Remember back 20 years ago when IBM was on the ropes and everyone thought it was a company of the past rather than the future? Everyone respected what they had previously done, but it did seem they were going to go the same route as other companies that had gotten too big, too slow, too entrenched and too stodgy to compete in the boom days of the 1990’s. But the proud company and competent leadership had a different idea. Massive change totally transformed their business model from one of products to one of solutions.
This article is a brief recap of some of the lessons learned as discussed by one of their senior leaders. I love the conclusion that says you need to accept that complacency is a business killer and it must be banished from your thinking. Transformation must be continuous and constant and change must be done not merely for survival but for success. Leadership is required. In case you haven’t followed the company, take note that Friday their stock closed at about $200 up from about $20 back when their transformation began.
Enough about IBM. The reason this analogy came to mind is this article that was updated on the Forbes site this past weekend. Take a look at the piece and the comments that follow about those things our industry could learn from IBM. It is also very informative to watch the imbedded video on the second page. Note the way the stock market has punished our industry over the last decade as we stood still while they rewarded IBM for making their dramatic changes.
I am not here to comment on the specific solutions made by IBM or even those suggested for the pharmaceutical industry, although I find some of them very interesting, I think that that those involved in the fight for survival, and make no mistake that is what is happening, need to work through these issues for their own companies. Rather, what I would like to do is to put some parameters around what needs to happen.
I think change needs to be big. We need much more than minor tweaks. The problem is not about cost controls and can’t be fixed with layoffs. If we have too many reps, leaders should be thinking about how to deploy them better not about just laying them off. If research is not working, the solution will not come from shutting down the labs, but rather from looking at completely different ways to go after drug discovery. If marketing is not having the desired impact we need to find new ways to let the world know about our products rather than just complaining about poor execution. Pricing and how we compete against generics needs to be totally reconsidered. We need to start developing products that are used by millions of patients once again.
It is easy for all of us working in the industry to agree with what is being said and then to wish our leaders would do something about these issues. The challenge really goes out to everyone. Take a look at how you are doing your job today and put down on a sheet of paper how it is different than a year or two years ago. If it is about the same then you are not transforming your job. Dig up a business plan from a few years ago and see if there have been significant changes in the way you market your products. If not, there has been no transformation. If you are just working harder, longer hours basically doing the same thing then I would argue inefficiencies are setting in and change is needed. Some would argue if things aren’t broke don’t fix them. In this case quite the opposite is happening in our industry and it is a little strange that we keep doing things the same way when things clearly are broken.
Perhaps as a goal we can think about IBM or perhaps even consider Bob Beaman’s long jump in the 1968 Olympics where he surpassed the world record by almost 2 feet, which was approximately a 10% improvement over what had ever happened before. The industry has the talent to design and lead change, all that seems to be missing is the desire to take the risk. If you believe complacency is the killer, then the real risk is in not making changes!