Leading Digital Transformation
Digital leaders find that they need to wear many hats - strategist, technologist, change agent - reports Nick de Cent.
The freshly minted role of Chief Digital Officer is enjoying something of a boom.
“At the end of 2015, there were approximately 2,000 CDOs. CDO hires have been doubling every year and I expect there to be 2,500 CDOs by the end of 2016,” the CDO Club’s CEO David Mathison noted recently.1
But what’s fuelling this trend? Quite simply, traditional businesses have woken up to the need for digital transformation as customers demand new ways of engaging with businesses and the companies themselves look to improve the customer experience, streamline processes and reap the benefits of innovation down the length of the value chain.
To some, the role of the CDO seems fuzzy – part technologist, part marketing specialist and part change agent, because organizational transformation is a big part of the process. This means that, as leading agents of change that cuts across multiple functions in complex organizations, CDOs need a strategic view and the ability to generate a road map for the lengthy journey on which their organization will inevitably find itself. This also requires them to understand the business context and have the ability to communicate with all the relevant stakeholders.
Strategy not technology
Pharma is no exception to this model; there’s a need for a great deal of joined-up thinking. According to Hicham Naim, who was recently appointed Strategy & Customer Centricity Director at Takeda’s Europe and Canada business units, a key lesson is that technology shouldn’t be driving the strategy; it should merely be a facilitator.
First of all you need to work out what your customer engagement strategy is. “If you really want to make a difference, you need to ask the right question: How does my engagement strategy fit for a new digital world? Instead of “how does my digital strategy fit my brand strategy?”
Thus, whatever technologists might be tempted to tell us, digital strategy is not easy – business process re-engineering has never been simple, especially when it applies across a whole organization. It certainly isn’t about merely acquiring some technology and additional capability, and job done.
Moreover, stakeholders external to the organization – especially customers – need time to adapt: if you approach digital in the wrong way, you risk offending them. Behavioral expert Rob Wyer from Swiich emphasizes the point: “You need to think behavior first, tactics and technology second.”
The industry commercial model relies on ‘brand managers’ instead of ‘brand experience managers.
Discussing his previous digital experience within the pharma industry prior to Takeda, Naim tells eyeforpharma ahead of his appearance at Multichannel Excellence: “The way some PharmaCos are engaging customers still tends to be the ‘old way’ – except this is amplified by digital.
“The industry is ‘flooding’ customers with an increasing number of ‘digital’ tactics, potentially creating more ‘noise’. Some of the customer experiences that PharmaCos deliver are perceived negatively and lag behind the experience that other industries create for their customers.
He continues: “The industry commercial model relies on ‘brand managers’ instead of ‘brand experience managers’. This involves adopting an inside-out perspective, creating a brand plan and then asking the multichannel/digital team: ‘OK, what can you do with that? Can you translate it into a multichannel strategy.’”
Many organizations are asking themselves, “What is my business strategy or multichannel strategy to align with my corporate strategy?” According to Naim, the correct question should be: “What is my strategy in the digital world.” This is because the environment has changed significantly from when our tried-and-tested strategies were originally formulated.
He recommends adopting an outside-in view, defining promises to customers, understanding what a good customer experience should look like, and finally exploring the best way to harness digital to execute and differentiate. He is a firm advocate of moving away from traditional marketing and brand management approaches towards brand and customer experience.
A significant benefit of the new digital approach is the opportunity for businesses to re-engage with customers and develop sources of differentiation in an increasingly commoditized world. We can achieve this by generating a much clearer picture of the patient journey that enhances our understanding of what is happening and why. This enables us to carry out far more effective market segmentation – “microsegmentation” in the words of Google’s Ryan Olohan – than has traditionally been possible. We can then focus on generating insights that deliver solutions and value to customers and to patients as consumers in terms of outcomes that are meaningful to them.
Olohan, who is the National Industry Director for Healthcare at Google in the US, offers this advice: “Demographics rarely tell the whole story. Understanding consumer intent is much more powerful. When someone has a want or need, they turn to their smartphone for help – whether it's a teenager with acne watching their favourite star’s night-time skincare routine on YouTube or a mom looking for a coupon for children’s seasonal allergy medication.”
He talks about “micro-moments” and how this is now the new battleground for winning HCPs (healthcare practitioners) and patients. “When a need arises, people turn to digital to look for answers, discover how to do something (e.g., how to inject an EpiPen), and make decisions about their health. We call these intent-filled moments, micro-moments.”
All of which can seem frighteningly new to an industry that has been using the same business model for some 50 years. Adapting to digital successfully involves internal change on a grand scale; meanwhile, the technology itself keeps evolving.
The only way to drive internal change is to have both a dedicated, persistent team and top-management engagement. So often, to change the status quo, you actually need someone from the very top. In our case, this is a board member.
Naim is clear about the scale of the transformation required: it is a five to seven-year journey. “We are talking about a mindset change.” Along the way, there are many hurdles to overcome: internal silos and power structures; lack of integration between marketing, sales and other relevant departments; the fact that the old share-of-voice method is still working to some extent; a lack of available new talent – these are just a few of the potential barriers to change.
From the top
Because digital transformation touches so many areas of an organization from interactions with customers to the company’s vision, operations and culture, the digital strategy needs to come from the very top. Unsurprisingly perhaps, many CDOs from across different sectors have been presidents and CEOs of corporations, and they often return to that role once digital has been bedded in. According to a recent article in ZD Net, 60% of chief digital officers in the advertising industry were previously CEO, president or general manager, while over 30% of CDOs in media and publishing used to be CEO, GM, or president.2
Leadership from the top and a very dedicated implementation team are the two prerequisites for a successful digital transformation, suggests Jessica Federer, who leads digital transformation at Bayer. “The only way to drive internal change is to have both a dedicated, persistent team and top-management engagement. So often, to change the status quo, you actually need someone from the very top. In our case, this is a board member.””
Panos Papakonstantinou, Head Digital Commercial, Europe at Novartis, underlines the importance of a focus on change management. As with any such program, this means spending some 80% of the time working on things like communication, training, stakeholder building and so on, with 20% spent on actual development of the activity. “We really have to think of change management as a key topic in driving digital forward.”
“One of the challenges I’ve seen with pharma is that it’s really siloed still,” stresses Wyer. Naim’s view is that the customer journey is in essence cross-functional and requires an integrated approach by which all the functions work together: medical affairs, sales, marketing, market access, digital – collaborating around one specific customer journey, and that’s how we achieve customer centricity.
Functional silos can be a big problem for a couple of reasons:
1: They compete for scarce resources – Pharma has traditionally not been organized into cross-functional teams, with clear separation between disciplines and brand teams. Siloed teams compete for funding and resources in a company, especially in shared services groups like marketing and IT.
2: Functional silos and limited interoperability between systems limit the flow and utility of data and our ability to uncover insights. Last year, a survey by research organization Forrester found that 49% of companies (across all sectors) have yet to implement a strategy to obtain a unified view.
Switching from the traditional inside-out view to outside-in opens the door to a comprehensive picture of the customer journey and experience. For instance, the US Food and Drug Administration (FDA) has issued a consultation paper3 stating that, in order to see the highest success, clinical trial leaders must use electronic health records (EHR) that promote health data interoperability, a recent blog from leading US digital transformation consulting firm Perficient reveals.4
Finally, any transformation should introduce new capabilities gradually so that people can absorb them; as part of the process it is important to provide critical evidence through “proof of concepts” to facilitate learning and change mindset, culture and practices. Most important of all, however, is the need to be practical. “To be successful, you can’t design multichannel from an ivory tower,” concludes Rob Wyer of Swiich.
1 “The Many Faces Of The Chief Digital Officer,” by Falguni Desai, Forbes, 13 June 2016, http://www.forbes.com/sites/falgunidesai/2016/06/13/the-many-faces-of-the-chief-digital-officer/#201292277ada
2 “Digital transformation: What is a Chief Digital Officer?” by Michael Krigsman, ZD Net, 15 February 2016.
3 “Use of Electronic Health Record Data in Clinical Investigations, Guidance for Industry – Draft Guidance”, May 2016, http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM501068.pdf.
4 “FDA: Health Data Interoperability Key to Clinical Trial Success”, Perficient blog, 17 May 2016,
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