The effects of compressive disruption
The biopharmaceutical industry looks good, on the surface. But that calm surface obscures some underlying issues inherent in many biopharmaceutical companies’ operations and strategy. A quiet force is making its entrance: compressive disruption.
Companies experience compressive disruption when they become overly mired in their core business, even as consumer preferences, customer bases, industry trends and technology change around them. It squeezes operating margins over time, slowly eroding profits and revenue. Because compressive disruption happens slowly, most biopharmaceutical companies do not detect the financial pressure until the balance sheet shows real damage. But, companies that can identify the symptoms of compressive disruption early are best placed to overcome it by moving into the New—finding new sources of growth to combat decline in their traditional core business.
The antidote to disruption: New growth
Biopharmaceutical companies that can pursue new growth while maintaining their core business (until the New becomes their now) have the best chance of beating compressive disruption.
The “New” in the biopharmaceutical industry is New Science, which will drive 54 percent of industry growth through 2022. New Science is an evolving, unique combination of the best in science and health technology, from genomics and biomarkers, to companion technologies and delivery methods.
Our survey of 35 biopharmaceutical executives from the world’s largest companies revealed three critical areas where companies can act immediately to fuel the competitive agility and new growth they need to compete in the era of New Science:
How to get started toward being competitively agile
Biopharmaceutical leaders who act now have the luxury of more time to plan their strategy and pivot to the New. Competitors who wait will be in reaction mode.
Taking steps toward competitive agility and new growth now just makes sense for biopharmas who want to lead the industry into an exciting future.
Most companies in the biopharmaceutical industry are still in an advantaged position. Because of this, leaders have the luxury of planning, developing and implementing growth in a measured manner versus reacting to rapid disruption thrust upon them.
Despite that fact, most companies need to act now to address compressive disruption. They must increase their agility. Those that do will put themselves light years ahead in the search for new growth.