Every single healthcare organisation I have met with this year in the UK has spoken at length about the implications of CCGs (Clinical Commissioning Groups) and why wouldn’t they? For commercial directors, it’s one hell of a headache.
One organisation was quite illuminating: They bemoaned the lack of “big ideas” coming from the sales management team. Where are the strategic thinkers when we need them? Actually, I believe the problem they face is common to many healthcare / pharmas at present: The landscape has changed enough that the default mode of strategic thinking is now mal-adapted.
Styles of Strategic Thinking
In their very helpful September 2012 article “Does your strategy need a strategy” the Harvard Business Review makes the point that different industry contexts require different ways to construct strategy – they name 4: Classical, adaptive, shaping and visionary strategies. Dependent on the predictability and malleability of the environment, we should adopt different types of strategy formulation.
Historically, the healthcare sector has been firmly rooted in the “classical” box i.e. a predictable environment with little ability to shape it. Under these circumstances, incremental improvements and optimization have been the name of the game. We see that today with many Sales Force Excellence roles heavily focused on coverage and efficiency. Added to that, the isomorphism generic in the sector does not help. Conferences with the same speakers and participants, revolving door career structures, and heavy regulation have created a feeling of conservatism and sameness among the hallowed halls of our great healthcare institutions.
It can be argued that because the new NHS is by definition untried, it is also not predictable. And with a new focus on patient outcomes rather than products, the industry has the possibility to shape outcomes more than ever before, via innovative programmes and services. Therefore, a new kind of strategic thinking is called for, more shaping and visionary than ever before.
Dealing with NHS procurement
It is also clear that sales forces will need to understand the workings of procurement if they are to survive in the new NHS. McKinsey have been involved with GP consortia to help them manage their businesses better . Historically, healthcare organisations have largely sidestepped this threat by leaning on the clinician who typically holds high influence in the purchase decision.
That sales people struggle with the procurement relationship is something we discovered in our 2012 research with 70% not enjoying or indifferent about this relationship. Also, it seems that procurement have edged ahead of sales people in terms of capturing a slice of the value, due to more sophisticated supplier management programmes.
Factoring in the procurement perspective can only be an advantage in shaping a sales strategy. It is clear whoever buys in the new NHS, that value will be top of the list. And, there are many ways to deliver value; sales people must be conversant and active with all of them.
Breaking the mould
Our experience indicates that innovative, effective strategisers are rare in any organisation, and in an environment constrained as we already have discussed, they are even harder to find. Therefore, we must help them flourish, if health care organisations are really going to maximize the opportunity that the new NHS represents.
This takes a combination of appropriate business education and a facilitation process that strongly fosters the necessary creativity based on solid analyses. Good strategy emerges from a thorough and granular view of the current situation, combined with leaps of inspiration to find break-through approaches.
We advocate taking a cadre of suitably motivated individuals, and exposing them to the right insights, analyses, cases and thinking methods to develop a coherent, ambitious and executable strategy. It should take into account the realities of the new NHS, but not be hamstrung by legacy thinking. We take this approach in a Go-to-Market Model consulting engagement and when this is combined with a selling to procurement viewpoint the result is a bolder, more visionary approach to sales engagement strategy. For sure they will need help in jumping to easy conclusions, pet projects, and unworkable ideas.
Building on strengths
The healthcare industry is almost too modest sometimes in the amount of clinical value it brings to the NHS: Witness a stent representative expertly advising a surgeon in theatre on how best to perform a procedure, or a pharmaceutical specialist advising on the best treatment regimes. There will not be a shortage of creative ideas in how to add value from the industry side. If this expertise is used in the strategising mix with sufficiently divergent and paradigm-challenging thinkers, a powerful cocktail will emerge.
To avoid “more of the same” ideas emerging, it is vital in this current window of opportunity, that health care organisations get their strategic thinking processes right, or the risk will be a me-too, product based offering, that feeds straight into the hands of a hungry procurement team, tasked with shaving £20bn off the healthcare budget.
Join the debate
Does pharma have the right kind of strategic thinkers to address it’s market challenges? Add your comments to the special discussion we have set up in the pharma SFE group on Linked-in.
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