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PhisoTech Tomorrows Innovations Today

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THE PHISOTECH STORYTHE COMPANY

Background:PhisoTech, a fictional company, is a pharmaceutical supply company that manufactures andmarkets the Patcha medicated adhesive product using patented skin interface technology.The use of medical patches for treating a variety of problems, such as smoking cessation andeven birth control, has been widely accepted by doctors and patients alike, resulting in amulti-million dollar market for the category. Although PhisoTech competes in the enormous,fiercely competitive, over-the-counter (OTC) medication market, it is one of the few thatmanufactures medicated patches. The company has thus managed to carve out a respectableniche. In fact, PhisoTech is what some analysts have called a small, but promising cog in amammoth machine. Weve fought hard just to stay afloat, says CEO, Lyndon Shriver.Shriver, a veteran sales and marketing professional with some of the Midwest's major playersin the health care industry, was hired in 1996. Under Shriver's dynamic leadership, thecompany has been transformed from a tired old medical supply company with a patented, butlacklustre adhesive product, to an appealing contender in the medical field with aninnovative, topical patch that people can buy without a doctor's prescription. PhisoTech is apublicly held company whose stock is traded locally, over the counter. The current stock price $3.00 a share.

Industry Overview:The pharmaceutical industry is a $300 billion business and is comprised of the world's largestdrug companies. The top three drug categories are ulcer medications, cholesterol treatments,and antidepressants, with ulcer medication, Prilosec, the world's best-selling drug (over $6billion in sales in 2000). Analysts note that the US currently has the largest worldwide marketshare, and with improved living standards and health care systems globally, the demand formedication will increase substantially. Furthermore, with the over-65 market (who consumethree times more medication than younger populations) reaching 690 million by 2025, thedemand for drugs is expected to climb exponentially. Within the pharmaceutical industry,

over-the-counter medications represent a $2 billion market, of which the patch marketaccounts for only a fraction. However, analysts have identified patch products as the fastest-growing segment in the OTC consumer remedies category, and given the popularity amongdoctors and patients of the patch to treat a wide range of health problems from smokingcessation to birth control, the market potential for PhisoTech's patch products is immense.Today, the market for the OTC patch is growing at the rate of 15%annually, but PhisoTech,optimistic about the future of patches and the strengths of its management team, isforecasting a long-term growth rate of 5% per quarter.

Competitors:Three of PhisoTech's major competitors - Pfizer, Noven Pharmaceuticals, and WatsonLaboratories 1 are some of the world's largest pharmaceutical corporations that also market

over the counter medications, and some of whom have adopted the patch technology forsome of their products.

Pfizer is one of the top five drug makers in the world. Its products include such prescriptiondrugs as impotence treatment Viagra, cardiovascular drug Norvasc, and cholesterol-loweringLipitor, as well as such consumer brands as Visine, BenGay, Listerine, Certs, Dentyne,Efferdent and Zantac (which are united under the Warner-Lambert nameplate).

1 Profiles are company capsules from www.hoovers.com


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Noven Pharmaceuticals develops transdermal and transmucosal drug delivery systems whichuse an adhesive patch containing medication that is administered through the skin into theblood stream over an extended period of time. Noven's patented drug delivery systems can beadapted to deliver many different kinds of drugs. Its estrogen patches have been approved fortreatment of menopause and osteoporosis in over 35 countries; products are in development

to treat dental pain, motion sickness, and attention deficit hyperactivity disorder. Marketingagreements and joint ventures with Aventis and Novartis account for nearly all the company'ssales.

Watson Laboratories makes generic and branded drugs, focusing on niche pharmaceuticalsand products that are hard to make. It offers generic versions of such brand-name products ashormone replacement therapies Estrace and Ogen, analgesics Vicodin and Lortab, and ulcerdrugs Zantac and Carafate. Watson's branded drug development efforts are focused onnephrology (iron-replacement therapies), women's health (contraceptives and hormoneregulators), and general products (antihypertensives, anti-psychotics, and dermatologics).

The Marketing Plan:Products: PhisoTech developed ReliefPatch, its first topical patch designed to relieve muscleaches, in the early 90s. In addition to ReliefPatch, PhisoTech currently also manufacturesCoolPatch, a vaporized cooling patch for bruises and minor skin rashes, and ViralPatch, apatch that delivers cooling medication to relieve fever and flu symptoms. ViralPatch andCoolPatch also come in children's versions. Chief among the advantages of the patch is itsclean application over the messier applications of conventional topical creams andointments. Patches also last longer than creams and ointments, and they are more convenientto carry and store. On the horizon for PhisoTech is a revolutionary product that coulddramatically impact revenues an OTC topical patch that would deliver anti-inflammatorymedication (such as aspirin and ibuprofen) to painful areas of the body. The New England

Journal of Medicine reported that pain relief delivered in this way had few of the side effectsthat similar medication taken orally can have, the worst of which are blood clotting problemsand potential damage to vital organs in the body.

Distribution: PhisoTech has a network of distributors who sell to independent drugstores andthe major retail chains, such as Wal-Mart and Target. PhisoTech would like to increase itsnumber of customers by acquiring several new distributors every year. Currently, their five-year plan is primarily focused on increasing customer share-of-wallet; thatis, increasingthe spending levels of their existing customers through customer relationship managementselling and marketing strategies. However, customer acquisition will also play an importantrole for the future profitability of the company.

Promotion: So far, PhisoTech has done virtually no consumer advertising to the consumer

(end user) of the product. With a relatively small marketing communications budget, Lyndonwants to make every dime count and get it done with less. The lion's share of thepromotional budget has been directed toward strategies that will push product through thedistributor network (rather than strategies that use promotional activities to pull in the end-users of the products).


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THE HIRING DECISIONAs part of her job as the newly-appointed Vice President of Sales and Marketing, JuanitaValdez is in the process of hiring two new sales professionals to round out the smallPhisoTech sales force. PhisoTech, like many companies, has experienced a turnover of itssales reps. One sales rep has quit PhisoTech and gone onto greener pastures, as the formeremployee put it, and two others were fired due to poor productivity in the field. The specific

reasons were legion, but in general, it seemed that those who that were no longer with thecompany either weren't right for the job or the job wasn't right for them.

Currently, Juanita had only three reps on the sales team: Bill Telle and Doug Fredrick, twoof PhisoTech's highest-performing sales reps, and Kathleen Kane, a relative newcomer whoseperformance was already very promising. But now, Juanita and the PhisoTech hiringcommittee were very anxious to hire at least two more sales professionals to round out thesales team.

Looking over the qualifications of a pool of candidates that the hiring committee hadnarrowed to six (given below). Juanita wanted to make sure she made wise decisions. Sheknew that two major problems relative to the sales profession were, as PhisoTech hasexperienced -- low productivity and high turnover. 2 Wanting to avoid both of those problemsto the degree possible, Juanita thought I need to try and select candidates that will bothperform well for the company and that will be happy and satisfied working for PhisoTech.So what characteristics have you usually looked for in a job candidate? Juanita asked thenext time she met with the hiring committee. The committee said that two main hiringcriteria were how much sales experience a candidate had, and then whether or not thecandidate had a college degree. A few on the committee also admitted that sometimes we just had a hunch about a candidate. Analytical to a fault, Juanita frankly wasnt sure thatthese were sufficient criteria for predicting job performance, and could be a reason forrelatively high turnover and low productivity. For example, while she agreed that salesexperience was obviously important, relevant sales experience was even more important,as was a good fit for the job. In other words, Juanita wanted to make sure that the criteriaof the job matched the qualifications of the candidate, and that a candidate would fit withthe unique PhisoTech culture. Following her meeting with the committee, Juanita jotteddown her own hiring criteria:

1. Has th e candidate had relevant sales experience? I want someone who has at leastsome familiarity with pharmaceuticals or a closely-related field, as well as experienceselling to distributor channel members, rather than selling direct to the end user.

2. Can the sales person sell? Experience would be one indicator, of course. But itwould help a lot if I could some concrete information about a candidate's ability tomeet or exceeded established sales quotas.

3. College degree? Hmm, a candidate with a collegedegree certainly is the ideal, allother things being equal. However, I do know that studies have shown that sales reps

with college degree do not do significantly better than those without, depending, of course, on the industry. 3 I probably wouldn't eliminate a good candidate if the onlything missing was a college degree.

4. Then theres personality, talent, self -motivating, smart, energetic these are thingsthat I probably would trust my intuition about.

2 Harvard Business Review, Job Matching for Better Sales Performance, Greenberg and Greenberg,September-October 19803 Ibid, p. 131.


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8484 Elm Street, Cincinnati, OHCell: 483 - 842 - 4820

Marcy J. TaftObjective To expand my selling skills.Experience May 2001 - present Slumberland Cincinnati, OH

Inside Sales and Marketing Coordinator- Inside sales agent, taking orders, serving other customer needs.- Update and generate monthly sales forecasts.- Monitor open sales leads.- maintain the customer database.

June 2000 - May 2001 Graley Industrial Supply Cincinnati, OHCustomer Service Representative- Rectify problem situations involving warranties and shipping.- Override system errors including order rejection in SAP system.- Communicate directly with customers to resolve discrepancies.

Nov 1998 - May 2000 Missionary Work VenezuelaMissionary- Taught people within the community- Organized and performed community service activities.- Learned to communicate in Spanish (85-90% fluent).

June - Oct 1998 GE Capitol Cincinnati, OHInformation Systems Intern- Designed and developed an intranet web page.

- Developed an internet program to provide warranty information for infieldservice technicians.

Education 1995-2000 Brigham Young University Provo, UTBS Business Management

Computer Extensive knowledge of Windows operating systems, MS Office, PowerPoint,Skills Netscape, some SAP and experience using MS Visual Basic.

Honors El Puente Mentor. Recipient of President's Outstanding Minority, AndersenConsulting, Holden Graphics and Schapira Scholarships.


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J ONATHAN H ENDERSON6409 Lawson Avenue

Chicago, [email protected]

EDUCATION UNIVERSITY OF CHICAGOBachelor of Science in Business, December 2001Double Major: Sales Management, FinanceCumulative GPA 3.30

EXPERIENCE USA FILMS. INCChicago, IL Films/Campus Sales RepJanuary 2001 - Present- Market and sell USA films productions to local colleges- Implement marketing programs that target special interest groups and

student organizations- Assist account managers with promotions of major motion picture

releases- Exceeded sales revenue goals by 10%

RECREATION WORLD Lake Buena Vista, FloridaCorporate Sales January 1999 - Dec 2001Responsible for developing and selling corporate packages in themarket. Target customers were public relations managers and seniormanagement.- Partner with local advertising speciality company to achieve goals.- Designed an online informational and ordering web site.

Merchindise Host January 1998 - Dec 1999

- Recongnized as a four-time "Guest Service Fanatic" in the diverse,busy and quality driven environment of the Disney - MGM Studio- Assigned closing responsibilities as nightly stage manager.

TARGT CORPORATION Orlando, FloridaSales Management Intern June - August 2001- Enhanced Target brand image through ensuring quality merchandise

presentation and employee behaviour on a store wide level.- Delegated responsibilities, motivated team members, and managed

inventory flow as a department team leader.- Demonstrated excellent communication skills in resolving guest's

conflicts quickly and easily as the lead on duty.

- Effectively used computers to aid in advertisement planning andmerchandise presentation, as well as analyzing daily sales figures.

ACTIVITIES Honors Emerging Leadership ProgramYoungest member of the Toastmaster's ClubVolunteer - Illinois State Horticultural Society

AWARDS Emerging Leadership Scholarship RecipientSmith Foundation Scholarship Recipient.


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NATHAN P.BRAGGS, III10 Tyrol Avenue

Lawrence, NY 11559Cell: 895 -652 - 9234

CAREER OBJECTIVE:Looking for an outstanding sales opportunity that will showcase my abilities as a consistentlyhigh achiever who is highly motivated, well educated and totally sales oriented.

EDUCATION:Yale University, New Haven, CTBachelor of Science: MarketingCumulative GPA: 3.7

Graduated: Magna cum laude, 1999

EXPERIENCE:

Draper Systems, Inc., Philadelphia, PA (www.whoneedsaplan.com)Promoted to management position within one year where I leveraged my marketing and salesskills for a newly established internet company.- Contributed to sales volume of more than 49% over the previous year in a highlycompetitive market.- Assisted in the development of a new e-strategy that tripled the sales for the firm.- Created and wrote individualized proposals for venture capitalists.- Recommended implementation of a successful telemarketing program, includingcompensation plan for staff.- Participated in strategic development of marketing and sales campaigns.

Lancaster Electronics, Lancaster, PA

Account Manager for mechanical equipment division - internship during my senior year atYale.- Expanded markets for established and new products, resulting in an impressive increase innew accounts

CORE COMPETENCIES:I AM SMART, ANALYTICAL, ACHIEVEMENT - ORIENTED, PERFORMANCE DRIVEN. I AMCONFIDENT, BOLD AND PERSUASIVE. I BELIEVE I CAN SIGNIFICANTLY ENHANCE ACOMPANY'S PROFITABILITY THROUGH SUPERIROR MANAGEMENT OF CUSTOMERSAND PROSPECTS.


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Lyle Miller

1414 Stevens Way, Minneapolis, [email protected]

Objective To maximize my selling ability by developing a new or existing territories.

Experience 1984 - 2002 Skippy Peanut Butter Minneapolis, MNSenior Sales Representative- Grew territory to $30 million from $5 million.- Suggested new products that increased earnings by 23%- Salesman of the Year 1988 - 1990 - 1992 - 1995- Developed excellence in sales training course

1980 - 1984 Duffy Vineyards Hastings, MNSales Representative- Expanded sales team from 50 to 100 representatives

- Tripled division revenues for each sales associate.- Expanded sales to include mass market accounts.

1975 - 1980 LitWare, Inc. Southridge, SCSales Representative- Expanded territorial sales by 400%- Received company's highest sales award four years in a row.

Education 1971 - 1975 Mankato State Collage Mankato, MN- B.A., Agri-Business.

Interests Baseball, fishing, hunting


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Jacqueline Spratte1907 Lamplighter Lane

Lancaster, PA 17604717-954-6033

Career Goal : I'm seeking a sales position with a growth company that will allow me to buildand expand a territory

Working ExperienceRegan ManufacturingPittsburgh, PA 10/98 - presentEstablished new markets for a mature industrial product line, as well as increased revenuesfrom existing customers by 25%. Developed sales and marketing strategies identified specificniche markets, and developed methods for penetrating those markets.

Researched and identified the market size and opportunity, the competitive landscape, and thetarget market for a new product introduced in 2000. Developed new opportunities fordistribution channels and assisted in building these new channel relationships.

Implemented a successful win - back strategy for lost customers, gaining back 33% of thosecustomers.

Canton IndustriesCleaveland, OH 1/95 - 9/98Serviced established accounts and generated leads for new business, creating new businessfrom established customers and new markets for existing products. Worked directly withcustomers regarding product improvements and collaborated with the engineering departmentto integrated various product modifications. Also worked closely with service department toaddress areas of customer dissatisfaction with service issues

Participated in "extreme prospecting" a mew selling strategy being tested by the company,the result of which was establishing 18 new accounts in 4 days (200 calls, 50 pitches -working 4 hours a day).

Quality Homes, Inc.Canton, Ohio 1993 - 1994As a telephone sales representative, booked new appointments for accounts managers.Analyzed transactional data for opportunities to build more business with existing customers.Handled customer complaints.

Education:B.S. Business Management Overall GPA: 3.3Bowling Green University

References available upon request.


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Melissa Brooks

2-3 Pinewood Dr. Austin, TX 75203

e-mail: [email protected] Cell Contact: 241 -891 - 3215

Career Objective ; To secure a position as a field sales representative in order to demonstratemy sales strengths as well as expand my career potential

Experience :4/99 to present Thomason Pharmaceuticals , Austin, TXResponsibilities Inside Sales - 10 Accounts

- Service existing accounts- Develop new accounts for the company- Interface with marketing team to communicate the needs of my

accounts- Troubleshoot and quickly react to customer complaints and area of

dissatisfaction- Maintain and update account records.- Report directly to Regional Sales Manager.

9/95 to 3/99 Austin Medical Consortium.Responsibilities Office Manager/Administrator

- Provided support services for senior management- Worked as a liaison between sales reps and customers.- Supervised 2 - person, administrative support team.- Coordinated meetings and prepared presentation materials.- Managed the routine administrative functions.

Education1992 - 94 University of Texas - Austin

Major course study - Mass Communication

Skills High level of computer proficiency (MS Office)

Capabilities I am particularly good at managing delicate and sometimes - difficultcustomer relationships. Because of my previous administrativeexperience, I have very good organizational and time managementskills.

Personal Interests Former Miss Medicina

Also model part - time. Like to ski, play tennis and read.


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Answer the following questions:

1. After reviewing the five resumes, which two new sales professionals would you hire?

a. Marcy J. Taft ( ) b. Jonathan Henderson ( ) c. Nathan P. Braggs, III ( )d. Lyle Miller ( ) e. Jacqueline Spratte ( ) f. Melissa Brookes ( )

2. Now write a few points discussing your choices. For example, what characteristicsdid the candidates have that specifically qualified them for PhisoTech. Whatdisqualified them?

a. Marcy J. Taft

b. Jonathan Henderson

c. Nathan p. Braggs, III

d. Lyle Miller

e. Jacqueline Spratte

f. Melissa Brookes


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Scene One:The National Sales Meeting

During the National Sales Meeting at Bob's Bunkhouse and Corral, a dude ranch in Arizona,Lyndon Shriver, Chief Executive Officer, mapped out an aggressive business plan forPhisoTech. Although his objectives were very ambitious and exceeded industry standards,CEO Shriver was confident that with his talented sales organization on the front lines, his

vision could become a reality.

Here were his main objectives:1. To increase sales revenue by 5% per quarter, which exceeded the annual rate of 15%

projected by analysts for the over-the-counter (OTC) patch market.2. To increase customer lifetime value (ltv) by 5% per quarter.3. To increase contribution income by 5% per quarter.

While a hopeless optimist by nature, Lyndon had several reasons to be particularly confidentabout achieving his objectives. First of all, as the major player in the niche market, he wascertain that PhisoTech could leverage the growing demand for medicated patches, theirflagship product line. Lyndon knew that PhisoTech was well positioned to capture greaterrevenues from its existing customers as well as to leverage the significant opportunity toexpand its customer base.

Another reason Lyndon was particularly optimistic was his infinite confidence in his VicePresident of Sales and M arketing, Juanita Valdez. Juanita was one of the new breed of sales managers where setting sales quotas should be tied to both profitability and salesrevenue. She also believed in a hands-on management approach, coaching and training hersales reps to be increasingly strategic in their approach to account management. Thus far,Juanita's performance as one of PhisoTech's movers and shakers had been beyond reproach.She had beefed up the sales force, adding, as Lyndon put it, fresh blood to the herd. (Asthe son of a butcher from a small ranch in Texas, Lyndon was well known for his penchantfor a host of meaty metaphors.) Lyndon liked PhisoTech's five sales reps. They' re primecuts, according to Shriver, and they were certainly up to the task of carrying out thePhisoTech mission.

Actually, Juanita herself was relatively new to PhisoTech. Although quiet and understated,particularly in comparison to the flashy sales team she was heading up, Juanita's leadershipqualities were irrefutable. In addition to her broad, cross-functional experience in sales andmarketing, Juanita's long tenure with, among others, a major supplier to pharmaceuticalseminently qualified her for the position.

Feeling deceptively chic in his jeans, cowboy shirt and finely crafted cowboy boots, Lyndonspoke loudly into the sometimes- squealing microphone. I'd like to welcome you to Bob's

Bunkhouse and Corral, a truly fine dude ranch. I've been waiting a long time to dust off mycowboy boots and don my bolero, as some of you know. Reminds me of growing up on theranch. Elsie, Lyndon's wife, quickly and discreetly nudged him to stay on track. Don'tstart, Lyndon, she whispered. Quickly getting back to the subject at hand, Lyndon expressedhis appreciation to all his employees, and especially to Juanita for her fine leadership thus far.I like the way you've taken the bull by the horns, Juanita, remarking that she was respectedand well liked throughout the company. Lyndon was certain that her meticulous attention tofiscal accountability and her strong strategic approach toward managing the sales force wouldhelp PhisoTech achieve its goals.


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Furthermore, Lyndon continued, Juanita's conciliatory nature would go a long way towardminimizing poor productivity and high turnover among the salespeople problems thatplague many industries, the pharmaceutical industry being no exception. Rarely concernedabout political correctness, Lyndon concluded his speech by saying that both he and the board thought that Juanita was quite the gal!

Although she could do without the gal thing, Juanita was humbled by Lyndons glowingremarks, and blushed as she walked to the podium. Thank you so much, Lyndon, for your kind words. Knowing how Lyndon appreciated any reference to cows, Juanita commentedthat her tenure with PhisoTech had thus far been utterly fantastic. Both Lyndon and Elsie,who frequently accompanied him to major meetings, got a big chuckle out of that one.Juanita briefly acknowledged that Lyndon's goals for PhisoTech were very ambitious, but shehad great faith in this new vision for PhisoTech, and in Lyndon's ability to lead the company.I am also very excited about our new sales team if anybody can do it, this team can! Solet's not keep the spotlight on me tonight. I'd like to take this opportunity to introduce thenewest members of our sales force - Nate Braggs and Mel Brooks. Won't you please stand upand allow me to formally welcome you to the PhisoTech family. Amid polite applause, thenew sales reps stood briefly, and then, at Juanita's encouragement, were joined by the othermembers of the team: Bill Telle, Doug Fredrick and Kathleen Kane.

As you know, Juanita continued, Im a great believer in profitability through effectiveCustomer Relationship Management sometimes called CRM. I know eyes roll when Ieven say CRM, and perhaps rightly so. The term has been so loosely bandied about inindustry and in the business press, and seems to come in so many forms. Lyndon is correctwhen he says that many firms claim to be managing customers effectively, but few actuallyare. However, I have pointed out to Lyndon that CRM doesn' t have to be just a lot of bull,as Lyndon says. When you have a plan and the right tools to make it happen, CustomerRelationship Management is a fabulous way to do business. And I believe I have the righttools, a plan to stay focused on our customers, and a great sales force in place. We can getthis don e!

Just briefly, for those of you who may not know a lot about the concept of CRM, it's allabout growing company revenues by better serving PhisoTech's loyal customers. And how dowe do that? Well, Lyndon says it best and often: By spending our money where we make it.By focusing more on retaining customers and less on acquiring customers. I stronglyrecommended that all the sales reps set as their personal goal to better manage PhisoTech'sbest and most growable customers in their territories, and approach new customer acquisitionactivities systematically. For both cases our existing customers and the prospects whatmakes the most sense is to focus on those that can bear the most fruit for the company. Inother words, to the degree possible, evaluate the customers and prospects for their projected

long-term value to the company, not necessarily for their short- term transactions. Few in theaudience could disagree that the concept made a lot of sense.

If I had to summarize what I see as my most important role in heading up the sales force, Iwould say my tasks are three-fold: to motivate to compensate to evaluate. I will do what Ican to see that all of our sales professionals are sufficiently supported by corporate, and thatthey are motivated to optimize their sales performance, through generous compensation andother benefits. Addressing the sales reps specifically, Juanita said, you will know exactlywhat is expected of you in terms of performance goals, and my office door is always open.


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Furthermore, as we move toward achieving Lyndon's new goals for PhisoTech, I will bedirecting my energies toward coaching you toward helping fine-tune your sales activities. Iwill be spending a fair amount of time working directly with you in the field, both coachingyou and spending time with our customers. Juanitas speech left little doubt that she wasclearly convinced that good selling didn't happen by accident. Proper training and planningusing the proper tools would play an integral role in making Lyndon's vision a reality.

After Juanita's presentation, Lyndon, always the company cheerleader and zany to a faultended the meeting the way he always did. Joined by Elsie in her matching cowgirl attire, theybegan waving their arms in the air as if conducting the Philharmonic. His reluctant managersand other employees knew what this meant--- it was time for the company rousers: What theheck, we're PhisoTech, what'd'ya expect, we're PhisoTech. What the heck, we're PhisoTech,what'd'ya expect, we're PhisoTech, what the ..

The night was clear, the stars were bright, and the food and spirits were plentiful at thebarbecue that followed the meeting. Mesmerized by the crackling campfire, everyone buzzedabout the meeting (and, as usual, Lyndon Shriver's incessant cow references and requisitechanting). Most agreed that Lyndon was correct in his assessment of Juanita. She wasuniversally liked and respected. If anybody can get their arms around that aggressive visionfor the company, it's Juanita, remarked Perry Tex Pennypacker III, one of PhisoTechsboard members.

Meet The Sales ForceThere was little question that Bill Telle and Doug Frederick, both two-year veterans of PhisoTech's sales force, were poised to take move the company forward. Bill and Doug wereequally professional and analytical in their approach to selling, and were the best of friends.Both felt that the PhisoTech product line was compatible with market demand and theirpersonal selling interests. Both measured success by achievement of corporate goals as wellas meeting their individual sales quotas, and both were clearly motivated by PhisoTech'sgenerous compensation plan.

The very ambitious Bill had made impressive strides at PhisoTech. He was astute andprofessional and, by his own admission, a real team player. Doug Frederick, while admittedlynot a team player like Bill, was the consummate sales professional, with an indefinable, yetundeniable presence. When originally hired by PhisoTech, Dougs proven sales track withother companies had easily convinced the hiring committee to bring him on board. Theygladly agreed to give him the autonomy he wanted to do his own thing. So far, Dougsaggressive performance had exceeded their expectations.

Kathleen Kane was wh at Juanita called the PhisoTech evangelist. Her energy andenthusiasm for her job and for PhisoTech was refreshing. Prior to joining PhisoTech,

Kathleen had several years of valuable field experience selling metallurgical chemicals forSteel Technologies, a large steel company out of Dayton, Ohio. In her job with Steel Tech,she had been actively involved with building and retaining relationships with the top-tieredcustomers, as well as with identifying and capturing new business from untapped markets.Her B.S. degree in Chemistry and impressive sales experience, together with her infectiousenthusiasm, served to persuade the hiring committee that Kathleen Kane would be a valuableasset for PhisoTech. During her relatively short tenure with the company, Kathleen hadalready demonstrated superior sales ability and brought in significant revenue for thecompany, and her enthusiasm for the PhisoTech product line was infectious. She could sell


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hamburgers to a vegetarian, Lyndon would quip. While not quite asseasoned as Bill andDoug, Kathleen was poised and professional, and braced for the ambitious goals set forth atthe meetings.

Melissa Brooks, fondly called Mel, was one of the new hires. Although her earlier work experience had been with a small pharmaceuticals company in Texas, Mel's position was

largely that of an inside sales agent . Primarily, she took telephone orders and fieldedcustomer complaints, in addition to administrative tasks for the company. A former MissMedicina and college cheerleader before dropping out of UT-Austin, Mel had a vivacious personality, and was easy on the eyes, as one employee whispered. Frankly, Juanita wasless enthusiastic about hiring Mel than were some on the hiring committee, primarily becauseshe lacked any rea l sales experience. She is, however, familiar with the pharmaceuticalindustry, argued two men on the committee, and she seems to have a lot going for her. Letsgive her a chance! Juanita reluctantly agreed.

Finally, there was young and brash, Nathan P. Braggs III, the second of PhisoTech's newhires. Although well educated and extremely sure of himself, Nate was somewhat of alightweight, when it came to solid sales experience in the field. Before joining PhisoTech, hisonly real sales experience had been with an Internet start-up headed by an old collegeroommate of his. To his credit, Nate did manage to cut inroads into the marketplace for hisbuddy's dot.com, and was quickly and perhaps prematurely promoted to mid-management.As one might expect, the promotion only further ignited his sense of self-importance andconsiderable ego. These personality flaws notwithstanding, both Juanita and the hiringcommittee thought that with the proper training, Nate could be successful.

So there they are thePhisoTech sales force. Now let's listen in as they relax around acampfire and talk about the tasks ahead.

Like Lyndon, both Bill and Doug had thought that while the whole CRM thing looked goodon paper, it was largely marketing hype. But having the right reporting tools and the propercontext for analysis had made believers out of both of these high-performance sales professionals. Bill started the conversation by saying, although I wouldnt have believed thaI could learn anything new since I've been in sales for so long, I've actually learned a lotworking with Juanita, particularly with regard to strategic customer management. I'm beingmore selective about which customers get my red carpet treatment, and which dont. As aresult, I'm more producti ve and my commissions well, lets just say Im pretty satisfied atthis point.

Doug had to agree with Bill that the reports had helped him accomplish two of his careergoals to run his territory effectively while still running it independently. Whathe likedmost about this type of reporting system was its broad versatility. Juanita is systematic in her

approach to everything she does she uses her reports to motivate, to educate, to evaluate you name it, Doug added. In Juanitas mind, and I guess mine too, there's no arguing withthose numbers.

Kathleen, sipping on her lite beer, was already a strong advocate of CRM as a businessparadigm. Not only had she been introduced to the concept in several marketing courses shetook while at Wright State, she had actually attempted to implement a quasi-CRM initiativeat her previous job. The brick wall she always ran into was the IT department. Real timeperformance reports were hard to come by and the IT usually gave only lip service to her


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requests. But Ive also thought the most effective way to use my time and talent was to makesure I distinguish my good customers from my crummy customers, and then lavish myresources on the good ones.

So I'm really anxious to get going and to work with Juanita. In my opinion, there isn't one of us who couldnt profit, and I do mean profit, fr om her coaching. I heard through thegrapevine that she was one of the best salespersons out there when she was with her othercompany --- I guess she was always in the winners circle and had a zillion awards and perks to show for it.

Feeling relaxed as he sipped on a scotch on the rocks (his drink of choice these days), Nategot pretty candid about his opinions. First of allwhats with the cow talk? he chuckled.And second, I frankly dont know that being coached is something I n eed. I hate to brag(actually, he loved to brag) but I'm really good at what I do. My track record speaks for itself.Plus I'm not sure what the big deal is about CRM. My other company never trackedcustomers, in fact, they didn't even have a business plan , and they did great. (Well, not quite.The dot.com he had worked for had tanked, but Nate rationalized that that wasn't the point.)Plus I didnt hear a lot about CRM at Yale, and may I remind you I graduated Magna so I think Id know. Ruminating momentarily, he concluded Nope, just put thatcompensation carrot in front of me and thats all the motivation I need to knock em dead outthere!

Mel Brooks only comment was that she thought both Lyndon and Elsie Shriver wereseverely fashion-challenged.


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Douglas Fredrick10 Wafer RoadSante Fe, NM 87420505-379-5764

OBJECTIVE:I am seeking a sales position with broad territorial responsibilities. I want to develop my ownleads, manage my own accounts, and establish my own quotas. In other words, I want thefreedom to do what I do best...sell!

EMPLOYMENT HISTORYSystems inc. of North America 1995 - presentSante Fe, NMAs account manager, I was responsible for expanding the Southwestern market for SI'sflagship database product and its associated products. My territory included all of NewMexico, North Texas and Oklahoma. Attained quota of $1.1 million, finishing 101% of quotafor 1996.

Fordham Corporation 1991 - 1995Kansas City, MOAs senior sales and marketing representative, my responsibilities included selling andmarketing the entire line of computer hardware. I managed the Midwestern territory,forcasting revenue and budget control. In 1994, I booked close to $600,000 business andinstalled 17 new network systems, coming in at 216% of quota.

As a rookie sales representative with Fordham, I successfully developed new accounts andbrought in greater business from existing accounts. In 1992 alone, I far exceeded my quota,booking $200,000 of new business.

Major_Med Group 1988 - 1991Kansas City, MOI was responsible for over 100 customer accounts for this medical and hospitalizationinsurance brokerage firm. Furthermore, I was responsible for generating leads for threeaccount managers in the association. I set up appointments, assessed customer's insuranceneeds, qualified customers, and made recommendations to the account mangers regardinginsurance quotes to reflect those needs.

EDUCATION:Iowa State University, BA, Marketing 1988

INTERESTS AND HOBBIES:Boxing, competitive weight lifting

References on request


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William Telle6498 Newton Ave. So

Minneapolis, MN 55423Home Office: 612-846-2316

Fax: 612-858-8127

Personal SummaryA results-oriented business professional experienced in sales within high-techindustries. i am a self-starting team player with the ability to manage multiplelines and customer/vendor relationships. I am seeking an opportunity to work with other sales professionals in a fast - paced sales environment. I haveexcellent verbal and written communication skills.

Professional StrengthsMaking Energetic Sales Presentations, Selling Highly CompetitiveEnvironment, Persuasive Oral/Written Communications, Results- Oriented and

AmbitiousProfessional HistorySoftware Dynamics - Minneapolis, MN Jan 1999 - Present

A custom Software Solutions Start - Up.

Software Sales Specialist: Certified sales specialist responsible for managing anexisting customer base and identifying potential new customers for thecompany.

Responsible for managing customer relationship, writing customer proposals,establishing pricing structures and making customer sales presentations. Alsoassisted in developing a web - based sales training tool used to educate newsales employees and channel partners.

- Grew product line by more than 20% while during tenure with SoftwareDynamics- Worked with Software Dynamics management to negotiated distributorpartner contract.- Selected as sales team consultant for corporate expansion and acquisitionprojets

MD Systems Incs. - Minneapolis, MN Oct 1996 - Dec 1998 An enterprise system company specializing in secure network, storage and messaging solutions.

Solutions Sales Specialist: responsible for growing and expanding revenues forMD systems. Responsible for establishing and maintaining vendor relationship


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Kathleen Kane

2015 Columbus Avenue Daton, OH 45427

937 - 521 - [email protected]

Pharmaceutical SalesOffering an excellent combination of technical knowledge, physical sciences background andrelationship-building selling.

Strengths:- More than 7 hears in chemical sales.- Consistent top producer.- Creative, energetic and visionary to create successful sales strategies and follow through- Proficient in all stages of the sales process with solid accomplishments in developing newbusiness and build and sustain client relationships.- Computer proficient in Microsoft software including Word, Excel, Access and PowerPoint.

Education:B.S. Chemistry, Wright State University, Dayton, OH. Currently in the evening MBAprogram.

Professional ExperienceSteel Technologies, Inc., Dayton, OH 1994 - 2001Distributor of multiple lines of metallurgical test and measurement equipment.

- Sales engineer, generating close to $4 million of total sales through cold calling,telemarketing and lead follow - up.- Built solid customer base through relationship marketing and sales strategies. Strengthenedretention of existing customers and grow referral business.Account base of 60 customers.

Thermolite, Lexington, KY 1991 - 1994Small company that produced and marketed heat exchangers and pumps to industrialcustomers.

- Sales representative- Acquired 23 new accounts in first 6 months.- Assisted in the development of sales training program- Collaborated with technical writers to improve the quality of product training manuals.

--Please request referrals--


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Discussion Questions1. Are Lyndon Shriver's goals realistic? Provide reasons.

2. Speaking of Lyndon Shriver is he simply a little eccentric, or is he kind of a crackpot? Isthere anything about him that would lead you to believe that he could build a successfulbusiness?

3. What are your initial impressions of Juanita Valdez and the sales reps? Who, in youropinion, is likely to succeed with PhisoTech over the long run? Who isn't? Be specific aboutyour answers.


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Scene Two:Goal Achievement through Managing the Sales Function

Sitting pensively in her office, Juanita struggled to put a framework around the tasks ahead.Lyndons vision for the company is really ambitious, she thought, and certainly not forthe faint-hearted. Of course, about the last t hing Lyndon Shriver is faint-hearted! Sippingfrom her bottled water, she sketched out her plan of attack. Lets see, first we have Lyndonsthree objectives. Whew! Now I have to figure out my strategies for achieving them.

Hmmmmobviously, the big picture is to achieve Lyndons goals. So how am I going to dothat? I think Ive got plenty of talent on my sales team some more raw than others buttalent nonetheless. So that's good. I know the selling profession is notorious for its high rateof turnover, but I also know that how long a person stays with a company depends on howsatisfied he/she is with the job. So I have to figure out to how create a high level of jobsatisfaction. I think my coaching time in the field accompanying the reps to their variousaccounts, and working with them will be good. Since all the reps have had their producttraining, this will be my spit and polish time with them. Anyway, my field time should leadto increased productivity (another perennial problem for field sales types) which will lead togreater sales revenue, all of which should go a long way toward maximizing the repsindividual job satisfaction and overall team performance. So I can kill two or three birds withone stone by going out in the field: I can increase job satisfaction and thus reduce turnover,and I can ramp up revenue. Yes, this is looking good on paper anyway.

Now I need to lay out my tactics. Lets see- if I want to optimize job satisfaction andproductivity, I'll have to invest in additional training and teaching the ropes to some reps. I'mespecially excited to teach them about CRM in action, like how to create long-termrelationships rather than short-term transactions and how to differentiate between our goodcustomers and prospects from our not-so-good ones. Then we have to make sure our bestcustomers know how much we appreciate them. Funny I remember reading results from asurvey recently that found that more than anything else, customers of all types just want to

feel cared for by the companies they do business with. Seems simple enough, but I know itcould be easier said than done. So, anyway, here we go: Teach and train for some, revitalizeand refresh for others.

Now I need to find ways to keep ever ybody motivated and focus on building PhisoTech andachieving Lyndon's goals. Since I know that the purest form of motivation is compensation,all I have to do is figure out the right compensation packagealso easier said than done, thatI know for a fact! Hmmmm what is that magic mix of compensation, benefits, incentives."

Finally, I promised the reps that everybodys cards would be on the table, and we would allhave a good handle on performance expectations. Our goals will be clearly stated andreported so there are no surprises. The reps will be given regular feedback evaluating their

performance their strengths, their weaknesses, etc.Education, Motivation, Compensation, Evaluation. This is the way to achieve Lyndonsgoals.


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Walking out of the meeting, Doug and Bill remarked about Juanita's growing hands-onmanagement approach, and were always open to working with her, as they had in the past.Both Kathleen and Mel were anxious to have Juanita work with them and accompany themon their sales calls. Kathleen would never turn down an opportunity to hone her selling skills,and Mel, quite frankly, was relieved to have someone show her the ropes.

Nate gave only tacit approval to what he called Juanitas micromanagement, although heconceded that he probably could use her to help him jumpstart his introduction in theterritory. But just get me started and Ill dazzle these accounts because Im good. Imreally, really good, he was thinking. Then saying out loud to Mel and Kathleen, frankly,most of Juanita's time would probably be better spent with yo u guys. Uh, oh, no offense.

None taken, Nate, Kathleen replied, as she rolled her eyes. None taken, because you can be such a jackass, she muttered under her breath.


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DP2 Scenario:Travel & Entertainment (T&E) Budget

Juanita, please have a seat. G morning, Lyndon. Although Lyndon had shed hiscowboy duds, Juanita noticed that he was wearing a bolero similar to the one he'd worn at thedude ranch. Only Lyndon could get away with such a fashion faux pas, she thought.

I wanted to give you a heads up about my field activity as I rally the troops, Lyndon. Ireally do think that the best way to achieve your goals for the company is to work closelywith the reps to help them achieve their individual goals. So I've been spending several daysper quarter, 28 to be exact, accompanying them on their sales calls and working with them. Ithink my time in the field has been important to help the reps maximize their productivity and

job performance (and incidentally meet the quotas I've set for them), all of which will help usmeet our objectives. Even superstars like Bill and Doug, I'm sure you'll agree that everyone,can use a little spit n polish once in awhile. What are your thoughts?

Hmmm, I think field time is agood idea, although I'm sure you realize that time spent in thefield is time lost in the office. But I would expect that the reps you spend more time with are producing more. Anywaytell me more.

Yes, there are certain trade-offs being away from the office, but if I want to increase ourstrategic approach to selling, I need to take this time. Its what I call my high investment,high return proposition. First of all, as far as the reps are concerned, theyve already gonethrough our formal in-house product training, so I'm hoping to take this time to refine theirrelationship selling activities. I'd like to address topics such as how to manage certaincustomers, how to listen and negotiate more effectively, how to stay motivated, and how tobe effective closers. I'd also like to show them that sales is as systematic and analytical as anyother profession in fact, a systematic approach to selling is preferable in order to get themost out of their time. So I've been showing them how to use the quarterly sales reports as astrategic tool, how to identify and differentiate their various accounts based on profitability,and then, most important, how to treat high value customers differently than the low-valuecustomers.

Actually, Id really like to spend some relationship-building time myself with our betteraccounts in each of the territories. It will be a good time to renew acquaintances and re-emphasize PhisoTech's commitment to them. I'll be talking to the owners and asking themabout how satisfied they are with our products and service, what can we do to make lifeeasier for them, etc. I plan to roll out the red carpet for our key customers as a way to thank them for their loyalty. It should prove to be very fruitful.

Gazing out the expansive window as he frequently did when he was really concentrating,Lyndon began. Sometimes, Juanita, I can be a cheap buzzard when it comes to the company

till, but this sounds like time and money well spent. We've got some great customers outthere some I even brought on board myself years ago - and we definitely want to keep themhappy. Not only do they give us a trough-full of business, but the longer they stay with us, theless it costs us to service them. So yep we want to spend it where we make it!

Heres something else to think about, continued Lyndon. I know that one of your goals isto reduce turnover on the sales force. I was just reading something recently, although I can'tremember where, that while there are a lot of people who wouldn't think twice about leavinga company and going on to greener pastures, those same people would find it difficult to walk


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out on a good team. So I want you to also focus on building and reinforcing team solidarityamong the reps, and do whatever it takes to build a cohesive team. Keep me posted. Oh, andhave Philly give me your travel schedule.

After Juanita left his office, Lyndon caught his reflection in his expansive window. Adjustingthe bolero he was especially proud of, he couldn't help but admire himsel f. I sure do look

good in corporate casual, even if I do say so myself.Back in her office, Juanita pulled down the sales reps schedules from her e -mail, and startedputting her calendar together. Then she had Philly, her administrative assistant, start makingher flight and hotel arrangements. Oh, and dont forget to get me a car mid-size is best.


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DP3 Scenario:Promotions Budget

Juanita was just about to end a conference call with Lyndon and Philly regarding her travelschedule when she remembered something she wanted to mention to Lyndon. Oh, before Iforget, I recently put together all the sales promotion tools that PhisoTech has created and Ido mean all. I had no idea myself about the incredible number of collateral materials suchas product brochures, brochures about doing business "the PhisoTech way," presentationaides and handouts my gosh, the list is seemingly endless. They are beautifully produced,immensely valuable, and grossly underutilized ! Our sales people don't realize how fortunatethey are to have all this marketing communications support at their disposal to reinforce theirselling efforts. So I'm designating budgets for each of the territories to encourage everyone touse every possible tool we have to make the sales. After hanging up, she could tell thatLyndon was pleased with her full-court-press approach. Looking at her watch, she wasstartled at how q uickly time had passed. Oh, Im going to be late to my meeting. Rushingby Philly, she requested coffee and bottled water in the conference room.

Good morning, everyone, Juanita said as she quickly walked in the PhisoTech conferenceroom. Sorry Im a minute or two late. Always chipper andalways professional, Juanita gotright to the point. I suppose youre wondering why Philly has strewn several productsamples, corporate advertising slicks, press kits, collateral materials, point-of-purchasedisplays, presentation handouts, etc., etc. all over this huge table. Well I thought that if youcould actually see the sheer number of advertising and promotional materials we haveavailable to support your sales efforts and to educate your customers, it would leave animpact. Kind of the "one picture is worth a thousand words" idea.

Anyway, as you can see, there is no shortage of advertising and promotional support for youto leverage when you're out there prospecting and also when your building your customerrelations. But frankly, other than product samples, I don't think you're taking full advantageof these wonderful aides and I want you to. I mean just think about everything we wantour new customers to learn about our product offerings, our technology, our billing system,our customization capabilities, even our corporate culture, etc. And even though our existingcustomers already know a lot about our company, every time we revamp in any way, we needto get the word out."

Heres what I want youto keep in mind: Marketing communication is more than a vehiclefor short-term gains only. It's true that advertising and sales promotions, samples, etc..influence sales today, but it's also true that these types of marketing communications buildloyalty, repeat purchase, reinforce the PhisoTech image, and create enormous future goodwill. In other words, profitability can be very positively influenced by use of these tools. SoI'm going to budget for each of your territories, and I want you to use these materials to createtop-of-mind aware for PhisoTech. Any questions?

The reps poured through the materials and, as Juanita had suspected, were amazed at themountain of sales aides that were available. Doug and Bill, not always on top of technology, tended to shy away from such things as electronic slides, but they admitted thatthere were many, many materials that they could be and should be using. Kathleen and Meloften used electronic presentations, but both were quite impressed with the breadth of somany other pieces that were also available. Although they had seen most of it, seeing it alltogether had, as Juanita hoped, made the right impression. Nate had been putting together hisown electronic slide presentations, forgetting that PhisoTech had their slide presentations


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done by a local promotional agency. He had been quite pleased with how his stuff turned out,but had to admit (only to himself, of course) that the professional set looked a lot better.

Following the meeting, Juanita asked Nate to meet with her briefly. Nate, even thoughPhilly had a hard time coordinating our schedules, I'm glad we have managed to spend sometime together. I heard through the grapevine that you discovered that one of the prospects in

your territory is an old college buddy, and that you've been spending a lot of time with himtrying to nail down account. What a small world.

Yeah what are the chances ? Nate responded. He knew, however, that Juanita wasletting him know that she was aware of all the tee times on the expense account, and that hewas probably spending a little too much time with his friend from college at the expense of his other accounts. But Nate loved to golf and talk about Yale (it made him feel important),and the fact that the guy was a bonafide prospective customer well, that made it even better.But he also knew that he had to get out more with his key accounts and was starting to feel alittle guilty about not making the rounds. Plus, he wanted to build up his commissions.

Next time youre in town, Juanita, Ill get appointments with my A listand Ill be armedwith plenty of collateral materials! Youre on, Nate.


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some of these I.T. consulting firms charge -- millions of dollars, year after year-- to installcustom software systems that never work the way they're supposed to. So I definitely want toavoid a situation like that.

One system that I have heard about that has been praised for its efficiency and effectivenessis called ezOrder Software by Panoptics. It does everything were looking for trackstransactions, stores order histories, aggregates data so we can segment our customers basedon their order history, and allows online orderingfor a price of $225,000, plus trainingexpenses of $25,000. I know $225,000 is a big up-front expense, but we could spread it outover three quarters so we could expense $75,000 to the administrative budget each quarterrather than one lump sum. In the first year, it will be a $100,000 charge, if we include the$75,000 and $25,000 in training. When all is said and done, Lyndon, I think something likethis is really an investment in technology.

The other option is to hire an inside sales agent who can also function as a customer servicerep and a web administrator. This person would have the same kind of product training andsales training that the field reps have and would be the central, in-house contact for ourcustomers. I guess I see this person as our in-house customer relationship manager. He or shewould be a trouble-shooter and be able to put out fires quickly. That person would have to bevery conciliatory, flexible, caring, and helpful. On top of all that, this person should be tech-savvy, and able to handle our e- commerce.

Given these expectations, I think a beginning salary of $50,000 for starters is quitereasonable. In fact, we might have to up the ante with a signing bonus or something. We wantto make it quite clear that this is not a minimum wage position. Whichever way we chooseto go, Lyndon the enterprise software or the inside sales person I think we need to addressthis issue of lost sales opportunities...and quickly!

Having been uncharacteristically quiet as Juanita talked (no doubt because he was thinking of his ongoing feud with Jay R. Ewing), Lyndon finally chimed in. You dont have to tell meabout some of these I.T. outfits and how they overcharge for services that are really never rendered! Have I ever told you about my experience with a well-known consulting firm? Notgood not good. Thinking about it makes me mad as a charging bull! You may be rightabout this Panoptics outfit, but, given my bad experience, I gotta tell ya - I'm sceptical, eventhough I can see the wisdom in your argument. You may be right, it does seem to me we arekind of lagging behind the times. On the other hand, the idea of hiring a customer relationshipmanager (which is really the function of the software) is very appealing and an idea weshould have considered a long time ago. I guess I m open to either one, and I'll go along withwhatever you decide. But keep in mind my concerns about it, Juanita. We,, I'm gonna rustleme up some grub, so p lease join me.


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O.K., Philly. Help me sort this out, and lets make some progress. Here are the steps we needto think through in designing the compensation plan

I've set the sales quotas for each rep which are Lyndon's set of objectives. I know the primary aspects of job performance to be rewarded individual sales

revenue and ltv numbers. Plus their relationship selling skills, how satisfied theircustomers are, etc.

Then I can decide on the most appropriate level of total compensation (including basepay, commission, benefits, etc.).

Finally, I will bring in each individual for a formal evaluation. My evaluation of theirperformance will be based primarily on whether or not they consistently met theirsales goals. Then secondarily, I will evaluate them on my judgments regarding theiraccount management skills, customer satisfaction levels (measured by what I learnfrom the customers while I'm in the field), and finally, attitude.


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Lyndon, Oscar and I have discussed the possibility of taking PhisoTech national for severalmonths. My firm, Streeter, Streeter & Strand, is very excited about this move, as is thePhisoTech Board. Tex Penneypacker, for example, has been wanting to do this longer than Ican remember. We think PhisoTech is well positioned for this step forward, and our firm isprepared to back you all the way when the time comes. Although Oscar, Lyndon and I will be

happy to answer any questions now or in the coming weeks, I hope you understand that, atthis point, we have to be extremely cautious about who we talk to about all this. Since a movelike this would be of great interest to the investment community, premature disclosure couldsignificantly influence the stock price. After making a few more brief comments, Wallyturned the podium back over to Lyndon.

Lyndon cleared his throat, and interjected that Wally s firm, SS&S, was prepared to issue aglowing report to the investment community about the promise of PhisoTech moving to thenext level. We have all the confidence in the world that this will be a positive move for PhisoTech, and should boost our stock price significantly. I'd like to conclude by telling youthat, as my top managers and as a reward for your outstanding performance and contributionto PhisoTech, Oscar and Wally have put together a stock option plan for each of you. I will

be meeting with you individually to discuss in the near future.

Before op ening the discussion for Q&A, Lyndon reiterated this cautionary note. You are mytrusted associates and I want you to be informed about our plans. On the other hand, Istrongly recommend that, for now, you handle this meeting as highly proprietary and that younot reveal the nature of this meeting to any of your direct reports. The SEC (Securities andExchange Commission) is eager to prosecute even a hint of insider information disclosure.

-------------------------------------------------Six weeks later, as Juanita was getting ready to meet with the reps individually, she reviewedall the performance evaluations (see Appendix). Sitting back from her desk, she feltsomewhat relieved to have them done and copies sent to Lyndon. However, she knew she hadsome issues to deal with.

Of greatest concern was the dramatic increase in order activity with some of Doug's accounts.much more than was typical even for a superstar salesman like Doug. O.K., this isntnecessarily a bad thing, why this flurry of accou nt activity? Juanita asked herself. She triedto think back to her last visit with Doug. She hadn't noticed that he was doing anythingsubstantially different from his normal activities. Plus I dont think the needs of any of hismajor accounts have chan ged that much at least not that Im aware of. Doug has alwaysbeen a terrific producer and fiercely independent. But one thing was certain in Juanita's mind.Somethings just not right.

As for Bill and Kathleen, both are well on track, although there are a few minor issues todeal with when I meet with them. Mel and Nate, however, are another story. I need to put mycards on the table regarding their respective performances. Mel is what I call "malleable,and does benefit from my coaching efforts. Nate well, Nate is a handful.

Just as Juanita was about to start her meetings, Lyndon popped his head into her office.Juanita, can I have a few minutes? As Lyndon came into her office carrying all theperformance evaluations, Juanita noticed that he was not his usual self. Ill get right to thepoint. Do you remember when Wally Streeter was here awhile ago to announce our plans to


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go national? Juanita nodded, as Lyndon continued. Do you also remember when hecautioned that the information in that meeting was to be held strictly confidential? Again,Juanita nodded. Well, it has come to my attention that a handful of our customers got windof our plans to go national and started trading our stock prematurely.

Ya' know, that kind of insider information is pretty valuable and customers would probably

richly compensate someone for it. So my question to you is (1) do you know who let the calf out of the bag and (2) how did they found out? In other words, which one of the reps spilledthe beans?

Juanita was shocked that word had leaked out. Lyndon, I cant think of a single person onyour executive team who you can't trust to keep things confidential. So how someone foundout is beyond me. However, who that someone is may not be quite as much of a mystery.You know me, I like everybody, but when it comes to business, Im all business. So Ill befrank, interrupted Lyndon. According to Wally, PhisoTech will be closely scrutinized byindustry analysts as we announce our plans to move to the National exchange. About the onlything that Wally is worried about is this: Benchmarked against the industry, our sales salaryexpenses are too high as a percentage of sales. Analysts won't like that., and about the onlyway to improve the situation in the short-term anyway is to put somebody out to pasture.You're the VP of Sales and Marketing and you know these reps better than anyone especially since you've been spending so much time with them. Frankly, after looking overthe evals (given below), I see that not everyone is making PhisoTech look good. So while Iknow this is a difficult task, I want you to decide who to terminate. Who, in terms of futureworth to the company, is a liability?


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PERFORMANCE EVALUATION Check if Quotawas met.

Quota Q1 Q2 Q3 Q4 Q5 Q6Employee: Mel Brookes Sales $

LTVEvaluator: JV ACCTS

Excellent Exceptional performance which consistently and in all areas exceeds jobrequirements and PhisoTech's standards of excellence

VeryGood Performance exceeds job requirements and PhisoTech standards of excellence inmany areas

Good Performance meets all job requirements and PhisoTech standards of excellenceNeeds Improvement Performance is fully satisfactory in most respects, but development is required to

achieve PhisoTech standards of excellenceUnsatisfactory Overall performance was unsatisfactory; failed to meet job requirement and

PhisoTech standards of excellenceNot Observed Data insufficient to make an evaluation

Professional Skills E VG G NI P NO

Market & Product Knowledge Analytical/Quantitative/Problem Solving Skills

Creativity Initiative & Commitment

Judgement & Decision Making Overall Attitude

Oral Communication Skills Written Communication Skills

Professionalism

Relationship Selling Cross-Selling/Up-selling

Revenue Contribution Expense control

Negotiation and Deal Execution Account Management

Time Management Budget Management

Planning and Organization Team Player skills

Adherence to Policies/Procedures

Comments: Mel has a marvellous attitude about being a part of PhisoTech. She's very articulate when she's infront of the customer and communicates well. She has worked hard to learn about the products, markets etc.Her greatest strength is in customer service bringing about a quick resolution to problems with products orservices, areas of dissatisfaction, etc. But clearly, Mel's greatest problem is her fear of selling. Hence,relationship building is a strength, creating selling opportunities is a serious weakness. Prospecting is also hugeissue for Mel. I've been coaching Mel to teach her how to be more systematic and analytical in her approach tomanaging her territory.Note : Mel responds positively and quickly to coaching and training in most areas. For example, I cautioned Melto watch the necklines and hemlines, and she's made a concerted effort to dress more professionally. But, of course, poor selling skill is a bigger problem and I am frankly concerned.


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PERFORMANCE EVALUATION Check if Quota was met.

Quota Q1 Q2 Q3 Q4 Q5 Q6Employee: Nate Braggs Sales $



Very Good Performance exceeds job requirements and PhisoTech standards of excellence inmany areas









Professionalism







Comments: No one can dispute that Nate is smart! His analytical skills are strong, plus his quick grasp of theproduct line and knowledge of his territory is impressive...particularly since he hasn't been with us very long.However, I have a number of concerns about Nate. He lacks good planning and time management skills, and isnot very motivated. He has concentrated the bulk of his time with a prospect he knows personally. In themeantime, several of his key accounts have had to call in their orders (it's a good thing we took care of that in-house customer service issue). Nate has some excellent accounts and I will not allow those accounts to be put in

jeopardy. Nate needs to get his act together....and soon.Even with is poor account management, he has managed to put up some decent sales numbers. I'd like to seewhat he could do if he put forth a real effort. I'm losing my patience with him, however.


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PERFORMANCE EVALUATION Check if Quota wasmet.

Quota Q1 Q2 Q3 Q4 Q5 Q6Employee: Kathleen Kane Sales $












Professionalism







Comments: I'm very pleased with Kathleen's continued progress. When I met with Kathleen, she agreed withmy overall evaluation. her true strengths are in relationship building and selling. I've observed that she is verycomfortable with most of her customers, plus prospecting seems to come rather naturally. She has noted areaswhere she an work to improve, and I have no doubt that she will. Overall....Kathleen has done very well.


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Quota Q1 Q2 Q3 Q4 Q5 Q6Employee: Doug Fredrick Sales $












Professionalism







Comments: The numbers that Doug has been bringing in are unbelievable lately. Truly extraordinary..and i'mnot exactly sure why.When I asked Doug about this flurry of sales activity among his key accounts, he attributed it to his relationshipselling efforts. If that's the case, we ought to bottle it and sell it! However, when I mentioned Lyndon's concernsinsider stock tips being leaked twosome of our customers. Doug got noticeably defensive.One of my key concerns with Doug has been his need for complete autonomy. I appreciate his independentspirit, but I wish he was more of a team player. plus I sometimes wonder if his strong need - to - achieve couldrun amuck.If my suspicions are correct about Doug, I will be faced with a difficulty decision.


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Quota Q1 Q2 Q3 Q4 Q5 Q6Employee: Bill Telle Sales $












Professionalism







Comments: Bill is one of my most consistent top performers. When working with him, I've been impressedwith Bill's professionalism and his analytical approach to working with his accounts. He makes PhisoTech look good!I do recommend that Bill look for cross-selling and up-selling opportunities that he may be missing with his keyaccounts. Also, Bill's expenses can get 'over the top'. while his numbers indicate that he's making good use of those expenses, there are areas that he could cut without jeopardising his sales (i.e. he should use his upgrades tofly business class - otherwise he should fly coach). In both cases, Bill has agreed to be more aware of potentialselling opportunities and to be more vigilant with expenses.


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time. You know that when Lyndon does spend, he likes to spend BIG. So your winningefforts would be richly rewarded!

On the other hand, think about this! To build a little team spirit, Im thinking about anotherpossible incentive. If you, as a team, can successfully exceed PhisoTech's revenue, ltv andcontribution income objectives for two quarters in a row, you'll all win an all-expenses paidweekend junket to Lake Tahoe (including golf green fees and a liberal gambling allowance)!I've been to Lake Tahoe, as perhaps some of you have, and it is truly spectacular.

The carrot Juanita has judiciously placed in front the reps had, as she predicted, started theflow of competitive juices, and all the reps started buzzing about the contests. Sales contestsat PhisoTech? It had just never happened before, so Juanita's challenges elevated the energyand enthusiasm in the Scalawag' s meeting room significantly. Any catches, Juanita?

Pausing momentarily, Well there really aren't any catches. But here are the two contests asI see them. (1) Maui Oneand only one person can win. So to get to Maui, you'd have tocompete ag ainst each other. On the other hand, (2) Lake Tahoe everybody can win. To getto Lake Tahoe, you'd have to work as a team. We'll vote on it majority wins!

As the evening wore on, and the friendly repartee died down, each of the reps started thinkingabout Juanitas proposals

Id love to get to Tahoe and do some gambling and golfingalthough Maui would be veryromantic. Either way, I really need a vacation.

I like to gamble, but its gotta be Maui. Lord, its hard to be humble when you look asgood as I do on the beach.

Maui Yes!! Lord, its hard to be humble when you look as good as I do on the beach.

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