Compound UK is the selling division of a multinational pharmaceuticals company mainly concerned with selling products in the UK health sector. They also undertake clinical trials of new drugs with participating doctors. In the late 1980s and 1990s, the UK health sector underwent a period of major reform resulting in a reorganisation of the NHS and hospitals became more autonomous. Compound UK would have to deal with more complex sales situations and they responded to these changing conditions in 1993 by reorganising themselves into eight regions. The main purpose of this was to give each region a considerable degree of autonomy in planning and dealing with their own locality. Knowledge sharing was difficult as all members of the commercial function with the exception of the director would work from home, while employees from other departments would work at head office in Compound Square. Senior management believed that their selling activities could be improved by sharing information and knowledge across functional and geographic boundaries. Lotus Notes was viewed as the package that could meet those requirements. In addition it was believed it would also enhance team work between staff.
The Lotus Notes system failed to be introduced in time for the restructuring in 1993, there was a 6 month delay in this process. Compound should have introduced Lotus Notes at the same time as the restructuring and most importantly, training should have been provided for all staff and not just the new employees. Lotus Notes was certainly an improvement over the previous Jaguar system it replaced. However, there were problems that needed to be addressed. The issue regarding contact recording and the resulting league table performance put an inordinate amount of pressure on the sales reps. This resulted in low morale and eventually led to inaccurate sales figures being produced for the company.
League tables were devised to indicate centrally how many contact records and strategic selling sheets had been completed by each sales representative. However the use of league tables worked against the interests of Compound as many of the reps became disillusioned and believed that the whole intention of the system was merely to increase surveillance and control of their staff. Another problem that is inherently problematic with most league tables is that they measure only the results which in this case are contact records; they do not measure the quality of any work done. Some reps abused this system by going against the ethos of only recording 'relevant' calls and recording all the doctors, managers, accountants and even nurses they met. Lotus Notes was misused by the reps to enhance their position in the league table and hence further their careers within the company. Perhaps the idea of having league tables should have been abandoned. Alternatively, if league tables were to be incorporated then it should not only be dependent on customer contact but rather on sales which follow on from customer contact. To resolve this issue an idea might have been to limit the number of contacts within the practice or hospital so that reps could concentrate on developing and building upon relationships that they have already established. Additionally, the league tables could use a number of different indicators to measure performance in order to accommodate for quality of work as well as quantity.
The sharing of information and motivation of staff was effectively demonstrated in the approach that James Black, a Senior Manager, adopted to the programme. He developed a rapport with the reps, outlined what was required and encouraged a two way approach so that reps would feel confident enough to contact him for assistance whenever they needed to, even if contracts were unsuccessful. This approach should have been further developed and encouraged so that the company would ultimately benefit from increased sales contracts.
The rewards scheme could also have been managed differently. Compound wanted to encourage and motivate sales staff to collaborate within and between regional boundaries. When Lotus Notes was being introduced into the system the reward structure should also have been updated and improved. There were inconsistencies regarding rewards between different area managers and nothing introduced to encourage proper use of Notes. Some managers would award 30% of the reps salaries at their own discretion. However, others would allocate rewards depending upon whether reps worked overtime or surpassed targets. It could also be rewarded for more qualitative work such as training less experienced staff. A rewards scheme is a good idea as it is fairly unrealistic to rely on people's altruism to always work to their capacity but there should be a clear measure for the rewards scheme which should be using Notes in the proper way, i.e. collaborating and sharing knowledge. The only drawback of having a clear target is that staff will focus solely on achieving this in order to be rewarded. This is acceptable providing this measure is not detrimental to the interests of Compound.
In conclusion, the introduction of Lotus Notes was not a failure by any means. It could have proved itself to be more successful if management had provided better training for all staff and not made it a culture of pitting employees against each other by the use of league tables. In addition, the reward system adopted did not lend itself to encourage employees to be successful in gaining new contracts. They could have adopted a better method of measuring performance and also an improved rewards scheme, than the one they have currently employed. For example, rewards could be given to the entire team for achieving targets, which would result in greater motivation amongst the workforce. If Compound were to implement these new measures and consider the existing flaws in their system then the staff would feel more motivated and this would encourage growth in the company’s sales targets.
This assignment was produced in collaboration with Rishi Chada
The Lotus Notes system failed to be introduced in time for the restructuring in 1993, there was a 6 month delay in this process. Compound should have introduced Lotus Notes at the same time as the restructuring and most importantly, training should have been provided for all staff and not just the new employees. Lotus Notes was certainly an improvement over the previous Jaguar system it replaced. However, there were problems that needed to be addressed. The issue regarding contact recording and the resulting league table performance put an inordinate amount of pressure on the sales reps. This resulted in low morale and eventually led to inaccurate sales figures being produced for the company.
League tables were devised to indicate centrally how many contact records and strategic selling sheets had been completed by each sales representative. However the use of league tables worked against the interests of Compound as many of the reps became disillusioned and believed that the whole intention of the system was merely to increase surveillance and control of their staff. Another problem that is inherently problematic with most league tables is that they measure only the results which in this case are contact records; they do not measure the quality of any work done. Some reps abused this system by going against the ethos of only recording 'relevant' calls and recording all the doctors, managers, accountants and even nurses they met. Lotus Notes was misused by the reps to enhance their position in the league table and hence further their careers within the company. Perhaps the idea of having league tables should have been abandoned. Alternatively, if league tables were to be incorporated then it should not only be dependent on customer contact but rather on sales which follow on from customer contact. To resolve this issue an idea might have been to limit the number of contacts within the practice or hospital so that reps could concentrate on developing and building upon relationships that they have already established. Additionally, the league tables could use a number of different indicators to measure performance in order to accommodate for quality of work as well as quantity.
The sharing of information and motivation of staff was effectively demonstrated in the approach that James Black, a Senior Manager, adopted to the programme. He developed a rapport with the reps, outlined what was required and encouraged a two way approach so that reps would feel confident enough to contact him for assistance whenever they needed to, even if contracts were unsuccessful. This approach should have been further developed and encouraged so that the company would ultimately benefit from increased sales contracts.
The rewards scheme could also have been managed differently. Compound wanted to encourage and motivate sales staff to collaborate within and between regional boundaries. When Lotus Notes was being introduced into the system the reward structure should also have been updated and improved. There were inconsistencies regarding rewards between different area managers and nothing introduced to encourage proper use of Notes. Some managers would award 30% of the reps salaries at their own discretion. However, others would allocate rewards depending upon whether reps worked overtime or surpassed targets. It could also be rewarded for more qualitative work such as training less experienced staff. A rewards scheme is a good idea as it is fairly unrealistic to rely on people's altruism to always work to their capacity but there should be a clear measure for the rewards scheme which should be using Notes in the proper way, i.e. collaborating and sharing knowledge. The only drawback of having a clear target is that staff will focus solely on achieving this in order to be rewarded. This is acceptable providing this measure is not detrimental to the interests of Compound.
In conclusion, the introduction of Lotus Notes was not a failure by any means. It could have proved itself to be more successful if management had provided better training for all staff and not made it a culture of pitting employees against each other by the use of league tables. In addition, the reward system adopted did not lend itself to encourage employees to be successful in gaining new contracts. They could have adopted a better method of measuring performance and also an improved rewards scheme, than the one they have currently employed. For example, rewards could be given to the entire team for achieving targets, which would result in greater motivation amongst the workforce. If Compound were to implement these new measures and consider the existing flaws in their system then the staff would feel more motivated and this would encourage growth in the company’s sales targets.
This assignment was produced in collaboration with Rishi Chada
Bibliography
Walsham, G., & Hayes, N., (2000), Sharing Knowledge through Lotus Notes in a Pharmaceuticals Company, Judge Institute of Management, University of Cambridge
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