Having been born and raised in Detroit, it is impossible not to pay attention to the automobile industry and the pioneers who built it during the 20th century. I am proud the industry is coming back recently, and relate with the “Imported from Detroit” line introduced during last year’s Super Bowl.
Now, with the full disclosure out of the way, I was struck by the following quote in Clayton Christensen’s new book attributed to Henry Ford, “If you need a machine and don’t buy it, then you will ultimately find that you have paid for it and don’t have it.”
Christensen used this quote in a section of the book where he talked about businesses making decisions based on fixed and marginal costs, and for the last several days this has stuck in my head. This is one of the main issues I see with our industry right now. All problems seem to be solved by making only marginal changes to existing systems and structures, when perhaps we need to buy some new machines.
Take for example the sales teams where so many of our human resources reside. For years now, the relative importance of physicians or providers has been decreasing from nearly 100% to wherever you might think it is today and yet the primary marketing strategy centers still around face-to-face discussions between representatives and physicians. We tend to ignore the fact that these extremely expensive interactions are now usually between representatives and whoever can get the physician to sign for samples. We tweak the model by resizing, cutting back on multiple teams or giving the teams iPads, but in reality it is still the same model that we used 50 years ago.
When we look at other important influencers such as payers, pharmacists, LTC, employers, urban clinics and Native American health services we tend to build less than ideal initiatives because they don’t fit nicely into the sales representative model. Even when we fully accept the huge percent of sales calls that are just sample drops we still pay representatives as if they are making solid sales presentations for eight hours a day. In many cases, lesser paid, sample stockers and office service folks would do just as well.
I am not suggesting big layoffs but rather massive change. Why not totally re-look at the sales model and redeploy the highly trained/paid colleagues to areas where they can have an impact. Have them only call on doctors who will really see them, even if that means going lower on the decile grid. Have them call on key pharmacists to really try to influence business in a local community. Have them work with health organizations and significantly expand work with ACO’s. In other words “buy a new machine” as you can’t keep fixing the old one, that was build for a different era.
Perhaps a blog from HBR last week might be relevant. They talk about the importance of myths in an organization and how they are the real barriers to change. We could write volumes on the myths we adhere to in our industry. Note that the theory is not to ignore or throw out the myths but rather to examine, gain perspective, honor and modify them.
Even though I am very happy the auto industry in Detroit is doing better, I am under no illusion it is anywhere near as dominant as it was when I was young and Detroit was the fourth largest city in our country. The industry held onto the old way of thinking and didn’t adequately face their myths. It was only when faced with economic disaster did they really start to make some changes. It took the industry a long time to actually buy the new “machine” Henry Ford talked about. Let’s hope our industry learns from this and makes the critical moves much faster.
As pharmaceutical marketers, it is important to closely examine those things that need changing, even in our individual assignments. How many things do we continue to do just because that is the way we have always done them? How many myths still exist in our areas? Are we facing them or ignoring them as we try to make changes? Are we still trying to live with old machines when in reality we need to invest in something completely new? How about our own individual skill sets? How much time, money and energy have you invested in trying to re-invent yourself? We might learn something from that old quote coming out of Detroit nearly a century ago.