Corless Takes Simple Approach to Heading Up PSS

Edition: September 2002 - Vol 10 Number 09
Article#: 1300
Author: Repertoire

In May, Jacksonville, FL-based PSS World Medical announced the promotion of Gary A. Corless to president of its physician division, Physician Sales & Service, and to executive vice president of PSS World Medical. For three years prior to that, he had been president of Gulf South Medical Supply, PSS World’s long-term-care division.

He began his career as a physician sales rep for PSS in Miami. Nine years later, he joined the company’s Diagnostic Imaging business, helping identify acquisition targets and integrating them into the company. Ultimately he ran day-to-day business of DI’s Eastern region.

Repertoire spoke with Corless about his plans for the company.

Now that you have taken the helm of PSS, what will be the direction and focus of the company?

First and foremost, it is important not to overcomplicate what we do. We will grow in sales and profitability by adhering to four principles: First, know your customer better than anyone else. An advantage that we have is that PSS is a physician business; we are not distracted by the need to service or sell to other areas of healthcare.

The second principle is, listen to your sales reps and field leadership. It’s an indisputable fact that they’re closer to what’s happening than anyone else in your company.

Third, build a service model that enables you to outservice your competitors. We would prefer to do this rather than get caught in the efficiency trap, where the push for greater and greater internal efficiencies ends up pushing customers away. Yes, we need to be more efficient, but efficiency is a strategy to help service your customers better and be more profitable – not a guiding principle on which to run the company.

Fourth, shoot straight with everyone – salespeople, operations people, leaders, manufacturers. To me, that’s a matter of respect for people’s intellect and intentions. Don’t beat around the bush.

What needs fixing?

We could probably communicate better both internally and externally. We all get busy. Still, we will take the time to stop and say, ‘Here’s where we are, here’s where we are going, here’s how we are going to get there and here’s how we are doing.’

What needs reinforcing?

Sticking to the four principles we talked about.

What do you feel are the best attributes that PSS has to offer regarding the representation of a manufacturer’s products?

We have the largest and best-trained sales force in the physician market, and the service to back them up. That’s not to say that there aren’t great individual reps working for our competitors, but overall, our offering to manufacturer partners is very valuable.

PSS has always emphasized training of its sales force. Will that continue?

As it says in bold letters in our office, ‘Training is an event; learning is a process.’ We firmly believe that it’s a foundation of our culture, and we will keep training.

Is it difficult to keep people open to and excited about training and learning?

People don’t resist learning so much, if it’s about a new product. But changing behavior is a different thing. It can be hard for any one of us. We figure, “My present behavior has gotten me to where I am today, and that’s not too bad.” But that won’t necessarily get us to the next level.

Before you ever talk about the “what” and “how” of something new, you have to firmly address the “why.” If that gets missed, the initiative will fail.

Does that have to do with respecting people?

When people fail to hit the “why,” it’s not due to a conscious lack of respect. Sometimes people feel that to get results quicker, they need to speed up the process and potentially skip steps. But you can never skip the “why” somebody needs to do something. In fact, until you answer the “why,” you can’t get to “what” and “how.”

PSS has stated that individual branches will not have as much autonomy to drive product decisions as they have in the past. What is PSS doing to drive centralization?

We don’t think in terms of, “Which is better for PSS – centralized or decentralized?” Instead, we try to focus on what’s best for the customer.

That said, we have worked on bringing some elements of our supply chain process under field support. [In PSS terminology, “Field Support” refers to the headquarters office in Jacksonville.] These are non-inventory items that the customer never buys, such as office supplies, warehouse supplies, etc.

Capital equipment partnerships are still negotiated at the Field Support level.

Decisions for most brand-sensitive disposables are made at the local level. However, we may look to consolidate items that are not brand-sensitive to our customers.

For the past three years, you headed up Gulf South. What lessons do you bring to your new position from long-term-care? What lessons will you have to unlearn from that market in order to serve physicians better?

First, I’d say that people sometimes forget that even though I spent the past three years in long-term-care, I spent nine years prior to that in the physician market. I started as a sales rep to physicians.

Second, when I was with Diagnostic Imaging and Gulf South, I tried to adhere to the same four principles I mentioned earlier. As a result, I didn’t really have to unlearn anything to go over there, and I didn’t have to unlearn anything when I returned here, to the physician business.

I did learn that people who are unsuccessful making the switch from one market to another are probably trying to copy tactics they used in one market and apply them to another. You need to go up a level and focus on taking care of your customers and taking care of your people. It’s not complicated. If you stick to those two things, you’ll make good decisions.

Can we expect PSS to expand through acquisition or building anytime soon?

We’ve already built a distribution network, so we don’t need just another star on the map. We’ll evaluate any opportunity for its strategic, cultural and financial fit. If something fits from those standpoints, then it’s definitely a possibility.

Are there any areas of the country you’d like to strengthen your presence?

We don’t look at it like that. Again, we’re looking less for geographic fit and more for strategic, cultural and financial fit.

Under your direction, Gulf South cut the number of its distribution centers from 18 to 14. Has the same thing been done in the physician business? Will more be done in the near future?

We’ve gone from 46 distribution centers to 33, plus 13 sales office/break-freight centers. But the magic isn’t in the number of centers. It’s in the service you offer. People can get caught up in the numbers. They think, “If 18 to 14 is good, then 14 to 10 is even better.” But you have to make informed decisions based on what level of service you want to provide. Then you look at the map.

At Gulf South, we had extensive conversations with customers before we made those cuts. We had a strong understanding of what they were willing and able to pay for. Only then did we make the decision to reduce the number of facilities. And by using a “best practice” model, we were able to provide better service with 14 facilities than with 18.

The physician customer is different from the long-term-care customer. First, the type of person ordering supplies on the physician side often is someone with 30 other tasks. On the long-term-care side, that person usually has more of a focus on purchasing. Secondly, physicians’ orders are usually smaller, and they have more of a need for smaller units of measure and special services. Third, the two customers differ in their willingness and ability to pay for service. We found out that many times, long-term-care customers liked certain services but they weren’t in the position to be able to pay for them.

Can you maintain deliveries and customer satisfaction while consolidating distribution centers?

We have been converting some distribution centers into sales-office/break-freight centers. In 13 cases, where there once was a distribution center, now there is one of these. In “break-freight centers” no product is stocked, yet it is distributed from there. It is also referred to as “hub and spoke,” where the stocking warehouse receives the order, picks it that night, ships it to the break-freight center, where it is then picked up by our local delivery people and taken to the customer.

How do they work?

Each of these centers has an office manager, and small warehouse. Let’s talk about the center in Tallahassee [FL]. Suppose a customer orders today at 4:30 pm from the Tallahassee center. The order is transmitted to Jacksonville – the closest distribution center – and picked at night. Then it is dropped off at the break-freight center. The driver there – in Tallahassee, in this case – loads up his truck at 7:30 or 8 in the morning and makes the delivery.

In some cases, customers are actually getting their orders earlier than they did when they were receiving their shipments directly from a distribution center. That’s because now we’re working at night.

Why have you chosen to employ this approach using break-freight centers?

First, we believe that our delivery people’s knowledge and relationships with their customers gives us a competitive advantage. These people know what their customers typically order and can spot discrepancies or mistakes quickly. And in some cases, they stock supplies for their customers.

Secondly, the local presence also gives us the ability to do setups more easily, something that is extremely difficult to do from far away.

Third, these centers give us the ability to handle customer returns and special service needs much more easily.

Has PSS made any changes in the compensation systems for its reps? Do you anticipate doing so in the future?

We have aligned compensation with certain strategies. One example has been margin enhancement, and that has been successful. Our reps remain the highest-paid in the industry, and our changes have given them the opportunity to widen the gap even further.

The SRx program [a disease-state-based sales program] has been a big initiative for PSS. Has the program lived up to its intended purpose?

SRx was designed to move us to a solutions-selling mode from a product-selling mode. That’s no small task. It means making new behavior a habit. We all have to keep in mind that this doesn’t have to be achieved overnight – and it can’t be. If you’re willing to take on something that’s really a worthwhile cause, then you have to understand it’s a process.

So yes, the program has lived up to its goal, if you understand that we’ve completed one lap of a 10-lap race. More than half our reps have used it, and it has increased sales for vendors who are our partners in the program. As it evolves, we’ll make it easier to sell and easier for the customer to buy. But the fundamental point is that it is our goal to move from product selling to solutions selling, and it is taking hold.

Is the customer ready for solutions selling?

They definitely are willing to buy a solution instead of a product. It’s the difference between an auto salesman asking you, “What do you want to accomplish with a new car?” vs. “Here’s a red Toyota, etc.”

But it’s important that you don’t overcomplicate the process. Solutions-selling is not more complex than product selling; it’s actually easier.

Another big initiative of the past few years was [an e-commerce system for PSS customers]. Can you give us an update on how that program has progessed?

At Gulf South, more than 50 percent of our sales were via e-commerce. The customers liked it and were good at it. But the physician market is different. Five years ago, most customers were not ready for it. Even today, we need to focus on delivering it first to those customers who are ready for an e-commerce solution, then educating those customers who are not.

How about Icon [PSS’s customer relationship management system for its sales reps)?

We continue to make improvements to it. In fact, we just released a new version.

Icon is definitely more than just a way to order supplies. It’s a way for the sales rep to manage his or her territory. It gives the rep access to every bit of customer information that anyone in the company has. Later this year, we’ll introduce further improvements that will help our salespeople manage their margins better.

What are the common attributes of the best manufacturers with whom you work?

The best ones are those who understand that first principle I spoke about earlier: Know your customer. They know distribution and they know PSS when they walk in the door. When they show up, it’s obvious they know you rather than, “Let me show you what I have to sell.” That separates more of them than anything else. And it shows that we, like our customers, are ready to be solutions-sold.

Any last thoughts?

Let’s just remember that this is not overly complex. Take care of your customers and your people, and the rest will take care of itself.