Part 7: How do you manage risk and uncertainty in your brand plan?

This month we are going to explore the best techniques for identifying, managing and monitoring risks within your brand or franchise plan. 

In our industry we often acknowledge the changing external healthcare system environment, pricing/access, competitive and corporate environments and yet build plans with only one set of assumptions and one scenario for the future articulated and quantified.

A few statistics feel useful here to support our theme:

• Across all major industries, 72% of all product launches fail to meet their revenue targets
• Across the globe, 83% of companies are suffering from strong price pressure.

So what do we mean by a risk? A risk is defined as a future uncertain outcome, usually with a negative impact on the brand/organisation, that can be quantified. This should be distinguished from an uncertainty which is more difficult to quantify and can be positive or negative in its impact on the brand/organisation.

Risks can be characterised in different ways: known and unknown, internal and external – a 2x2 box could help you plot and present your risks in this way.

So what’s the best approach for identifying, assessing and quantifying risks?

1. Evaluate the risks you identified in last year’s brand plan – how well did you identify, articulate, assess and manage these risks? What are the biggest learnings to take into this year’s plan?

2. Brainstorm the risks – internal and external – for this year’s brand plan as a cross-functional brand team. Top tips are to set some dedicated time aside for this, away from the day-to-day job, and to think as broadly as possible.

3. Assess the risks – the classical approach to prioritising risks is to evaluate their likelihood of occuring (probability) and their potential business impact across high, medium and low ratings, and then to plot them in a 3x3 grid with the ‘hottest’ risks top right.

4. Prioritisation – as a team, you will then need to decide how many and which risks to  prioritise. A good question to ask is: what is the relative risk profile of this therapy area, this brand and this healthcare market? The answer to this question is an important commentary to add to your brand plan executive summary to inform senior management of the risks, volatility and uncertainty in your plan.