Recently, we hosted a round table for European Medtech commercial excellence leaders to discuss the current state of their function. Overall, the group was enthusiastic about the impact they have been able to demonstrate, even with limited organizational investment; however, there was recognition of EU medtech‘s maturity and small scale relative to other industries such as pharmaceuticals. While the commercial excellence function is critical for organizational success, the path to realize that impact demands a strategic plan, close business collaboration, and a clear executive mandate.
During our conversation, we noticed three broad areas for opportunity: foundational structures, team setup and talent management.
In the past three years, many organizations have created European (sometimes as a subset of global) commercial excellence structures. This initial mandate includes prioritizing a selection of focus initiatives, generally activities that are sales-force oriented (segmentation, targeting, resource optimization, territory alignment) and which are often executed in a decentralized manner in local markets.
Even with these fundamental initiatives, the group found that the business impact has been significant. Generally, this was due to the best practice approach applied to standardizing processes, leveraging data-driven decision making and prioritizing high-value customers.
However, even with success, three challenges were commonly sighted as limiting the transformational impact of these initiatives:
- Overcoming issues in master data management (MDM) continues to be the largest limiting factor as the amount of data clean-up necessary limits scalability in commercial excellence initiatives.
- Finding ways to build scalable programs becomes critical after early, high-touch programs need to expand across business divisions and geographies.
- Elevating analytics capabilities to derive value from the ever-increasing wealth of data thereby increasing the ability to support an organization through timely, data-driven insights in the future
While there is no blueprint for commercial excellence operating models, leaders agree that a mix of factors play a role in designing a feasible structure, including a mandate of the function, capability maturity, business leadership needs and local- and business-specific differences. The challenging question all companies face is on how much centralization and standardization is possible while still meeting the specific needs of businesses and local markets.
As an example, one organization was able to establish a sales force capability evaluation program in a highly centralized fashion by defining a global model and processes that allow efficient roll-out across all geographies through the HQ team. In other situations, companies have identified the need to provide support on go-to-market and other commercial strategy decisions to their local business leaders and found that the degree of business and market-specific expertise requires specialization within their team in order to become a credible partner and drive impact.
While specialization and highly customized support will always be the preferred model for commercial leaders, the group also highlighted the need to challenge the call for specialization in some instances – especially when too much specialization limits transparency and the ability to manage the business effectively on the European level.
Sourcing, development and retention of talent in commercial excellence teams is a common challenge faced by the leaders participating in our round-table.
Commercial excellence leaders employ a variety of ways to source the right talent, from working with universities, to sourcing internally within an organization and partnering with external experts.
Within their existing team, leaders highlighted the importance of building a sustainable model and managing retention. Being conscious about knowledge transfers across the team to avoid high dependencies on select individuals is essential. Some organizations have found ways to provide attractive opportunities to their team members. They range from elevating these roles by putting them on country leadership teams to enabling deep expertise that can create career opportunities for these individuals on the business side.
One component that’s often overlooked is systematic, individual capability development within commercial excellence teams. While leaders are familiar and oftentimes already active in measuring field-force competencies and identifying development priorities, only limited, structured programs exist for their own teams today, but there is recognition that as the function grows in scale, this will become an important success driver.
Beyond immediate optimization needs around data fundamentals, team structure and talent management, commercial excellence leaders are excited about future opportunities for their function. They see the potential of growing the role and the breadth of commercial excellence by becoming the connector and interpreter of all sorts of data across the organization and applying advanced analytics to uncover new insights that inform business decisions.