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Winning at any cost is a wink and a nod to doing whatever it takes to get the job done. It speaks to a work ethic that encourages persistence and creativity.
But as Alec Burlakoff experienced firsthand, it can also cause people to lose sight of right and wrong. His is the case of a sales super star who ended up pleading guilty to a criminal conspiracy charges, landing a 26 month jail sentence along with an order of restitution.
His is a cautionary tale of how winning at any cost can lead good people to do bad things.
What You’ll Discover About Winning at Any Cost:
* How messages received while growing up create a winning at any cost mindset
* How incentive structures promote winning at any cost
* Why poor corporate governance and regulatory compliance practices are complicit in bending the rules
* Why winning at any cost is more expensive than most realize
* And much more.
Guest: Alec Burlakoff
Alec Burlakoff in his own words:
WHO AM I: I bring value to any sales organization. Why? Because I’ve spearheaded sales teams that generated more than $3 billion in sales. Besides leading sales teams for Fortune 500 companies, I was the senior VP of sales for Insys Pharmaceuticals. I collaborated with the CEO to build a salesforce for the medical profession. We inappropriately incentivized doctors to write more than $1 billion worth of prescriptions. I’ve also pleaded guilty to federal charges –and I want to be entirely up front about that. I’ve learned from that experience.
WHAT I DO: I create training and compliance systems for sales professionals. I work with startups and large organizations. I assess markets, create strategies, and identify risks that could put companies in the crosshairs of authorities.
I help organizations identify the essential “What’s-in-it-for-me” question that buyers inevitably ask. Every sale is like a chess match. We need critical thinking skills, knowing when to make sacrifices so that we can position ourselves for the longer-term vision. Balance is at the core of each lesson I teach. Together, we can accelerate sales without compromising integrity. Systems I create teach mental athleticism—without violating any regulations.
WHY IT WORKS: I’m 100% authentic and transparent, keeping policies safe. We’ll improve company-wide performance, partnering to create value for groups and individuals.
WHAT MAKES ME DIFFERENT: Profound attention from federal authorities and the judicial system have made me wiser. I’m an invaluable asset to any organization because of that experience. My expertise will help your team succeed in the short term, and also ensure your company is built to last.
Related Resources:
If you liked this interview, you might also enjoy our other Risk Management and Law episodes.
Contact Alex and connect with him on LinkedIn.
Check out his book: Selling: Hard Lessons Learn
Schedule a FREE consult
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How Winning at Any Cost Causes Good People to Do Bad Things
Winning at any cost is a wink and a nod to doing whatever it takes to get the job done. It speaks to a work ethic that encourages persistence and creativity. But as my next guest experienced firsthand, it can also cause people to lose sight of what’s right and wrong.
His is the case of a sales superstar who ended up pleading guilty to a criminal conspiracy charge, landing a 26-month jail sentence along with an order of restitution. And when we come back, we’ll learn more about how winning at any cost can lead good people to do bad things.
This is Business Confidential Now with Hanna Hasl-Kelchner. Helping you see business issues hiding in plain view that matter to your bottom line.
Welcome to Business Confidential Now. The weekly podcast for smart executives, managers and entrepreneurs looking to improve business performance and their bottom line. I’m your host, Hanna Hasl-Kelchner, and I have a fascinating guest for you today. He’s Alec Burlakoff. He’s a sales trainer, coach, and motivational speaker who’s also the author of the book, “Selling: Hard Lessons Learned.”
His book is a true story detailing his two decade rise and then fall as a sales superstar in the pharmaceutical industry. And how, as the former head of sales at Insys, he was instrumental in selling a fentanyl spray that was approved by the US Food and Drug Administration for cancer patients already taking opioids who are experiencing the sharp pangs of what’s also known as breakthrough pain.
What happened next at Insys was the subject of a joint investigative reporting by the Financial Times and the PBS series, Frontline. And, in a nutshell, it was this: by targeting doctors who were not oncologists to write prescriptions for the off-label use of the drug, by establishing a quid pro quo speaker honorarium program for doctors willing to write prescriptions valued at more than double those of the speaking fees, and then by creating a billing scheme to deceive insurance companies to pay a higher reimbursement rate for the drug when prescribed to non-cancer patients. The company and many of its top executives, including today’s guest, found themselves in serious legal hot water. Hundreds of deaths have also been reportedly linked to this drug.
Now, before you judge Alec Burlakoff too harshly. Please remember, he did plead guilty to the crime, and he did the time. He has paid his debt to society and is making restitution.
My goal in having him join us today is to learn more about the culture that created and supported his behavior. Because the philosophy of winning at any cost is not unusual. And it begs the question, could it happen to you or me? What red flags should we be looking for?
So, let’s have him join us now to learn more. Welcome to Business Confidential Now, Alec.
Hey, Hanna. How are you? Thanks so much for having me on the show, giving me an opportunity to talk with you and, of course, your listeners. It’s great to be here.
It’s good to have you, Alec. I really think you have an amazing story and a lot that we can learn. I read that you started your career in education and as a guidance counselor. What made you shift gears and move into sales?
To get right to the point, I shifted gears and got into sales because I had come to the conclusion, regretfully, that I didn’t feel like I was going to make enough money in education. My wife was pregnant with our first child. I felt the pressures mounting. I was also working as the guidance counselor in a very affluent private school, and I was surrounded by money. And I wanted.
The one quick story that kind of propelled me to make that leap after a lot of thought and consideration prior to that, I was monitoring the carpool lane. There was a man in there driving a Bentley convertible, smoking a cigar. We had a nonsmoking policy on campus. I went out there and politely asked him to put the cigar out, explaining to him why, and he took another puff and blew it in my face and said, “Petty rules from petty people.”
It was really at that time where I decided no more. I just cannot allow myself to be put in a position where people will talk down to me and think little of me because of who I am and what kind of money I was making.
Obviously, at this point in my life, I realized that my thought process was all wrong. But that is what led me away from school, education, guidance counseling, coaching basketball, into the fast world of sales, specifically pharmaceuticals, in my case.
So, it was really the disrespect that you felt when he acted that way.
Yeah. I mean, unfortunately for me, respect was huge. Growing up as a kid, you know, middle school, high school, college, I was always very comfortable in my own skin, very social. Led many groups and functions and was very active in my fraternity. And respect was never an issue.
But once I got into “the real world,” it seemed as if lack of money was directly correlated with lack of respect and my lack of self, and that inner confidence and insecurity that I had clearly at that moment in time allowed me to succumb to outside pressures.
Okay. I understand. So, let’s talk about that transition into selling for pharmaceutical company. What kind of training was provided to you?
So with my first company, Eli Lilly, out of Indianapolis, which is a major player in the industry, the training was quite extensive. It was eight weeks, kind of in Indianapolis, then home, then back in Indianapolis and so forth with a number of tests, one right after the other each day. If you didn’t score a certain grade on those tests, you would pack your bags and go home.
So, the training was really, really extensive, which, kudos to Eli Lilly. I can tell you that I never had training that came even remotely close to that in positions that I took down the road. And then, on the other side of the spectrum, at Insys, when I joined and many reps and managers joined, at one point, there really was no training whatsoever, just maybe getting some information in the mail.
So, a complete paradigm shift as far as I’m concerned. But my training at Lilly, just the eight weeks and then the three-month school training and nine-month school, just that little bit of time was a thousand times more difficult than anything I’d ever come across in college as well as graduate school.
Well, I’m glad to hear that they had a rigorous program that you went through, and obviously you sailed through it beautifully or you wouldn’t have completed that and moved on. I’m curious about how much they talked about compliance, because after all, pharmaceutical is a very heavily regulated industry. Tell me a little bit more about that.
Well, with regards to compliance, quite frankly, there was very little set. You would hear whispers. There would be someone that would come in and do a quick talk on compliance. But, 95% of all training was sales; how to obtain sales, how to grow the business, how to increase the numbers. That’s the training.
I mean, you’re being hired as a sales person and the training itself, train – the way that you kind of interwoven compliance was done so that you kind of came away with this is really not that important because it was just an afterthought. And then with every company, they give you a piece of paper from time to time, and tell you to sign it, like right before the meeting is starting.
So, you honestly, you don’t even read it. You just sign it because, if you don’t, you’re not going to continue to be employed there, but they don’t expect you to read it or pay any true attention to it. That’s my experience.
That’s your experience. And then after you left Eli Lilly, it sounds like there was even less emphasis put on the compliance piece of your job. Is that right?
Yes. Compliance became less and less as we began to take on more responsibility and higher roles in the sales. Basically, like with Eli Lilly, when you start as a rep, you start as an entry level rep, which means you’re calling on primary care physicians. They practice family medicine, internal medicine.
And then once you do well and get promoted, then you call on specialty doctors, whether it be a psychiatrist, a neurologist, podiatrist, anesthesiologist, whatever the specialty might be. And then hopefully, if you if you’re truly ambitious, you’ll be promoted to management and then move your way up from there, many people are very happy being a sales rep and they do it for a career, and they do – they’re very – they do wonderfully.
For me, unfortunately, I don’t know why or where exactly this came from, but once I got into pharmaceuticals, that Excel spreadsheet came out on a monthly basis with whatever number of reps they had 500, 750, 1,000, I got it in my head that if I wasn’t at the top of that list, literally, number one, that I was a failure, and again, the respect thing and so forth.
So, for me, I worked feverishly on a daily basis to ensure that I was doing everything necessary within my means to make myself number one in the company.
Well, I’m interested. I understand. You’re working hard to make these connections and make the sales with these doctors and these organizations. But I’m curious about the messages that you received from the organization that led to some of the creativity that caused problems at Insys. How did you know it was okay to do that?
Well, to say it was okay is a bold statement. It would be accepted. To say that it would be not noticed, unrecognized, not something that was serious in their minds. Meaning, like in your intro, you said it perfectly. It’s just a means to an end. They want the numbers. They want the sales results.
And I can tell you, if you’re number one in the company, you’re not getting fired. Now, if you’re number 500 of 500 and you’re doing something that’s not okay, they might make an example of you and let you go because quite frankly, it doesn’t cost them anything. And it’s an excuse to get rid of somebody that’s not producing. But if you’re producing, you’re almost untouchable.
So, that’s kind of the mindset that you learn very quickly. I mean, pharmaceuticals and sales were around way before I came about. And of course, anyone that wants to be successful, they want to surround themselves with successful people. They want to know who the top guy is; who are the top five? Who are the top 10? And I did that. I met with them. I spoke with them. I interrogated them, and I learned very quickly all the practices that they were imploring to help make them successful.
Now, I’m sure that many, many people in the sales force were aware of those same things that those top producers were doing and made a decision to themselves, No, I’m not going to do that.
I don’t want to be a part of that. I’m fine with being in the top 50%. Nobody bothers me. They leave me alone. I make a nice living. But for me, I wanted to know what they were doing so that I could do it and even do it at a more egregious level so that I could be number one. I thought that being successful meant being the best.
I thought from my upbringing since I was a little child, that in the end of the day, if you’re not first, your last. Being second is for losers. I was given all these messages as a child my entire life, and I took those messages with me throughout my career. And it’s just it’s mind boggling.
It’s alarming how the messages that you receive as a child at growing up can transfer into your adult life and can mold your behaviors. I remember being on the plane when I was going to training and Eli Lilly and I sat next to a rep who already had experience, came from another company, and we kind of talked and we hit it off.
We had a beer and he said, “Alec, do you want to know how to be successful? Do you want to know how this business is done?” I said, “Yeah. Of course.” He says, “You pay speakers. You find a doctor that wants to champion your medication, is supposedly some sort of thought leader, and you pay them to speak to his peers. And you’ll find that once you start paying him, he will start writing a whole lot more. And you get three or four or five of those guys, and you’ll find yourself at the top of the company.”
So, not something that I learned or created. It was just something that that I adopted. And shame on me for not having the fortitude to say right then and there, Oh yeah, that’s not going to be for me, but let me try it out. Let me try my way out and pharmaceuticals see if I can still maintain my job and my salary and so forth and be content with just being in the middle.
Unfortunately, that wasn’t me. I was nothing but miserable if the numbers came out and I wasn’t at the top of the board.
So, the ends justify the means. Does that sound fair?
At that point in time, yes. That sounds fair. Now, is that right? A hundred percent no. It’s wrong. I did a lecture yesterday at the University of Washington. They asked me the same question.
My take on that is if someone is telling you that they don’t want to know how you got there and how you did it, that they just want the results and the sales and the numbers, then that’s a red flag. That means that they truly don’t have the integrity necessary to be a leader.
A real leader wants to know exactly what’s going on. Now, in my case at Insys, my leader did know exactly what was going on. He understood that this was the standard in the industry, and so he wanted to exceed that standard. And so, if another company was paying a physician 100,000, he wanted to pay him 300,000. That was the strategy. “Okay. This is what’s going on. Not only are we going to pay, but we’re going to pay more.” And that’s partly what we did.
I had so many opportunities. To say enough is enough. There’re lines that I crossed, and, for whatever reason, I was able to be comfortable crossing those lines. But now this is a line that I’ve never crossed, and this is a line that I’m uncomfortable. And instead of walking away, I forced myself to get comfortable enough to do something that was very uncomfortable. And that’s on me.
Well, it’s interesting that you talked about how you got comfortable because it sounds like, deep inside, you knew that. “Well, wait a minute.” This is outside your comfort zone and the “encouragement” and I’m going to put encouragement in quotation marks, air quotes here.
Okay.
That you got from your leadership. Is that what gave you, what you thought cover? Is that would allow you to compromise and say, “Well, if he says it’s okay, then we’re going to go with it. What’s the worst that could happen?”
Listen, I was working for a true billionaire. I mean, he was in Forbes magazine as a top 50. So, I told myself on so many occasions, Alec, you have wanted to play in the sandbox with the big guys your whole life. You’re in it. And you didn’t know what it was like to be in that sandbox. You’re just finding out now for the first time. And either you get comfortable and play or you literally change your entire mindset that you thought you had your entire life.
So, I forced myself to play in a sandbox that I’ve never been in before. And I convinced myself that if this man is a billionaire. Clearly he knows what it takes, and he’s been doing this his entire career, and that I thought that he would have the necessary measures and safety rails in place to protect. But I was wrong.
And again, this is not to place blame because I am culpable. I am responsible. I pled guilty. It’s my fault. And that’s a message that I would want to pass along to everyone, that, until you get comfortable with yourself and your own skin, until you can wake up every morning and look in the mirror and say, “I feel good about myself. I like myself.” There’s – “I’m not weak, I’m strong. I’m not insecure.” Meaning that I cannot be bullied or negatively influenced by others, then I’m in a place where I can really, truly make good decisions for myself.
And the fact of the matter is, is I was just the opposite. I was insecure. I was weak. I was begging for guidance and direction from a leader. I thought that I had chosen a great mentor based on one thing and one thing only: the amount of money he had in his bank account.
So again, I was dead wrong. I selected my mentor for all the wrong reasons. I had all the wrong criteria in place. It was a recipe for disaster. I was a recipe for disaster. And that’s exactly what happened.
That’s a great way to summarize, how the wheels came off. With the selection of your mentor, your strength within which you felt somewhat insecure. Because I can also imagine that there are some people who could ask to do some things that maybe they’re not 100% comfortable with, but “Oh, it’s just to get us through this quarter or just to get us over the hump here.”
And so they compromise and they don’t realize what personal risk they’re putting themselves in at that particular moment. And maybe it’s a risk worth taking, and that’s an individual type of decision. But I’m curious, Alec, when did you realize that you might have personal criminal liability in this situation?
So, I started with Insys in 2012 and I think around mid-2013, 2014, I came to that realization. And I was the Vice President of Sales, there was a Vice President of Marketing that I worked with at another company. He also became aware.
He pulled me aside and said, “I’m packing my bags. I’m leaving. You should do the same, Alec.” And I said, “No, no, no. We’ve got to toughen up. We’ve got to ride this out. We’ve got to be leaders. This is a tremendous opportunity for us. And leaders, they work their way through these challenges. You don’t think that the owner of this company or any other multimillionaire or billionaire has been faced with these types of challenges? This is how they got there. This is how they did it. we got to toughen up. We’ve got to persevere.”
No, it was rationalization, right? I was just convincing myself, to take that risk as opposed to walking.
You mentioned the word compromise. There’s no room for compromise when you’re talking about business and ethics. Because once you start compromising and blurring those lines, the lines start to move further and further away from you, and you start chasing them.
The real leader, basically, he plans with the end in mind. He knows exactly what he’s going to do, how he’s going to do it, and he understands the way in which he’s going to go about doing it as far as integrity and ethics are concerned. For me, I was planning with the end in mind and never once did I really think about ethics and integrity.
I was thinking about money and power. And there were times where I had moments of weakness, if you will. Or maybe I was just being human and I heard a negative story about a patient and so forth and so on, through the grapevine or even in the paper.
And I would raise a question to my boss or my boss’s boss, and they would always just kind of jump down my throat and say, “Alec, what are you doing? Like, stay in your lane. Like, you’re in sales. This is none of your business. This is a clinical type of question, this, that and the other. We have our medical affairs people dealing with it. You’ve got to stay in your lane. You’ve got to continue to lead. And if people start to see doubt or hesitance in you, then they will follow. And we cannot have that.”
So again, I kept telling myself, “Be a leader, Alec. Keep going, keep moving forward. Keep getting rid of all these distractions that are potentially going to bog you down.” When, in reality, had I grabbed onto those distractions and really took a deeper dive into what was happening and made it my business to know perhaps I would have made better decisions moving forward.
But to be clear, at that moment in time, it was already too late. I had already sealed my fate. There was no walking away.
Well, let me ask you this, Alec. I mean, I understand Insys is a much smaller company than, say, an Eli Lilly, but didn’t they have any people who had their eye on compliance issues or legal issues? I mean, where were they?
Great question. I mean, I’m convinced that had we had a real compliance and legal department, and your listeners might be appalled by this, but I also just want to be candid. Otherwise, what am I doing here?
Had we had a real legal department in place, there would have been stops put in place and we would have ended up probably paying a very hefty fine and we would have had a probably a CIA corporate integrity agreement that we would have had to work under.
And there would have been very stringent rules and regulations and monitorization that we would have been working under moving forward.
For the first year I was at Insys, we had no legal department or compliance at all. The only thing we had was an HR manager, and the HR manager had not even obtained her master’s degree yet. She did eventually do so and so forth, but at that point in time, we were so lean and mean, I had never been a part of anything like this in my life. And there were times – and it wasn’t me – I can’t say it was me, because part of me was happy we didn’t have a compliance and legal department.
The other part of me was concerned because I’m like, “Oh my God, we have no protection here.” But there were others in the company that did raise questions and say, why – “We’ve got to have legal in here. We’ve got to have compliance.”
And the owner of the company said, “No, no.” He said, “I’m not paying lawyers,” like, “I can – there’s nothing they can do for me that I can’t do myself. I’ve done this with numerous companies. We’re lean and mean. We don’t need that right now. Maybe one day.”
So, no, we didn’t have anything for the first year. And, not only for myself should I have seen a tremendous red flag in an industry that’s so heavily regulated, but for everyone coming on board, right? The reps, the managers, directors, it was a disservice to everyone.
It sounds like the head of the company just didn’t want anybody walking in, to create the stops that you were talking about a moment ago because it would just be in their way when in reality it’s like, “Please let them help you stay out of jail.”
Yeah. I mean, to be fair, like, again, I was thinking, “Hmm, maybe this is a good thing.” Obviously, we know now that, had we had all of those measures taken and people in place, yeah, maybe the sales wouldn’t have been as good. And I know they wouldn’t have been. Not even close.
And maybe I would have gotten fired as the head of sales because we weren’t meeting the numbers that he wanted us to meet. And so, what – so I would have gotten fired. Like, compared to what I actually ended up having take place, which again, I deserved, it would have been nothing. I would have – in looking back, I wish, I hoped, and prayed that I would have gotten fired and walked away.
In fact, the Vice President of Sales that was in place before I came aboard, they’ve parted ways and I’m sure it was not amicable. And I’m sure he thinks every day, “What a blessing.”
Well, I’m wondering, Alec, you talked about how, the list of sales reps and you wanted to be the number one person. And there’s nothing wrong with being competitive and wanting to be number one. I think people encourage and certainly admire the drive and the work that it takes to – to go in there.
But I’m wondering whether you think the commission-based structure created a little bit of a conflict of interest between the reps and the organization where they’re more interested in doing whatever it takes to be that number one or be in the top 20, 50 or however you want to measure it, as opposed to looking out for the best interests of the company.
One hundred percent, not even 99% – 100%. We were selling a schedule to opioid fentanyl in the middle of an opioid pandemic. There’s no place for commissions or carrots to be dangled in front of salespeople to obtain those commissions, because in the end of the day, the only person that matters or should matter is the patient.
And if you are incentivizing sales reps to move business, then they’re going to do things just out of being a human being that are not directly in line with the patient’s best interests, not that they’re going to go out there and proactively try to harm the patient, but they’re not going to be 100% in sync with what’s in the best interests of the patient.
You know, when you go to pharmaceuticals, they preach, we’re saving patients, we’re changing patients lives. It’s all about the patient. But when you have an uncapped bonus plan, you’re not really delivering on that message.
Interesting. So, the incentive structure really, you know, it can actually be in sync, as you say, with the mission of the organization or it can sort of run counter to that. That’s really interesting.
Yeah. I mean, just so you know, the bonus plan – the average rep might make 80,000 if you are actually meeting and exceeding your plans, you’re looking at more like 300,000-350,000. So, I mean, it’s a game changer and there’s no place for that schedule to opioid.
That’s a huge difference. And you can see how people would be incentivized – look the other way or cut a corner or try to maximize that as best that they can.
And wrapping up here, Alex, I’m wondering what advice you have for listeners who may feel conflicted about their careers or about their work; you know, that they feel like they’re in a little bit of an ethical dilemma, maybe not as a huge one as you found yourself in with a regulated industry, and the pressure for sales and so forth. But nonetheless, people can find themselves in other kinds of ethical jams. What advice do you have for them?
Yeah, I mean, my advice is, be comfortable with yourself before you expose yourself to others. To really know who you are as a human being and what you stand for. The man you are today and the man you want to be moving forward, or woman. And then you literally stick to that.
I mean, literally write it down on a piece of paper, put it up on your mirror and look at it every day and ask yourself, “Am I being that person?” And if the answer is no, you’ve got to really think about walking.
Now, I don’t judge anyone. I understand there’s bills that need to be paid, there’s mortgages, there’s rent, there’s car payments. I get it. But, I have to believe that there is another job out there. And maybe I’m wrong, depending on that particular person’s circumstance.
But if you could think about me and think about the fact that, in hindsight, getting fired and being unemployed for a period of time, in comparison to what I actually ended up dealing with consequentially, it’s nothing. So, try to look at the big picture.
And if you know you’re in a blurry situation, you really got to try to find a way out. And that might take a little bit longer than you would like, but you’ve got to be seeking that better opportunity that doesn’t conflict with the type of person that you are, and you want to continue to be.
Because once you allow others to influence you or you subject yourself to those people who do not have your best interests at heart, ask yourself, “Does this person have my best interests at heart?” If the answer is no, then you have to take control of your life first and foremost, and then put everybody else secondary.
Very good. I think that’s a great way to phrase that. “Is this best for them or is this best for you?”
So, this has been great, Alec. I really appreciate your time and your candor and sharing your story with us. Yours is definitely a cautionary tale that I think we can all learn from. I wish you all the best in this new chapter of your career.
Thank you so much for listening. Be sure to tell your friends about the show and leave a positive review. We’ll be back next Thursday with another episode of Business Confidential Now.
Until then, have a great day and an even better tomorrow.
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