What Are You Doing to Protect Your Most Important Asset – Your Sales Talent?

Presented by: Scott Hudson – VP Sales/Marketing, ChallyChris Sena – VP of HR Cardinal HealthMark Kramer – CEO Laird Plastics

Let’s Meet Our SpeakerScott Hudson – VP of Sales/Marketing at Chally

•Scott joined Chally in 2006 and has successfully led Chally through its own Sales/Marketing Transformation resulting in the company’s best financial results in over their 35+ year history. He specializes in workforce effectiveness and productivity with a particular interest and focus in the area of sales transformation.

•Previously, he led the sales, marketing, and product development teams as the Solutions Executive at Reynolds and Reynolds, the leading provider of Systems and Document Management solutions to the Automotive Retail market.

•Chally is a Global, Sales Force Potential and Performance Measurement Firm Utilizing our Industry Leading Research, Analytics and Advisor Services to help our clients minimize risk associated with key talent management decisions.

Agenda

• Talent Trends and How Analytics Can Improve Sales Talent Management Decisions

• Key Trends and Best Practices within Sales Talent Management

• Cardinal Health's Sales Transformation Journey

• Sales Talent is available in places you may not of thought of

Talent Trends and How Analytics Can Improve

Sales Talent Management Decisions

The New Workforce

Ten forces shaping the future workplace1.Shifting workforce demographics2.The knowledge economy3.Globalization4.The digital workplace5.The ubiquity of mobile technology6.A culture of connectivity7.The participation society8.Social learning9.Corporate social responsibility10.Millennial in the workplace

Power of HR Analytics

Analytics helps navigate changing workforce issues by mining data foractionable intelligence.

Analytics provide hard evidence of the business impact of people investments.

Those organizations adopting “data-driven decision making” achieved productivity gains that were 5-6% higher than those who did not.

Study of 179 large companies by Professor Erik Brynjolfsson, MIT, 2010

Did you see the movie MoneyBall?

“The math works,” Beane says. “Over the course of a season, there's some predictability to baseball. When you play 162 games, you

eliminate a lot of random outcomes.”

A very creative and unusual use of statistical analysis on the part of the Oakland A's GM, Billy Beane. These stats enabled Beane to discern the unique talents of undervalued players no one else wanted.

"The minute you feel like you have to do something, you're screwed; that you can always recover from the player you didn't sign, but you may never

recover from the player that you did sign that you shouldn't have”

Applications for Analytics

• Talent acquisition• Succession planning• Retention/Turnover• Performance management• Onboarding• Mentoring/Coaching• Diversity and Inclusion

• Tuition assistance• Systems consolidation• Recognition and Rewards• Compensation• Customer service• Wellness programs

• Leadership Development• Job function training• Sales readiness• Compliance training• Social learning• Learning modality$

Key Trends and Best Practices Within Distribution Sales Talent Management

Maximizing Customer Engagement

Quality (CEQMax)

The Distribution Business ChallengePost-recession markets have changed the game permanently:

Your competitive advantage can only come from your

SALESPEOPLE NOT the product or service offered

DigitalImpact

Little To No Competitive Advantage

We Use The Wrong Science of Recruiting and Selecting Salespeople

We keep looking for “sales stars”•What’s wrong with that? It doesn’t work

•Why?• We can’t predict who they are because different sales

stars are unique and great for different reasons• Even though their results are the same

•Even if you could predict who they are, there aren’t enough to go around

The Right Science

• Forget the stars … look for “Above Average”… CANDIDATES THAT HAVE LOW PROBABILITY OF FAILURE

• Assuming the customer has a real need, sales success depends on:– Carrying out the important sales and service tasks– Not making critical mistakes

• Sales does requires talent and certain skills – Many candidates don’t have the right combination

The Right Science

We succeed if we eliminate the candidates:

• Who can’t carry out the important tasks

• Who will make critical mistakes

Why Benchmarking and Traditional Competency Modeling Can Fail

The following “logical” benchmark competencies (supposed predictors of success) are officially tracked to measure professional golfers as a measure of success;

Tiger Woods Phil Mickelson Paul Casey

Kenny PerrySergio GarciaHenrik Stenson

Geoff OgilvySteve StrickerJim Furyk

Vijay Singh

2007-2009 Listing of many of the World’s Top Golfers

a) Driving accuracy b) Driving distancec) Greens in regulation

d) Ball proximity to hole e) "Scrambling"

f) Putts per roundg) Sand saves

Traditional Methods Don’t Always Work!Would results like this get you excited about selecting this person?These were Tiger Woods’s results when he was #1 Golfer in World!

#83 in driving accuracy #38 in driving distance#71 in greens in regulation#68 in ball proximity to hole#9 in scrambling#38 in putts per round

REJECTED

• These “competencies” do not predict – scores do!

• What makes Tiger different is he didn’t make fatal errors!! Emphasis on didn’t!!

• How few bogeys, double bogeys, or worse they don’t get ... round after round after round

The Solution: The Good NewsThe same actuarial research, science, and predictive statistics that the insurance companies use to predict risk:CAN also more accurately identify:•Who can’t do the job, or •Who will make critical mistakes!

The Proof

Applying Actuarial Science to Sales SelectionToday’s Typical Sales Force

= $200 MillionTotal Sales

$6 Million$150K/person

$90 Million$750K/person

$104 Million$2.6M/person

The Problem

ABC Company: 200 Salespeople and $200M in Sales*

5% improvement here gets you $5.2M

5% improvement here gets you $4.5M

The ProofApplying Actuarial Science to Sales SelectionReplacing the Bottom 20% with just “Above Average” Candidates

ABC Company: 200 Salespeople and $200M in Sales*

$104 Million$114 Million = $218 MillionTotal Sales

5% improvement here gets you $5M

5% improvement here gets you $5M

= $228 MillionTotal Sales

Best Practices of World Class Distribution Sales Forces

Achieving the Strategic Sales Standards in Growing Business

Done: Right customer Right offering Right effort Right message Right rewards …

So what’s next?

The formula for sales success is simple

The right Raw Talent

The right Critical Moves

Sales Success

X =

Our sets of critical moves for sales professionals

ReconnaissanceReconnaissance

Charting the CourseCharting the Course

MapMap

NetworkingNetworking

Clinical NarrativeClinical Narrative

Capability BuildingCapability Building

Social Narrative

Social Narrative

AccessAccess

CollaborationCollaboration

Itinerary PlanningItinerary Planning

DebriefDebrief

PreparationPreparation

Follow-upFollow-up

EntryEntry

OpeningOpening

ConnectingConnecting

Message & DialogMessage & Dialog

Objection HandlingObjection Handling

ClosingClosing

ExitExit

Navigate the customer's

networks

Navigate the customer's

networks

Engage the customer for the long-term

Engage the customer for the long-term

Prepare and follow-up

each interaction

Prepare and follow-up

each interaction

Speak with the customer

Speak with the customer

What are critical moves?•They describe an action - not a result, skill or capability•They instruct how results are achieved--how skills/capabilities are applied•They are not all the actions sales professionals or Sales Manager do

How to Make it Work

Sales Expertise: Validating Profiles

1. Chally Pre-Validated ProfilesChally has built an extensive library of sales roles based on data collected from over 500k sales professionals. There are 14 sales roles that we have defined. These are frequently used when organizations find their business model has changed, and they need expertise help in defining new roles.

2. Creating Client Specific Custom Profiles For organizations with large enough incumbent populations, and a defined business model, we typically run validation studies. These studies identify those 4-8 critical behaviors that differentiate top and bottom performers.

All sales roles are not the Same! •Inside Vs. Outside•Direct Vs. Indirect•Hunter Vs. Farmer•Product Vs. Solution

Research on What it takes for Distribution Sales Success

Analyses based on data from Chally historical validation studies over more than 10 years

Focus on Sales roles only

Over a dozen organizations from the largest to smallest

Over 25 separate roles/studies (e.g., CAMs, AMs, TSRs, inside sales)

Approximately 4000 individuals

Performance metrics include gross sales, target achievement, performance ratings, etc.

By correlating assessment results against performance we identified competencies at three levels:

COMPETENCIES THAT DIFFERENTIATE “TOP PERFORMERS”Develops sales leads

Penetrates accounts by increasing consumption of productsAnswers objectives by reinforcing product benefitsProvides personal customer attention and support

Creates positive outcomes using proven approaches

KEY COMPETITIVE EDGE COMPETENCIES FOR SELECT POSITIONSQualifies prospects with targeted probes

Closes through a formula approachThrives on stress and change

Navigate the customer's networks

Navigate the customer's networks

Engage the customer for the long-term

Engage the customer for the long-term

Prepare & follow-upeach interaction

Prepare & follow-upeach interaction Speak with the customerSpeak with the customer

Maximizing customer engagement quality and sales force impact means answering three key questions

• Do we have the right Sales Professional and First Line Manager talent in our roles? No – Then focus on hiring/selection Yes – Then focus on learning/coaching

• What are the learning and coaching priorities that will have the largest performance impact?

• How do we train and sustain the critical behaviors – for Sales Professionals and for First Line Managers?

Let’s Meet Our Speaker

Chris Sena – VP Human Resources at Cardinal Health

For Cardinal Health’s $8B Channel Management organization, Chris is responsible for leading a team of senior HR business partners, developing and implementing HR strategy, executing strategic HR initiatives, and creating an inclusive and winning culture. Chris is currently a member of the Channel Management Senior Leadership Team, the Medical Segment Extended Leadership Team, and the Cardinal Health HR Operating Committee.

Chris joined Cardinal Health in February 2009 as Sr. Director, Human Resources for the $1.2B Nuclear Pharmacy Services business unit. In 2010, Chris was promoted to Vice President, Human Resources a role with significantly expanded responsibilities. As Vice ‐President, Chris was responsible for leading HR and training teams, setting and executing HR strategy, and creating an “employer of choice” culture.

© Copyright 2012, Cardinal Health. All rights reserved. CARDINAL HEALTH, the Cardinal Health LOGO and ESSENTIAL TO CARE trademarks or registered trademarks of Cardinal Health.

Sales TransformationNuclear Pharmacy Services

Chris SenaVP, HRJanuary 2013

Cardinal Health – Essential Facts

30

32,000employees with direct operations in 10 countries

60,000sites

delivered to daily

*An estimate of the pro forma revenue for fiscal 2012 in accordance with generally accepted accounting principles with adjustments expected to reflect each company as a stand-alone entity. The estimate is based on assumptions that management currently believes are reasonable, but actual revenue may vary materially from the estimate.

Leading provider of products and services across the healthcare supply chain with an extensive footprint across multiple channels

$108BFY12 pro

forma revenue*

#21on Fortune

500 list

50%of U.S. surgeries use our products

and services

Nuclear Pharmacy Services

31

Create a culture where our ability to attract, hire, and develop diverse talent differentiates us

from our competition and drives competitive advantage in the marketplace.

Landscape

32

Healthcare Consolidation

• Growth of Integrated Delivery Networks (IDN)

Strong Pipeline for New Products

• Many in clinical trials• Complex products

Need for Better Team Coordination

•Overlapping of responsibilities

Change Management

33

- Kotter’s 8 Step Process for Change

Solution Overview

34

Create a Sense of Urgency Anchor the

Change

AchieveGlobal & HR Chally Partnership

Creating a Sense of Urgency

1. Communicated the need to adapt to changing health care landscape extensively– Sales team meetings– Regional meetings– National meeting

2. Leveraged articles and customer testimonials3. Circulated Our Iceberg is Melting4. What’s the plan?

35

Enabling: Success Profiles

36

• Leveraged SME panel in development process

• Highlighted skills and capabilities sales team would need to win in the future

• Helped understand the changing skills and behaviors needed to meet the demands of our rapidly changing markets

Client Case study - Major Consumer Products Division for a Global Pharmaceutical company

•Business Issue for Client - Needs team to transform quickly and become more consultative and solution focused vs. traditional Account Management (Famer/Product) Focused.

• 12 align well with traditional model, 6 probable and 4 with low probability• 6 can make the transformation, 7 probable and 9 with low probability

Who can make the Transformation• Chally assessed the competency level of sales

team using an online assessment.• Data was used to assist sales directors

• Give more meaningful feedback to current employees

• Create group and individual development plans

• Introduce roles to employees that were more of a natural fit.

Enabling: Assessment Results

• Detailed assessment reports generated for each salesperson• Manager version also

generated• Sales leaders discussed

results with each sales rep• Gap between assessment and

results kept short

Enabling: Coaching & Development

• Sales leaders leveraged coaching tool to build individual development plans

• Training for new skills and capabilities

Enabling: Staffing for the Future

• 1st and 2nd interview guides that targeted new role profiles• Behavior based

• Incorporation of Chally assessment for finalists• Provides additional insights

Enabling: Roll out• Sales Directors trained centrally over two days in the following

areas:

Tool Introduction & Training

•Profile construction•Assessment tools •Selection tools•Talent dashboard•Coaching tools

•Coaching & feedback models

•Coaching skill practice•Development planning

•Behavioral interviews•Probing•Scoring•Calibration•Legalities•Skill practice

1 2 3

• Sales Directors and training team rolled out new profiles, training, and development tools

Anchoring the Change

• Making a new organization stick involved …• Creating and aligning new compensation plans• Incorporating new competencies into sales leader “observation”

documents and performance discussions• Allowing a transitional period for training, meeting new

customers, and meshing with new leaders• Hiring for new profiles

Progress• Discipline and focus added to sales interviewing and selection

process• Good correlation between Chally results and % payout on sales

incentive plans• Increase in new hire sales performance• New hires selected with new process and tools have 3 X win

rate

Let’s Meet Our Speaker

Mark W Kramer – President & CEO of Laird Plastics

•30 years in wholesale distribution in chemicals and plastics

•Includes working with privately held and public companies, both US and foreign owned, ranging in size from $50M to $1B

•Laird Plastics is the largest independent distributor of plastic stock shapes in North America with 56 servicing locations across the US and Canada

•Graduate of Bucknell University (BA 1976) and Washington University, St. Louis (JD – 1979)

•Retired USMC Lt. Col.

WHERE TO ACCESS the NEW sales HIREs?• THE RIGHT ‘RAW MATERIAL’ FOR THE TALENT MANAGEMENT PROCESS …

SALES DEGREE AND SALES CERTIFICATE PROGRAMS …

A BETTER SOURCE FOR YOUNG SALES TALENT

PONDER …PONDER …

Some 50% of sales workforce (17M people) will retire as the “Baby Boomer” generation plays out in coming years – an enormous gap to fill …

THE ACADEMIC VIEW IS CHANGING …THE ACADEMIC VIEW IS CHANGING …YEARS AGO …•Liberal Arts reigned

•“Knowledge and Theory” predominant

•Business Major curriculum lacked focus on “sales”

•“Selling Profession” marginalized by society

TODAY ….•Relevance and practical skills critical to success

•“Sales Majors” and “Sales Certificate” programs increasing

•Over 70 Universities now offer

•“Selling” recognized for contribution it makes

““THE SALES MAJOR”THE SALES MAJOR”• Within the School of Business, some Marketing or Management

Departments now offer degrees with “Sales” as a Major field of study or a ‘Certificate’ Program to complement another major

• For the “Sales Major” - Typically two years of concentrated sales focus:

– All Essential Selling Skills

– Negotiating, Communication, Presentation Skills

– Extensive Role Plays and Competitions

CAUTION …CAUTION …• According to the SEF, only 70 of 4,370 Colleges and

Universities have a formal sales training program

• At FSU, there are approximately 45,000 students on campus, 5,000 enrolled in the ‘business school’, 1500 in the ‘marketing degree’ but only 112 graduating with a sales major each year

• THERE IS A NEED TO EXPAND BOTH THE NUMBER OF PROGRAMS AND THE CAPACITY OF EXISTING ONES

LAIRD’S EXPERIENCELAIRD’S EXPERIENCE• Actively recruiting from two universities

– First year, we were unsuccessful

– Have now hired “6”, expect 3-5 more by June, 2013

• Florida State and University of Washington

• School and Staff engagement, classroom presentations, competition judging, mentoring

“SUCCESS HAPPENS WHEN PREPARATION MEETS OPPORTUNITY”

FLORIDA STATE SALES INSTITUTE MOTTO

IN THE FIELDIN THE FIELD• Recent Graduates have gone to ATL, DFW, DTW, HOU, PHL and

TPA.

• While young and facing a challenging transition, their energy and fearless approach to selling quickly compensate.

• All ramped up to acceptable levels of productivity well inside of a year.

OBSERVED BENEFITSOBSERVED BENEFITS• All well schooled in selling fundamentals – we were able to go

right to our industry, products, and solutions

• Brought increased energy and work ethic to their locations

• Comparatively low cost of acquisition and low risk of implementation

• Absorbed values, methods, and preferences without past bias

THE CRITICAL DIFFERENCETHE CRITICAL DIFFERENCE• Wholesale Distribution is an industry whose primary mission

is devoted to Selling

• Our general business model coincides with their career preferences

– Action, variety, relevance, importance, flexibility

• They can get into the “action” and to where they can “make a difference” faster in wholesale distribution

HOW TO STARTHOW TO START• DISCOVER those schools near you with programs

– http://www.saleseducationfoundation.org/

• VOLUNTEER – to join advisory councils, make class or club presentations, offer internships and practicums, mentor sales program students, offer input to faculty on curriculum

• ADVOCATE where programs do not exist

• TAILOR YOUR ON-BOARDING PROGRAM – if you do not typically hire college graduates

Getting it right can have significant impact – some observations on sales talent

• 45% more likely to attain sales quota

• 5 times higher lead conversion rate

• >20% higher customer renewal rate

• Significantly better year-over-year results in average sales or contract value

The right Raw Talent

Source: Independent analyses of companies using Chally’s predictive analytics vs. all others, by Aberdeen Group and CSO Insights

Top performing sales team achieves more• 50%+ longer face time with

customers• 50% more topics discussed

during customer visits• 25%+ higher quality rating

by customers• 50%-100% higher sales,

market share, growth ……and incentive payouts

Getting it right can have significant impact – some observations on rep critical moves

• For example, 6 months after customer engagement “learn-practice”:– 14% higher customer rating– 10-30% higher sales

performance

• Reps with best execution had >30% faster uptake during new product launch

The right Critical Moves

Source: Misc. ZS Associates Performance Frontier analyses 2000-2011

Q&AScott Hudson

Vice President Sales and Marketing3123 Research Blvd., Dayton OH 45420

Direct: 937.610.4313Cell: 513.520.4187

ScottHudson@chally.comwww.chally.com