management system should give salespeople a fair hearing about the situation or circumstances that led to committing an unacceptable incident even if they are instantly dismissed for serious or gross misconduct. CPI should thoroughly investigate allegations of fraud, theft, or assault. Lastly, SMS should ensure that future dismissals do not reflect discrimination or prejudice based on gender, race, age, color, religion, or political affiliation. Typically, a member of the direct sales force must have good social skills and education, as well as build a personal relationship with the doctors to win their (the doctors’) loyalty and trust. In addition, detailers should be anxious and dedicated to doing well. They should also acknowledge and follow suggestions and instructions and should generally be well-received by hospital personnel and physicians. Detailers should also be helpful and cooperative, and be able to overcome bad personal and work habits (Cespedes & John, 2009). Also, they should be individuals with the ability and competence to rise above the tendency to prejudge promotion programs and customers. They should also be better planners, and be able to respond and follow-through the company policies and future plans. In particular, they need to be more responsive to the management directives and always focus more attention on organization and planning (Cespedes & John, 2009). Finally, they should have positive attitude towards work and produce unmatched work performance and standard. The executives of Cabot Pharmaceuticals Inc. are particularly keen to ensure that service delivery to customers is up to the set standards and steers the company towards attaining its vision, goals, and objectives. Building positive customer rapport is vital to the overall goal achievement and continued survival of both sales forces (Cespedes & John, 2009). Also, performance evaluation is usually the basis for salary increases and promotions. People who do not live up to the expectations of the management often resign or have their contracts terminated. Consequently, it is the responsibility of each salesperson of the two sales forces, especially the direct sales force, to meet the growing expectations and build excellent rapport with customers and virtually everyone they work with. Positive attitude of a salesperson towards work, customers and colleagues will help enhance their understanding of the workings of the company (Cespedes & John, 2009). In addition, good acceptance by fellow associates and most gratifying improvements in the territories will improve an employee’s relationship with the executives. Although the president and executives should limit their role to management and supervision of the broad range of activities going on in the company, they need to prepare their staff for what could constitute the toughest job in their career. For instance, they should enlighten the members of the direct sales force of a typical customer’s response, attitude and expectations (Cespedes & John, 2009). A doctor will probably open up for a constructive conversation with a detailer if he or she has got a good education and well-versed in matters medical. In other scenarios, doctors may be willing to engage people who are confident and demonstrate outstanding command of the language. The member of the direct sales force should show the ability to hold health conversation and demonstrate understanding of the intrinsic issues affecting the health sector. The salesperson should display the cause or reason as to why they believe in the products and why the customers (doctors) should purchase them. In the case of hospital personnel, the CPI detailer should address unmatched understanding of the various problems facing modern health care providers in an effort to solve prescription and medical-related issues (Cespedes & John, 2009). Apparently, many patients have reportedly suffered in the hands of nurses and medical practitioners due to wrong prescriptions from manufacturers or sellers of drugs. In other words, detailers should demonstrate an understanding of the issue and offer informed, convincing assurance to hospital personnel and physicians that all supplies of CPI meet conventional standard. Apart from having or demonstrating a valid proof of the product suitability for health care settings, salespeople should highlight other details about their supplies which an ordinary hospital personnel or physician may be unaware of. In essence, an illustration of knowledge beyond the obvious will boost the detailer’s confidence while addressing the physician or hospital personnel (Cespedes & John, 2009). In the same way, the doctor will be more attentive to every fresh detail about the supplies that the detailer talks about. However, every detail presented to the doctor should stand the test of time and not merely help the CPI detailer find ready market for CPI products. Also, they would probably want to know the best approach as per the company policy and work ethics that a salesperson would use to deal with customers who wish to determine the solution they need, the price they will pay, or even the kind of supplier they need (Cespedes & John, 2009). In certain circumstances, a customer may demand to get a response from specific individual of the sales team rather than being assigned to salespeople at random. Meanwhile, the CPI should address any controversies which may arise due to internal or external factors. In particular, the company should look into ways of addressing looming discontent of members of the two sales forces concerning the recruitment and termination policy (Cespedes & John, 2009). Incidentally, the premium on finding, training, motivating, and ultimately retaining key salespersons in this competitive environment has never been higher. Like many businesses, CPI should prepare to spend substantial amounts annually on compensation of sales force and another mega value of sales training. Most companies today seem to focus their attention and expenditure on evaluating past sales performance to determine a salesperson’s worth and productivity going forward. Firms use metrics such as unit sales, revenue generated, and conversation rates to measure past performance (Cespedes & John, 2009). They usually have limited insight or consideration of how the salesperson will perform going forward or even the types of incentives and training that will foster their effectiveness. Overall, CPI’s failure to forecast the future value of their sales forces can result in costly misallocation of incentive and training dollars. It can also allow the arguably undervalued but highly competent detailers such as Bob Marsh to slip through their fingers and eventually into the competitor’s arm. Such top-flight salespeople may end up taking steadfast and valuable customers with them. In summary, CPI should set appropriate and widely accepted dismissal or termination policies. The company should avoid unfair or controversial dismissal. The recommended fair grounds for dismissal include gross misconduct, poor performance, dangerous behavior, redundancy/retrenchment, and refusal to follow instructions. The controversy surrounding the termination of Bob Marsh from CIP adversely affected the confidence and loyalty of other members in the company. It shows that CPI undervalues its star salespeople but overvalues the ultimate returns (Cespedes & John, 2009). Hence, they have, on many occasions, misdirected the investments of their sales force. Even though people get fired or resign from their jobs for reasons that are generally explicable, the case of Bob, a hard working and dedicated member of the direct sales force, would perhaps make other associates to review their future commitment to CPI. The associates would probably start demanding to know the rationale or criteria the company often use to hire, promote or even terminate the contract of its salespeople (Cespedes & John, 2009). Any salesperson deserves a fair hearing and clear procedures for termination and discipline. Salespeople should be given a fair hearing about the situation or circumstances that led to certain unacceptable incident even if they are instantly dismissed for grave or gross misconduct, including fraud, theft, or assault. Lastly, CPI should ensure that future dismissals do not reflect discrimination or prejudice based on gender, race, age, color, religion, or political affiliation. References Cespedes, Frank V., and John T. Gourville (2009). "Cabot Pharmaceuticals, Inc." Harvard Business School Case 510-030, August 2009. (Revised August 2012.) Read More