Whither Reps:Time for a

Re-think!Tom Peters/ spbt/ Toronto/ 06.17.2002

All Slides Available at …

tompeters.comNote: Lavender text in this file is a link.

Friday.

Nardelli’s goal ($50B to $100B by 2005):

“… move Home Depot beyond selling ‘goods’ to selling ‘home services.’ …

He wants to capture home improvement dollars wherever and

however they are spent.” E.g.: “house calls” (At-Home Service: $10B by ’05?) … “pros shops” (Pro Set) … “home project management”

(Project Management System … “a deeper selling relationship”).

Source: USA Today/06.14.2002

Saturday.

“A WHISTLE-BLOWER ROCKS AN INDUSTRY: Doug Durand’s Risky

Documentation of Fraud at TAP Is Prompting Wider

Probes”

Headline: Business Week/06.24.2002

Sunday.

“Clinic to Drug Reps: Pay Up and Take a Seat”—Seattle

Times (06.17.02), on Polyclinic, a physician-owned, multi-specialty group

based in Seattle

One person’s opinion …

Sorry, Elliott/spbt … the issue is not the delivery of training. The

issue is … training for WHAT!

Issue #1:

NOT … “How to do what we do better.”

IS … “What the hell should we be doing?”*

*I am largely convinced that both your content and field processes are all screwed up.

??????

From: “We are pill peddlers.”

To: “We are providers of ‘Integrated, demonstrable health- & wellness-

enhancing outcomes’ … in partnership with … CMOs, HMOs, state AGs & Govs, Patients, docs … of which

pills may or may not be a/the central part.”

E.g.: Should we … abolish drug co. sales forces? And replace them with

… Integrated Marketing Services/ Solutions Teams that (1) focus on outcomes, (2) include

“sales,” “marketing,” “drug discovery process teams,” and various

outsiders?

“No longer are we only an insurance provider. Today,

we also offer our customers the products and services that help them

achieve their dreams, whether it’s financial security, buying a car, paying

for home repairs, or even taking a dream vacation.”—Martin Feinstein, CEO,

Farmers Group

The Future of Reps:

Whoops!

“Consultative selling requires dialogue … and

the time for that dialogue. Unfortunately, this seldom

happens in today’s hurry-up complex world of

pharmaceutical selling.”—newspost/spbt

Study of 500 Reps*: 65% “had face-to-face conversation with the

physician for less than

30 seconds per visit. In fact,

more than half of the 65% admitted that the average time is

less than 15 seconds.”*Holy shit!

Source: newspost

“Research reveals no evidence of overall superior selling behavior related to

experience beyond five years. Quite the

opposite …”—newspost/spbt

TP/06.2002: “So, tell me about reps …

Pediatric cardiologist & practice head: “I don’t see them, period. I study, write

papers, use the Web, attend a minimum of 4 or 5 major conferences a year. My staff may see them, but I in general find their views uselessly prejudiced. Call it, I’m afraid to say, ‘hucksterism.’ If I want

anything at all from them, it’s thoughtfulness—good luck!”

Family Practice Office Administrator (3 Docs, Midsize town)

TP: “How often does Dr. X see Reps?”PA: “He doesn’t.” [Emphatic.]

TP: “That was sharp in tone! Why?”PA: “We used to set aside a two-hour block, once a month. But a lot of the Reps missed appointments. That, however, was the least of it. The biggest problems were the Reps who kept pushing the same thing, visit after visit. They had absolutely nothing new to say.”TP: “So how does Doc X keep up?”PA: “The Internet.” [T.O.V. = “What else?”]

Internist (Silicon Valley): “The Web is generally better. I spent a year of

painstaking study, and now I have a system that keeps me informed in a ‘push’ fashion. I began as a skeptic,

harassed by a few of my techie patients—and I’ve become a ‘believer’

and proselytizer. Now I find myself haranguing other doctors.”

Oncologist (Urban Med Center): “They are, or can be, helpful to the two-thirds of docs, to be frank, who

don’t study much. I’ve got one or two I’ll call, but otherwise I’m ‘not

available.’ Quiet study, and increasingly the Internet, are my

tools of renewal.”

Pharmaceutical exec: “Truthfully, we hire attractive women as much as we can get away with. That plus

pens are huge influencers—it’s what our focus groups tell us.” (The

“attractive young women” theme was a constant refrain. “I find it laughable, to a point,” a female M.D.

told me. “What I fear is that it works.”)

ER doc/exec: “It’s pathetic. The docs are half-assed in their learning styles.

Most don’t even pretend they are keeping up. Reps? She who has the best pens wins. Health care is out of control—and laughably unscientific. Whatever your nightmare stories are,

Tom, trust me and my 25 years of experience, the reality is far worse.”

Plastic surgeon & practice head: “My practice has changed 100% in the last 10 years. Sadly,

that’s not true for three-quarters of my colleagues. Information technology is a big part

of it. It’s extremely user-unfriendly. It took me and my partners and office staff a year to

customize our approach—and as we did so the role of the reps became less and less important.

I won’t even let our staff schedule time with them. It’s inefficient, and most of them are

humorously biased—and insult us by imagining it’s not transparent. I’m not complaining—but,

fact is, I’m busy.”

My voyage: (1) “Hey, I’ll do TP’s eLearning pitch.” (Not as good as

Masie’s.) (2) “Why do docs waste time with reps? Isn’t the Web the answer?” (A: Docs don’t spend time/much

time with reps.) (3) “Hey, the fundamental concept of pharma’s

selling relationship may be all bollixed up.” (Hmmmmm …)

Any Idiot’s Conclusion: The

System Is Busted. (And: You are part of the system

… not spectators from the “privileged drug co.s.”)

“Without being disrespectful, I consider the U.S. healthcare delivery system the largest cottage industry in

the world. There are virtually no performance measurements and no

standards. Trying to measure performance … is the next revolution in

healthcare.”Richard Huber, former CEO, Aetna

“As unsettling as the prevalence of inappropriate care is the enormous amount of

what can only be called ignorant care. A surprising 85% of everyday medical

treatments have never been scientifically validated. … For instance, when family

practitioners in Washington were queried about treating a simple urinary tract infection, 82

physicians came up with an extraordinary 137 strategies.”

Demanding Medical Excellence: Doctors and Accountability in the Information Age, Michael Millenson

“Quality of care is the problem, not managed care.”

Institute of Medicine (from Michael Millenson, Demanding Medical Excellence)

CDC 1998: 90,000 killed

and 2,000,000 injured from nosocomial

[hospital-caused] drug errors & infections

1,000,000 “serious

medication errors per year” … “illegible handwriting, misplaced decimal points, and missed drug

interactions and allergies.”

Source: Wall Street Journal/ Institute of Medicine

“In a disturbing 1991 study, 110 nurses of varying experience levels took a

written test of their ability to calculate medication doses. Eight out of 10 made calculation mistakes at least

10% of the time, while four out of 10 made mistakes 30 % of the

time.”Demanding Medical Excellence: Doctors and Accountability

in the Information Age, Michael Millenson

YE GADS! New England Journal of Medicine/ Harvard Medical Practice Study: 4% error rate (1 of 4 negligence). “Subsequent investigations around the

country have confirmed the ubiquity of error.” “In one small study of how clinicians perform when patients

have a sudden cardiac arrest, 27 of 30 clinicians made an error in using the defibrillator.” Mistakes in

administering drugs (1995 study) “average once every hospital admission.” “Lucian Leape, medicine’s

leading expert on error, points out that many other industries—whether the task is manufacturing

semiconductors or serving customers at the Ritz Carlton—simply wouldn’t countenance error rates like

those in hospitals.”—Complications, Atul Gawande

It’s (measurable, systemic) outcomes,

stupid!

“Practice variation is not caused by ‘bad’ or ‘ignorant’ doctors. Rather, it is a natural

consequence of a system that systematically tracks neither its processes nor its outcomes,

preferring to presume that good facilities, good intentions and good training lead automatically

to good results. Providers remain more comfortable with the habits of a guild, where

each craftsman trusts his fellows, than with the demands of the information age.”

Michael Millenson, Demanding Medical Excellence

Leapfrog Group/med errors: “Not since Jackson Hole Group guru

Paul Ellwood, Jr., M.D., coined the term ‘HMO’ in 1970 has one idea so

fully captured the imagination of the healthcare industry.”—

HealthLeaders/06.2002

Leapfrog Group:

CPOE/Computerized Physician Order Entry*ICU staffing by trained intensivists**EHR/Evidence-based Hospital Referral***

*Duh I: Welcome to the computer age.**Duh II: How about using experts?***Duh III: If you do stuff a lotta times, you tend to get/be better. Source: HealthLeaders/06.2002

Computerized Physician Order

Entry/CPOE: 5% of U.S.

hospitals

source: HealthLeaders/06.02

The Benefits of … FOCUSED EXCELLENCE

Shouldice/Hernia Repair: 30-45 min, 1% recurrence.

Avg: 90 min, 10%-15% recurrence.

Source: Complications, Atul Gawande

Empire Blue Cross and Blue

Shield: 4% quarterly bonus for hospitals that meet Leapfrog’s CPOE and

ICU-staffing standards.

Source: HealthLeaders/06.2002

Whose motto?*: We hate

change!*Choices: AMA, AHA. Both

Tom’s World

NEW BUSINESS.

NEW CONTEXT.

All Bets Are Off.

“There will be more

confusion in the business world in the next decade than in any decade in history. And the current pace of

change will only accelerate.”Steve Case

Way to Go, Guys …

2002 write downs from recent

acquisitions …

$1,000,000,000,

000**$1 trillion (Source: Harper’s Index 04.2002)

“When asked to name just one big merger that had lived up to expectations, Leon

Cooperman, former cochairman of Goldman Sachs’ Investment Policy

Committee, answered: I’m sure there are success stories

out there, but at this moment I draw a blank.”

Mark Sirower, The Synergy Trap

The Destruction Imperative.

Forget>“Learn”

“The problem is never how to get new, innovative

thoughts into your mind,

but how to get the old ones out.”

Dee Hock

“BIG DRUG MAKERS TRY TO POSTPONE

CUSTOM REGIMENS. Most drugs don’t work well for about half the patients for whom they are

prescribed, and experts believe genetic differences are part of the reason. The

technology for genetic testing is now in use. But the technique threatens to be so disruptive to the

business of big drug companies – it could limit the market for some of their blockbuster

products – that many of them are resisting its widespread use.”

The Wall Street Journal (06.18.2001)

“Pharmacogenomics could

fundamentally change the nature of drug discovery and marketing,

rendering obsolete the pharmaceutical industry’s practice of spending vast amounts of time and

money to craft a single medicine with mass-market appeal.”

The Industry Standard (05.28.01)

NEW BUSINESS: NEW TECH

IBM’s Project

eLiza!** “Self-bootstrapping”/ “Artilects”

Deep Blue Redux*: 2,240 EKGs … 1,120 heart attacks.

Hans Ohlin (50-yr-old chief of coronary care, Univ of

Lund/SW) : 620. Lars Edenbrandt’s

software: 738.

*Only this time it matters!

“Most physicians believe that diagnosis can’t be reduced to a set of generalizations—to a ‘cookbook.’ … How often does my intuition lead me astray? The radical implication of the

Swedish study is that the individualized, intuitive approach that lies at the center of modern medicine is flawed—it causes more mistakes

than it prevents.” —Atul Gawande, Complications

WebWorld = Everything

Web as a way to run your business’s innardsWeb as connector for your entire supply-demand chain Web as “spider’s web” which re-conceives the industry

Web/B2B as ultimate wake-up call to “commodity producers”

Web as the scourge of slack, inefficiency, sloth, bureaucracy, poor customer data

Web as an Encompassing Way of LifeWeb = Everything (P.D. to after-sales)

Web forces you to focus on what you do bestWeb as entrée, at any size, to World’s Best at Everything

as next door neighbor

Case: CRM

Anne Busquet/ American Express

Not: “Age of the Internet”

Is: “Age of Customer Control”

Amen!

“The Age of the

Never Satisfied Customer”

Regis McKenna

“The Web enables total transparency. People with

access to relevant information are beginning to challenge any type of

authority. The stupid, loyal and humble customer, employee, patient

or citizen is dead.”

Kjell Nordström and Jonas Ridderstråle, Funky Business

“A seismic shift is underway in healthcare. The Internet is

delivering vast knowledge and new choices to consumers—raising their

expectations and, in many cases, handing them the controls.

[Healthcare] consumers are driving radical, fundamental change.”

Deloitte Research, “Winning the Loyalty of the eHealth Consumer”

“CRM has, almost universally, failed

to live up to expectations.”

Butler Group (UK)

CGE&Y (Paul Cole): “Pleasant

Transaction” vs. “Systemic Opportunity.” “Better job

of what we do today” vs. “Re-think overall

enterprise strategy.”

NEW BUSINESS. NEW VALUE

PROPOSITION.

The Heart of the Value

Added Revolution: The “Solutions

Imperative.”

The Big Day!

09.11.2000: HP bids

$18,000,000,000for

PricewaterhouseCoopersconsulting business!

“These days, building the best server isn’t enough. That’s the

price of entry.”Ann Livermore, Hewlett-Packard

Gerstner’s IBM: Systems Integrator of

choice. Global Services:

$35B. Pledge/’99: Business Partner Charter. 72 strategic partners,

aim for 200. Drop many in-house

programs/products. (BW/12.01).

“We want to be the air traffic

controllers of electrons.”

Bob Nardelli, GE Power Systems

“Customer Satisfaction” to “Customer Success”

“We’re getting better at [Six Sigma] every day. But we really

need to think about the customer’s profitability. Are customers’

bottom lines really benefiting from what we provide them?”

Bob Nardelli, GE Power Systems

Keep In Mind: Customer

Satisfaction versus

Customer

Success

Nardelli’s goal ($50B to $100B by 2005):

“… move Home Depot beyond selling ‘goods’ to selling ‘home services.’ …

He wants to capture home improvement dollars wherever and

however they are spent.” E.g.: “house calls” (At-Home Service: $10B by ’05?) … “pros shops” (Pro Set) … “home project management”

(Project Management System … “a deeper selling relationship”).

Source: USA Today/06.14.2002

“UPS wants to take over the sweet spot in the endless loop

of goods, information and capital that all the packages

[it moves] represent.”ecompany.com/06.01 (E.g., UPS Logistics

manages the logistics of 4.5M Ford vehicles, from 21 mfg. sites to 6,000 NA dealers)

Omnicom: 57% (of

$6B) from marketing services

A World of “Experiences.”

“Experiences are as distinct from services as services are from

goods.”Joseph Pine & James Gilmore, The Experience Economy:

Work Is Theatre & Every Business a Stage

Experience: “Rebel Lifestyle!”

“What we sell is the ability for a 43-year-old accountant to dress in black leather, ride

through small towns and have people be afraid of him.”

Harley exec, quoted in Results-Based Leadership

“The [Starbucks] Fix” Is on …

“We have identified a ‘third place.’ And I really believe that sets us apart. The third place is

that place that’s not work or home. It’s the place our

customers come for refuge.”Nancy Orsolini, District Manager

“Club Med is more than just a ‘resort’; it’s a means of rediscovering oneself, of inventing an

entirely new ‘me.’ ”

Source: Jean-Marie Dru, Disruption

WHAT CAN BROWN DO FOR YOU?

The “Experience Ladder”

Experiences Services

Goods Raw Materials

1940: Cake from flour, sugar (raw materials economy): $1.00

1955: Cake from Cake mix (goods economy): $2.00

1970: Bakery-made cake (service economy): $10.00

1990: Party @ Chuck E. Cheese (experience economy) $100.00

Message:

“Experience” is the

“Last 80%”

P.S.: “Experience” applies to all work!

1940: Cake from flour, sugar (raw materials economy): $1.00

1955: Cake from Cake mix (goods economy): $2.00

1970: Bakery-made cake (service

economy): $10.001990: Party @ Chuck E. Cheese

(experience economy) $100.00

It’s All About EXPERIENCES: “Trapper” to “Wildlife Damage-control Professional”

Trapper: <$20 per beaver pelt.

WDCP: $150/“problem beaver”; $750-$1,000 for flood-control

piping … so that beavers can stay.

Source: WSJ/05.21.2002

NEW BUSINESS. THE TALENT IMPERATIVE.

From “1, 2 or you’re out” [JW] to …

“Best Talent in each industry segment to build

best proprietary intangibles” [EM]

Source: Ed Michaels, War for Talent

“AS LEADERS, WOMEN RULE: New Studies find that female managers

outshine their male counterparts in almost

every measure”Title, Special Report, Business Week, 11.20.00

Women’s Strengths Match New Economy Imperatives: Link [rather than rank] workers;

favor interactive-collaborative leadership style [empowerment beats top-down decision making]; sustain fruitful collaborations; comfortable with sharing information; see redistribution of power

as victory, not surrender; favor multi-dimensional feedback; value technical & interpersonal skills, individual & group contributions equally; readily accept ambiguity; honor intuition as well as pure

“rationality”; inherently flexible; appreciate cultural diversity.

Source: Judy B. Rosener, America’s Competitive Secret

????????

½ the current #, 4X as good

NEW BUSINESS.

NEW MARKETS.

Trends I:

Women Roar.*

*Duh II.

Women & the Marketspace.

?????????

Home Furnishings … 94%Vacations … 92% (Adventure Travel … 70%/ $55B travel

equipment)

Houses … 91%D.I.Y. (“home projects”) … 80%

Consumer Electronics … 51% Cars … 60% (90%)

All consumer purchases … 83% Bank Account … 89%

Health Care … 80%

Carol Gilligan/ In a Different Voice

Men: Get away from authority, familyWomen: Connect

Men: Self-orientedWomen: Other-oriented

Men: RightsWomen: Responsibilities

FemaleThink/ Popcorn

“Men and women don’t think the same way, don’t communicate the same

way, don’t buy for the same reasons.”

“He simply wants the transaction to take place. She’s interested in

creating a relationship. Every place women go, they make

connections.”

Read This Book …

EVEolution: The Eight Truths of Marketing to Women

Faith Popcorn & Lys Marigold

EVEolution: Truth No. 1

Connecting Your Female Consumers to Each

Other Connects Them to Your Brand

“The ‘Connection Proclivity’ in women starts early. When asked,

‘How was school today?’ a girl usually tells her mother every

detail of what happened, while a boy might grunt, ‘Fine.’ ”

EVEolution

What If …

“What if ExxonMobil or Shell dipped into their credit card database to help commuting women

interview and make a choice of car pool partners?”

“What if American Express made a concerted effort to connect up female empty-nesters

through on-line and off-line programs, geared to help women re-enter the workforce with today’s

skills?”

EVEolution

“Women don’t buy

brands. They join them.”

EVEolution

Enterprise Reinvention!

RecruitingHiring/Rewarding/Promoting

Structure Processes

MeasurementStrategyCulture Vision

Leadership

THE BRAND ITSELF!

STATEMENT OF PHILOSOPHY: I am a businessperson. An analyst. A pragmatist. The enormous social good of increased women’s

power is clear to me; but it is not my bailiwick. My “game” is haranguing business leaders

about my fact-based conviction that women’s increasing power – leadership skills

and purchasing power – is the strongest and most dynamic force at work in the American

economy today. Dare I say it as a long-time Palo Alto resident … THIS IS EVEN BIGGER THAN

THE INTERNET!

Tom Peters

Psssst! Wanna see my “porn” collection?

What is your “Pull Strategy” re

women???**DTC ads are just the start

Trends II: Boomer

Bonanza/Godzilla Geezer.

2000-2010 Stats

18-44: -1%

55+: +21%(55-64: +47%)

“NOT ACTING THEIR AGE: As Baby Boomers

Zoom into Retirement, Will America Ever Be the

Same?”USN&WR Cover/06.01

50+

$7T wealth (70%)/$2T annual income50% all discretionary spending

79% own homes/40M credit card users41% new cars/48% luxury cars

$610B healthcare spending/74% prescription drugs

5% of advertising targets

Ken Dychtwald, Age Power: How the 21st Century Will Be Ruled by the New Old

“ ‘Age Power’ will rule the 21st century, and we are woefully

unprepared.”Ken Dychtwald, Age Power: How the 21st

Century Will Be Ruled by the New Old

What is your “Pull Strategy” re

boomers???**DTC ads are just the start

Bottom Line: Are you up for totally

rethinking what you are here for?

HealthCare21Tom Peters/03.26.2002

HealthCare21: 21 Ideas for Century211. Hospitals kill people. (And those they don’t kill, they wound.) (And they deny it.) (ERRORS RULE!)2. Hustling ambulances kill pedestrians—and don’t save patients.3. Doctors are spoiled brats—who don’t like measurements. Or any form of “interference.” Docs are also cover-up artists … par excellence (the REAL Hippocratic Oath: “DON’T RAT ON A FELLOW DOC”). 4. Most prescriptions don’t work … for the PARTICULAR individual in question.5. THERE IS LITTLE “SCIENCE” IN “MEDICINE.” (See state to state variations, country to country variations, the general lack of agreed upon treatments.)6. We could save thousands of lives (think Schlindler)—if we just outlawed handwritten prescriptions.7. “Detailers”/reps will disappear … when GenX docs arrive.

HealthCare21 (Cont.)8. IS/IT in hospitals is sub-primitive (despite enormous expenditures).9. ELECTRONIC MEDICAL RECORDS … PERIOD. (PLEASE.)10. Systemic IS/IT is worse—links between docs, insurers, providers, patients.11. The Web WILL Liberate. (Info = Power.) (BELIEVE IT.) 12. 80M BOOMERS RULE. ($$$$$. Desire for c-o-m-p-l-e-t-e CONTROL. NOW. “LEADERSHIP” OF AGING PROCESS.)13. “Drug Discovery” processes at Big Pharma are … hopelessly over-complicated. (???: Bye Bye … Big Pharma.)14. 90% of the fix: HARVEST THE LOW-HANGING FRUIT. “They” are … NOT … the Enemy. Damn it.15. Insured “consumers” are spoiled brats … who act as if H.C. is a Free Good. (MAKE THE BASTIDS PAY … at least a little more than a little.)

HealthCare21 (Cont.)

16. Genetic engineering & biotech change … EVERYTHING. (Within 10 years.)17. New Medical Devices change … EVERYTHING. (Within 20 years.)18. IS/IT changes … EVERYTHING. (Within 10-15 years.)19. New Docs change … EVERYTHING. (Within 10-15 years.)20. New Patients change … EVERYTHING. (Within 5-10 years.)

*

*

*

HealthCare21 (Cont.)

21. ALL THIS = ENORMOUS OPPORTUNITY. The

Opportunity of Several Lifetimes. (For the Bold & Brave.) H’Care WILL be … TOTALLY … re-invented in the next two decades.

Bottom Line: Are you up for totally

rethinking what you are here for?

Have you changed

civilization today?Source: HP banner ad