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The Crisis in Corporate Strategy (Part 1)

Note from the Editor:  Charles Fiaccabrino is a seasoned executive with 50+ years of sales management experience.   Charles began his career at Hoffmann La Roche on April 1st, 1969 as the first diagnostics sales representative in the newly formed Diagnostics Division and helped grow the organization into a multi-billion dollar enterprise.  During his career at Roche, he became known within the company as “Mr. Roche,” having earned the Presidents Achievement Award an unprecedented 20 times and received written accolades from Roche’s former CEOs, Irwin Lerner and Patrick Zenner, amongst other executives.  We, at Flevy, asked Mr. Fiaccabrino to contribute a series of articles detailing how he helped grow Roche into the Fortune 200 corporation it is today.  You can read his other narratives here.

This is the first narrative of a series titled The Crisis in Corporate Strategy.

* * * *

Sales CrisisIn recent days, an excellent article was written about the crisis in Sales Management. As a former sale manager with a very large prestigious company, the subject is troubling to me because I can remember when it was not a crisis, but quite the opposite. The sales manager was the focal point of the organizational structure with enormous power and prestige with all other elements of the company complimenting and supporting the leadership of the implementation process.

Yes, there was marketing and finance and an excellent marketing research team that played an important role in achieving consistent success, but it was the leadership of the sales manager that focused on “doing the right things.” Recalling those exhilarating times with great pride and purpose, there were National SALES meetings every year with individuals who excelled, honored with the Presidents Achievement Award, a highly coveted level of recognition. The sales manager at every level was highly trained in the candidate selection process, exemplified by the fact that the quality of people assembled gave rise to a corporate culture the likes of which made my former company the standard of the industry. This was supported by a career development department that helped produce some of the finest salespeople in the industry. As a part of this well thought out process was the management assessment center, where manager candidates were evaluated as to who would become the leaders of the future with the sales manager entrusted with the appointment decision. All of this designed to support the Sales Manager’s initiatives. This could not have been achieved without the direction and leadership of the Chief Executive Officer and herein lies the issue. It was through the prism of executive reality that drove the system to greatness. We were a product of their vision and the rest is history.

And so what happened next?

With the good fortune of working with a great organization for over twenty eight years, through a number of political, and economic changes, the one thing that allowed for our survival was the quality of our people. But changes were coming. It has been said that change is a constant, but not all changes are made for the right reasons and the consequences not always considered.

Around twenty or so years ago, consolidation of hospitals and medical centers took place with enormous dollars concentrated in a lesser number of buying structures. This gave rise to a “key account” selling philosophy which some might argue was not so really innovative but on the other hand which in and of itself a necessary strategic approach to gear up to a more “sophisticated” mode of business development selling. But where did this leave the Sales Manager?

Key account “managers” were selected for this purpose and in the process perhaps not by design but due to the financial reality this strategy would create, the question would also arise as to who would manage the process?

Was this the beginning of the crisis in management? Was the Sales Manager unwillingly relinquishing power and purpose?

Clearly, not withstanding the importance of key account strategies, would the role of the sales manager be modified and on a comparative basis become a less dominating influence in the implementation process? And who would lead this new strategic initiative?

Discussion.

The Diagnostics Division was formed in the early seventies and its diagnostics representatives assigned to Roche Laboratories philosophy, structure and culture which is described in the early comments of this narrative. This provided for a solid foundation for future growth of Roche Diagnostics and after a few years, the Diagnostics Division became its own entity, with key personnel from Roche labs becoming the core management structure providing direction and stability of a new division. As I look back in time, the influence of the Roche Labs culture had a very positive effect on my early growth and development and at the same time became a major factor to my success as a manager as well. The early years are depicted to serve as a standard for what was to follow. Crisis in management caused by failure of corporate strategy.

The author developed the Fiaccabrino Selection Process (FSP), a powerful methodology for interviewing and screening the best people for your organization. The objective is to select those people who will be the highest performers with the lowest turnover.  You can download a free primer of the FSP here: http://flevy.com/fiaccabrino-selection-process.

Stay tuned for the next segments, which will further explore the genesis of the problem and more importantly, how to reverse the crisis in management.

EDIT:  The next segment has been published, which you can read here.

About Charles Fiaccabrino

Known as "Mr. Roche," Charles Fiaccabrino helped grow Roche Diagnostics from a startup to a multi-billion dollar company. Roche is now a Fortune 200 enterprise with $50B+ in sales. Charles is a seasoned executive of 50+ years who has experience across all topics Sales- and Strategy-related. He also published the Fiaccabrino Selection Process, a powerful methodology for interviewing and screening the "best of the best" sales people.

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  • Rick Weaver

    Thank you for this extremely interesting analysis of Hoffmann La Roche. It is concise and compelling.

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