For the exclusive use of J. Uecker, 2021. NA0207 Improving Customer Service in Sunpharma Pharmacies Katarína Lacková, Comenius University–Bratislava Michaela Polaková, Comenius University–Bratislava Joan Winn, University of Denver L inda Dolinová, Human Resources manager for the Sunpharma Group, looked over the results from the Mystery Shopper visits that had been conducted a month earlier, in January 2011. On the whole, the evaluation was positive, but the agency’s report highlighted some deficiencies in customer service. Linda thought this was a pervasive problem among pharmacists throughout Slovakia. To her it seemed only natural that they didn’t have good customer service skills, since they were not trained in such things in school, but these skills were important for Sunpharma as it rolled out its new corporate strategy. Linda had asked to meet with Friedrich Plail, Sunpharma’s CEO, to discuss the Mystery Shopper report and its implications for her unit’s activities. As she prepared for her meeting with Mr. Plail, she asked herself, What would be the best way to teach “soft skills” to pharmacists who prided themselves on their technical knowledge? How should she prepare for this meeting and what should she propose to the CEO? Sunpharma Sunpharma’s first retail pharmacy was opened in 1998 in Slovakia’s second largest city, Košice, in eastern Slovakia. The next year two new pharmacies were opened—one each in Košice and Prešov. A year or two later Sunpharma acquired a pharmacy in centrally located Poprad. (See Exhibit 1 for a map of Slovakia with Sunpharma locations.) In August 2009, Sunpharma’s founder decided to sell the company. The new management moved the company headquarters from Prešov to Bratislava, the capital city, as this location was more convenient for the new management. All of the original employees working in the Prešov headquarters were given an option to relocate but only two people accepted. This resulted in the development of a completely new management team. Linda Dolinová was hired in November 2009, as a part of Sunpharma’s new organization. Linda had worked in human resources since 2002, shortly after completing her master’s degree in human resources management. She had worked as an HR specialist for several large Slovak companies, most recently for the biggest telecommunication Copyright © 2012 by the Case Research Journal and by Katarína Lacková and Michaela Polaková, Comenius University in Bratislava Faculty of Management, and Joan Winn, University of Denver. The authors are indebted to CRJ editor Debbie Ettington and three anonymous reviewers for their substantive and detailed critique and suggestions. The case is intended to be used as the basis for class discussion rather than to illustrate the effective or ineffective handling of a managerial situation. Improving Customer Service in Sunpharma Pharmacies 65 This document is authorized for use only by Jacqueline Uecker in ODC 6447 A Consulting and Group Process Facilitation in Organizational Change -Spring 2021-1 taught by KEN ROSSI, Hawaii Pacific University from Aug 2021 to Feb 2022. For the exclusive use of J. Uecker, 2021. company in the country. She had also received accreditation in training and development from the ministry of education for the Slovak Republic in 2005, and considered herself an expert in recruitment, motivation, and performance management. By 2011, the Sunpharma organization included twenty-seven corporate employees in departments of purchasing, finance, marketing, human resources, and operations. These corporate staffers supported Sunpharma’s 203 pharmacy employees in thirty-five pharmacies—most of which were located in shopping centers or medical clinics. (See Exhibit 2 for Sunpharma’s organizational structure.) Exhibit 3 shows annual revenues for the individual pharmacies in Sunpharma’s portfolio. The Retail Pharmacy Industry The retail pharmacy industry in Slovakia was fragmented and growing at about nine percent per year. According to the Slovak Chamber of Pharmacists, there were 1,300 pharmacies in Slovakia in 2005. By 2011, this number had grown to 2,005 or roughly one pharmacy for every 2,683 inhabitants. (Exhibit 4 shows pharmacies and population densities in major Slovak cities.) The number of pharmacies in Slovakia was high, creating a highly competitive industry environment.1 Most of the pharmacies in Slovakia were not owned by a parent company or financial group, but were owned by individual, independent pharmacists. These were typically traditional pharmacies dedicated to prescription and nonprescription (“overthe-counter”)2 medications, with no self-service section and a limited assortment of non-pharmaceutical items. (See Exhibit 5 for a description of the differences between pharmacies and drugstores in Slovakia.) The largest Slovak pharmacy chain was Dr. Max with 107 pharmacies, while the Farmakol group had fifty-two pharmacies, and Slovlek had thirty-nine pharmacies. Pharmacies were similar in their prescription-drug offerings, but differentiated themselves by their cosmetic and hygiene product selection, and customer service. Since pharmacists were the ones in direct contact with customers, the image and reputation of a pharmacy were largely dependent on customers’ experiences with the helpfulness of the pharmacist. The preponderance of individually owned pharmacies in Slovakia resulted from national legislation. In 2011, by law, there was one license or concession given to one person who was responsible for the pharmacy and known as the “responsible pharmacist.” Every pharmacy in Slovakia had to have a lead pharmacist who either ran the pharmacy or with whom the management of pharmacy group headquarters communicated. This person was responsible for managing the operation of an individual pharmacy under various acts of parliament and related governmental regulation under the current pharmacopoeia and professional guidelines and directives issued by the Ministry of Health. The responsible pharmacist had to be a university graduate with a diploma from an accredited pharmacy, research, or clinical pharmacology program. The responsible pharmacist’s name was shown on the license to operate the pharmacy. The current law did not allow more than one pharmacy per license. This arrangement inhibited the growth of pharmacy chains. With each of Sunpharma’s thirty-five pharmacies treated as independent companies, losses could not be offset by gains at the corporate level, thereby increasing the potential tax burden. Occasionally groups of individual pharmacists would band together in a “network” under a limited liability 66 Case Research Journal • Volume 32 • Issue 3 • Summer 2012 This document is authorized for use only by Jacqueline Uecker in ODC 6447 A Consulting and Group Process Facilitation in Organizational Change -Spring 2021-1 taught by KEN ROSSI, Hawaii Pacific University from Aug 2021 to Feb 2022. For the exclusive use of J. Uecker, 2021. corporation, but each pharmacy had its own owner. Legislation to relieve this limitation was in parliament, and the creation of chains of corporate pharmacies was expected to be legalized in December 2011. The new law would also lessen restrictions on generic drugs by removing the requirements that prescriptions specify a commercial name directly instead of the chemical composition. Trends and Consumer Expectations In addition to the move toward corporate ownership of pharmacy “chains,” the proliferation of pharmaceutical products available throughout the European Union—and a wider array of advertising media—brought more product choices and more consumer control over their purchasing decisions. Consumer expectations were changing, not just in Slovakia, but throughout Europe (and the U.S.) as well. Exposed to more products on the shelves, customers sought advice from the resident pharmacist, not their doctor. Pharmacists had always been regarded as trusted medical specialists, knowledgeable about effectiveness, side effects, and possible complications from combining different medications. The increase in generic drugs and over-the-counter medications prompted questions about price and effectiveness, especially by older customers or those with financial problems. The clarity and courtesy with which pharmacists communicated and offered information were important in courting customer loyalty and referrals. Customer understanding also helped avoid potential claims and complaints. Recently, there had been several articles about poor service in the pharmacy industry in newspapers or magazines like Hospodárske noviny (“Business News”) or Trend (which were considered to be reputable publications). Criticisms ranged from lack of professional expertise and courtesy to product selection and availability. Because of these reports, Linda did not think Mr. Plail would be surprised at the mystery shopping results. The emerging role of a pharmacist required not only technical knowledge and skills, but had largely shifted from the preparation of pharmaceuticals and analytical inspection to informing and counseling the customer. Industry changes were putting more and more pressure on pharmacists to change. New legislative requirements were in the offing, as a part of more comprehensive pharmaceutical care guidelines that specified information requirements (specifically on nonprescription OTC items), e-pharmacy (online) services, and an increasing presence of specialists among health care service providers. There was a move toward greater emphasis on “serving” and “satisfying” customers, a response to the loss of respect in the relationship between patient and medical providers generally. The pharmacist was the first line consultant in the use of both prescribed and OTC medications, and increasingly expected to be knowledgeable about all of the other items available in the new self-service space. Pharmacy Design Traditional Slovak pharmacies had no self-service section—that is, all products were accessible only to the employees. Between the consumer and pharmacist there was a desk with a glass wall display barrier that had a small gap through which the pharmacist would deliver the assortment of goods and collect money from customers. (See Figure 1.) Improving Customer Service in Sunpharma Pharmacies 67 This document is authorized for use only by Jacqueline Uecker in ODC 6447 A Consulting and Group Process Facilitation in Organizational Change -Spring 2021-1 taught by KEN ROSSI, Hawaii Pacific University from Aug 2021 to Feb 2022. For the exclusive use of J. Uecker, 2021. Figure 1. Traditional Slovak Pharmacy Interior In a departure from the structure of the traditional pharmacy, every new Sunpharma pharmacy was designed as a modern open space with a large self-service section. (See Figure 2.) In Sunpharma pharmacies, most items were self-service, and only prescription medications required the help of a pharmacist. This allowed customers to examine the products on the shelves closer and at their leisure, reading the information on the package and comparing brands and ingredients. At traditional pharmacies, customers waited in line to speak with a pharmacist and there was implied pressure to complete their transactions quickly, without purchasing additional products. The open space pharmacies allowed a more relaxed atmosphere where pharmacists could assist in selection of both prescribed and self-service products, after the customer perused the aisles. In addition to an assortment of OTC medications, the open space shelves contained nutrition and vitamin supplements, cosmetics, common sanitary goods, and other items for personal health and hygiene. Figure 2. Sunpharma Pharmacy with Self Service Space 68 Case Research Journal • Volume 32 • Issue 3 • Summer 2012 This document is authorized for use only by Jacqueline Uecker in ODC 6447 A Consulting and Group Process Facilitation in Organizational Change -Spring 2021-1 taught by KEN ROSSI, Hawaii Pacific University from Aug 2021 to Feb 2022. For the exclusive use of J. Uecker, 2021. Sunpharma was not the only “new concept” pharmacy in Slovakia. Dr. Max, like Sunpharma, was a network of pharmacies noted for its large selection of OTC products and a personal approach to customers. Like Sunpharma, Dr. Max pharmacies were located in shopping centers and medical buildings. However, Sunpharma prided itself on its wider product assortment, especially in cosmetics and specialty products, and its emphasis on quality of product knowledge and advice. Recruiting and Training Recruiting was a major source of concern for all pharmacy companies in Slovakia. In 2010, there were over 1,500 university students of pharmacy. According to Hospodárske noviny, 800 new pharmacies had opened in Slovakia over the previous 3–4 years; 200 pharmacists graduated from accredited programs annually. This pharmacist shortage was exacerbated by the fact that many pharmacists from Slovakia emigrated to the Czech Republic, Great Britain, Ireland or other EU countries where salaries were higher. The number of pharmacy students in Slovakia was increasing, but not as fast as the number of pharmacies. Once a pharmacist took a job, he or she was required by law to renew his or her knowledge and skills on an ongoing basis. A pharmacist was required to earn at least twenty credits per year by participating in continuing education programs. These programs were governed in detail by the Slovak Chamber of Pharmacists (SCP) licensure regulations for pharmacists registered in that SCP area. Sunpharma Strategy Friedrich Plail and his management team wanted Sunpharma to be the most popular pharmacy in Slovakia, renowned for its world class professionals and comprehensive services including drug consultation and price-comparison information, and complementary services such as blood pressure and cholesterol screening, fat measurements, and dermatology advice. Another chance to achieve higher revenues was to attract customers who purchased OTC drugs as demand and availability were increasing. Sunpharma set up a loyalty program that gave customer discounts, and promoted Sunpharma’s offerings. As competition increased, these differences in quality and service became increasingly important. The company’s mission statement was: To be a long-time favorite and the most in-demand pharmacy renowned for world class professionals, comprehensive services and an individual approach. Respecting ethics in business; providing a polite, pleasant and professional demeanor to customers and to business partners (physicians and suppliers), as well as high professionalism should facilitate achievement of this goal. Linda Dolinová believed this strategy depended on the pharmacists providing highquality services, attentive to customer needs. Linda was confident that Sunpharma had competent employees, but she thought that Sunpharma needed to do a better job of showing them what areas of their work they needed to master to do their job in accordance with the company’s strategic goals. In Linda’s opinion, achieving these goals depended on the level of customer service. Improving Customer Service in Sunpharma Pharmacies 69 This document is authorized for use only by Jacqueline Uecker in ODC 6447 A Consulting and Group Process Facilitation in Organizational Change -Spring 2021-1 taught by KEN ROSSI, Hawaii Pacific University from Aug 2021 to Feb 2022. For the exclusive use of J. Uecker, 2021. She explained: Customer service means having a friendly and patient approach. Communication with customers often means a lot of explaining to people who are a little bit nervous. Pharmacists have to understand the importance of their role is not only in dispensing prescribed drugs and preparing the medications. They have to realize that their behavior could influence whether the customer comes back or not. Professional demeanor was also essential for good relationships with business partners such as physicians, pharmaceutical firms and other product suppliers, pharmaceutical schools, and training institutions. Creating and maintaining a network of contacts with pharmaceutical firms and suppliers kept everyone abreast of industry changes and helped maintain inventory control. Open and honest communication led to better working conditions and more efficient operations. Cooperative marketing with pharmaceutical firms yielded supplementary revenues from product promotion. Cooperation with pharmaceutical schools allowed Sunpharma to build relationships with future pharmacists, and benefited the schools by informing them about what was needed in practice. Ideally, this dialogue influenced curriculum changes in order to prepare pharmaceutical students for their future job. The new open self-service concept had been well received by Sunpharma’s employees. Some of the pharmacists had initially expressed skepticism about the remodeling, but when they saw the results they were very pleased as well. They had already experienced changes in customer expectations for accessible product displays and more personal attention, and understood Sunpharma’s proactive efforts to modernize with the times. Seven pharmacy locations had been remodeled in 2008, four more in 2009, and another two in 2010. Organizational Culture Linda thought that organizational culture also played an important role in pharmacist behavior and willingness to change. Individual pharmacies had cultures that were influenced by specific characteristics of the particular responsible pharmacist in each pharmacy. In 2011, Sunpharma was a young company, with many recent graduates among its pharmacy staff. Sunpharma’s management team wanted to create a common corporate culture and espoused a corporate values statement: Sunpharma’s organizational culture focuses on people. People are the most important factor for this organization which is why it is not oriented toward creating and maintaining a system, which usually leads to putting the person out of this system. Sunpharma tries to support human faith in the ability to change the environment, provides time for learning, and shows the importance of training and learning for the everyday work of employees. Corporate values are openness, commitment, initiative, professionalism and respect. These behaviors were still new to a country that was used to top-down management practices and adherence to rigid policies. Customer service relied on open communication and flexibility. Good working relationships relied on mutual confidence and cooperation. Responsible pharmacists needed to understand that they were part of a team that included laboratory technicians and paramedical personnel; the pharmacy could not run without a concerted effort of everyone working in the pharmacy. Friedrich Plail had instituted company-wide management activities with Sunpharma’s values and strategy in mind. Regular meetings, for all managers and responsible 70 Case Research Journal • Volume 32 • Issue 3 • Summer 2012 This document is authorized for use only by Jacqueline Uecker in ODC 6447 A Consulting and Group Process Facilitation in Organizational Change -Spring 2021-1 taught by KEN ROSSI, Hawaii Pacific University from Aug 2021 to Feb 2022. For the exclusive use of J. Uecker, 2021. pharmacists, were organized twice a year. These meetings provided an opportunity for upper management to keep everyone informed about the operational and strategic situation of the organization, reiterating their vision, expectations, ideas and values important for the organization’s success. These corporate-wide meetings also included an opportunity for one or two credit seminars for responsible pharmacist recertification, and informal activities for idea-sharing and networking among responsible pharmacists. Linda observed that many employees, including pharmacists, stayed at Sunpharma because of its “employee friendly” organizational culture. Several of the newer pharmacist hires commented that Sunpharma’s culture was unique and they felt better working for Sunpharma than its competitors that did not communicate so openly or empower their employees to make decisions with their teams. Employee turnover for Sunpharma pharmacies was under 10 percent, which was low by industry standards. Sunpharma’s Current Training Programs Consistent with the Slovak Chamber of Pharmacists (SCP) guidelines, Sunpharma provided its pharmacists opportunities to obtain the necessary credits. The company offered accredited continuing-education training or covered expenses for accredited training that its pharmacists and pharmaceutical laboratory technicians could undertake on their own. Part of the required continuing vocational training and education was covered by a unique project at the Pharmaceutical Faculty of Slovakia’s prestigious Comenius University called “Excellent Pharmacy.” The curriculum of this program included the following: Pharmacotherapy seminars, highlighting • • • • • • innovations in dispensing procedures new developments in pharmaceutical technology psychology of patients, communication skills pharmaceutical, legal, economic, and tax issues nutritional supplements and their interaction with drugs phytotherapy Interactive workshops • problem-solving sessions in collaboration with pharmacists, physicians, and trainers Monothematic seminars • focused on providing complete and practical information about diagnostics, treatment, and education of patients Lectures covering themes such as • pathophysiology of diseases • prevention of disease • training in the use of durable medical devices Linda hoped that an innovative training system would serve as an incentive for applicants to take jobs with Sunpharma over their competitors. Eighteen pharmacies in the Sunpharma group had participated in this project, whose aim was to involve pharmacists in a wide range of educational activities in all key areas. Improving Customer Service in Sunpharma Pharmacies 71 This document is authorized for use only by Jacqueline Uecker in ODC 6447 A Consulting and Group Process Facilitation in Organizational Change -Spring 2021-1 taught by KEN ROSSI, Hawaii Pacific University from Aug 2021 to Feb 2022. For the exclusive use of J. Uecker, 2021. The training currently provided by Sunpharma and its contracted providers was not oriented toward customer service and did not address these changing expectations for the pharmacist’s role. Linda recognized that increasing the proficiency of pharmacists was required by law, but she also understood that the changing nature of pharmacists’ work required more than technical or pharmaceutical knowledge. The modern pharmacist was expected to be a customer’s personal advisor and consultant and this new role necessitated communication and interpersonal skills seldom addressed in their university training or certification. (See Exhibit 6 for the pharmacist job description used by Sunpharma.) Hana Kubová, one of Linda’s assistants, reminded Linda that they were not “starting from scratch” in developing a training system. She pointed out, We already provide certain training activities and we are also working on fostering a continuous-learning culture. Important documents and information that employees need to carry out their work or to understand the philosophy, direction and values of the company are presented at the new-employee orientation organized by our HR department and are available for all employees through our intranet. As every employee has to sign a document stating he has read all the directives published through our internal network, everyone should know that our priority is to focus on human resources and their development. Linda acknowledged Hana’s point, but was afraid that few people paid attention to the document they signed when they were hired. Linda responded, Yes, we try to ensure that training and development are seen by all employees as an important part of their working lives. But, first and foremost, we need to focus on the pharmacists. Continuing education for them is required by law, and they are in the best position to model behavior for the other employees. Sunpharma’s Mystery Shopping Initiative The mystery shopping initiative was part of Sunpharma’s efforts to assess overall customer satisfaction with its pharmacies and pharmacists as they moved from the traditional Slovak “closed-space” model to the new “open-space, self-service” model. The new management team supported the mystery shopping effort because they wanted to understand their pharmacies from the customers’ point of view. They recognized the increasing demands of customers, high competition, and changing trends within the industry that put downward pressure on revenues. Linda retrieved the file labeled Mystery Shopping and reviewed the report results with Hana. (See summary in Exhibit 7.) “I see you already have the results,” observed Hana. “Yes, it came on Tuesday,” said Linda. “Mr. Plail should also have gotten a copy. He may not have had time to read the entire report, so I want to point out some of the highlights when I meet with him next week.” Linda looked at her notes, and said: Overall, the evaluation was quite positive. Of course, some imperfections were identified, particularly in sales and communication skills of pharmacists. Results show insufficiencies in detecting the customers’ needs as well as not providing information about the offered products, price and possible alternatives. Also a more personal approach in the form of a smile, and “thanks for visiting” were missing in about half of our pharmacies. Given the fact that they were not trained in these things in schools at all, it’s only 72 Case Research Journal • Volume 32 • Issue 3 • Summer 2012 This document is authorized for use only by Jacqueline Uecker in ODC 6447 A Consulting and Group Process Facilitation in Organizational Change -Spring 2021-1 taught by KEN ROSSI, Hawaii Pacific University from Aug 2021 to Feb 2022. For the exclusive use of J. Uecker, 2021. natural that they do not know how to do it, which is another reason why we need to start to pay attention to their training in these areas as well. The loyalty program was not mentioned in any of the thirty-five visited pharmacies. Hana frowned. “The report was not very positive about sales skills. Mr. Plail will not be happy about that. And what about other employees? We also have to deal with their training, not only that of the pharmacists.” “Of course,” agreed Linda, “but everything cannot be done at once. It seems to me that since the pharmacists are the only ones who are able to issue prescribed drugs, training them should be our priority.” “Or at least, the first step,” added Hana. Preparing Her Presentation Linda had already initiated discussions with her employees and with the management of Sunpharma regarding industry trends and the mystery shopping initiative, so both sides understood the need for some kind of system that would provide continual training of employees in the organization. Nevertheless, she had not yet proposed a specific program that addressed the reports highlighting the need for customer relations skills or the behavioral deficiencies in Sunpharma’s current pharmacy employees. As she prepared for her meeting with Sunpharma’s CEO, Linda thought about the link between training goals and strategic goals of the organization. She explained to Hana: If first-rate specialists are one of the key factors to help pharmacies become more in demand by customers, the company should have a training system that emphasizes flexibility and adaptability to market trends and customer needs and improved communication skills to ensure competence and knowledge-sharing. Highly trained employees perform better; teamwork can improve the level of service company-wide. The right training program should increase motivation and confidence in the company. An increase in employee satisfaction keeps employee turnover low, as employees seek long-term employment in the company. Last but not least, a well-functioning training system may help in our recruiting efforts. A good training program could attract candidates interested in self-improvement. Linda would meet with the CEO the following Friday, and she wanted to be able to present a plan of action. Linda thought out loud: We have to think about the goals of education, about creating an environment that supports learning—a learning culture—and create a systemic approach to the training activities, identify training needs, select the right mix of training methods and the methods of assessing the effectiveness of the training process. Hana added: What have we found out from the analysis of the organization, tasks and people? We need to lay out what kind of training is needed and for whom, and also which training methods would be the most appropriate. We should try to combine “on the job” methods with “off the job” training sessions. Linda replied, We have already made an important step toward developing a training system by our decision to use a competency approach. We created competency-based job descriptions for all positions in the company. So we should also think about competency-based Improving Customer Service in Sunpharma Pharmacies 73 This document is authorized for use only by Jacqueline Uecker in ODC 6447 A Consulting and Group Process Facilitation in Organizational Change -Spring 2021-1 taught by KEN ROSSI, Hawaii Pacific University from Aug 2021 to Feb 2022. For the exclusive use of J. Uecker, 2021. training. This should serve as a linchpin to employee training and development. It assists us in identifying the competencies for certain positions and helps us to identify important competencies that we should be focusing on and developing in our employees. It is these competencies that should be integrated into our training system and learning plans. This approach is also a way to ensure that we are training people in something that is really important for their work. Developing these skills and characteristics should lead to improved effectiveness and productivity, but more importantly, increased satisfaction for our customers and patients will ultimately be reflected in improved sales results. Linda was well aware of the importance of the task assigned to her. A well-designed training system could help increase the competitiveness of the company substantially. There were a lot of ideas that should be included in the system, but she also needed to be mindful of financial and time constraints. In addition to the direct costs, each training activity required some time off for employees participating in training activities. Part of Linda’s task would be to find qualified replacements in the pharmacies during the training sessions. Earlier in the year, Linda had prepared a preliminary budget, totaling 3,390 EUR for training headquarters personnel and 5,640 EUR for the pharmacies. (See Exhibits 8, 9, and 10.) Linda’s current plan proposed 2 percent of current revenues for training. Now, with the new emphasis on customer service, she wondered if these amounts would be sufficient. (Exhibit 11 gives cost estimates of different training seminars in Slovakia in 2011.) Linda knew that Mr. Plail supported training and development initiatives for employees, but he had said, “Every coin has two sides,” and he always looked at balancing costs and benefits for the company. She knew that the CEO expected her to present a draft of the training system proposal, but she did not want to rush her decision at the expense of quality. In her head she was contemplating the various advantages and disadvantages of each possibility. “Which factors are the most important? Which of them do I need to take into consideration in designing the training system? What strategy should I use to create an effective training system?” she thought as she was navigating through the results of the mystery shopping report and browsing through the articles. “And how do I convince the CEO that this is what we need?” She wanted to make sure that he understood how important employee training was for the company to achieve its strategic goals, since it would take strong support from the top to get people to buy into a new way of doing business. 74 Case Research Journal • Volume 32 • Issue 3 • Summer 2012 This document is authorized for use only by Jacqueline Uecker in ODC 6447 A Consulting and Group Process Facilitation in Organizational Change -Spring 2021-1 taught by KEN ROSSI, Hawaii Pacific University from Aug 2021 to Feb 2022. For the exclusive use of J. Uecker, 2021. Exhibit 1: Map of Slovakia, Showing Number of Sunpharma Pharmacies in each Region The Slovak Republic is located between Austria and the Czech Republic on the west, Poland on the north, Ukraine on the east and Hungary on the south. In 2011, its population was approximately 5 million people. Source: adapted from www.d-maps.com. The map was edited and the number of pharmacies added. Improving Customer Service in Sunpharma Pharmacies 75 This document is authorized for use only by Jacqueline Uecker in ODC 6447 A Consulting and Group Process Facilitation in Organizational Change -Spring 2021-1 taught by KEN ROSSI, Hawaii Pacific University from Aug 2021 to Feb 2022. For the exclusive use of J. Uecker, 2021. Exhibit 2: Organizational Structure of Sunpharma Group (as of April 2011) Chief Executive Officer (1) Lawyer (1) Chief Operating Officer (1) IT specialist (1) Financial manager (1) Economic department HR manager (1) Purchasing manager (1) HR specialist (1) Accountant (6) HR officer E-shop specialist (1) Purchasing specialist (2) Marketing manager (1) Marketing specialist (1) (2) Financial officer (1) Operations manager (1) Operations specialist (1) PHARMACIES Responsible pharmacist Deputy of responsible pharmacist Assistant (1) Pharmacist Maintenance technician (1) Archivist (1) Pharmaceutic laboratory technician Paramedical personnel Source: Company documents. Note: Number of employees given in parentheses; each pharmacy has one Responsible pharmacist. 76 Case Research Journal • Volume 32 • Issue 3 • Summer 2012 This document is authorized for use only by Jacqueline Uecker in ODC 6447 A Consulting and Group Process Facilitation in Organizational Change -Spring 2021-1 taught by KEN ROSSI, Hawaii Pacific University from Aug 2021 to Feb 2022. For the exclusive use of J. Uecker, 2021. Exhibit 3: Sunpharma Company Gross Turnover (Revenues) Pharmacies SUNPHARMA 1, s.r.o. Revenues in EUR3 2008 2009 2010 inactive 535 924 557 683 1 560 454 1 643 910 1 757 498 SUNPHARMA 3, s.r.o. 468 347 497 923 522 389 SUNPHARMA 4, k.s. 880 948 906 121 763 157 SUNPHARMA 5, k.s. 1 747 899 1 824 865 1 853 257 SUNPHARMA 6, k.s. 1 453 391 1 635 965 1 625 303 SUNPHARMA 2, k.s. SUNPHARMA 7, s.r.o. 536 790 584 187 536 102 SUNPHARMA 8, k.s. 1 377 003 1 300 936 1 086 708 SUNPHARMA 9, k.s. 2 113 948 2 008 901 2 030 608 SUNPHARMA 10, k.s. 3 074 597 3 748 863 3 461 315 SUNPHARMA 11, k.s. 2 872 437 2 901 399 2 928 550 SUNPHARMA 13, k.s. 2 407 062 2 183 209 2 193 791 SUNPHARMA 14, k.s. 1 815 557 1 827 169 1 946 097 SUNPHARMA 15, k.s. 835 238 759 087 641 243 SUNPHARMA 16, k.s. inactive 1 158 097 1 137 807 SUNPHARMA 17, k.s. 2 083 891 1 914 027 1 599 747 SUNPHARMA 18, s.r.o. 277 811 403 073 410 669 SUNPHARMA 19, s.r.o. 264 267 772 830 inactive SUNPHARMA 20, k.s. 400 489 932 324 1 071 489 SUNPHARMA 21, s.r.o. 5 672 303 806 483 329 SUNPHARMA 22, s.r.o. 129 345 459 590 060 SUNPHARMA 23, s.r.o. inactive 361 499 563 209 SUNPHARMA 24, s.r.o. inactive 104 430 528 514 SUNPHARMA 25, k.s. 130 730 266 844 619 540 SUNPHARMA 26, k.s. inactive 22 341 719 341 SUNPHARMA 27, s.r.o. 9 177 6 168 140 865 SUNPHARMA 28, s.r.o. 223 778 inactive 198 603 SUNPHARMA 29, s.r.o. 104 224 117 511 227 949 SUNPHARMA 30, s.r.o. 368 005 137 651 249 307 SUNPHARMA 31, s.r.o. 35 139 82 049 202 941 SUNPHARMA 32, s.r.o. 287 139 inactive 18 144 SUNPHARMA 33, s.r.o. inactive 584 524 301 002 SUNPHARMA 34, s.r.o. inactive inactive 501 261 SUNPHARMA 35, s.r.o. 368 446 395 744 49 087 SUNPHARMA 36, s.r.o. 481 488 399 985 13 418 1 913 110 1 910 782 126 764 44 018 Headquarters PASIMUS PRIMUS SUNPHARMA SLOVAKIA merged into SUNPHARMA SLOVAKIA 1 476 321 Note: s.r.o. (spolocnost s rucenim obmedzenym) designates a limited liability company (corporation); k.s. (komanditna spolocnost) is a special limited partnership. These abbreviations are usually part of the company name. Improving Customer Service in Sunpharma Pharmacies 77 This document is authorized for use only by Jacqueline Uecker in ODC 6447 A Consulting and Group Process Facilitation in Organizational Change -Spring 2021-1 taught by KEN ROSSI, Hawaii Pacific University from Aug 2021 to Feb 2022. For the exclusive use of J. Uecker, 2021. Exhibit 4: Population and Pharmacy Density in Slovakia Region Number of Inhabitants Number of pharmacies Number of pharmacists Inhabitants per pharmacy Banskobystricky 662 000 246 414 2692 Bratislavsky 599 000 319 881 Kosicky 766 000 273 478 Nitriansky 713 000 270 Presovsky 790 000 Trenciansky 606 000 Trnavsky Zilinsky SLOVAKIA Inhabitants per pharmacist Pharmacists per pharmacy 1599 1.68 1878 680 2.76 2806 1603 1.75 498 2642 1433 1.84 260 452 3038 1748 1.74 188 334 3221 1813 1.78 551 000 225 417 2449 1321 1.85 692 000 224 452 3091 1532 2.02 5 379 000 2 005 3 926 2 683 1 370 1.96 Exhibit 5: Difference between Pharmacy and Drugstore in Slovakia Pharmacies and drugstores in Slovakia were viewed and understood differently than in the USA. According to Act No. 140/1998 on medicines and medical devices, pharmaceutical care included the provision, preparation, control, storage, and supply of medicinal products (except preparation of transfusion medicines and medical devices); provision of professional information on medicines and medical devices, and consultation in determining and monitoring treatment procedures. These medical preparations and devices could be provided by hospital pharmacies, licensed public pharmacies including their branches, dispensaries of medical devices, and public pharmacies established as a teaching base. In order to operate, these locations needed to obtain an official authorization from the area’s self-governing region and must employ a pharmacist with a university diploma in pharmacy or diploma of specialization in the field of pharmacy and a minimum three years of experience and practice in a public pharmacy. The basic permitted range of products sold in Slovak public pharmacies and branches of public pharmacies included registered human medicine, registered veterinary medicine, medical devices, regulated dietary foods, and drugs listed in the Slovak Pharmacopoeia or the European Pharmacopoeia paid for by public health insurance. In addition to this, dietetic products, baby food, natural mineral waters, and other products designed to protect and promote health were regulated and could only be found in licensed public pharmacies, in branches of public pharmacies, and licensed dispensaries of medical devices. Prescription drugs could be sold only in public pharmacies, branches of public pharmacies, and hospital pharmacies. Only people with completed university diplomas in pharmacy could sell prescribed drugs. Drugs that could be obtained without prescription could be sold by people who had completed studies at a secondary medical school in the field of pharmacy or as a pharmacy technician. These drugs were called over-the-counter drugs. Even though OTC medications did not need to be prescribed by a doctor, they still needed to be registered at the State Institute of Drug Control. Nutritional supplements could be found in grocery stores and drugstores, but most nutritional supplements were purchased in pharmacies and specialty stores. In Slovakia (and the Czech Republic) drugstores did not sell prescription or OTC drugs, so they did not need to hire pharmacists or pharmacy technicians. Slovak drugstores sold nutritional supplements, toiletries and cosmetics and perfumery products, laundry detergents and household cleaners, specialty foods and snacks, and textile products (e.g., kitchen and bath accessories). The pharmacist was a licensed medical professional and people expected to receive advice when they went to a pharmacy. Typically, pharmacists would advise about prescription and OTC medications, as well as nutritional supplements and specialty cosmetic and hygiene products. 78 Case Research Journal • Volume 32 • Issue 3 • Summer 2012 This document is authorized for use only by Jacqueline Uecker in ODC 6447 A Consulting and Group Process Facilitation in Organizational Change -Spring 2021-1 taught by KEN ROSSI, Hawaii Pacific University from Aug 2021 to Feb 2022. For the exclusive use of J. Uecker, 2021. Exhibit 6: Job Description for Pharmacist Job description Position: Pharmacist Organizational unit: Sunpharma Supervisor: Responsible Pharmacist Description of the position: Dispensing prescribed drugs, OTC drugs, medical devices and complementary health aids, compounding individually prepared drugs in accordance with good production practice, standards and pharmacopoeia. Complies with the provisions of the Act no. 140/1998 and Act no. 139/1998 of narcotic drugs and psychotropic substances. Responsible for: • Compounding individually prepared drugs in accordance with the principles of good production practice, applicable standards and pharmacopoeia. • Dispensing prescribed drugs, OTC drugs, medical devices and complementary health aids. • Processing of prescriptions and medical voucher by computing. • Providing advice to patients regarding proper use, dosage, side and natural effects of medicines. • Checking the status of inventory, ordering medicines, medical devices and complementary assortment of pharmacy. • Checking the quality of drugs, taking drugs and raw materials in the stock records. • Verifying the correctness of the deposit and storage of medicines and medical supplies. • Coordinating the work of pharmacy lab technicians. • Ensuring the implementation of marketing activities in pharmacies and coordinating purchases with the purchasing department. • Preparing the details and documentation for updating the company web site. • Cooperating with other departments within the company as well as with responsible pharmacists in other pharmacies. • Performing other duties assigned by the supervisor. Competencies: Education: Experiences: Professional knowledge, skills: Pharmaceutical faculty—field of study: pharmacy Windows Office Sales and communication skills Abilities: Ability to direct and open communication, team spirit, ability to set priorities, work organization, time management Personal qualification: Autonomy, initiative/proactive, reliable, responsible, loyal, positive thinking, self-reflection Core/Key competencies: Ability to make decisions, ability to implement laws in practice, conceptual thinking, initiate problem solving, ability to learn and progress Improving Customer Service in Sunpharma Pharmacies 79 This document is authorized for use only by Jacqueline Uecker in ODC 6447 A Consulting and Group Process Facilitation in Organizational Change -Spring 2021-1 taught by KEN ROSSI, Hawaii Pacific University from Aug 2021 to Feb 2022. For the exclusive use of J. Uecker, 2021. Exhibit 7: Summary of Mystery Shopping Report4 Design of the Project The Mystery Shopping survey and report were conducted and summarized by a professional Slovak company specializing in mystery shopping. Method Mystery shopping—trained mystery shoppers visited each pharmacy in the role of real customers with a prepared “mystery story.” Every pharmacy was visited once by one mystery shopper. Mystery Story “Good morning, I don’t feel well.” Detailed specification: Mystery shopper in the role of customer visited the selected pharmacy. According to the mystery story, he asked pharmacist for help in choosing a non-prescription cold medication. After the initial information about not feeling well, the initiative was left to the pharmacist. At the end, the customer/mystery shopper left with the selected product that he bought. Main objective: Identification of the current level of customer service during the sale of a non-prescription medicine. Secondary objective: Identification of major deficiencies in customer service. Purchased goods: Non-prescription medication for initial cold symptoms according to the requirements of the mystery shopper. Main areas of interest of the mystery shopping: • Exterior and interior of the pharmacy (cleanliness and atmosphere in the pharmacy). • Greetings and salutation of pharmacist. • Appearance of the sales person (clothing and name badge of pharmacist). • The process of drug selection (detection of health problems, suitable product offering, provided information about offered drugs). • Completion of the sales talk (cross-selling, thank you for visiting and farewell to the customer). • Loyalty Program (offering a loyalty program and information about its benefits). • Communication and professional skills (pharmacist’s ability to answer questions, his attention to the customer). • Overall assessment of pharmacy visit (overall customer satisfaction, pros and cons of the visit). Summary of Results Positive Results • Environment of pharmacies (exterior and interior) is rated as clean. Customers feel comfortable in Sunpharma pharmacies. • Pharmacy staff is attentive upon arrival of a customer. All customers were served as soon as possible. Waiting time was 1.6 minutes. • Greeting and establishment of eye contact upon welcoming of the customer was never missing. • Sunpharma pharmacists were evaluated as professionals. Customers had no problems with getting answers to their questions. • Pharmacists knew assortment of products of the pharmacy in which they worked. Alternative drugs for the health problems of a customer were offered in 97 percent of cases. • Communication skills (pharmacist’s ability to answer questions, attention to the customer) of pharmacists were evaluated positively. However, deficiencies in active approach to customers were found, notably greetings and salutation from the pharmacist, detection of health problems, suitable product offering, information about offered drugs, cross-selling, thank you for visiting and farewell to the customer and offering the loyalty program and providing information about its benefits. Negative Results • Overall customer service index rating averaged 72 percent, which means there is still some room to improve levels of customer service. • Identification of needs and symptoms of health problems of the customer was lacking. Pharmacists offer a suitable product for the customer only in response to customer questions. • The results show deficiencies in the sale of suitable medicine for the customer. Providing information about offered products was low (59 percent). Customers are often not given information about the product’s price before buying the product (45 percent). Information about possible alternatives (59 percent) or pharmacist‘s recommendation (62 percent) is also missing in many cases. • Loyalty program information was completely absent in all sales transactions. None of the pharmacies mentioned it during mystery shopping visits. • Customers would appreciate a more personal approach by pharmacists. When evaluating the pharmacist’s approach to the customer, details like lack of smile (56 percent), thanks for the visit (59 percent) or name badge (50 percent) are very important. • Pharmacists lack sales skills. Cross-selling was part of just 35 percent of sales transactions. 80 Case Research Journal • Volume 32 • Issue 3 • Summer 2012 This document is authorized for use only by Jacqueline Uecker in ODC 6447 A Consulting and Group Process Facilitation in Organizational Change -Spring 2021-1 taught by KEN ROSSI, Hawaii Pacific University from Aug 2021 to Feb 2022. For the exclusive use of J. Uecker, 2021. Exhibit 7: Summary of Mystery Shopping Report (continued) Overall satisfaction with pharmacy visits Very satisfied 41% Somewhat satisfied 26% Neither satisfied nor dissatisfied 24% Somewhat dissatisfied 6% Very dissatisfied 3% Satisfaction with the pharmacist Very satisfied 35% Somewhat satisfied 29% Neither satisfied nor dissatisfied 18% Somewhat dissatisfied 15% Very dissatisfied 3% Recommendation of the pharmacy to friends based on the visit Definitely yes 47% Somewhat yes 18% Neither yes or no 24% Somewhat no 6% Certainly not 6% Return visit Definitely yes 41% Somewhat yes 21% Neither yes or no 26% Somewhat no 9% Certainly not 3% Overall Index—The Results Index of customer service quality is 72 percent (overall average). The highest ranked area is “Exterior and interior of the pharmacy” with 92 percent of the mystery shoppers satisfied with both exterior and interior of the pharmacy. This area contributes to the overall index with 15 percent. (Each index was calculated based on partial indices identified by the company hired to do the mystery shopping for Sunpharma. Each measure was assigned a weight of importance, totaling 100 percent for all measures combined.) The worst ranked area is the “Appearance of the sales person.” This was mainly due to the fact that many sales people did not have a name badge pin on their clothes. The second worst ranked area is “Completion of the sales talk.” The conclusion of the customer’s visit and the loyalty program are often underestimated by pharmacists. The pharmacist should give attention to a customer until he leaves the counter and should try to offer as much as possible to leave a good impression which can lead to another visit in the future. Sub-index Exterior and interior of pharmacy 92% Greetings and salutation 88% Appearance of the sales person 50% The process of drug selection 66% Completion of the sales talk 52% Communication and professional skills 86% Overall index 72% Improving Customer Service in Sunpharma Pharmacies 81 This document is authorized for use only by Jacqueline Uecker in ODC 6447 A Consulting and Group Process Facilitation in Organizational Change -Spring 2021-1 taught by KEN ROSSI, Hawaii Pacific University from Aug 2021 to Feb 2022. For the exclusive use of J. Uecker, 2021. Exhibit 8: Training Budget per Person for Sunpharma Headquarters Personnel for 2011 (in Euros) Position Training Position Training Purchase specialist 300 Market. tech. specialist Financial manager 300 Executive officer HR specialist 200 Operation. tech. manager 300 Personnel officer 200 Project manager 200 Financial analyst 200 Chief executive officer Financial accountant 90 Purchase specialist 0 Marketing manager 300 Receptionist 0 200 0 0 Lawyer 200 Operation. tech. specialist 200 HR manager 500 IT specialist 200 Exhibit 9: Estimated Employee Compensation by Department for Sunpharma Headquarters for 2011 (in Euros) Position Top management IT department Purchasing department HR department Legal department Financial department Cost of employees (annual total) 150 000 30 000 74 000 115 000 25 000 218 000 Marketing department 72 000 Operations department 128 000 Source: Sunpharma Group internal documents 82 Case Research Journal • Volume 32 • Issue 3 • Summer 2012 This document is authorized for use only by Jacqueline Uecker in ODC 6447 A Consulting and Group Process Facilitation in Organizational Change -Spring 2021-1 taught by KEN ROSSI, Hawaii Pacific University from Aug 2021 to Feb 2022. For the exclusive use of J. Uecker, 2021. Exhibit 10: Estimated Cost of Employees (Total Compensation) and Training Budget for 2011 (in Euros, per Pharmacy) PHARM. Cost of pharmacy employees per year Training PHARM. Cost of pharmacy employees per year Training PHARM 1 73 000 100 PHARM 20 113 000 200 PHARM 2 166 000 300 PHARM 21 75 000 100 PHARM 3 55 000 100 PHARM 22 81 000 100 PHARM 4 67 000 100 PHARM 23 57 000 100 PHARM 5 148 000 250 PHARM 24 80 000 120 PHARM 6 156 000 300 PHARM 25 60 000 100 PHARM 7 54 000 100 PHARM 26 129 000 200 PHARM 8 60 000 100 PHARM 27 42 000 100 PHARM 9 150 000 300 PHARM 28 74 000 100 PHARM 10 267 000 300 PHARM 29 80 000 100 PHARM 11 218 000 400 PHARM 30 90 000 100 PHARM 13 170 000 300 PHARM 31 77 000 100 PHARM 14 168 000 300 PHARM 32 78 000 100 PHARM 15 78 000 100 PHARM 33 110 000 150 PHARM 16 97 000 150 PHARM 34 109 000 200 PHARM 17 108 000 150 PHARM 35 40 000 100 PHARM 18 42 000 100 PHARM 36 78 000 120 PHARM 19 82 000 100 Exhibit 11: Sample Costs of Different Training Seminars in Slovakia in 2011 Training seminar Communication skills Training cost in EUR5 Training duration in hours 100–200 7–30 70–300 7–30 Interpersonal skills 300–700 7–21 Problem solving 400–700 14–30 Team work 200–400 7–24 Leadership 300–600 14–28 Time management 150–300 7–24 Sales skills Improving Customer Service in Sunpharma Pharmacies 83 This document is authorized for use only by Jacqueline Uecker in ODC 6447 A Consulting and Group Process Facilitation in Organizational Change -Spring 2021-1 taught by KEN ROSSI, Hawaii Pacific University from Aug 2021 to Feb 2022. For the exclusive use of J. Uecker, 2021. Notes 1. By comparison the Czech Republic had roughly one pharmacy for every 5,500 inhabitants. 2. Over-the-counter (OTC) medications were those that could be bought without a prescription from a doctor. In the United States, the term could refer to non-prescription medicines and nutritional supplements, which could often be purchased in drugstores, supermarkets and service stations. In Slovakia, OTC medications could only be purchased in pharmacies. In general in Europe many medications that were easily purchased in the U.S., like ibuprofen, were more closely regulated. 3. Inactive means pharmacies were closed for remodeling and later reopened in the same location or in a different location (a few moved to another city). Some pharmacies, for example #32, 35, and 36, were closed for only a few months before reopening later in the year. Sunpharma Slovakia, the company headquarters, was an independent company in 2010. This was expected to change in 2012 with the new legislation. 4. These are excerpts from the 32 page report. 5. Training cost depends on provider. References (English Translation of Slovak Titles) (2011). Restraint of Competition: Does Bother Us? Interview. Pavel Vajskebr, General Director of transnational network of Dr. Max Pharmacies. HNONLINE. Retrieved April 27, 2011 from http://m. hnonline.sk/c3-50157810-kw0000_d-vajskebr-pre-hn-prekaza-nam-ze-sa-tu-brani-konkurencii. (April28,2011).SlovakPharmacistsInvolvedinUniqueSystemofEducation.RetrievedJune6,2011fromhttp:// www.sanofi-aventis.sk/l/sk/sk/layout.jsp?cnt=4F5A764C-69EE-4104-8161-E6581A1563EC. (November 29, 2008). Directives of Slovak Chamber of Pharmacists about Continual Learning. Act no. 140/1998 on medicines and medical devices (1998). Corporate internal materials. Sunpharma Group. Gb. (June 24, 2009). Big Number of Pharmacies Causes Problems. ETREND. Retrieved April 28, 2011 from http://ekonomika.etrend.sk/ekonomika-slovensko/velky-pocet-lekarni-sposobuje-problemy. html. Number of pharmacies in Slovakia. Retrieved November 18, 2011 from https://www.slek.sk/ lekarne-gis-kraje. TASR (October 10, 2008). Lack of Pharmacists, the Reason is Big Number of Pharmacies. SME. Retrieved April 28, 2011 from http://www.sme.sk/c/4118655/je-nedostatok-lekarnikov-dovodom-je-velalekarni.html. 84 Case Research Journal • Volume 32 • Issue 3 • Summer 2012 This document is authorized for use only by Jacqueline Uecker in ODC 6447 A Consulting and Group Process Facilitation in Organizational Change -Spring 2021-1 taught by KEN ROSSI, Hawaii Pacific University from Aug 2021 to Feb 2022.