1. Identify the issue
By the time Guylaine Beliveau joined Bristol-Myers Squibb Canada (BMS), the pharmaceutical industry had become intensely competitive, and the company had lost some of its edge. It had just lost exclusivity on one of its major products, which had been a market leader, and it found that it was no longer the first to the market with many of its new products within a highly competitive environment. It was time to change.
Beliveau led a team to determine some of the problems embedded in BMS’s business model and understand what exactly the company wanted to accomplish with its sales incentive plan. She found that the company’s way of assessing employee performance was too complex, using a variety of unclear metrics. The system had bred an atmosphere in which the focus on competition was insufficient within the sales teams.
2. Benchmark the competition and adapt
Beliveau and her team collected data from other pharmaceutical companies and used it to inform BMS’s new approach. They asked themselves, “What should the key drivers in measuring performance be?” The answers were absolute sales and market share.
Before the changes, the incentive plan did not distinguish enough between top performance and lower performance to motivate employees to go the extra mile. The plan was simplified to focus on measurable elements and reward employees who went above their target with significantly more money. “Competition in the marketplace underlies the new sales incentive plan,” Beliveau says. “We needed to bring a greater competitive mindset to the whole organization.”
3. Invest in your employees
Because the new plan’s structure allowed employees to earn more money, it meant that BMS’s overall company expenses would be increased. But this was a welcome sacrifice. “If they drive higher sales,” Beliveau says, “we’re willing to put more money on the table. This shows your salespeople that you not only believe in their abilities but that you also care about them.”
4. Engage with all departments and leadership
The transition to the new system took more than six months to complete. Meetings between the HR team, salespeople, first-line managers, and even the company president ensured that the project progressed smoothly and that it was in line with BMS’s philosophy and vision of “Caring, Competing and Winning … as One.”
The workshops with the managers and salespeople helped Beliveau and her team account for the needs of individuals on the front line. “We wanted to make sure to promote the plan and engage our employees,” she says.
5. Communicate the positive changes
The shift in compensation was going to fall flat if employees weren’t made aware of the plan, so a presentation was developed to take on the road. Led by the HR team, a cross-country tour was organized to ensure face-to-face direct communication to support managers through the change. They made their first presentation in Vancouver, then spoke again two days later in Toronto, and two days after that, they wrapped it up in Montréal. Everything was communicated in a week.
6. Provide tracking tools
Working with the sales-effectiveness department, a bonus calculator was created that allows employees to see how they are performing against their objectives throughout the year. At any time, sales reps can see what results they have achieved and reevaluate or change their approach as needed. Also, in the past, employees would be informed about their targets much later in the year—which made no sense. Now targets are determined every January, giving reps a full 12 months to reach their goals.
“The plan was solid,” Beliveau says. A year after the introduction of the new plan, BMS beat its sales projections by a healthy margin. “In 2014, we made adjustments to our metrics and their weighting, based on evolving business priorities. This will ensure that the company drives the appropriate culture, behaviour, and recognition based on our business needs.”