Cherene Powell was recently named a Luminary by the Healthcare Businesswoman’s Association (HBA) as a leader in the healthcare industry at the annual Women of the Year event in New York city.
Describe your role as CFO & EV Priority Industry lead for Life Sciences Strategy.
I am accountable for driving our presence in the life sciences industry by understanding industry trends and challenges, as well as the rapidly changing portfolio of players, and developing our strategy to create a differentiated brand and unparalleled reputation for helping our clients. We help them address challenges related to their cost structure and the capability of their functions to drive value to the broader enterprise.
What are the industry trends as they pertain to the strategic management of cost structure?
Never before has the life sciences industry faced a time of greater demand for transparency and competition—both from traditional peers and from emerging disrupters that few saw coming, and tremendous pressure to achieve sustained profitable growth. The recipe that the industry has followed to achieve success to date will not yield the same results in this redefined, highly competitive construct. The pace in which products are brought to market, the changing paradigm of patient-payer-provider and the emphasis on the customer experience requires companies to take a very critical look at the distribution of resources and the investments they are making. As such, life sciences companies are increasingly examining how they can optimize their internal cost structure as a means to fund the critical investments in achieving growth ambitions, and do so in a way that continues to provide strong returns to its shareholders.
How do they change this pattern?
In order to shift from this episodic pattern, the connection between cost and growth is key. Shifting the mindset to a relentless prioritization of fueling growth—through permanent changes to the operating model and the internal cost to deliver services, as well as the consumption model for non-labor spend. Getting non-working money out of SG&A and reallocating it to R&D and M&A needs to govern all decisions—and companies need to have the visibility, accountability and discipline to consistently execute with the end game always in mind.
What do you enjoy most about helping life sciences companies achieve strategic cost management?
I truly enjoy helping my clients tackle their biggest challenges. While helping companies to manage their cost structures is not the most glamorous, it is critical to helping clients deliver on their commitments to investors, customers and their business partners. Helping companies to identify the non- or low-value add aspects of their organization; and helping them to eliminate or reduce that spend so they can reinvest into bringing products to the market faster; and discovering new ways to improve the customer experience are all about playing the long game and keeping an eye on the bigger picture.
Are you seeing a change in business models and operating models?
Our industry business models are rapidly changing—and that is very exciting. It is easy to see how emerging technology will transform how products and services that are consumed by customers. What is less clear to most companies (and supported by our research) is translating how the operating model, which exists to support the execution of the business model, will also need to evolve to embrace new ways of working. Operating model agility is a big issue for most life sciences companies, particularly the larger ones. Many have grown through acquisition and/or have followed a decentralized model, the result of which is often fragmented and complex. To combat this, companies need to look critically at what needs to be done to simplify the operating model.
Our research shows that pharmaceutical companies are likely to incorporate digital to commercialize therapies and explore wearable devices, but reluctant to take full advantage of using digital to increase flexibility and reduce operating costs. Why?
Embracing digital in the enabling functions will not be a matter of executing the same processes but with better tools—but rather a fundamental change in how work gets executed. Complexity breeds complexity, and from that complacency sets in, of which it can seem impossible to escape. Radically simplifying the structure of the enabling functions and embracing the power of data and robotics to drive outcomes are key elements to future ways of working. Outcomes will be measured by not just explaining what happened, but why it happened and most importantly what recommendations will the enabling functions be proposing to their business partners to achieve or maintain competitive advantage in the market.
Where do you see the future of healthcare?
The healthcare landscape in 2020 will look dramatically different, including a more research-and digitally-savvy customer base that will demand more end-to-end services. The silos within the industry—medical device and drug manufacturers, healthcare providers and insurance providers—will be more closely integrated with the customer at the center of the experience. Technology will dramatically change how we diagnosis and treat illness—prevention will be a greater focus, diagnosis will be much earlier, and treatment will be more precise to the individual. It’s an exciting time to be part of this industry.
What do you do in your spare time?
On the weekends I like to let my brain take a rest and focus on physical activity. I am what is known as “weekend workout warrior.” I enjoy running, cycling, pilates, barre classes and yoga. I love the feeling at the end of 2-3 hours of exercise. It helps me feel balanced and restored, both physically and mentally.