Mike Burnett and Mike White of the Alexander Group’s Healthcare practice discuss how to translate your revenue growth strategy into an actionable commercial plan. Learn how to organize your planning process with four primary phases:
Mike Burnett: Hello, thanks for joining us on the Alexander Group Healthcare podcast. This is Mike Burnett, joined by Mike White from Alexander Group’s medical practice and our last episode, Doug Beveridge and Trey Chamberlin discuss the key elements of developing a revenue growth strategy. In this episode, we’ll take that discussion a step further and outline how to translate your revenue growth strategy into an actionable commercial plan. Mike, every year we get called on to help organizations define and execute their annual commercial planning process. From my understanding, you just recently wrapped up a commercial planning project with a Fortune 500 medical device manufacturer. Isn’t that right?
Mike White: Yeah, that’s right, Mike. Over the course of four months, we work with the head of sales, marketing and field service to drive alignment on go-to-market strategy to find key initiatives and update a number of programs like team structure, territory design and sales compensation plans.
Mike Burnett: Sounds interesting and like a lot of work, especially when you consider the complexity of coordinating across sales, marketing and service. How did you go about organizing this process?
Mike White: So ultimately, there were four primary phases to the process over that four-month period. First was the strategy for the upcoming year, this included doing things like interviews and surveys with within the organization everywhere, from the executive level down to key individual contributors. Second phase is to find gaps, so once we understand the strategy for the year, we wanted to make sure we understand where we were clear on what our gaps are currently to get to that strategy.
Some examples of activities that were completed during the defined gaps phase is territory redesign. Do we need to include metrics such as high acuity beds versus total beds that are indexed? Can we align territories closer to changes in IDN affiliations? Once we went through and defined all those gaps, we went into the third phase, which is design solution. So really coming up with a plan or solutions for all the areas of opportunity that we’ve outlined. Examples of this phase include in sales compensation plans. Informatics products are a critical component of many medical companies currently, and it was the case with this company. How do we ensure that our compensation plans are effectively incenting focus of our reps on our informatics products or any other strategically important products? Once we went through and designed all of the detailed solutions, the final phase is implement developing rollout messaging for the field. This includes also things like setting quotas and posting and hiring for new job roles. Ultimately, this phase is intended to set up the organization to effectively execute the new strategy.
Mike Burnett: Now, I know that communication is a critical component of any successful implementation. Is there anything that this organization did especially well regarding communication?
Mike White: Yeah, they were, I would say, very strong and communication broadly, which really makes the process effective. But there are two specific components of communication. They were strong and one is communication throughout the planning phases. So soliciting feedback early in the process from all levels of the organization, setting checkpoints with key members of the field and field leadership team to test ideas during design, including many of those individuals actually on the teams that were on the design teams that were developing the solutions. And then the second component is at the end the communication cascade during rollout. So ensuring that the executive level is on board and understands what the messaging is. Once we designed all of our solutions, then bringing in the next layer of management, ensuring they’re on board and understand what the key changes are and why we’re making the changes, and then from there down to the individual contributor or field level. To summarize it all, we work through many different work streams, such as territory redesign-based compensation plans, redesign and job roll and organizational restructuring. But it was done through four primary phases, set the strategy to find gaps, design solutions and implement, and the communication was really the glue that helps hold all of those phases together and ensure an effective process.
Mike Burnett: So looking back, what were the keys to success to this annual planning process? Any key learnings or advice you could offer to our listeners?
Mike White: Yeah, I think there were a handful of key learnings that really apply across anybody. Any organization is running a planning process like this first was clear alignment between marketing and sales from day one, ensuring that both functions were jointly defined. What success looks like. Partnership with senior leadership to help drive work streams. So really, this has two primary benefits. One is that it shared internal buying decisions. And second, it develops strong leaders within the business because they have an opportunity to lead some of these work streams and across different areas of sales and marketing. Third, key takeaway is collaboration with commercial operations and finance to clarify the impact of any changes on AOP goals and budget, as well as making sure that we’re really clear that anything that we’re designing can truly be implemented and administered by the commercial operations team. And in the last key takeaway, I would say, is you need to have strong modeling capabilities to make sure we understand as you’re going through the process what is the impact. Results of the changes we’re going to make if we can’t clearly define what we think the impact, there’s a positive impact on results. Of course, we shouldn’t go through with these changes, so having strong modeling capabilities throughout the process is also an important key to success.
Mike Burnett: Thanks for sharing, Mike. Do you need help with your annual commercial planning process? If so, please email us or visit us at Alexander.