Leaders in MedTech: Magdalena Kowalewska talks about Commercial Excellence and its Impact on sales

Today we have a Q&A with a recognized Senior Commercial Excellence and Sales Force Effectiveness Leader in the?Life Sciences market,?Magdalena Kowalewska. Having spent more than 20 years in the?Pharmaceuticals and MedTech industries?including?Global Business Service Manager at DSM,?Director of Commercial Excellence EMEA at Abbott and currently being a Director Regional Sales Effectiveness EMEA at Cepheid, she will be speaking about Commercial Excellence, Cross-Industry Innovation, Multichannel and Leadership Storytelling.

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Stan: Hi Magdalena, thank you for your time today with us. You are a very seasoned Leader in Commercial excellence, and the first question I would like to ask what is the history of this department and function?

Magdalena: Hi Stan, thank you for your questions. Commercial excellence is a relatively new concept compared to more traditional functions like sales, marketing, or finance. Back twenty years ago when I was starting my professional career as a Deloitte Consultant, companies were focusing on implementing CRM platforms to get 360° view of all customer interactions and increase customer retention rates. With digital transformation, sales processes have become more complex. In increasingly competitive markets, training teams have been busy upgrading value-selling competencies of their sales teams.?

All those programs impacting directly commercial teams used to be run by different functions independently of each other. This often led to internal inefficiencies and misalignment. It became critical to think more holistically. That’s how first stand-alone sales enablement departments started to emerge to foster better cross-functional collaboration between these groups and increase impact on sales. Over the last five years the percentage of organisations with formal sales enablement function doubled helping revenue teams effectively navigate transformation.?

Stan: You mentioned the sales enablement. Does commercial excellence importance reside only in operational gains?

Magdalena: No, commercial excellence covers more than sales enablement projects aiming to align internal resources. Sales excellence should also look externally towards the market and new strategical challenges that may need to be addressed. In times of high-speed technological innovation, the competitive advantage from superior product features does not last long any more. Customers are better informed and have higher expectations. Buyers are interested in the value they can get from a solution rather than individual product characteristics.

Finally, a very costly “milkman” selling model still predominant in the Healthcare industry becomes increasingly difficult to sustain in the market with increasing downward pricing pressure. Moving towards multi-channel sales to optimise selling costs when maximising ROI becomes critical to secure future growth of MedTech and Pharma players.

That being said, new strategies often remain very high-level and do not cascade down at the actual account level. This leads to a disconnect between the corporate goals and commercial execution. A commercial excellence executive will help you to identify those gaps and design cross-functional programs to overcome both internal and external complexity and drive above-market growth.?

Stan: What is the Impact on sales and how do you measure it? Is there a specific way to do it right?

Magdalena: There are multiple studies quantifying sales enablement impact on business results.

The report published by Sales Enablement Pro in 2021 shows that having a dedicated sales enablement function is correlated with 4-percentage-point higher win rates, 8-percentage-point improvements in quota attainment, and 9-percentage-point greater customer retention compared to those without a dedicated sales enablement function (1).

There are two main business scenarios where commercial excellence is particularly relevant: scale up and turnaround.

The first relates to the situation when after an initial phase of hyper growth in a start-up type of environment, the company needs to formalize its processes and strengthen commercial engine to sustain future performance. But it’s not only for start-ups. The MedTech giants following M&A activities regularly reorganize their operations creating new business units to pursue strategic opportunities. This was the case at Abbott Structural Heart division which was only four-years old when we embarked on our commercial excellence journey.

In more mature highly competitive markets, when facing a disruptive market factor upgrading sales processes and tools might not be sufficient. Commercial excellence can then facilitate strategic GTM and revenue management innovation. At CSG operating in consumer goods market, we have pioneered a best-in-class value-based pricing framework that resulted in more qualitative distribution network when enhancing customer experience and protecting the brand image.

Stan: Having worked in various industries I want to ask: How is it different from FMCG and Medical Devices / Healthcare??

It’s a great question. It is true that each industry has specific market forces that shape its ecosystem. However, sales fundamentals and commercial performance drivers remain the same. For example, managing omnichannel calls to effectively address selling opportunities based on value versus on volume becomes an imperative across all industries, including Healthcare.

MedTech and Pharma players has long lagged behind other industries in commercial innovation. Based on the recent article by McKinsey, the healthcare industry faces an acceleration in costs of nearly $600 billion in 2027, which could make healthcare less affordable and threaten the sustainability of industry margins (2).?Those who will adopt a more open approach will weather the storm and outperform through the recovery.

A commercial excellence professional may bring value by identifying new commercial practices used outside of Healthcare that once translated into industry-specific setup will drive value and business growth. Thinking outside the box skill will make a difference there.

Stan: What does Leadership in Commercial Excellence mean?

Magdalena: I like to think about commercial excellence as a way to ‘bring science into art’ of selling. We speak a lot about KPI, ratios, quotas and leaders tend to forget humans behind those numbers. Launching a new commercial policy, customer segmentation or multichannel sales processes bring uncertainty and requires a lot of effort to learn a new skill or do things differently. To get their teams quicker from denial and anger phases into exploration, leaders need to rebuild an emotional connection with their associates to create space for change and innovation. ?

The storytelling is one of the most powerful tools that seems to get forgotten. When launching a new multi-channel commercial policy in the past, I made a reference to the Matrix movie where the choice of the main character Neo between a blue or red pill is a central metaphor for overcoming the fear of unknown. Shifting people’s attention into a widely known cultural reference helped us generate more excitement about the company future and transformation needed. Matrix remained our symbol for more than two years of project iterations and sustainment. So be creative in your communication. Inspire action.

Stan: Thank you Magdalena for your time and a very interesting discussion.

Sources:

(1) SE Pro – 2021 State of Sales Enablement

(2) https://www.mckinsey.com/industries/healthcare/our-insights/the-gathering-storm-an-opportunity-to-reorder-the-healthcare-industry

Stan Kalinin draws on an extensive track record of more than 14 years of search and executive team-building expertise. He is the host of MedTech Opinion Leader supporting growth of MedTech industry and creating insightful stories with key market executives forging alternative narrative about the sector current and future trends.