Hurricane Season and Quota

Note:? This post is not intended to diminish the seriousness of the recent hurricanes tragedy. My thoughts and prayers to all of those who have been impacted by the storms the recent few weeks.

I am adding some perspective on how commercial operations, sales, and marketing teams have to adjust business plans when events like hurricanes can disrupt the flow of sales on those (in the field sales teams) who have incentives (quota) tied to their compensation.

Compensation Team Challenges

For those who are in sales and compensation teams as a function of commercial operations, naturally occurring events like hurricanes, earthquakes, etc. will certainly disrupt sales. At Ethicon (Johnson & Johnson), challenges from such events ultimately meant a disruption to medical procedures.

In particular, those medical procedures that are seen as elective in nature. As such, as procedures are delayed in the impacted geographic areas, sales of medical devices for those elective surgeries come to a screeching halt. As such, sales representatives that have predetermined quota for the month/quarter/half/year will not be to have the opportunity to achieve their incentive goals due to unexpected shut downs.

In light of Hurricanes Helene and Milton, wide sections of southeast United States saw devastating winds, rain, and flooding that will take months to recover. As such, quota adjustments come into play to provide some "relief" to impacted sales teams.

The Broad Steps for Adjustments

Quota adjustments are as much art as it is a science when naturally occurring events do strike. It takes a great deal of collaborative work among leaders in sales, marketing and the compensation team to fairly and objectively to derive reasonable quota adjustments in light of the circumstances.

Here are some of those steps to address this issue, that may be useful to other readers:

First, use an authoritative map of the hurricane path – National Hurricane Center of National Oceanic and Atmosphere Administration (NOAA). Maps in this article would be useful to understand the path of healthcare disruption that occurred by hurricanes. Utilizing the rainfall color keys (purple, red, yellow, green), this would be a useful gauge to understand the geographies most affected by the hurricane.

Second, if your compensation and/or deployment team uses a mapping tool internally (Javelin, Tableau, Buxton etc.), replicate the map from step one to the zip codes and the business geographies of the sales force. By doing this step, the compensation team can get a better understanding of what hospital systems, individual hospital/ASC accounts, sales teams, and sales representatives are impacted by hurricane fallout based on zip code.

Third, like step one's rainfall color coding, determine the highest, moderate, and low impacted business geographies. This will help further refine the sales analysis that needs to be understood in the subsequent steps. Based on all the previous steps, the compensation team should have a lot of understanding of the geographies, accounts, sales teams, etc. that are impacted by varying degrees (high, moderate, low).

Fourth, using the findings from step three, the compensation team needs to review sales data for those accounts in all zones for several weeks prior to hurricane impacting those geographies.? Come up with average sales.

Fifth, review the pre- and post-hurricane sales to best understand what sales may have been lost over that period. More specifically, review the sales averages -5 days of event to 1 month post (or a few months post) to understand the impact of the various zones.

Sixth, note the differences in sales trends prior and post. Also, review the averages from prior year post-hurricane date. What were sales averages in October through December 2023? Since these are elective procedures, will the delays suffered by the hurricanes be made up in the coming weeks to months with above average procedure throughput?

In this case of elective medical procedures, there is a seasonality when it comes to these procedures. The fourth quarter of the year is particularly strong due to how medical insurance works. By this time of the year (November and December), medical insurance deductibles are met, so elective procedures increase with the opportunity of a larger portion of cost covered by insurance. As such, there are nuances in how to review the sales data pre-event, post-event, and historical (with strong seasonality) to consider in the quota adjustment.

As such, a quick adjustment to quota may only cause more issues for the compensation team. This is where leaders need to be patient and to allow time to pass to see if the sales readjust following the temporary stoppage. It is a delicate balance, as sales reps will want a quick adjustment (rightfully so), but clear communication with reasonable timelines will help keep the field motivated knowing that relief is forthcoming while finishing the year strong.

?#healthcare #medicine #health #future

Joseph W. Sunderman is an Intelligence Analyst/Strategist that is a student of understanding the Current State of the US Health and its impact for the next decade. I developed the thesis over several months for Directions Research Group.? Upon completion of boiling the ocean on the topic and created an impeccable deliverable, which can be found in my project section of my LinkedIn page.

?In the past, Joe spent seven years at medical device giant Ethicon (division of Johnson & Johnson) with the most recent role as US Regional Manager of Strategic Insights and Pricing.? In his seven years at JNJ, he received recognition for his servant leadership, where he was a stand out in performance by being a top 10% recipient of Encore and Inspire Awards over multiple years.? Dozens and dozens of accolades from contributors to senior leaders for his collaborative work.? Prior to Ethicon, Joe has had a wide variety of experiences in medical claims, banking, publishing, and retail.? He began his career at Schaeffer's Investment Research as a financial analyst, where he was ranked by Bridge Information Systems as one of the top 10 market analysts for three straight years for his commentary and stock picks found in Schaeffer's Daily Bulletin. Joe has been published in the Market Pulse Journal and Chartpoint and his market comments have been printed in the USA Today, Wall Street Journal, Barron's, Investor's Business Daily, Dow Jones News Wire, and Reuters. Also, Joe has made appearances on Bloomberg television.