Improving Competitive Agility in Pharmaceuticals

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How radical simplification can improve competitive agility in pharmaceuticals

Complexity—which is deeply rooted in pharmaceutical operating models—has become a silent killer of operational excellence, innovation, profitability and ultimately, competitive agility in the industry. Nearly half of the largest global pharmaceutical companies have reached complexity levels not in line with current profitability.

Simple and agile pharmaceutical companies will have the advantage in today’s world where healthcare segments are converging and new technology is reinventing business models. Shifting to the new—such as expanding into the realm of patient services, diagnostics and provider collaborations—should happen in parallel with simplification.

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KEY FINDINGS

Complexity lurks beneath the surface, infecting four key dimensions of the business:

Policy. Over-documented, inconsistent, conflicting policies and unclear direction create a document landscape that is not in line with the process model. Some pharmaceutical companies have almost one policy per employee.
Process. Many pharmaceutical companies have a decentralized process landscape that includes numerous handovers and wasteful activities. At one leading pharmaceutical company, more than 30 percent of processes are governance or risk management based.
Systems. Complex pharmaceutical companies have a high number of stand-alone systems that require inefficient manual effort and increase the number of transactions and data inconsistencies. At one pharmaceutical company, 25 percent of its systems have less than 50 users.
People. Roles are often inconsistent, overlapping and redundant. One leading pharmaceutical company has five roles for each full-time employee.

By looking for ways to radically simplify complexity, pharmaceutical companies can treat the root problem, not just the symptoms.

RECOMMENDATIONS

Steps to fighting complexity include:

Get radical. To dismantle complexity that has built up over the years, simplification must be radical and follow a zero-based approach.

Take advantage of technology. Technology has added complexity in the form of abundant data, but it can dramatically help to reduce complexity when organizations use automation, robotics and artificial intelligence to streamline labor-intensive tasks.

Adopt an entrepreneurial mindset. It is essential for leaders to have more of a startup spirit, looking for innovative ways to improve speed-to-patient, quality, compliance and cost base. The C-suite also can clarify roles and accountability.

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