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1.
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Brief
introduction
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·
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Hello,
and thanks for watching this
update.
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·
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Nearly
two years ago, we began our journey to build an industry-leading
commercial model and transform the way we interact with our
customers.
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·
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Since
then, we have invested significant energy and resources in designing and
beginning to implement a new model that aligns our teams around our
customers … and that positions us to build trust and demonstrate value by
partnering with
our customers to improve patient health
outcomes.
|
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·
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In
the past several weeks, with the placement of our customer
representatives, we have now completed the restructuring we began last
August when we created the U.S. Commercial Operations
organization.
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·
|
You
are probably wondering what will happen next given the Merck – Schering
Plough merger announcement we made on Monday. I know that the announcement
may be creating some new concerns just when you thought that things might
be stabilizing in terms of our people and our
organization.
|
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·
|
We
have known that our Merck leadership team was actively pursuing
opportunities that would strengthen our pipeline and position the company
for sustainable growth for the future. Our organization, our U.S.
Commercial Model approach and launch timing have been designed with an eye
toward successful business development that would expand the depth and
breadth of our pipeline and our opportunities to enhance our value to
customers.
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·
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The
good news is that all of the tough decisions we have made to create a
structure that is lean, flexible and sized for our current portfolio of
products has put us in a good position to work through the integration
process that will come later this year with minimal disruption to our
organization.
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·
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For
now, until the merger is executed, which is expected some time in the
fourth quarter, we must continue to perform our jobs in the same way as
before the announcement.
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·
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That
means ensuring that the national launch of our U.S. Commercial Model
proceeds as planned and that we stay focused on delivering the 2009
results that are expected of us.
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·
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Before
I give you the highlights of our 2009 priorities, I want to acknowledge
the significant milestone that our last step of the re-alignment
represents.
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·
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Getting
to this point didn't come without some pain. At every step of the
restructuring, we have had to make the difficult decisions that have led
to the displacements of some of our
colleagues.
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·
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This
final step of our restructuring resulted in a reduction of about 750
employees. These 2009 actions, combined with previous reductions in the
U.S. sales organization in 2008 and in 2007, represent a total reduction
of approximately 2,800 positions or 33% since early 2007. These numbers
reflect all sales-related positions including headquarters and sales
management.
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·
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Decisions
like these are never easy, no matter what the reason or how compelling the
business rationale … and I am acutely aware of the impact to our
people.
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·
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I
want to thank you again for your participation in the bottom-up process
that led to our ability to create an organization that is durable and is
aligned with our customers in every geography. I know that everyone across
the organization has contributed to getting us to this
point.
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·
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I
sincerely appreciate your focus and
dedication during these challenging times … I know that you have continued
to work hard despite the uncertainty caused by the realignment
process.
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·
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I
believe we can move forward with confidence that we have the right teams
in the right structure. Having made these difficult choices we have paid
the toll on building an organization that is durable, forward looking and
prepared for the task at hand.
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·
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The
next step is to focus on aligning every aspect of our work around our core
Business, Customer and People
priorities.
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·
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You
will hear more details about our priorities at your upcoming launch
meetings, but here is a brief summary of our focus for
2009.
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·
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With
respect to our Business:
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o
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We
must achieve our profit plan net sales and operating income
targets
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o
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Our
gross sales target for 2009 is $16.3 billion for the 15 products we
promote in the U.S.
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o
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And,
we must remain forward looking and develop plans to achieve 2010 LROP
revenue, expense and infrastructure
commitments.
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·
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With
respect to our Customers,
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o
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We
will build trust and demonstrate value through the delivery of the desired
customer experience …
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o
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Our
key measure on this will continue to be our quarterly customer trust and
value survey metric, which is also a part of our 2009 scorecard. Our first
baseline survey is currently underway and we expect to share those results
soon.
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·
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And
finally, with respect to our
People,
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o
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Our
2009 priorities focus on holding ourselves, our colleagues, and our
leaders, accountable to demonstrate the behaviors consistent with the
desired USCO culture.
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o
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We
will focus on doing those things that we know create a
highly engaged and satisfied workforce, because we know that’s a leading
indicator to highly satisfied
customers.
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o
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Our
key measure for this priority will continue to be our Denison Culture and
Plan to Win
survey results, also a part of our ’09
scorecard.
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·
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It
goes without saying, but I'll say it anyway, that we will deliver on our
2009 priorities in compliance with policy, safety standards and our
diversity and retention goals.
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·
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I
want to reinforce that, while we’ve achieved a critical milestone in
completing our alignment … we are far from reaching the intent of the U.S.
Commercial Model.
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·
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In
terms of changing our culture and our mindset, and learning how to work
differently both as individuals, and as an organization
... it’s really just beginning
…
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·
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To
fully deliver on the vision we have for our U.S. Commercial Model, and for
our U.S. Commercial Operations organization, we must take on a real
cultural transformation …
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-
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We
must become comfortable with the need to experiment, act and learn
….
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-
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We
need to be willing to consider new ways to work, and to try new ideas
without having all the answers
first.
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-
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I
know that our teams in the pilot region are certainly testing new
approaches and are continuing to learn everyday. We always love hearing
about the success stories, but I especially appreciate it when someone
stands up and talks about something that didn't work out exactly the way
they had planned.
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-
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One
of these stories came from Amy Flynn, an MGAM in
Minneapolis.
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-
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Early
in the roll out of the new commercial model in the pilot geography, she
had made good in-roads with a clinic manager with a mid-sized customer.
This customer was having a difficult time convincing her provider staff to
make some changes in their office processes and thought that Amy might
help her make a case for change with her
team.
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-
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The
clinic manager was able to schedule a meeting where Amy would show the new
Merck capabilities and share what Merck would be able to do for their
office. Amy was so excited to have this opportunity and prepared like mad,
trying to know all the potential resources we might have available to help
them.
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-
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Amy's
big day arrived, but as she began to go through all of her material, she
got the sense that she was missing the mark. The physicians were very nice
but non-committal when she asked them what they
thought.
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-
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After
the meeting, she had a chance to de-brief with the clinic manager who was
so supportive of what she was trying to accomplish. But, knowing what she
knew of the physicians, she thought that it was too much information too
soon.
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-
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So,
lessons learned?
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-
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Amy
says she would have taken more time to work with the clinic manager to
narrow the focus of what she thought was the most important area of
need.
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-
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She
would have met with a few of the physicians prior to the meeting to give
them some background on Merck's new approach and to get their perspectives
on what was important to them.
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-
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Finally,
she would not have brought so many resources to the meeting. It was just
too overwhelming to hear about a new approach and then see all of the
resources.
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-
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Important
lessons to be sure, but it's what the team has done with them that is
making the difference.
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-
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They
are now taking a different approach with the customer representatives
allowing them to build a relationship with the physicians and slowly
introduce the new commercial model
concepts.
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-
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And,
they are working with the clinic manager to introduce resources and tools
when they are ready for them.
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-
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Thanks
Amy for sharing your story and knowing that we have to look at both our
successes and our failures if we are going to be
successful.
|
|
·
|
Another
cultural shift we must tackle is to become more efficient and agile…. and
more adaptable to our changing industry and market
pressures.
|
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·
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One
example where we’re increasing efficiency and agility with measurable
success is through our strategic partnership with inVentiv Health, which I
announced last fall …
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-
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We
entered into this partnership to gain greater flexibility in providing
services to our customers especially as we were taking the steps to
restructure our field sales
organization
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-
|
Now
that we have completed the placement of our field sales representatives,
we have decided to expand our partnership, filling a large portion of our
future entry-level vacancies through inVentiv. We have waited to implement
this decision until now to allow any displaced Merck employees to post for
remaining vacancies.
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-
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We
believe this approach will help us meet the changing customer and business
needs and will provide our organization – and over time, the entire
company – with the increased flexibility that our new model demands of
us.
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-
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Beyond
flexibility, this new partnership will be more cost-effective, and it will
enable us to manage ups and downs in workloads more
efficiently.
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-
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All
of this directly supports the spirit of a new efficient, customer-focused
model that meets our business and our customers’ needs … while, at the
same time, minimizing the impact on our core sales
teams.
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3.
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Close:
|
|
·
|
I
know that the news this week will prompt many new questions. I ask that
you continue to focus on the important work at hand to launch our U.S.
Commercial Model and deliver the results that are expected of us for 2009.
I can promise you that we will continue to communicate with you on a
regular basis and will share what we know as soon as we are able to do
so.
|
|
·
|
We’ve
accomplished so much to build and begin to implement our new model in the
past two years … and it couldn’t have happened without your
support.
|
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-
|
We’ll
need that same continued focus and dedication as we now begin the work to
deliver on the intent of our new model and prepare for the new
opportunities that will come as a result of the
merger.
|
|
·
|
This
is a defining moment for our organization and for our
company.
|
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-
|
Your
Regional launch meeting this month is where it all
begins.
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-
|
I
look forward to joining you and your colleagues at the meetings, because
that’s when we’ll really start working in our new model
…
|
|
·
|
Please
come into your meeting fully engaged, and plan to give your leadership and
your colleagues your enthusiasm and full
attention.
|
|
·
|
To
get the most out of that experience, before you attend your meetings, I
encourage you to complete the pre-meeting exercises. You may also want to
visit the U.S. Commercial Operations website and learn as much as you can
about the model and your new role in it
…
|
|
·
|
And,
by the end of your meetings, I hope you’ll walk away with a strong sense
of exactly where we’re headed as an organization, and feel confident in
what our future holds.
|
|
·
|
I
am certainly excited about our future. We are poised to take our
organization and Merck in a completely new direction as we rebuild trust
and create a new kind of partnership with our
customers.
|
|
·
|
Thank
you.
|