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Strategic planning in pharma and avoiding frog soup

Formulating the recipe for a successful strategic plan
Frog soup

The secret of strategic planning in the pharmaceutical industry may come from asking the most unlikely of questions: has my brand team succumbed to the Parable of the Boiled Frog? The theory is that organisations can become so blind to 'creeping normality' that they fail to recognise the cumulative threat of subtle change - and ultimately implode. The parable? If you drop a frog into a pan of boiling water it will immediately jump out. But if you place it in a pan of water at room temperature and slowly increase the heat, the amphibian will stay put and you'll soon end up with frog soup. Why? Because a frog's survival instincts are geared to sudden changes in the environment rather than slow, gradual change. The science may well be questionable, but the metaphor (literally) holds water. Beware of slow and stealth-like change.

The warning should resonate with pharmaceutical executives developing long-term brand strategies in a changing environment. Yet for many, the focus is either fixed on the horizon looking for game-changing headlines or reactively adjusting to the sudden jolt of market dynamics. Agile and responsive strategy development is currently all the rage. But it's not new. Back in the 1900s, Darwin argued that it's neither the strongest nor the most intelligent species that survives, but the one that's most responsive to change. The frogs must have missed the memo.

But does all this talk of flexible and adaptive operations negate the need for a long-term strategic plan? The answer is an emphatic no. Long-term planning is an essential ingredient of any successful brand. In an environment where society, healthcare and global communications are evolving in significant but subtle ways, the development of strategic plans that pre-empt change is the only way to stop the frog ending up in the soup.

There's no universal model for successful strategic planning. There are, however, common characteristics that can either make or break your brand plan. So, with the help of some of pharma's leading strategic communications partners, here are some tips to help you avoid the pitfalls and embrace the opportunities.

Developing customer understanding is more than a tick-box exercise

Don't confuse financial and strategic planning
The link between strategy and budgeting is important, but companies are often guilty of confusing the two - leading to budgeting decisions that don't drive the strategy, they become the strategy. “Quite often pharma's strategic planning is, in reality, fiscal planning,” says Fred Bassett, head of strategy, Blue Latitude. “A complete strategic plan starts with an understanding of external and internal factors such as customer needs, competitive pressures and organisational capabilities. It includes realistic objectives and the plan to achieve them. Budget projections - sales targets and the investment required - are critical. However, often the two are brought together as a single budgeting exercise. That's neither right nor helpful in the modern environment. The natural progression from here is the tendency to use 'last year's plan' as the start-point for the next cycle, and simply dial each component up or down by 10%. This, at the very least, results in missed opportunities.”

Don't work in silos
Strategic planning is cross-functional. The plan exists as a response to the multi-stakeholder, multichannel world that pharma operates in and must engage with different functions at different points in the journey to satisfy diverse needs. It's widely understood that processes need to be put in place that allow those different departments to work together to create a coherent strategic plan - yet rumours of silo-working in pharma are still rife. This can undermine strategic planning.

“We've come a long way but the industry as a whole is still quite guilty of operating in internal silos,” says Rikki Jones, director, GCI Health. “There's a big opportunity to integrate all elements more effectively so that channel components are considered holistically in terms of how they work together to achieve an end goal. Communications agencies are primarily brought in to look at the strategies and inherent channels that fall within their remit - but any good communicator is going to attempt to build a bridge across the silos. Ultimately though, integration needs to be considered at the strategic planning stage and continue throughout a brand's lifecycle.”

Understand the basics
Surprisingly, strategic planning can suffer from the lack of a clear definition. In addition to the blurring of strategic and fiscal planning, some plans can be too short-term, too tactical or too focused on individual channels. “Strategic planning is about answering two questions: where will you play and how will you win?” says David Coleiro, partner, Strategic North. “It's about defining opportunities and how you can maximise them to build a brand that will engage customers. The 'where will you play' aspect should initially be brand agnostic. The danger is that companies are so fixated on their product that they believe it's central to their customers' world. It's not. You have to understand that world before you even think about your product. The broader you look at the opportunity, the better it is for your brand.”

The link between strategy and budgeting is important, but companies are often guilty of confusing the two

Don't play at customer experience
The clichés are legend. We know that the 'customer is King' and that it's all about being 'customer-centric' and learning to 'walk in your customers' shoes.' The new kid on the block is Customer Experience. This may sounds like another industry buzz-phrase, but it's the engine for the strategic plan.

“Customer understanding is True North,” says Fred Bassett. “Pharma operates in a multi-stakeholder environment. Getting a handle on all the resulting multifactorial issues is the role of strategic planning. However, it's only by having a thorough understanding of customer needs that companies can optimise the experience of their customers. This in turn drives engagement and accelerated adoption of the product. Identifying the optimal customer experience therefore lies at the heart of an effective plan. It's not a nice-to-have. It's a need-to-have.”

Remember the customer is human
Developing customer understanding is more than a tick-box exercise. “Ironically in brand planning the things that often get lost are the notion that the customer is also a human being and what the brand should mean to them,” says David Coleiro. “Customers' drivers must form the basis of your plan, but it's easy to become too functional. You need to understand your primary customers are humans making buying decisions using conscious and subconscious processes. What are their goals? What tools do they currently use to achieve them? By understanding what informs their decision-making, you're better-placed to build a brand to engage them in relevant ways that change behaviours.”

Think human-first, not channel-first
Human considerations are a vital component of strategic planning, not least in terms of communications. However, plans often fail due to a lack of real-world thinking - and a tendency to think 'channel first, customer second'. “Sometimes we forget that our audiences are like us,” says Mike Collinson, Director of Digital Strategy, inVentiv Medical Communications. “HCPs are not using the 'magical pharma marketing web', nor are they using Snapchat to discuss cases with patients - yet marketers rush towards new digital tools simply because they think they need to be seen as embracing innovation. Strategic plans should focus on how customers are using digital platforms and, through insight, how that might evolve in the coming years. Brand teams should avoid thinking 'channel-first'. It's a mixed metaphor, but if you put the cart before the horse, you end up with the tail wagging the dog!

“Moreover, as humans we are naturally stubborn and prefer the familiar. This can make it challenging when introducing a new concept or trying to facilitate behavioural change with customers. Whilst new channels offer great potential, proper strategic planning identifies the opportunities that are most appropriate for our customers and helps us create the influential moments that chip away at their stubborn nature.”

Make customer engagement an ongoing journey
Markets and customers change with time. So how do you make sure your long-term plan is future-proof? One answer is ongoing engagement. “Pharma has a high need to continually build trust with all of its customers; prescribers, payers and patients,” says Rikki Jones. “Without trust, these groups will become more reliant on other sources of medical information. So we have to focus heavily on engaging with each group on their own terms - forging a continuous two-way dialogue to understand their real needs rather than relying on previous assumptions. This constant engagement is key to developing a responsive strategic plan. But it requires a shift away from traditional methodology to a more personalised approach that puts stakeholders at the centre. The only way that we can understand the future and pre-empt trends is to have the right level of stakeholder engagement and insight to enable us to change tack, as required, as we move along the continuum.”

Don't forget to scenario plan
Scenario planning is a vital component of the strategic plan. “It's important to develop a broad view of your market; the macro factors, the broader healthcare issues and the corresponding therapy-specific factors as these all impact the opportunities and risks,” says David Coleiro. “Then you need to identify potential catalysts for change - and prepare future scenarios for all possibilities. It's about establishing the signals and triggers for change and being able to flex strategy in line with them.”

Don't ignore internal factors
Another common mistake is that companies focus so much on external activities that they fail to pay attention to the internal changes required to deliver them. “Internal structure can be one of the most important factors when pushing innovation in a highly regulated environment,” says Mike Collinson. “Without the infrastructure to welcome change, internal barriers can prevent the vision becoming a reality. It's therefore important to ensure that plans include comprehensive situational analysis of both external and internal factors from the outset. In addition, thorough measurement frameworks and control measures must also be in place to ensure that progress can be monitored, audited and improved. Introducing these measures has historically proved challenging, but as companies acknowledge the importance of internal processes, improvements are increasingly being made.”

Don't skip steps - and watch out for boiled frogs
Pharmaceutical companies are undoubtedly experts in their specialist therapy areas - but their in-depth knowledge should not be an excuse for skipping steps in the strategic planning process. “Brand teams should always take a step back and make sure they've researched their market appropriately,” says Fred Bassett. “Putting mechanisms in place by which market assumptions can be challenged is incredibly valuable. Companies can often underestimate the impact of subtle change in their marketplace - and it's a short walk to Boiled Frog syndrome. There's no substitute for thorough customer insight.” 

Article by
Chris Ross

A freelance writer specialising in the pharmaceutical and healthcare industry

23rd October 2015

From: Marketing

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