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Strategy - It's All About Choices

If you are entirely comfortable about the decisions you have made about the future, then there is a very good chance that your strategy is not a good one.
‘If you chase two rabbits, both will escape’: if ever there was a saying which demonstrated what is at the heart of a great strategy, then this is it.  In my experience too many pharma companies build strategies geared to chase everything; leaving themselves exposed and unfocused, and at risk of catching nothing.  

There are as many ways of defining strategy as there are business school textbooks.  Unfortunately there is a trend in practice towards over-complicating what strategy is all about, when it should be kept simple.  Strategy is about the choices we make about the future; in other words, it’s where we play and how we choose to win to maximise long-term value.  

Jack Welch summarises it succinctly – ‘pick a general direction, and implement like hell’.  

Of course, making choices can be extremely difficult, and it requires brave marketers and managers willing to stay focused and provide clarity of direction on what they are choosing to do - and, importantly, what they are choosing not to do.   

Deciding where you will not play is probably the hardest part of building your strategy, because you will always wonder if you are leaving behind opportunities.  
Although tough, experience suggests that many senior managers appreciate plans that have absolute clarity on where the strategy is focused as well as where you are walking away.  This makes it much easier to understand the rationale for the positive choices you are making.
 

Clearly it is not always that easy; organisations need to deliver a return on their investment.  With the huge cost of bringing a pharmaceutical brand to market, it takes a brave person to decide to walk away from particular segments, markets or geographies in order to focus on others.  That is why a good strategy may well make you (and senior management) feel uncomfortable – you are making choices based on a future which doesn’t yet exist…  

The ability to make brave decisions depends on building a consensus across the organisation regarding the choices being made.  That consensus needs to be cross-functional, as well as with senior management.  If everyone understands why choices have to be made, then you are more likely to receive support for the choices you make.  

However, buy-in will require a strong and structured plan where the author and communicator provides joined-up thinking centred on critical business challenges and piercing customer insights. 
If these critical business challenges are at the heart of your plan then your strategy is all the more likely to be simple with clear choices addressing key issues.
 

In their book Playing To Win, Alan Lafley and Roger Martin discuss the need for simplicity and clarity of choice.  Whilst the book is built around a quintessential fmcg case study (Proctor & Gamble), it echoes caution relevant to pharma too: where many strategies are fainthearted; characterised by a failure of choice and padded out with some fluff and far-fetched ambitions.  So why do we fail to make our choices clear?  

I have already mentioned the cost of bringing a product to market and that definitely influences how prepared we are to choose.  

Pharma planning is cross-functional in nature, rather than (as is more common in the fmcg world) pulled together exclusively by commercial and marketing specialists.  When a team from different functions is creating the strategy for a brand, it is harder to make choices with which every individual in every function can agree.  So they have to be certain how their contribution is connected to the strategy.  

A fundamental difference in pharma is that by the time we get our hands on strategy there is usually very little we can do with the product itself.  You simply can’t knock out a quick clinical trial to address a product weakness – you have what you have, both in terms of product, and as an affiliate you may be unable to influence price, packaging or even positioning.  However, there are still significant choices that can (and should) be made.  The choices you make are critically important and can be the differentiator you are looking for versus companies delivering their unfocused approach.  

Sun Tzu wrote: ‘Strategy without tactics is the slowest route to victory; tactics without strategy is the noise before defeat’.  You can’t have one without the other, and in my experience this is where we fail to choose most often.  

How often do we make strategic decisions such as pulling back from market shaping activities, or reducing investment in our educational approach, or focusing on particular customers or messages - only to then continue doing what we were previously doing when it comes to tactical planning.  Often there are longstanding programmes which we feel uncomfortable stopping, or we don’t want to offend a team member who has worked on a programme for significant time.  

But our tactics have to connect to our strategy.  Our programmes, messages and initiatives must be focused, supporting our direction of travel and we must place our investment where it will have the greatest impact.  

For example, too often a great piece of customer segmentation, which understands unmet need and where your product could potentially fit, is undermined at the execution stage.  In specialty pharma, the tempting thought is, ‘the customer base is relatively small anyway, let’s go and see everybody’. 

We don’t want to miss out on other segments where we could do a bit of business, even though we know that they are not optimal for us. 
  We like the concept of connecting a Red Thread from our business challenges and insights through our diagnosis to the strategic choices we have made right through to what we implement and where we invest. This makes it easier to make choices and to justify those decisions  

It helps to structure our strategy around four pillars: what to focus on (e.g. customers, levers); what to build (e.g. capabilities, customers, and offerings); where to limit or maintain (e.g. energy, effort, programmes); and what to walk away from (e.g. customers, segments, levers).  

Using this framework helps make good choices.   

Many marketers are used to using the patient flow to understand where the bottlenecks are in their market.  You may be looking at factors such as how many patients get diagnosed, how long it takes from diagnosis to treatment, or what are the drivers of patients moving away from therapy.  

This is a great first place to consider strategic choice because you can’t do everything.  It may not be appropriate for you to put market growth activities in place as well as fighting for your market share and trying to retain patients on treatment.  You have to make decisions about which levers to pull and what is the right choice for your customers, for patients and for your business.  

In this situation, the ‘focus, build, maintain, walk away’ framework comes into play.  It helps you think through where you wish to focus in the patient flow (e.g. driving improved diagnosis), but also what you need to build to achieve that (e.g. screening capabilities or KOL relationships).  In doing this you may need to limit activity elsewhere (e.g. driving adherence) and even walk away from potential levers altogether (e.g. where there are significant barriers).  

We can also use this framework to choose our customer approach.  We may choose to focus on a physician segment which is focussed on real-world evidence, because that is where you brand stands out versus the competition.  There may be other segments more focused on clinical efficacy parameters or patient outcomes where you choose to either limit your activity or walk away altogether (based on your own capabilities or competitor strength).  

However there may be another segment, perhaps connected to a growth lever where if you develop certain capabilities, over time you may be able to win there too.  This is the ‘build’ part of your strategy.  

However you try to understand the challenge, there will always be distractions, which don’t play to your strengths, which will take additional time, energy and investment.  You have to be prepared to make the tough choice to not go there.  

And it is those tough decisions, those real choices, which characterise a strong strategy. 
Because if you try to go after too many rabbits, you will end up with an empty pot.
   

The Author Jon Bircher is Global CEO of Cello Health Consulting. Cello Health specialises in supporting companies through its unique Red Thread PlanningTM approach. Jon can be contacted at jbircher@cellohealth.com. Twitter: @jonbircher

24th January 2016

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