The goal of developing a strategy is to ensure that business objectives are met by aligning resources with market opportunities. What may sound simple gets exceptionally complicated when internal teams compete for corporate time and money while external competitors battle for the same customers. This takes the need for strategic planning to a whole new level.
Learning strategic planning by reading a book or taking a class is like learning how to drive by watching a video. If you by chance passed your driver’s license exam but only drove once a year you wouldn’t be a very good driver. Strategic planning and strategic thinking need to be practised. Practice leads to events becoming increasingly more predictable, allowing one to see further down the road using patterns of the past to make wiser strategic choices.
In today’s Twitter-fed world where “new” information is valued more than “true” information we need more people who can see past the clutter. These leaders are extremely valuable. Take the case of a pharmaceutical company with a product that was floundering with an insignificant 4.8% market share after four years in the market all because no one did the required work to develop a proper strategy.
Drug development is an expensive business so when a new glaucoma drug with a significant competitive advantage was launched there was high hope for its future. However, after four years in the market it had less than 5% market share while its three competitors controlled over 90%.
The marketing team had all but written off the product but one disturbing fact caused a senior leader to dig deeper. He asked: How is it that a product with equal symptom relief, priced at parity, with minimal side effects, and that is the only drug that retards the progression of the disease is losing out so badly to products which are clearly inferior?
Research revealed that 91% of patients who sought medical help for glaucoma were diagnosed using a subjective peripheral vision test. Patients in this group were prescribed the drug in question less than 1% of the time. The competitors’ older drugs were known to treat the symptoms of glaucoma, and in these cases it seemed the older products were deemed sufficient.
However, glaucoma is an eye disease caused by a build up of ocular pressure which damages the optic nerve causing a narrowing of the field of vision which can lead to blindness. The remaining 9% of patients received an objective eye test which included measuring the eye pressure and, critically, visually examining the damage done by the disease to the optic nerve. In these cases, where the doctor could see the progression of the disease, the product in question was prescribed 39% of the time.
The marketing team had become convinced that the drug was destined to be a niche product until this research uncovered the true reason for its obscurity. A campaign to encourage physicians to follow up with objective eye exams where glaucoma damage could be properly diagnosed led to an appreciation of the drug’s efficacy, doubling sales of the four year old drug in six months. What can we learn about strategic planning from this experience:
- Question incongruencies: A product with a clear competitive advantage should also have a clear market share advantage. If not, ask why not?
- Dig deep: The strategist’s mantra is to see what everyone else has seen before and think what no one else has thought before. Strategic plans that parrot the obvious bring little value!
- Practice strategy: Strategy takes a short time to learn and a lifetime to master. Strategy is an all times thing – not a somethings thing; you don’t develop a strategy once a year and forget it.
Aligning business resources with market opportunities is the goal of any strategic plan. To dig deeper and find opportunities where others see none requires an advanced level of strategic thinking. What are you doing to start seeing clearly?