For most executives, in that five-to-ten year horizon, they say, "Give me a break. Things are just too uncertain. I couldn't
possibly have a clear view of that." You need a clear view, but not a detailed view. You need to have a very high-level sense
of what the market's going to look like, and what your business is going to need to look like.
The other time horizon is six to 12 months. And the real challenge for executives there is to figure out what the two or three
operating initiatives are that are going to have the greatest impact in accelerating our movement towards that longer-term
destination. And be very focused on making sure those two to three initiatives have adequate resources and are moving as rapidly
And at the same time, figuring out what the organizational bottlenecks are that are preventing you from moving even faster,
and determining what you can do in a six-to-12 month timeframe, very tactical, very near term, to break down those bottlenecks
and move even more quickly.
And then, learning by continually moving back and forth between these two time horizons; so, what are you learning in the
six-to-12 month initiatives that refine your view of the longer-term destination, and how do you use that longer-term destination
to focus your near-term initiatives to have even more impact?
With pharma these days, it's split—away from the middle, and toward the short and the long would be even more important.
If it's taking you a dozen years to develop a new product and if the Medicare initiative threatens to completely transform
the economic structure of the industry within about five or ten years, it's tough to make that kind of mid-sized plan.
Right. And my sense is the reaction to uncertainty for many companies is to kind of spread their bets even more broadly. And
hedge their bets, if you will.
While it's certainly an understandable approach, it's often a very dysfunctional approach, in the sense that it breeds complacency.
If you've got a lot of bets, first of all, you don't have any real sense of urgency about any of those bets. If one of them
starts to unravel, the attitude is, "Well, not to worry, we've got a lot of other bets." So there's no real sense of, "I've
got to make this one work." And you're spreading your resources very thin. And often the company doesn't have critical mass
against any of these bets, so they're doomed to be unsuccessful, because you haven't really focused and doubled down on bets
that are really going to have an impact.
What else should pharmaceutical executives be thinking about?
It's particularly important to embrace some of the newer technology that allows companies to move to more rapid incremental
innovation, both around process and product. In particular, we see a lot of potential in new IT architectures. There's a new
generation of architectures under the label of service-oriented architecture, which allows companies to create much more flexible
connections across applications and across databases than has been feasible in the past.
One of the things that's particularly attractive about this technology is that it doesn't require companies to rip out their
existing applications or databases. In fact, it starts with the assumption that you've got a pretty heterogeneous set of applications
that need to be connected. This is particularly important because if you're trying to connect into business partners' applications,
unless you're a huge company, you can't force your business partners to rip out their applications either. These service-oriented
architectures give companies a lot more flexibility in connecting applications.