What Are You Doing to Protect Your Most Important Asset – Your Sales Talent?

1. What Are You Doing to Protect Your Most Important Asset – Your Sales Talent? Presented by: Scott Hudson – VP Sales/Marketing, Chally Chris Sena – VP of HR Cardinal Health Mark Kramer – CEO Laird Plastics

2. Let’s Meet Our Speaker Scott Hudson – VP of Sales/Marketing at Chally • Scott joined Chally in 2006 and has successfully led Chally through its own Sales/Marketing Transformation resulting in the company’s best financial results in over their 35+ year history. He specializes in workforce effectiveness and productivity with a particular interest and focus in the area of sales transformation. • Previously, he led the sales, marketing, and product development teams as the Solutions Executive at Reynolds and Reynolds, the leading provider of Systems and Document Management solutions to the Automotive Retail market.  • Chally is a Global, Sales Force Potential and Performance Measurement Firm Utilizing our Industry Leading Research, Analytics and Advisor Services to help our clients minimize risk associated with key talent management decisions.

3. Agenda

4. Talent Trends and How Analytics Can Improve Sales Talent Management Decisions

5. The New Workforce Ten forces shaping the future workplace • Shifting workforce demographics • The knowledge economy • Globalization • The digital workplace • The ubiquity of mobile technology • A culture of connectivity • The participation society • Social learning • Corporate social responsibility • Millennial in the workplace

6. Power of HR Analytics Analytics helps navigate changing workforce issues by mining data for actionable intelligence. Analytics provide hard evidence of the business impact of people investments. Those organizations adopting “data-driven decision making” achieved productivity gains that were 5-6% higher than those who did not. Study of 179 large companies by Professor Erik Brynjolfsson, MIT, 2010

7. Did you see the movie MoneyBall? “The math works,” Beane says. “Over the course of a season, there's some predictability to baseball. When you play 162 games, you eliminate a lot of random outcomes.” A very creative and unusual use of statistical analysis on the part of the Oakland A's GM, Billy Beane. These stats enabled Beane to discern the unique talents of undervalued players no one else wanted. "The minute you feel like you have to do something, you're screwed; that you can always recover from the player you didn't sign, but you may never recover from the player that you did sign that you shouldn't have”

8. Applications for Analytics • Leadership Development • Job function training • Sales readiness • Compliance training • Social learning • Learning modality • Talent acquisition • Succession planning • Retention/Turnover • Performance management • Onboarding • Mentoring/Coaching • Diversity and Inclusion $ • Tuition assistance • Systems consolidation • Recognition and Rewards • Compensation • Customer service • Wellness programs

9. Key Trends and Best Practices Within Distribution Sales Talent ManagementMaximizing Customer Engagement Quality (CEQMax)

10. The Distribution Business Challenge Post-recession markets have changed the game permanently: Little To No Competitive Advantage Digital Impact Your competitive advantage can only come from your SALESPEOPLE NOT the product or service offered

11. We Use The Wrong Science of Recruiting and Selecting Salespeople We keep looking for “sales stars” • What’s wrong with that? It doesn’t work • Why? • We can’t predict who they are because different sales stars are unique and great for different reasons • Even though their results are the same • Even if you could predict who they are, there aren’t enough to go around

12. The Right Science • Forget the stars … look for “Above Average”… candidates that have low probability of Failure • Assuming the customer has a real need, sales success depends on: • Carrying out the important sales and service tasks • Not making critical mistakes • Sales does requires talent and certain skills • Many candidates don’t have the right combination

13. The Right Science • We succeed if we eliminate the candidates: • Who can’t carry out the important tasks • Who will make critical mistakes

14. Why Benchmarking and Traditional Competency Modeling Can Fail 2007-2009 Listing of many of the World’s Top Golfers The following “logical” benchmark competencies (supposed predictors of success) are officially tracked to measure professional golfers as a measure of success;

15. Traditional Methods Don’t Always Work! Would results like this get you excited about selecting this person? REJECTED These were Tiger Woods’s resultswhen he was #1 Golfer in World! #83 in driving accuracy #38 in driving distance #71 in greens in regulation #68 in ball proximity to hole #9 in scrambling #38 in putts per round • These “competencies” do not predict – scores do! • What makes Tiger different is he didn’t make fatal errors!! Emphasis on didn’t!! • How few bogeys, double bogeys, or worse they don’t get ... round after round after round

16. The Solution: The Good News The same actuarial research, science, and predictive statistics that the insurance companies use to predict risk: CAN also more accurately identify: • Who can’t do the job, or • Who will make critical mistakes!

17. The Proof Applying Actuarial Scienceto Sales Selection Today’s Typical Sales Force 5% improvement here gets you $4.5M ABC Company: 200 Salespeople and $200M in Sales* 5% improvement here gets you $5.2M The Problem $6 Million $150K/person $90 Million $750K/person $104 Million $2.6M/person = $200 Million Total Sales

18. The Proof Applying Actuarial Scienceto Sales Selection Replacing the Bottom 20% with just “Above Average” Candidates 5% improvement here gets you $5M ABC Company: 200 Salespeople and $200M in Sales* 5% improvement here gets you $5M = $228 Million Total Sales = $218 Million Total Sales $114 Million $104 Million

19. Best Practices of World Class Distribution Sales Forces Achieving the Strategic Sales Standards in Growing Business

20. Done: • Right customer • Right offering • Right effort • Right message • Right rewards • … So what’s next?

21. The formula for sales success is simple The right Raw Talent The right Critical Moves Sales Success = X

22. Our sets of critical moves for sales professionals Navigate the customer's networks Engage the customer for the long-term Prepare and follow-upeach interaction Speak with the customer Reconnaissance Clinical Narrative Entry Itinerary Planning Map Social Narrative Preparation Connecting Charting the Course Capability Building Debrief Opening Networking Access Follow-up Message & Dialog Collaboration Objection Handling What are critical moves? • They describe an action - not a result, skill or capability • They instruct how results are achieved--how skills/capabilities are applied • They are not all the actions sales professionals or Sales Manager do Closing Exit

23. How to Make it Work

24. Sales Expertise: Validating Profiles • All sales roles are not the Same! • Inside Vs. Outside • Direct Vs. Indirect • Hunter Vs. Farmer • Product Vs. Solution • Chally Pre-Validated ProfilesChally has built an extensive library of sales roles based on data collected from over 500k sales professionals. There are 14 sales roles that we have defined. These are frequently used when organizations find their business model has changed, and they need expertise help in defining new roles. • Creating Client Specific Custom Profiles For organizations with large enough incumbent populations, and a defined business model, we typically run validation studies. These studies identify those 4-8 critical behaviors that differentiate top and bottom performers.

25. Research on What it takes for Distribution Sales Success • Analyses based on data from Chally historical validation studies over more than 10 years • Focus on Sales roles only • Over a dozen organizations from the largest to smallest • Over 25 separate roles/studies (e.g., CAMs, AMs, TSRs, inside sales) • Approximately 4000 individuals • Performance metrics include gross sales, target achievement, performance ratings, etc.

26. Competencies that Differentiate “Top Performers” Develops sales leads Penetrates accounts by increasing consumption of products Answers objectives by reinforcing product benefits Provides personal customer attention and support Creates positive outcomes using proven approaches Navigate the customer's networks Engage the customer for the long-term Prepare & follow-upeach interaction Speak with the customer By correlating assessment results against performance we identified competencies at three levels: Key Competitive Edge competencies for select positions Qualifies prospects with targeted probes Closes through a formula approach Thrives on stress and change Minimum Requirements for “Acceptable” Performance: “TABLE STAKES” Makes persuasive product presentations Partners as a customer advocate Takes a positive approach to customer concerns Maximizes results by pushing for quota attainment in distribution

27. Maximizing customer engagement quality and sales force impact means answering three key questions • Do we have the right Sales Professional and First Line Manager talent in our roles? • No – Then focus on hiring/selection • Yes – Then focus on learning/coaching • What are the learning and coaching priorities that will have the largest performance impact? • How do we train and sustain the critical behaviors – for Sales Professionals and for First Line Managers?

28. Let’s Meet Our Speaker Chris Sena – VP Human Resources at Cardinal Health For Cardinal Health’s $8B Channel Management organization, Chris is responsible for leading a team of senior HR business partners, developing and implementing HR strategy, executing strategic HR initiatives, and creating an inclusive and winning culture. Chris is currently a member of the Channel Management Senior Leadership Team, the Medical Segment Extended Leadership Team, and the Cardinal Health HR Operating Committee. Chris joined Cardinal Health in February 2009 as Sr. Director, Human Resources for the $1.2B Nuclear Pharmacy Services business unit. In 2010, Chris was promoted to Vice President, Human Resources ‐ a role with significantly expanded responsibilities. As Vice President, Chris was responsible for leading HR and training teams, setting and executing HR strategy, and creating an “employer of choice” culture.

29. Sales TransformationNuclear Pharmacy Services Chris Sena VP, HR January 2013

30. 60,000 50% sites delivered to daily of U.S. surgeries use our products and services $108B 32,000 #21 employees with direct operations in 10 countries on Fortune 500 list FY12 pro forma revenue* Leading provider of products and services across the healthcare supply chain with an extensive footprint across multiple channels Cardinal Health – Essential Facts *An estimate of the pro forma revenue for fiscal 2012 in accordance with generally accepted accounting principles with adjustments expected to reflect each company as a stand-alone entity. The estimate is based on assumptions that management currently believes are reasonable, but actual revenue may vary materially from the estimate.

31. Nuclear Pharmacy Services Create a culture where our ability to attract, hire, and develop diverse talent differentiates us from our competition and drives competitive advantage in the marketplace.

32. Landscape • Healthcare Consolidation • Growth of Integrated Delivery Networks (IDN) • Strong Pipeline for New Products • Many in clinical trials • Complex products • Need for Better • Team Coordination • Overlapping of responsibilities

33. Change Management - Kotter’s 8 Step Process for Change

34. Solution Overview AchieveGlobal & HR Chally Partnership Create a Sense of Urgency Anchor the Change

35. Creating a Sense of Urgency • Communicated the need to adapt to changing health care landscape extensively • Sales team meetings • Regional meetings • National meeting • Leveraged articles and customer testimonials • Circulated Our Iceberg is Melting • What’s the plan?

36. Enabling: Success Profiles • Leveraged SME panel in development process • Highlighted skills and capabilities sales team would need to win in the future • Helped understand the changing skills and behaviors needed to meet the demands of our rapidly changing markets

37. Who can make the Transformation • Chally assessed the competency level of sales team using an online assessment. • Data was used to assist sales directors • Give more meaningful feedback to current employees • Create group and individual development plans • Introduce roles to employees that were more of a natural fit. • Client Case study - Major Consumer Products Division for a Global Pharmaceutical company • Business Issue for Client - Needs team to transform quickly and become more consultative and solution focused vs. traditional Account Management (Famer/Product) Focused. • 12 align well with traditional model, 6 probable and 4 with low probability • 6 can make the transformation, 7 probable and 9 with low probability

38. Detailed assessment reports generated for each salesperson Manager version also generated Sales leaders discussed results with each sales rep Gap between assessment and results kept short Enabling: Assessment Results

39. Sales leaders leveraged coaching tool to build individual development plans Training for new skills and capabilities Enabling: Coaching & Development

40. 1st and 2nd interview guides that targeted new role profiles Behavior based Incorporation of Chally assessment for finalists Provides additional insights Enabling: Staffing for the Future

41. Enabling: Roll out 2 1 3 • Sales Directors trained centrally over two days in the following areas: Coaching & Development Training Interview Skills Tool Introduction & Training • Profile construction • Assessment tools • Selection tools • Talent dashboard • Coaching tools • Coaching & feedback models • Coaching skill practice • Development planning • Behavioral interviews • Probing • Scoring • Calibration • Legalities • Skill practice • Sales Directors and training team rolled out new profiles, training, and development tools

42. Anchoring the Change • Making a new organization stick involved … • Creating and aligning new compensation plans • Incorporating new competencies into sales leader “observation” documents and performance discussions • Allowing a transitional period for training, meeting new customers, and meshing with new leaders • Hiring for new profiles

43. Progress • Discipline and focus added to sales interviewing and selection process • Good correlation between Chally results and % payout on sales incentive plans • Increase in new hire sales performance • New hires selected with new process and tools have 3 X win rate

44. Let’s Meet Our Speaker Mark W Kramer – President & CEO of Laird Plastics • 30 years in wholesale distribution in chemicals and plastics • Includes working with privately held and public companies, both US and foreign owned, ranging in size from $50M to $1B • Laird Plastics is the largest independent distributor of plastic stock shapes in North America with 56 servicing locations across the US and Canada • Graduate of Bucknell University (BA 1976) and Washington University, St. Louis (JD – 1979) • Retired USMC Lt. Col.

45. THE RIGHT ‘RAW MATERIAL’ FOR THE TALENT MANAGEMENT PROCESS … WHERE TO ACCESS the NEW sales HIREs?

46. A BETTER SOURCE FOR YOUNG SALES TALENT SALES DEGREE AND SALES CERTIFICATE PROGRAMS …

47. PONDER … Some 50% of sales workforce (17M people) will retire as the “Baby Boomer” generation plays out in coming years – an enormous gap to fill …

48. THE ACADEMIC VIEW IS CHANGING … YEARS AGO … • Liberal Arts reigned • “Knowledge and Theory” predominant • Business Major curriculum lacked focus on “sales” • “Selling Profession” marginalized by society TODAY …. • Relevance and practical skills critical to success • “Sales Majors” and “Sales Certificate” programs increasing • Over 70 Universities now offer • “Selling” recognized for contribution it makes

49. “THE SALES MAJOR” • Within the School of Business, some Marketing or Management Departments now offer degrees with “Sales” as a Major field of study or a ‘Certificate’ Program to complement another major • For the “Sales Major” - Typically two years of concentrated sales focus: • All Essential Selling Skills • Negotiating, Communication, Presentation Skills • Extensive Role Plays and Competitions

50. CAUTION … • According to the SEF, only 70 of 4,370 Colleges and Universities have a formal sales training program • At FSU, there are approximately 45,000 students on campus, 5,000 enrolled in the ‘business school’, 1500 in the ‘marketing degree’ but only 112 graduating with a sales major each year • THERE IS A NEED TO EXPAND BOTH THE NUMBER OF PROGRAMS AND THE CAPACITY OF EXISTING ONES