Compound Case Study

Compound UK is the selling division of a multinational pharmaceuticals company and primarily operates within the UK health sector. The reforms which took place within this market in the 1980s and 1990s led to more complex sales situations for Compound UK as hospitals became more autonomous which meant that Compound could feasibly be dealing with many different needs and conditions within the same market. In response to the changing conditions Compound UK took the decision to reorganise their business and six months after the restructuring further changes were made as it was felt that staff should share information across functional and geographic boundaries and Lotus Notes was viewed as a package which could assist with this process.

The intention of Lotus Notes was clearly to make the company more efficient and effective in their dealings with customers but with the benefit of hindsight it is possible to see that the implementation could have been managed very differently and this will now be considered.
Firstly, the introduction could have been managed differently by providing training to all reps rather than only new reps who joined the company. The training not only ensured that reps had been introduced to Lotus Notes before being allowed out to visit potential customers but also became a good social event as it allowed new employees who would normally be isolated through working from home to meet with their colleagues and develop a good team spirit. Had this idea been expanded to include current reps Compound could possibly have avoided many of the internal problems as staff would not have been so suspicious of the reasons behind the implementation and would have been more responsive to using the software properly rather than using it to further their own objectives.

Following on from the above, I would have advocated more people in senior positions following the lead of James Black as he ensured that he met with staff and got to know them as people rather than statistics on league tables. This approach was clearly successful as reps were willing to communicate fully with him, even if this meant admitting to losing a contract, and this ensured that he had the best information available to him and could give advice to ensure that future contracts would be more successful. This approach should have been encouraged throughout the company rather than allowing certain managers to encourage the "yes sir" approach used by certain employees purely to further their own careers without considering what would actually be best for the company.

A final point which should have been managed differently relates to the reward structure which was in place. Despite a new system (Notes) being implemented the reward structure remained the same and this should have been changed in order to give employees an incentive to use the system correctly. The different approaches taken by different managers simply adds to the inconsistency within this company as some employees were awarded 30% of their salary for using the shared databases fully and effectively whilst others received no credit for this and were instead judged on how many hours they had worked and if they had surpassed their sales targets. The introduction could therefore have been managed more effectively if the company had made changes to the reward structure which would make it clear what would be judged to be "proper" use of the system and would therefore encourage such behaviour.
In terms of using the functions of Lotus Notes, there are a few things that could have been done differently. One major point arises from the contact recording database: a database used to record the views, interests and requirements of particular doctors. Many reps used this contact list to make their efforts more visible by inputting a large number of contacts including all the doctors, managers, accountants and even nurses that they met in practices and hospitals. This furthered them in the league however, it was not beneficial to Compound to have this many contacts all from one practice or hospital and it also infuriated other reps who were not as motivated to further their career. Moreover, many reps that were disillusioned by this new technology simply inputted a line or a full stop. In terms of resolving these issues there could be a facility installed within the customer database to limit the number of different contacts within one hospital or practice so as to build upon the relationships already established with these contacts rather than have numerous different contacts with little knowledge on them.

Further, the use of a league facility may have gone against Compound’s favour. As can be seen from the example of school league tables, they tend to only measure one thing – results. Therefore, everything is targeted at achieving these with no focus on other aspects of the teaching environment such as extra-curricular activities or teaching quality. This is exactly the case here as the results of the league tables are based on achieving customer contacts. Therefore, it is not measuring the quality of the work being done but, rather the quantity of customers. A recommendation to improve this would be the use of multiple indicators to measure improvement or measuring the number of followed through sales from customer contact. They need to ensure that when measuring targets, the targets fit in with their overall company strategy.

The strategic selling database also caused disruption between the different reps within Compound. Many career orientated reps used these to record numerous points regardless of whether they had any complex sales issues in their territory at that moment in time. This is again similar to the point of the customer contact database in that it was focused towards quantity with the use of league tables. Again, an initiative needs to be taken to ensure that what is being inputted is relevant to complex sales rather than quantity of words that may have nothing to do with the sales. Another recommendation that could be pushed to dissolve this problem would be to monitor the usage of the regional databases to share ideas to benefit each of the reps. This part of notes was said to be used effectively by those who were not trying to further their career by exploiting the technology. Therefore, if everyone was encouraged to use this, the culture adopted by the older reps may be installed in the younger reps.

In conclusion, I feel that had Compound managed the introduction of Lotus Notes more effectively by giving consideration to the effect that a lack of training and an unchanged reward scheme and introduction of a league table would have on staff behaviour. This could have been used as an opportunity to install an overall company ethos but instead has led to a divide amongst employees. The system could be improved by the above recommendations to ensure that the targets of Compound are being met in terms of sales to customers rather than a device to input 'office politics'.

This assignment was produced in collaboration with Lynsey Smith