Digital Transformation Means Wholesale Culture Change
How do pharma organizations successfully make the jump to digital? Nick de Cent talks to executives at Bayer about their DX journey.
From smartphones and smart cities to education and the way governments serve their citizens, digital is fundamentally altering our world. The rapid progress of digital technology has driven innovation and disrupted entire industries; in some sectors, digital is all-pervasive and underpins a new customer-focused philosophy – multichannel marketing evolved into “omnichannel” and the focus is now firmly on customer experience (CX).
Health today is no exception: digital transformation (DX) is ushering in profound change as technology impacts medical devices, care systems and the way we deliver medicines; big data transforms our R&D; and digital innovation is already disrupting the commercial landscape and the way we engage with customers. As a consequence, pharma companies are looking to evolve rapidly to thrive with new business models consistent with the digital environment.
Yet, pharma traditionally takes a long-term and measured view; it has been reluctant to abandon approaches and techniques that have served it well in the past. Resistance to change, compliance issues and a “this is how we’ve always done it” mentality have also fed into the equation. Moreover, digital’s early promise has not always lived up to expectations. This has left many companies playing “catch-up” in the face of digital disruption. So, where are we headed now?
Leadership from the top and a very dedicated implementation team are the two pre-requisites for a successful digital transformation, Jessica Federer, Head Digital Development, Bayer tells eyeforpharma in the recently launched whitepaper "Customer Experience & Beyond: Why Digital Changes Everything". Bayer set out on its DX journey back in 2014 and it expects the process to continue for several years.
“That internal change piece, the only way to do that is to have a very dedicated, persistent team to see what changes need to be made but then to have top-management engagement. So often, to change the status quo, you actually need someone from the very top and in our case a board member.”
Federer acknowledges the extent of the challenge: “We see the promise and the opportunity that multichannel marketing can bring and how we can better connect with our customer. However, this is new territory for the pharmaceutical industry. For so many years, we could only speak to physicians and to pharmacists and through specified channels – and we’ve been doing that for a hundred years or so.
“And now there’s this new state of play and, frankly, in a heavily regulated industry the primary focus is on safety, efficacy and on security. We’re much more cautious in taking some of these steps that are more creative and will connect us to our customers. And we should be; we’re dealing with people’s health and wellbeing.”
She continues: “We all know we need to get into this space and become better and have more expertise. We do see the dramatic potential to come closer to understanding our customers and delivering these relations and connections but we want to be very cautious and thoughtful and deliberate in how we become more active in this space.”
Jessica Federer, Head Digital Development, Bayer pictured at eyeforpharma Barcelona 2016
Pet Life animal health app
That said, large groups such as Bayer often have significant digital expertise and experience residing in other parts of the organization, and they can draw on this. Sharing ideas and information across teams is an important part of the change process.
“What I think is particularly nice right now is that in our digital marketing piece across pharma, consumer health, crop science and animal health, those digital experts in Bayer get together across the different divisions and share best practices.”
For instance, Bayer Vet Centre has developed “Pet Life”, a free mobile and tablet (iOS and Android) app aimed at pet owners. It is designed to help owners protect their pet against fleas, ticks, and worms all year round, and includes a useful treatment reminder about when they need to give parasite protection or antibiotic treatments.
Owners also have finger-tip access to helpful parasite protection information along the way. The “vet finder” tool helps owners connect with their local veterinary practice and allows them to store future vet appointments. The app is supported both by direct to consumer (DTC) and direct-to-vet marketing.
Pharma organizations need to overcome a number of key barriers that have tended to hinder progress towards digital transformation in the past: these span internal organizational, structural and cultural considerations, shortage of relevant talent, and a lack of vision and commitment to changing established go-to-market strategies, especially at the middle management level. Externally, the sheer pace of change can also be daunting, while the compliance and regulatory environment continues to struggle to keep pace.
Again, Bayer has significant experience of these issues and has developed a number of innovative approaches to tackling such barriers, although Federer does not downplay the significance of the challenge. She explains how a consumer health digital marketing team “ran into hurdle after hurdle because the existing processes don’t allow for some of these new methods.” Her view is that it’s “really easy to blame the process but the challenge now is how do we make adaptations to our processes which enable and facilitate newer models.” This is particularly important in the context of the IT, legal and compliance teams.
Regulatory approval remains a challenge if not an excuse for inaction: because content is tailored to each individual channel and, of course, across different geographies, this can add considerably to the regulatory burden. “In countries like France there are only certain times when you can submit things for approval and then it’s approved or it’s not approved,” Federer explains. “The restrictions for the pharma space mean that it’s still really hard.”
Regulators want better outcomes for the people they’re responsible for. If we can work differently and do pilots and try to create a solution, we have seen that regulators are very happy to experiment with us to deliver a better result.
Of course, such regulations were designed for a different era and much more static content. In today’s world of social media engagement across channels – which are far more interactive – the old-school approval process doesn’t allow for this: if you try to work the new channels like YouTube, Twitter and Facebook using the old approval process, what you end up doing, according to Federer, is trying to account for every potential hypothetical situation or question or arrangement and try to get everything approved at once. “That’s just a nightmare because you really don’t know what is going to come in!” Consequently, the drive is now on to find new, more appropriate regulatory systems, which span important issues such as data privacy.
Indeed, pharma should be working closely with regulators to explore the new territory together. “Regulators want better outcomes for the people they’re responsible for. If we can work differently and do pilots and try to create a solution, we have seen that regulators are very happy to experiment with us to deliver a better result.”
Driving a successful transformation
Federer lists a number of keys drivers in any successful transformation, but sitting at the top is talent. “The number one thing for us is always the talent – the people. We do have people in our organization who are world leaders in digital marketing and multichannel marketing and integrated customer experience. We have brilliant people here and you’ve just got to have people that get it and understand it.”
After people, the next stage is formulating the processes. “Can people create the change they need to create? Can they deliver what they need to deliver? Following that, it’s the enabling infrastructure. “We take a look at the platforms: the tools we are using also need to be updated or change.”
In addition, Bayer considers the external partners it needs to work with to make the transformation happen. These may range from well-known global digital disruptors such as Google and YouTube to regional and local collaborators. “You look at who are the partners that are meaningful to your customers and how do you do something with that partner that creates more value for your customer and makes sense for a long-term relationship.”
Tackling the talent issue
Gerhard Arnhofer, who will be presenting at Multichannel Excellence in London in October, leads the center of excellence for integrated multichannel marketing on the pharma side at Bayer. Set up some six months ago, the CoE is seen as the quickest and most effective way of building digital capability within the organization.
This center of excellence is one of a number of CoEs within the company, designed to inspire and transform the organization. These deal with different competency areas such that the bundled competencies available within these centers enable the wider organization to build up its skills, competencies, and knowledge in specific areas of focus. After several years of impact, individual CoEs are dissolved once they have done their work, with the result that the organization as a whole understands more than the CoE can then deliver. Traditionally, this knowledge transfer takes three to five years. This is a technique that Bayer has applied for several years.
Talent in the digital space is currently limited, particularly at mid- and senior-management level. Bayer imports some talent but is aware that pharma is a distinctive sector, so that “you either love it or hate it”.
One solution is homegrown talent. Bayer runs a dual study program for undergraduates who spend time at a university on technology and economics programs and then half their time on the job within the corporation. Bayer is able to hire fresh talent out of that stream and can shape individuals early on in their careers.
Currently, there are a number of people within Arnhofer’s team writing their dissertations and the organization is interested to see whether this approach will accelerate the digital transformation or not. Topics covered by the students include AI, evaluating concepts of remote detailing, and business decisions analysis, among others. Team members fresh from university have a very keen eye for evaluating problems but need considerable time spent on nurturing them.
Additionally, Berlin has a thriving start-up scene, with a large number of talented people from the digital community originating from all over Europe. This represents a significant talent pool for the company.
Digital transformation at country level
Bayer’s award-winning team in Turkey sits within the scope of Integrated Multichannel Marketing Manager Region EMA & EU, Berfin Demirbilek. The group is represented in the organization’s digital core team driving change across Bayer, and has been working across brands and divisions to embed digital excellence in all parts of the business. This role encompasses onboarding the Bayer Turkey organization – including the top management – in this journey of raising awareness, by enhancing the level of knowledge and, ultimately, the level of competency within the organization. Through effective collaboration and cross-functional work, the team has established a multichannel vision called INTEGRA, creating an environment in which ideas generated are integrated with the rest of the marketing activities.
Federer concludes: “We are well aware that this transformation requires profound changes in our thinking and execution that will impact every corner of our organization: our strategy, our people and skills, the products and solutions we provide, and the organizations we partner with. Accordingly, at Bayer, we have already set out on the journey, recognizing that our world is in beta, and no one has all of the answers yet, so the destination may change as we move forward. But we must move forward.
“Some pharma companies have already made good progress, while others have still to embark. This path is, of course, not simple, but across our industry, we must advance on this journey together.
“Together, our industry turns science into meaningful solutions for families around the world. This is not easy. If we can take a molecule through years of development to bring it to someone’s medicine cabinet, then we can embrace the immense opportunity that DX offers to serve patients and customers better. Because at the end of the day, that is the only thing that actually matters.”
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