“The underlying principles of strategy are enduring, regardless of technology or the pace of change.” The words of Harvard Professor and economist Michael Porter are a powerful rebuttal to those who question the nature and modern-day relevance of traditional strategic planning.
In a turbulent world shaped by market volatility and digital revolution, the founding principles of strategic planning provide a rare and reassuring constant. They haven’t changed. Yet the importance of the discipline polarises opinion. While the majority accept that a strategic plan is vital to business success, critics argue that, in a world of flux, agility is far more important. Their central argument is that the static strategic plan, built on an assumption that the past is a good indicator of the future, is a dated concept. There is truth on both sides of the debate. Yet Porter is right: the underlying principles of strategy are enduring. However, the nuances of how strategic plans are developed and executed – as well as the expectations placed on their principal architects – are ever-evolving. The question for pharmaceutical companies is: are their strategic planning methodologies evolving quickly and effectively enough to deliver sustainable success? Moreover, as strategic plans cascade through the business, do they translate into strategic brand plans with consistent communications that are anchored to a common organisational purpose? As ever, there’s room for improvement.
First let’s cast the net wider and look at planning trends across business in general. At the brand level, perhaps the biggest evolution in strategic planning is one of scale and scope. A recent Campaign article by US communications consultancy Hill Holliday suggested that the remit of the strategic planner has changed. Formerly judged on their ability to ‘land the plane’, today’s planners ‘not only need to land the plane, they also need to ensure that it successfully gets to its gate and flawlessly offloads its passengers.’ It’s a metaphor worth developing.
The role and reach of strategic planning has arguably become so big that seizing the controls for the high-risk manoeuvres of take-off and landing is no longer enough; planners are now figuratively responsible for helping passengers through check-in, serving the in-flight meals and, once they’ve disembarked, escorting them safely to baggage reclaim. You get the point. Modern strategic planning is about managing the full-flight experience of a long-haul journey where turbulence is inevitable. It’s a huge ask.
All aboard the Airbus
The burgeoning operational reach of strategic planning is certainly the case in pharma where the discipline now sits at the intersection of virtually every function across an organisation. “The way pharma does strategic planning today is much more inclusive – it’s bigger, broader, grander,” says Dennis O’Brien, CEO, Lucid Group. “Back in the day the role would likely entail one person writing a plan that had to engage everyone. Now it’s a huge job that involves upwards of 50 people. Today’s strategic plans must leverage the knowledge of – and continually engage – multi-disciplinary teams that bridge the likes of medical, marketing, market access, sales and business intelligence. What’s more, they must align this sprawling team – across affiliate, local, regional and global levels – behind a common goal. It’s a significant challenge. We’re improving – but we’re miles away from perfection.”
Knowing the flight path
So where do we begin? Firstly, you need to know where you’re flying to. As US author John Naisbitt says: “Strategic planning is worthless, unless there is first a strategic vision.” It pays to know the flight path.
“You always need that anchor – that organisational goal that everyone is pursuing – but it must be framed around patients,” says Dennis. “Our start point should always be: what are we trying to do for patients? Clarity here is essential if companies are to create something that’s clinically relevant. But we don’t always get it right. In the past, pharma has been guilty of developing clinical programmes simply to get a product licence – focusing purely on commercialisation and profit optimisation. However, there’s a fundamental difference between a strategic plan that focuses on asset optimisation and one that strives to improve patient outcomes. The latter sets a clear organisational tone that makes the subsequent transition into brand marketing so much easier.”
Piloting the plane
The links between organisational vision and brand strategy are key to securing sustainable growth – and they naturally rely on a company’s high flyers to set the sat-nav and captain the plane. But the journey cannot be conducted on autopilot, it requires manual control throughout. “Providing the overall direction for the company is the most important leadership responsibility. Thus, effective strategic planning has to be a real, living management task,” says Alexander Fink, managing director, commercial strategy and planning, Europe, Syneos Health. “The key component of effective strategic planning is alignment with the long-term vision of the company – a clear strategic agenda over the next 3-7 years anchored to core projects including annual budgets and investments. However, one of the biggest challenges for the pharmaceutical industry is the current fast-changing environment and the inherently increasing unpredictability. This complexity often leads to half-hearted planning exercises with limited buy-in of the executing teams. As a result, many pharmaceutical companies tend to have a more reactive approach to external changes rather than following a clear strategic agenda.”
The window seat
The successful alignment of the strategic vision and real-world execution certainly requires good information; the view from 20,000 feet is naturally very different from the one at ground level. But as Winston Churchill once famously said: “However beautiful the strategy, you should occasionally look at the results.” The question is: can you do that effectively? In the age of digital
revolution, there’s no excuse for poor visibility or sub-optimal business intelligence – but not everyone is taking advantage of this.
“The changing communications paradigm is undoubtedly providing increasing opportunities for pharmaceutical companies to reach their customers in innovative ways – and it’s also spawned new criteria by which we can measure progress. However, some companies still struggle to capture a deep understanding of their customers and markets and that invariably makes it difficult to change direction once they’ve started down a certain route,” says Helen Hey, executive director, Ashfield Healthcare Communications. “If you don’t have good visibility or access to the right data based on meaningful strategic questions, it’s impossible to make responsive decisions when the market suddenly shifts. Despite tremendous advances in business intelligence, some organisations still rely on archaic models and infrastructure that impairs their ability to measure the impact of brand campaigns. This in turn means that strategic plans can become static, sluggish and ultimately unsuccessful. Digital disruption has reset consumer expectations – to be successful, organisations need to be far more responsive. Many other sectors have adapted. Pharma must do the same.”
Changing route mid-flight
The unpredictability of global healthcare markets calls for an agility in strategic planning that’s at odds with pharma’s traditional methodologies. It’s time to change the game. “Strategic planning is like playing chess; you have to evolve your thinking as the game unfolds,” says Dennis O’Brien. “Historically, companies have been content to play the same moves every time, relying on dated templates and processes. But that old approach has reached checkmate. Organisations need to adopt a more agile approach so that if a competitor plays a move they didn’t expect, they can fundamentally change their game plan overnight. We need to move away from thinking in yearly cycles and prepare to evolve strategy every month. This requires empowering people with frameworks that allow teams to make changes that enhance their brand story, rather than being a hostage to static strategic plans.”
Extra legroom
So how can organisations improve their agility? Effective strategic planning methodologies can actually help create some extra legroom when the discomforting effects of a long-haul journey inevitably arise. “Strategic planning needs to be oriented on the company’s strength and opportunities. As such, pharmaceutical companies need to conduct an in-depth assessment of their own capabilities and match them continuously to customer needs,” says Alexander. “In order to achieve this, it’s essential to put the customer at the centre of strategic thinking. However, many of the key mistakes made in strategic planning boil down to poor customer insight and limited knowledge of true customer needs – both short-term and long-term. Furthermore, alignment with local country needs is essential to develop an executable strategic plan. These complex requirements call for an integrated and consistent planning system that allows for top-down planning and bottom-up validation to help to achieve a dynamic strategic plan. Moreover, a more collaborative, joined-up approach enables companies to leverage existing information as well as helping them identify potential gaps within their organisation and improve their consideration of local market needs.
“Best practice in strategic planning entails rigorous analysis to understand the strengths and weaknesses of the organisation as well as opportunities and threats in the respective markets and therapeutic areas a company acts in – linking strategic planning with strategic execution based on alignment of management and executing teams, as well as a consistent and transparent planning process.”
Getting the landing right
An effective strategic plan will commonly include four key components; a clear goal, critical success factors as to how you will win, an understanding of your audience and the behaviours you need to change, and a transparent outline of the metrics for success. These components provide the strategic blueprint from which you develop your tactics. “But effective marketing is not just about focusing the communications you’re going to put out, it’s about seriously considering where they’re going to land and how you’re going to know that they’ve had an impact,” says Helen Hey. “Ultimately, strategic planning is about changing customer behaviours and improving clinical practice. Communications play a pivotal role. However, it’s no longer enough to put information in front of the right audience via the right channel – that information must be built on a deep, human understanding of your audiences and where they sit on that pathway of adoption. What are their drivers, motivations and behaviours? What obstacles stand in their way? A good strategic plan will minimise the barriers, maximise the motivations, contextualise your communications and outline appropriate metrics that allow you to audit your progress. It’s only by understanding the whole pathway – and by being able to measure the impact of your communications as you journey through it – that you can identify the levers with the highest strategic value and determine the tactics that will maximise your marketing investment. That’s the essence of an effective strategic plan.”
Touching down
In the final analysis, strategic planning is ultimately judged on a company’s ability to ‘land the plane’. But in a global healthcare environment shaped by multiple and diverse stakeholders and influencers – and coloured by unpredictable winds of change and digital revolution – strategy is a long-haul journey that requires an agile pilot, a collaborative crew and a big jumbo jet. As a new year begins and you review your plans for 2018, fasten your seatbelts and enjoy the flight.