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E-Folder - Aligning Departments With Your Strategy
Over the years, several CEOs have asked me how I would go about getting departments of their organizations to support the vision we created in the strategic planning process. To begin with, it's important to recognize that this is a good idea: any department in your organization can either support your strategy by being aligned with it, or block your strategy by pushing against it. To see how, let's take a look at how several different dep
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
artments might affect strategy.
Purchasing — In many purchasing departments, performance is measured strictly by how well the department cuts costs. This is clearly useful for a company that is pursuing commodity customers, but it can be highly counterproductive when your target customer is a specialty buyer. The problem of measuring other values — such as the impact the purchase has on our operations or on our customers — somet
Purchasing — In many purchasing departments, performance is measured strictly by how well the department cuts costs. This is clearly useful for a company that is pursuing commodity customers, but it can be highly counterproductive when your target customer is a specialty buyer. The problem of measuring other values — such as the impact the purchase has on our operations or on our customers — somet
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
mes makes purchasing a difficult department to align with the organization's strategy.
Accounting — Accounting typically gives the company a way of measuring performance (financially) after the fact, as well as managing cash flow and, usually, budgeting. Some accounting departments also focus a good deal of effort on cost measurement and management. Naturally, the measurements that come out of accounting in most organizations ar
Accounting — Accounting typically gives the company a way of measuring performance (financially) after the fact, as well as managing cash flow and, usually, budgeting. Some accounting departments also focus a good deal of effort on cost measurement and management. Naturally, the measurements that come out of accounting in most organizations ar
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
e likely to be the easiest measurements to use for management. Since much of value creation is difficult to measure (except where it is efficiently translated into higher pricing), over-reliance on the easiest financial measurements for management can lead to commodity thinking, which is a potential disaster for companies who are targeting specialty customers. A general tendency caused by the ease of financial measurements is that accounti
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
g people like to focus on cutting costs and raising prices, which in turn can make the job of selling harder and harder.
Operations — Naturally, since your operations lie at the heart of creating the product or service that your customer is paying for, the way operations is managed can greatly alter the way customers experience doing business with your company. Commodity customers should be supported by operations that focus on
Operations — Naturally, since your operations lie at the heart of creating the product or service that your customer is paying for, the way operations is managed can greatly alter the way customers experience doing business with your company. Commodity customers should be supported by operations that focus on
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
fficiency even at the expense of some value, while specialty customers are best served when operations add costs in order to gain even greater value. In addition, companies that are seeking to move into specialty markets may need to improve their effectiveness with lower volume operations, while commodity markets are usually dominated by high volume operations.
Sales — Sales is often seen as the "front line" in strategy, since p
Sales — Sales is often seen as the "front line" in strategy, since p
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
eople in sales usually have the majority of customer contacts in many organizations. The nature of your sales force and its processes will greatly affect the success of your strategy. As a rule, people in sales find their jobs easier when the company is pursuing a commodity strategy. This is because selling something for a lower price takes far less sales skill than selling it at a higher price. Expensive, skilled, knowledgeable salespeopl
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
are a necessity when you are pursuing specialty customers, while commodity customers — who are selecting vendors predominantly on price — are much more effectively served by low-pay telemarketing people, or even a simple website.
Human Resources — In some industries — especially services — human resources is appreciated as a strategic area. Even in manufacturing, we can see that a significant portion of value added must come fr
Human Resources — In some industries — especially services — human resources is appreciated as a strategic area. Even in manufacturing, we can see that a significant portion of value added must come fr
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
om our people. What is sometimes harder to see is that some of the things that we do to keep our employees happy — such as HR, payroll and benefits — can dramatically affect employee retention and even what types of employees are retained.
Customer Service — Customer service —as a department — is sometimes treated as non-strategic because the customer contact here is not driving sales. The nature of this interaction can have a s
Customer Service — Customer service —as a department — is sometimes treated as non-strategic because the customer contact here is not driving sales. The nature of this interaction can have a s
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
gnificant impact on customer perception of the value or your product or service. In addition, customer service should always be viewed as a key source of information about possible improvements to make in your products or services.
Research and Development — Since R&D is often responsible for innovation in a company, it's easy to see how it can support strategy. Strategic alignment in R&D may go even farther than we think. For e
Research and Development — Since R&D is often responsible for innovation in a company, it's easy to see how it can support strategy. Strategic alignment in R&D may go even farther than we think. For e
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
ample, the way the R&D department works may affect whether it develops a few big innovations, many small one, or nothing at all.
It should be clear from these examples that you can find support or hindrance for your strategic vision in almost any department of your organization. As a general rule, the nature of this interaction boils down to five things:
1. The department has direct contact with the customer, or affec
It should be clear from these examples that you can find support or hindrance for your strategic vision in almost any department of your organization. As a general rule, the nature of this interaction boils down to five things:
1. The department has direct contact with the customer, or affec
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
ts the employees who do.
2. The department has a direct impact on the attractiveness (quality, features, etc.) of your product or service, or affects the employees who do.
3. The department affects our ability to measure and/or manage any of the above.
In most of the examples above, I've pointed out that you will see marked differences between departments that serve specialty customers well and those that serve commod
2. The department has a direct impact on the attractiveness (quality, features, etc.) of your product or service, or affects the employees who do.
3. The department affects our ability to measure and/or manage any of the above.
In most of the examples above, I've pointed out that you will see marked differences between departments that serve specialty customers well and those that serve commod
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
ty customers well. Clearly, this means that departments must support strategy by being aligned with the type of customer you are targeting. This also means that, in those unusual cases where a company is pursuing both specialty and commodity customers under one roof, you may well need to separate some departments into specialty and commodity support units. Let me illustrate this point with an example.
For years, I have done busi
For years, I have done busi
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
ness with a company that specializes in driving businesspeople to the airport from my hometown. They run a fleet of nice cars and vans which, for about the price of a cab ride (or two days' parking at the airport), will reliably deliver you to the airport on time. Recently, this firm merged their phone lines with a taxi company that services a much broader clientele. As you might expect, the telephone service for the cab company was far be
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
ow what one might expect from an airport limo service. Long waits on hold, dispatchers who didn't know which customers had corporate accounts and mix-ups where cabs were sent in place of vans became common. While this was a slight headache for the taxi business, the limo business lost a significant number of their customers to a competing firm because the operational change was made strictly on the basis of financial merits, rather than st
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
ategic ones. Did this have a financial impact on the company? People at the competing firm — the only other one in town — reported significant growth in sales during a period when business travel was declining. I can only assume that this increase was the result of many specialty customers voting with their feet.
So how about your company? Are your departments looking at optimizing just one result, or are they asking how they ca
So how about your company? Are your departments looking at optimizing just one result, or are they asking how they ca
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
n support your strategic vision? Here are a few steps that can help them move in the right direction:
1. Share the relevant strategies with each department.
2. Ask each department to enumerate how they are supporting your strategies
3. Ask each department to identify ways they might fail to support your strategies, and how to avoid such failures
4. Ask each department to think about ways to measure how well they a
1. Share the relevant strategies with each department.
2. Ask each department to enumerate how they are supporting your strategies
3. Ask each department to identify ways they might fail to support your strategies, and how to avoid such failures
4. Ask each department to think about ways to measure how well they a
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
e supporting your strategies.
Each of these steps can be as involved as you like. I have seen companies productively create separate strategic plans for individual departments, and I have also seen good results come from a two-hour coaching session where we asked the above questions. Clearly, you should match the effort here to your resources, as well as the potential payoff from increasing strategic alignment. The underlying c
Each of these steps can be as involved as you like. I have seen companies productively create separate strategic plans for individual departments, and I have also seen good results come from a two-hour coaching session where we asked the above questions. Clearly, you should match the effort here to your resources, as well as the potential payoff from increasing strategic alignment. The underlying c
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
oncept — that increased alignment with strategy can improve the effectiveness of your strategy — will work either way.
Robert Bradford is the President and CEO of Center for Simplified Strategic Planning, Inc. (www.cssp.com) He can be reached via e-mail at rbradford@cssp.com. Robert is the author of Alignment for Implementation: Getting Your People to Make Your Strategies Work, about how to handle the issues of strategic alignm
Robert Bradford is the President and CEO of Center for Simplified Strategic Planning, Inc. (www.cssp.com) He can be reached via e-mail at rbradford@cssp.com. Robert is the author of Alignment for Implementation: Getting Your People to Make Your Strategies Work, about how to handle the issues of strategic alignm
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
nt. This is the perfect book for you if you want to:
* Align your employees with your strategy
* Make implementation easier
* Get things done without pushing every step of the way
* Get ideas about creating a culture of execution
* Make sure you "walk the walk" with your strategies - and turn them into reality
* Bring the benefits of great strategic thinking to the next level down in your organization
* Align your employees with your strategy
* Make implementation easier
* Get things done without pushing every step of the way
* Get ideas about creating a culture of execution
* Make sure you "walk the walk" with your strategies - and turn them into reality
* Bring the benefits of great strategic thinking to the next level down in your organization
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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