Happened to see a thought provoking update by Anup Soans in Linkedin MedicinMan group.
Targets are never an arbitrary figure. There are many ways to arrive at them and each situation is unique when you arrive at a target. I share here some easier and established ones that we have practiced in the past.
In general, there are two types of target setting possible: Top-down approach and Bottom-up approach. It is better not to mix up both. Companies can follow one of the approaches throughout to make it transparent and get the conviction of the team to achieve it.
For each product, a company can decide on the growth percentage it wants to achieve and can set the targets accordingly. The company shall do so basis their reports on market research on overall market growth, competition, trends etc for each product. The company shall also analyze their resources and advantages and set the target for the product for the company. Once such a target is set, it is split basis contribution levels down the line and passed on as targets to achieve. Since the contribution levels will already reflect market conditions of each market (like growth, competition and others), accordingly each is given a target basis their current/past contribution (of respective markets). Each target shall be the same percentage growth on their respective current/past volumes. The numbers are arrived by applying this growth percentage on current volumes or past volumes. Of course, managers shall re-distribute the same according to other parameters within their zones, markets or teams. A similar approach is followed for allocating resources to achieve the targets.
Every team is asked to set their own targets basis their current volume, market potential and other parameters as they see fit and such targets are collated to arrive at the company’s targets. Here everyone justifies their numbers basis the respective market conditions and such a basis is followed till the top and the company arrives at its target and plans its growth. Accordingly resources are planned and given.
Two important things in target setting
If you are a market leader you will be thinking of increasing your market share % and need to think on how to get this percentage growth from either market growth or from existing competition of other brands or from similar range of products. Here one needs to be innovative and has to lead with creativity and originality to be ahead of the market increasing the lead and picking up more market share in %.
If you are not a market leader, then you already have a bowl established by others. You just have to think how much you can take from the existing bowl basis your own capabilities. One can be innovative and do what the market leader would do, but that is not a must as there exists ways to grow by just taking the share of others. For such brands, past is not an indication of future trends. They can go after as much as they can, to convert, depending on the resources they have available with them.
Targets are never arbitrary. Targets are not just some numbers. They tell you everything about your business and how you run it.
If we put up targets and don’t achieve them, one of our managers used to say, “Sugar will not be sweet, if written on paper and licked”. Targets are sweet when we achieve them and celebrate the achievements.
I started as a pharma guy (still I consider myself to be one) in the early 90s and the kind of learning that gave me has stood me in good stead. During that period the cream of talent joined pharma and we learnt a lot from each other in the market place. I knew 100s of pharma people from the old times. Only a very few are still around with pharma domestic marketing of formulations today. So I undertook an exercise to find some of those guys whom I respected to see what they are doing and how they are doing. With the current social media networking platforms available and the word of mouth that it can create, it was not very hard to find many of them. We were more than happy to connect, exchange notes and have promised to keep in touch. Here we go with what I found from my talking to those friends.
#1. Up the ladder in pharma: Let me start with those who still stay in Pharma Industry. They all have gone up the ladder due to their hard work and integrity and stay at the top today in various organizations. But personally when I interact with them, I hear most of them are unhappy. They love what they do. They do not regret staying with the industry, but are not happy about many things. Given a chance, they will get out to do more productive and meaningful things. My discussions with them on those areas are open and shall continue.
#2. Well into IT: As early as mid-90s, some seemed to have learnt about IT and had taken a sabbatical, went back to equip themselves with courses (like NIITs or with a post graduation in IT etc) and had joined IT. There has been no looking back for them. Most of them are well placed with IT today, given that they had learnt a lot of things in Pharma and combined with the domain knowledge of IT, they have done extremely well.
#3. International Marketing: As Pharma exports grew over the years, some had found international opportunity either with their own companies or outside of it, jumped in, learnt a lot by going to various markets and seem to have done extremely well with International assignments. They also have grown well rounded in terms of general management handling these international markets independently and have become matured leaders. I see them heading SBU of API and Formulations of various organizations. They also have been opening up opportunities for others.
#4. Migration: People who have a pharmacy degree (like BPharm or MPharm) seemed to have found attractive offers by migrating to western countries.
#5. Pharma distribution: Some had gone into distribution of domestic Pharma, in or closer to their home-towns, as they did not like the kind of touring that is associated with going-up-the-ladder in the industry.
#6. Pharma C&F: Some had taken C&F kind of opportunities growing up from the distribution platform as in point 5.
#7. Owners of pharma companies: Some had started their own pharma companies by marketing their own brands made from contract manufacturing. Early guys seem to have done well and late entrants seem to have suffered a lot. Both groups do not think they have any future with that. Very complicated it has become, they say. Apart from the newer regulations and uncertainties of markets, it also includes some of the reasons, which I had discussed earlier in my blog posts.
#8. Family business: Some have gone back to family businesses. They seem to be extremely happy for the decision for whatever personal reasons they stated.
#9. Exports and Manufacturing: Growing from point 3, some have done extremely well by opening up shop to export by themselves as trading houses and also some have gone the length to establish their own manufacturing plants and today run a full fledged export-oriented pharma company. This is very satisfying to hear and learn from.
#10. Sales and Marketing with others: Some people have chosen sales and marketing with other verticals like FMCG, hospitals and related healthcare areas. These guys are not very happy but happy enough that they got off from the troubles of the domestic Pharma selling.
This is only my sample. You can look around and share your findings/experiences.
Almost all of them, whom I had spoken to, have promised to keep in touch and are eager to discuss newer opportunities. That is overwhelming feeling for me.
What is the way forward for Pharma to attract good talent and retain them? I found this excellent article “Is Pharma sales coming of age at last?” explaining how the industry is poised for transformation in the days to come. Happy reading!!!
Feel free to add your experiences and comments here.
August had been a month of discussions on FDI in Pharmaceutical sector. We had argued leaning for and against with valid points on both sides. Obviously most of the pharma industry people have argued supporting it but have failed to acknowledge and see it from the other perspectives and answer the many questions that loom large. Here I present to you some posts(including the report on which the discussions centered around).
- Report on FDI in Pharmaceutical Sector
- 100% FDI in pharma sector bad for country: Parl committee
- Sharma says govt looking at concerns over FDI in pharma
- Pharma sector gets FDI of $1billion in April-June period
- Right prescription for pharma
- Pharma firms waiting for more clarity
- A naïve report from Parliament on FDI in the Pharmaceutical Industry
- India will continue to allow 100% Fdi in Greenfield Pharma CCI to develop necessary enabling regulations for brownfield FDI in Six Months PM chairs high level meeting
- A research paper on FOREIGN DIRECT INVESTMENT IN INDIAN PHARMACEUTICAL INDUSTRY
- DIPP plans alternate FDI policy for pharma sector
- Pharma FDI: Damning Report of Parliamentary Panel, PM Vetoes…and Avoids Ruffling Feathers?
While I had kept most of my discussions private, you are free to either buzz me with your perspective privately for a discussion or take the liberty of commenting here in public. If you have read other interesting perspectives, feel free to add them here in your comments.
Stay tuned for next posts.