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Business Planning

All the same – but different?

  • Monday, 28. February 2022
Business Planning
© plainpicture/Lubitz + Dorner

“Never change a winning team” is a popular and mostly true saying in many companies. If you have been successful with the same methods and the same personnel up to now, why change anything? But this is not true for all tasks. In strategy work, in particular, you can be overly routinized.

If business planning in a company is simply processed “as usual”, it will directly lead to the ‘routine trap’. If you just pick up the slide template and fill in the boxes in the same way you did last year and the year before, you will avoid dealing with what has changed and what needs to change. It is therefore worthwhile taking a closer look at how strategy work is set up.

Strategies should provide goals and directions to guide actions. The more an organization is based on division of labor, the more work has to be invested to bring the different functions or departments into line to pursue a common strategic goal. It is the executives’ task to establish a planning process in a way that takes two things into account:

  1. Creating a shared market understanding of the challenges and opportunities a company faces and/or with regard to the product in the marketplace.
  2. Developing strategic thrusts that consider different functional perspectives and dive in deeply while not getting lost in details.

If these points are not considered, the strategy work will run the risk of losing its way in the different functional views. No shared understanding of the market will be developed and instead, a variety of arguments from different perspectives and interests will be thrown into the ring and not brought into line. The exchange of experience in a pharmaceutical company’s strategy work could then go something like this: Medical looks at the latest study data which say something about the efficacy of a product and suggest that a biomarker could be an important unique selling proposition – as a strategic thrust. Market Access might share this strategic thrust – not only because the good study data convince medical practitioners, but also because this could result in a positive benefit assessment that guarantees long-term reimbursability. For Marketing, on the other hand, a biomarker-independent and thus larger patient population would be attractive for revenue reasons, even if the efficacy data are lower than in the biomarker-selected population.

In the power jungle

The interests of the individual functions are not (only) derived from the differing factual arguments. Just how fragile this can make strategy work is often underestimated. For example, a pharmaceutical company schedules a strategy workshop. The aim is to identify the strengths and weaknesses of the company’s own products and those of its competitors, as well as opportunities and threats, such as new therapy guidelines or treatment preferences. The analysis initially makes it easier for the participants to address critical points because its goal is to gather a wide variety of perspectives and aspects. However, it is important to be very clear that what is evaluated as weakness or strength and how much weight this evaluation will have depends on the positions of the respective participants. In other words, it is a question of power, influence, and affiliation. We consciously talk about patient share when discussing a biomarker vs. allcomers’ strategy. Which issues and parameters of decision are to be brought into focus, and which are to be left out are decisions that must be negotiated within a company’s micropolitical scenario. Actors who can position themselves well in micropolitical terms will bring forward arguments that support their interests and perspectives.

Shared planning in discourse

Looking behind the proverbial facade is a challenge in strategy work – not only in terms of individuals’ micropolitical interests, but also regarding the question of what market and what behavior is encountered in it. Here, it is helpful to differentiate between the various parameters that influence the decisions of medical practitioners. Study data, price, and labels are medical parameters. But knowledge of the care structure, patient share, and patient journey is equally important. In strategy work the relevance of these parameters has to be decided on and due consideration also given to the work of competitors in the life science field.

The question of how medical practitioners will behave when faced with a market situation is just as granular. This customer category is becoming more and more diverse with increasingly complex therapy offerings: treating physicians, pathologists, referring physicians, pharmacists, payers, patient organizations – and they all have their part to play in the treatment process.

New strategies for market development

New strategies for market development

From an executive’s point of view, a discourse about a common understanding of the market and the players involved is required to unite the different observations and perspectives of individual functions. This does not mean that executives have to choose one particular perspective, but rather that you have to move from sounding out interests to a level of strategic deduction that is no longer dedicated to the factual, but to the actual situation.

Implementing results – even when it hurts

The final danger inherent in strategy work is its abstract level. It is too easy to simply write down the findings from brand planning workshops, accept them, and flag them as goals to be implemented – but bypass the concrete questions: What exactly are the take-aways? What exactly will be implemented, and how? Who is responsible for what? Which levers should be used first? These questions lead more precisely to implementation and thus ensure that we do not remain in an all-too-comfortable false consensus.

The individual steps in the implementation process will not be defined in concrete terms but rather the goals that are to be pursued. Strategy work is all too often designed to produce results in the form of text, not action. However, what an executive needs to decide is not which presentation looks best or is best delivered, but where the most promising market development levers lie.

Uncertainties will always remain

Any market analysis, no matter how good, can never provide an all-encompassing understanding of the reality. In strategy work, it is inevitable that decisions will be made in a climate of uncertainty. You cannot know when approval will come and to what extent. You can never absolutely anticipate what the competition is going to do. The executives’ task is to deliver orientation for action by distinguishing what comes into the focus of the strategy, what remains outside, and what cannot yet be decided because it is impossible for a decision to be taken at that point in time. Even if approval is to be expected in good time, you still have to wait and see whether the patient population will be limited. You can think ahead about the options in either direction, but the strategic thrust must be kept contingent at this point. That doesn’t mean you shouldn’t take decisions, but you do have to consciously decide when it is possible to take a decision about something. And when it is, you should decide.


Why leadership is just one way to move your organization forward

A well-designed strategy process can also provide guidance in all this. It makes it easier to deal with uncertainty:

  • A discussion of the shared understanding of the reality enables the imponderables of decision making to be examined together.
  • Alignment creates a basis for leadership impulses from different directions. In well-designed strategy work, the differing expertise of the various functions can provide orientation where uncertainties exist. Using them for this purpose is the task of leadership.

Community Insight Event

Re:organize for markets in Life Sciences