Look Outside Your Own Industry
Pharma must look to other industries for inspiration when it comes to digital transformation.
Such is the pace of digital disruption that, for pharma companies, digital transformation is no longer optional – it is something they must get on board with. That is the view of Peter Stephenson, Asia-Pacific Multichannel Marketing Lead at MSD in a discussion ahead of his appearance at eyeforpharma Sydney. “We need to reframe digital from a tactical view to something that is all-encompassing,” he says. “At the moment in Asia-Pacific, I see a lot of innovation in pockets. This is driven by senior leadership sponsorship or by passionate individuals as an imperative of digital disruption.” For pharma to really grasp the scale of the issue, it will be vital to ensure that the work done in those pockets spreads to all parts of an organization. “It’s very hard given all the variables - we need to elevate the conversation,” he acknowledges.
While it is certainly a challenge, it is already possible to find clues elsewhere that point to the way ahead. By looking outside the industry, pharma might understand the characteristics of some of the companies leading digital disruption, such as Uber or Airbnb or Spotify. “One thing these companies show is that you cannot just do ‘cost-of-entry’ innovation,” he goes on. “You have to create a superior customer experience (CX) and a differentiated value proposition.”
Setting the norms
Critics argue that these examples – with wildly different customer bases to pharma – are not particularly relevant to a sector which is highly regulated, and which, in particular, cannot communicate with its customers in a free and easy way. “That’s fine, but these companies are the ones setting the norms in CX for everyone else,” counters Stephenson, who is responsible for leading MSD’s digital acceleration throughout the Asia-Pacific region. “It’s a new environment, and that’s the reality whether you like it or not. There is a massive degree of importance attached to CX, quite rightly, and companies who do not recognize that will lose relevance.”
Having said that, Stephenson laughs: “Big pharma companies cannot be Airbnb! Clearly, our organizational structures and business models are fundamentally different, but that does not mean there are not lessons to be learnt. Clever companies think digital transformation through up front so that it aligns with their business strategy and objectives.”
Acting without a plan will not create the right outcome, he says, citing the rise of social media as the perfect example of this. “It’s the shiny new toy,” he suggests. “And that’s awesome, because it pushes us forward as we keep up – but it can blind us as well. People get caught in the headlights. There is a massive focus on social media but, in many cases, reach and commercial impact is very low relative to traditional mainstream media.” In other words, without understanding why you are employing it, there is no way of making it work for a company. “When people step outside of their traditional areas of expertise they can lose their discipline: they don’t realize why they are doing something. You need to employ the usual skills and have clear commercial goals and you will get the outcome that is relevant to you.”
Virtual reality (VR) is picking up a lot of traction as a possible game-changer in healthcare. “It’s VR this year,” Stephenson laughs. “Everyone’s chasing VR as the next big thing. It’s innovative and we’re playing with it – but is it practical at the moment? No way. But there is a massive vibe around it and people can get caught up in that. But you need some kind of context to create your operational stance in order to move forward.”
That is not to say Stephenson is dismissing VR – far from it, in fact. “I believe that VR has an incredible future in our business,” he insists. “It can help patients understand what their experience of treatment is going to be, what’s going to happen, rather than having to listen to a specialist talking a language which they don’t really understand. It’s a really powerful tool. It will have its own place – but it’s up to us to find that place.” He also sees possibilities with augmented reality (AR), in particular with Microsoft’s HoloLens. “The demos are very powerful,” he says. “It’s an exciting new form of AR.”
Talking more broadly about what is required for digital transformation in pharma, Stephenson identifies two types of innovation: ‘commercial’ innovation and what he calls ‘true’ innovation. He sees commercial innovation as the type which carries a significant risk if things go awry. “You can’t afford to get it wrong, these areas are operationally sensitive so you need to ensure executional and operational excellence,” he says.
HCPs are saying that they see less value interacting with traditional reps so pharma must re-define new forms of value for field force to better meet the needs of HCPs. The majority of companies ‘get’ the need for a beyond the pill solution but perhaps do not have the wherewithal to do something about it.
True innovation is subtly different and involves immersing yourself in new technology and seeing where it leads you. For example, he suggests: “It could be picking up wearables or Google Glass or Oculus and playing with them. You can make mistakes, fail fast – and learn from that. In my opinion, pharma needs to learn to accommodate both.”
The latter can take companies off in all sorts of interesting directions, he believes. “If it is really true innovation and you explore, it’s a great opportunity to create co-partnerships and relationships with KOLs to see what the technology can mean for your customers, your patients and your company.”
Any pharma company whose leader believes in the importance of digital transformation has a bright future. But if they’re struggling to understand that, then they are an endangered species.
But he warns: “You have to go through that exploratory phase in a hands-on way – you can’t get someone else to do it and then come back and explain it to you. You have to learn with VR, say, that here’s the situation: you’re now here and this is what is changing – unless you understand it and are hands-on involved, you just will not get it.”
The ‘beyond the pill’ factor has become a new expectation from HCPs and patients due to consumer empowerment, and he believes digital can meet these needs. “Pharma companies have to move from asset to solution,” Stephenson says. “HCPs are saying that they see less value interacting with traditional reps so pharma must re-define new forms of value for field force to better meet the needs of HCPs. The majority of companies ‘get’ the need for a beyond the pill solution but perhaps do not have the wherewithal to do something about it.”
There is no ‘one-size-fits-all’, of course. But however they do it, companies do need to get into the digital space in a way that is meaningful to them. “You need to create non-product value,” Stephenson explains. “You need to demonstrate that value in order to earn the right to have an interaction with the customer. That can be delivered by traditional and non-traditional means – it depends what’s appropriate to the customer: that could be through VR, a mobile app or a more traditional solution. I’m a passionate believer that you have to mix those approaches: younger doctors are highly digitally savvy, but there is a place for traditional programs.”
The future is notoriously hard to predict. In the next five years, Stephenson thinks, the pharma players who will remain relevant will be the ones which are making partnerships with Tech companies and start-ups to investigate the opportunities which digital can bring. “The imposters will be the ones who don’t have such a commitment to disrupting their own position,” he warns. “They will not be in such a strong position and that may ultimately be reflected in their share price.”
Above all, he believes, pharma companies have to begin asking themselves whether they truly understand where to provide value along the whole continuum. “Digital transformation is not optional – but do you have the leadership and desire to take up the opportunities which are facing us?” he asks. “Any pharma company whose leader believes in the importance of digital transformation has a bright future. But if they’re struggling to understand that, then they are an endangered species.”
To conclude, he reiterates his point about the need to look outside to take inspiration from what is happening elsewhere: “Pharma needs to adopt an increasingly external view, learning from other industries.”
Sceptics often suggest that only highly regulated industries, such as banking or insurance, can really be comparable to pharma. But Stephenson thinks that is missing the point. “The financial services sector ‘gets’ digital and we need to be passionate about learning from them,” he says. “Pharma tends to be too insular, and that’s not a stance you can maintain in this environment. You can’t keep the blinkers on.”
Peter Stephenson will be speaking in his personal capacity at the eyeforpharma Sydney in October 2016. The material presented and comments shared by Peter Stephenson at the Summit and in the interview above represent the personal views of Peter Stephenson, and should not be construed as the views or comments of his employer.
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