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Business acumen doesn’t follow closing, differentiation, or prospecting, even though it is fourth on the list.

Although there are salespeople who may be able to close and obtain commitments, most of the time the ability to obtain commitments is reinforced or enabled by the salesperson’s business acumen.

There are lots of ways to differentiate yourself and your company from competitors, and business acumen is surely one of the most important. These two attributes and skill sets enable and reinforce each other.

Prospecting is a skill that may precede the need for business acumen, but in most cases it is made immensely more powerful by the addition of business acumen.

What Is Business Acumen?

Business acumen is a general understanding of business principles. It is the ability to make thoughtful business decisions. Mostly, business acumen relates to the ability to make decisions that lead to profit.

Business Acumen in Sales

It is only recently that business acumen became one of the primary drivers of success in sales. In the past, it was often enough to possess product knowledge, features and benefits knowledge, and a strong sales acumen (overcoming objections, rapport building, etc).
As sales has evolved, the role of value creation has required a new set of skills.

Great salespeople understand how business works. They understand their company’s go to market strategy, their company’s unique value proposition, how they compete and win in their market, and their financial metrics.

Great salespeople also understand generally how their clients compete in their market segments, their client’s unique value propositions, and their client’s financial metrics.

Great salespeople are now great business generalists.

Great salespeople are comfortable discussing profitability, metrics, throughput, and any number of financial metrics. They are as comfortable proving ROI using a spreadsheet as they are presenting ideas using PowerPoint.

Great salespeople are comfortable discussing execution with their client’s operations staff, and discussing technical ideas and details with their client’s technical team. Great salespeople are comfortable discussing compliance and legal issues with their client’s procurement and risk management teams.

Great salespeople leverage their business acumen to identify areas where value can be created, to build the vision of how that value will solve problems or create a competitive advantage, and to work with their clients to build solutions that deliver the promised outcomes.

When Business Acumen is Missing?

When business acumen is missing, the salesperson struggles to understand how their own company competes and wins in the marketplace, and they chase opportunities that don’t fit their company’s target or client models. They often try to sell price when their company doesn’t compete on price.

When business acumen is missing, the salesperson is unable to speak the language of business with their prospects. They lack the conceptual understanding to be able to discuss the business issues, challenges, and opportunities in a way that is meaningful and valuable to their prospects.

When business acumen is missing, the salesperson doesn’t understand the financial metrics that drive their prospect’s business, and they cannot develop solutions that improve those metrics. They are uncomfortable with numbers, spreadsheets, and proving ROI.

When business acumen is missing, the salesperson struggles to build consensus with their prospect’s buying teams. They cannot speak to operations about execution, they cannot speak to technical issues with the technical team, and they cannot speak to legal and compliance issues with the procurement.

When business acumen is missing, the salesperson cannot develop and create the vision of improved performance or the solutions that will deliver that value for their clients.

All of this can be lacking in a salesperson with very high sales acumen. They may have a natural ability to develop rapport and present ideas. They may have very high-level skills at prospecting and closing. Without business acumen, these are no longer enough to succeed in sales. Better the salesperson have the business acumen and the desire to sell.

Conclusion

In the past, success in sales depended very heavily on the salesperson’s sales acumen. While sales acumen is still necessary, business acumen is now equally as important as sales acumen (and in many cases, more!). The business of sales is now the business of business. Salespeople now need the business acumen of a great general manager.

About the Author:

S. Anthony Iannarino is the President and Chief Sales Officer for SOLUTIONS Staffing, a best-in-class staffing firm, and the Director of B2B Sales Coach & Consultancy. You can find more of his insights at The Sales Blog.

“the ability to make good judgments and quick decisions.”

Building strong Business Acumen requires multi dimensional approach which involves training people and creating processes that can facilitate your people. The key is to start by aligning your processes to support the critical thinking required to help your sales force achieve their sales objectives.

Dollar objectives not aligned with Rx Data by customer

Your sales reps are giving annual sales quotas by product and their incentive plans all have a strong weighting towards dollar achievement. Your organization purchases 3rd party data to effectively track dollar sales by product by FSA/territory and let them know how they are doing versus objective.

Sales reps are given a range of the number of physicians they should target (reach) and a range of times each physician should be seen (frequency) in a year. The sales reps must decide which physicians, specialists, pharmacies and hospitals in their territory that will be called upon.

1) To help your reps make better strategic decisions arm them with customer actionable information (dollar sales, growth and sales potential by physician).

Reps are also asked to allocate their resources to their territory in the best way to meet their objectives. There is great 3rd party data that is acquired to help the sales reps decide which doctors are the best to target. This data is delivered in scripts yet the sales reps quotas are in dollars. Your sales reps need to be able to answer the following questions when developing their business plan:

• “Where is my new business is going to come from?”
• “Which physicians represent the best opportunity to achieve my objectives?”
• “How should I effectively allocate my resources to achieve my objective?”

2) Design of business planning templates requires customization at each level. The need to be ability to easily make changes and update those changes across districts and regions.

Business planning is usually a top-down and bottom-up process. Your business planning templates need to be able to support and integrate across marketing-sales management and sales representative. Templates need to capture analysis and be able to capture key strategic decisions at each level of the planning process.

3) Changing Mindset

Professional pharmaceutical sales representatives have gone through immense change or the last number of years. They have been asked to evolve from a traditional detailer to an actual sales person. They have been asked to move the sales along and not just provide product features and benefits. The next evolution of the sales rep is to a business person. As decision making is moving closer to the customer sales reps need to make strategic decisions with limited resources. To many this is not what they signed up for.

Sales managers who where once sales reps and their sales representatives and their sales managers who have come

4) Develop a business planning and review process

The key to making business planning work is creating greater accountability for the sales force. Senior sales leaders need to set up a quarterly review process to ensure that sales managers effectively executing their area/district plans. In turn sales managers need to be taking their sales people through the same process. The purpose of this is to

• Ensure that sales people/managers have done what they said they were going to do.
• That there have been learning’s on what worked and what didn’t work.
• Given there are always opportunities and challenges that the individual can demonstrate that they know what they are
• And finally that the sales rep/manager are doing something to address their opportunities and challenges

5) Leading Change with a Vision

Every company may have their definition of business acumen. It is incumbent on the sales leader to generate buy in from the management team and the sales force on his vision of business acumen and the new pharmaceutical sales force. Business acumen is not an event it is a strategic direction a company decides to go. Although a company may adapt many of its processes and train its sales people it is in the hands of leadership to direct and guide not only the sales organization but support departments as well.  The need for greater alignment in the new era of customer focused business models requires it.

Conclusion:

With fewer resources sales leaders need to become more strategic in how they grow their business. Many have chosen to move in a more business and customer focused direction. The challenge is how to do it. We have discussed several important variables to making the transition. The reality is that it requires a multi-faceted approach. Sales leaders need to align the entire organization, adapt business planning processes, information systems and train sales people and their mangers.

The team comes back with new business planning templates and training.  After some consultation and development work, your team rolls out your business acumen initiative.

Here are the pitfalls:

Pitfall #1: Aligning Planning Processes

Marketing plans are built on strategies and tactics on a per product basis. Sales plans are built based on tactics on a per customer basis.
Great thinking happens at both levels but how do you align the two? When I was a business unit manager, I was responsible for the marketing and sales plans but I remember reading the sales plans and realizing that they had no relevance to the sales manager’s plan or the brand plans.

Pitfall #2: Changing Mindsets

In order to move any change initiative forward it is critical to get buy-in. Moving to a customer centric business model with sales reps and managers making important brand decisions requires several organizational shifts.

Support departments such as Medical Education and Key Accounts must understand they do not lead, but support the sales team. The sales team in turn, must understand that they should be making strategic decisions and need to step up and drive the business.

Pitfall #3: Using Apples to Deliver Oranges

Sales reps objectives are set in dollars, yet the customer level data they receive is in scripts.
Do you see the pitfall here? As a head of sales I think in dollars, reps think in dollars and yet they are provided information that makes them look at customers based on scripts. How can they really understand where their business is coming from and where their greatest opportunities for growth are? How do they ascertain the growth potential for each physician? How can they make strong business decisions if the data and their objectives are based on different criteria?

Pitfall #4: Knowing What “Great” Looks Like

Your top sales reps already have a keen sense of business acumen. Is
your business acumen team riding in the field and speaking with your top sales reps? Much can be learned from what your top people are doing. They are the starting point to see what “great” looks like. Then you can determine what would help them be better, and listen to their suggestions.

Pitfall #5: Finding Your Way

Have you identified to your sales force the definition of Business Acumen? Are you clear on what it will look like in practice? To ensure that your organization delivers upon expectations, it requires a clear vision of achievement. What concerns me, is that many organizations are moving forward with different initiatives without a clear destination of where they want to be.

In Conclusion:

Business Acumen is becoming an important skill for pharmaceutical sales reps and managers. Companies have or will be launching initiatives to improve the level of business acumen in their respective organizations. Sales leaders need to be clear on the potential pitfalls to ensure that their initiatives achieve the desired outcome.

Pharma companies have shifted away from the traditional marketing driven model to a customer centric business model. As a result greater decision making has shifted from product managers to sales reps and front lines sale managers.

Business acumen is defined as the critical business thinking, decisions making and resource allocation to meet ones objectives. Although sales leaders have recognised that the pathway to achieving sales growth is business acumen, many sales leaders are finding it challenging to put it into practice.

The problem is multi dimensional because to be effective at business acumen companies need to adapt both the people and process side. Initiatives that only address one or the other are doomed to fail. The solution requires changes in business processes, skills and mindsets at all levels of the organization.

Key people challenges:

1. The training department is well prepared to support development of business acumen skills
2. Sales managers are unsure how to coach business acumen
3. Most sales reps do not have strong business acumen skills
4. Marketing, sales and training need to change their mindset

The 2011 Canadian Pharmaceutical Sales Management Report, found that 84% of respondents felt that business planning/acumen was an important responsibility of the sales manager and 67% agreed that their organization put a high level of importance on business planning.

Only 20% of respondents agreed that their organization was providing ongoing support in developing their sales managers business planning skills.

Key processes:

1. Sales and marketing planning processes need to be aligned
2. Sales and script data needs to be aligned with sales objectives
3. Territory business planning
4. Business review processes

Over the next few weeks I will be examining the challenges sales leaders face as they build Business Acumen Strategies to ensure they can deliver sustainable sales growth. We will look at the people and process issues that are critical to success.

Conclusion:

Business acumen is going to be one of the key drivers of sales growth in the new era of pharmaceutical sales. To succeed sales leaders will need to take a comprehensive approach by adapting a combination of talent development and process realignment to gain the greatest traction in the industry.

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The Pharmaceutical Industry has undergone enormous change. The number of sales reps has declined significantly over the last 4 years. Declining sales has not only forced the industry to reduce the number of sales reps calling on physicians but has also created the need to better focus on customer needs. The days of adding sales forces are dead and companies are struggling to find ways to deliver value to their customers.

Many companies have realised that in order to better understand and meet customer needs they have had to evolve from a centralised/marketing focus to a customer centric model. By moving greater decision making into the regions and territories the ability of sales managers and sales reps to make strategic business decisions becomes even more important. With fewer reps calling on physicians, the allocation of sales calls and marketing resources must be rationalised. Have you created training programs that help your sales managers strategically look at their business?

The survey says…. No.

The 2011 Canadian Pharmaceutical Sales Manager Survey found that 84% of respondents felt that business planning/acumen was an important responsibility of the sales manager and 67% agreed that their organization put a high level of importance on business planning. Only 20% of respondents agreed that their organization was providing ongoing support in developing their sales managers business planning skills. Come on people, your sales managers are struggling! Can they coach their sales reps without assistance? Without training? Without support?

Is a lack of business acumen within the ranks affecting your sales? Sales leaders can’t ignore the issues any longer. If you want to empower your sales managers and reps to make strategic decisions you need to adapt and align you training and development programs.

Conclusion

It’s time to find solutions. I believe that companies who build solid business planning processes that align marketing and regional sales plans with individual territory plans will have the best chance to succeed in today’s competitive marketplace.