In the old (pre-digital) world, roles were clearly defined. Leaders were managing and “leading” employees and gave them decision-making powers. This role – and also its power and the associated claim to leadership – was explained by the position within an organizational hierarchy, the privileges and status symbols associated with it as well as expert knowledge, leadership experience and networking (“Old Men’s Club”). The steps taken up the career ladder were reflected in budget responsibility and available resources and were framed in a top-down corporate culture.
One thing among many that the digitalization and the associated transformation of analog processes calls into question is the self-image of managers. According to Tim Holt’s definition, digital transformation brings about the transition from an organizational structure based on performance and hierarchies to companies in which collaboration and co-creation are lived. Leadership therefore means helping the organization to become open to new forms of collaboration and goal achievement.
The concept of management and the understanding of leadership, which has developed and consolidated in companies over many years, is put to the test. How is management adapting to meet the demands of an increasingly digitalized work environment that is changing more dynamically than ever before?
When the importance of hierarchies, status and expertise changes, what will become of the leadership culture in companies? Does “management” by superiors still need to be provided at all? Or will only collaborative, self-organized teams act in the future? Is it enough to define roles and tasks? What does “leadership” mean in the digital environment?
The fact is that hierarchies represented in rigid organization charts are assigned to the old, predigital world. They are outdated.
Digital business models often require action across (organizational) boundaries and structures. Company boundaries disappear completely or increasingly dissolve. By working in networks, in different value creation systems and in cross-organizational collaborations, managers have to revive their claim to leadership: Anyone in a network who has nothing to offer to support success of its members is seen as superfluous.
Moreover, the world is becoming more volatile, uncertain, complex and ambiguous: VUCA sends its greetings. The early deceased psychologist Prof. Dr. Kruse spoke of the complexity trap. Planning, e.g. of actions, resources, budgets, no longer works as it used to. Planning phases are becoming increasingly shorter, project responsibility is being shared. And this is an enormous challenge for managers. In the past, employees could expect concrete answers to questions and challenges from their bosses. For decades, experts have been fixed points of contact in companies due to their specialist knowledge. Today, with a radically shrunken half-life of knowledge, both are becoming increasingly unlikely.
Where in an environment without permanent contact points is the framework located that creates identity? Who or what do people in companies identify with? Are corporate culture and boundaries still perceptible to the individual? Is it the conglomerate that finances the current “project”? Or is it the goal or result for which you are working? Is it the colleagues who are currently working in the “team”? The challenges to the structure and culture of the working world in the digital age are growing and changing the “new” definition of leadership.
Trust & Empowerment – still the two supporting pillars
What remains – even in the age of digitalization – are the two cornerstones of a successful corporate culture: trust and decision-making authority and thus the empowerment of employees, i.e. trust and empowerment.
Three very specific tips help corporate culture to grow in digitized working environments. In parts, these come from the so-called “agile manifesto”, which has massively changed complex development processes, such as software projects, in a results-oriented acceleration.
1 The customer takes it all,…
All understand the “why” and see in this one – namely their – meaning. In everything the team does, the customer takes center stage. Together established values support collaboration and interaction. The goals must be clearly understood and interpreted, so that alignment prevails and self-responsibility becomes possible. The teams build on diversity, i.e. they are composed of people who can differ and complement each other in age, professional qualifications, gender and cultural heritage. Transparency is the basis for trust and creates an atmosphere in which mistakes can be made in order to learn from them. This fosters courage, creativity and a willingness to take risks.
2. …we agree on resources and procedures…
The group develops a common understanding of best practice. The self-discipline and self-organization of each individual ensures that skills are brought in and resources released when and where they are needed. A toolbox of methods, processes and techniques, mastered by all, supports collaboration.
3. …and practice effective communication across borders.
Communication is the key to effective collaboration. It must be made possible – the choice of the appropriate form, medium, language or technique is of secondary importance. Communication takes place in both directions, i.e. it demands sender and receiver qualities. It creates access to the information necessary for the work, motivates and mobilizes people to achieve common goals in teams. This also and above all includes personal communication and mutual inspiration.
Therefore: Don’t be afraid of digitalization!
Leaders who can not only cope with change, but also drive it forward, who communicate across structures – with open, outward-looking and inward-looking eyes – will absolutely be needed in the digital environment.
The successful executives in the digital age
- develop tomorrow’s leaders
- create an atmosphere of trust and security
- formulate goals with the team, and the path to them
- promote collaboration and experiments that can also fail
- help to clear obstacles and difficulties out of the way
- listen, coach, support, motivate, animate
- allow people in the team to take responsibility
- make mistakes themselves and talk about them
- observe their working environment carefully, provide resources and open doors,
- and together with their team they are looking forward to the successes
And very important:
- They are self-reflective, open and curious about people and the environment.
Lippmann International LLC: Brigitte Lippmann helps with talent management and personnel problems, such as succession consulting, transition coaching, globalization support, diversity, leadership development, cultural expatriate training and talent pooling.
be@change beat schori managementberatung & coaching Ltd.: Beat Schori, the experienced consultant, guide and lecturer with many years of expertise in change management, culture change and integration projects, accompanies and supports companies in cultural change.
 Tim Holt, CEO Siemens Power Generation Services from Roland Dieser’s CFFO White Paper; Digital Transformation Challenges in Large and Complex Organizations, November 2018
 Peter Kruse: The leading power is shaken. Youtube Video, 2014
Pharma-, Medtech-, Biotech- und Diagnostic-industries are experiencing ubiquitouschange. Strong silo-mentality and tough regulatory forces in the healthcare sector create challenges for employees and leaders alike. In addition to that, trends such as reduced innovation in R&D departments and mounting digitalization of products and processes are increasing the complexity in the work environment. To solve the tension between the constant pressure to change on one hand and the rigorous structures on the other, organizations are looking for tools and methods that increase innovative thought and action.
How can this be successful without overtaxing the change readiness and ability of the organizational culture nor underestimating the impact of existing rules and regulations? Potentially one key to solving the riddle is a school of thought that came up during the beginning of the Internet-age: Ambidextrous Leadership. In combination with clear expectation management, this leadership style can become a lever for high agility, which is needed by the innovation-dependent healthcare ecosystem.
The concept of „Ambidextrous Leadership“ is not new.
It dates back to the time when traditional “brick and mortar” companies were struggling to become operational in the online world at the advent of the Internet age: “Online” was not only new, but different: Changing strategies, new competitors, novel business models, adapted processes, diverse employee profiles. Companies that could manage these two worlds concurrently – as so-called two-speed organizations – were more successful than those who tried to run the emerging online business with the same structures and rules as their traditional business models.
Let sources of Innovation bubble up.
What does that mean in the context of pharmaceutical companies in the age of digitization?
Internal research departments are generating fewer innovations organically. More and more frequently university spin-offs, small research laboratories and start-ups are innovating through leaner organizations and cost structures, shorter reconciliation processes and fierce entrepreneurial drive. Since Big Pharma urgently needs these innovations for market growth, they acquire those smaller entities or forge partnerships.
In order to ensure that a newly identified source of innovation does not stall, it takes leaders who can master [read: foster, harvest and manage] the diversity of both worlds. To be agile means for Leader to do both:
- co-create, think and act within the culture of the co-operation partners
- keep an eye on how the idea, the prototype, the orphan drug becomes not only a marketable product gaining approval but also meets the commercial expectations of Big Pharma.
Successful leaders manage to achieve this “ambidextrousness” by a high degree of agility in their thinking and actingwhen working withthe differences in e.g., the speed of processes or mindsets of employees.
Expectation Management: The “Knowing-Doing-Gap”
We all know that clearly communicated expectations greatly contribute to smooth operations. Nevertheless, many have a hard time communicating expectations of results to be achieved, lived values and, to some extent, behavior in clear, simple and open terms to our environment. Fixed processes and lengthy planning horizons are often ineffective in today’s environments and are replaced by a results orientation, which is guided by values and cultural norms. For this to work in the daily operations, [some] managers have to leave their comfort zone and express concretely, whatthey want to see achieved, without intervening too much in the technicalities of ‘howit is achieved’. Then innovation can unfold.
9 activities leading to more agility for [healthcare] leaders
Simple actions can help us to become more ambidextrous and hence create more nimble organizations – here a few ideas:
- Focus on a goal that the team develops, shares and tracks.
- Monitor the market continuously, recognize changes in time and respond promptly
- Role-model changes with your behavior – do not just trigger change, [ie: do not stick rigidly to plans, but respond flexibly to suggestions and market changes]
- Demonstrate, promote and demand high-quality thinking [and thus achieve better results]
- Proactively and courageously ask for feedback [and build an effective feedback culture]
- Inspire and motivate others to bring their best self to work [Integrative management creates listen-up-speak-up cultures]
- Accept that leadership exists throughout the organization [if you give employees the freedom to act so they feel engaged, empowered and committed]
- Be open to being influenced and persuaded by others [because those who are directly confronted with the problem often have the best solutions – regardless of title or status]
- Allow errors as long as they are used as a basis for improvement and learning processes [to get into the fast pace mode of testing-learning-change-testing]
Conclusion:Simple actions ofagility allow executives to be more innovative in highly complex work environments, bridge the gap between the “old world” and digital transformation, between traditional drug selling and patient focus, between clinical drug approval trials in mass markets to personalized and digitized therapies, all the way to individualized drug manufacturing with 3D printers.
Start today with being more explicit in your expectation setting around what needs to get accomplished!
Based on hypotheses of the Agile Business Consortium – Culture and Leadership Workstream April 2017 https://www.agilebusiness.org/resources/white-papers/culture-and-leadership-the-nine-principles-of-agile-leadership
Pharma M&A: Agile Shouldn’t Mean Ad Hoc, McKinsey and Co., (Accessed Aug 2018) – https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/pharma-m-and-a-agile-shouldnt-mean-ad-hoc
see also “Innovation, Diversity & Market Growth”, Center for Talent Innovation, 2013 – http://www.talentinnovation.org/_private/assets/IDMG-ExecSummFINAL-CTI.pdf
The day of rare diseases on February 28 focussed attention once again this year on the high unmet medical need in view of the 6,000 to 8,000 ‘rare’ or ‘orphan diseases’ for which there are until now no comprehensive therapies.1 The summary of the medicines newly approved in 2017 in Germany may mark an advance with 9 of 31 orphan drugs in this regard.2 The potential for innovative foreign companies, however, is evident – combined with the fact that a market entry in Germany is critical for success at the European level, it is logical for start-ups in particular to take the German market into consideration as their first choice for an expansion. A successful concept for this will include both organizational and market-specific aspects.
Orphan drugs, in addition to other therapeutic agents, provide a good example of business ideas with a potential for expansion. That’s because those who are working in the area of orphan diseases are researching at the forefront: many rare diseases are genetically determined, and scientists need to make use of molecular biology methods to clarify the disease mechanisms.3 The corresponding medicinal products are not infrequently developed by start-ups based in the USA.
After market launch in the United States, the second step is to develop markets in Europe. Due to Germany’s size as well as its relatively rapid reimbursement, many such companies consider the country an attractive initial target market. The lessons learned in Germany can then be transferred to other European countries.
Laying the foundations depending on company size and requirements: organizationally, structurally, close to the market
In a market expansion, foreign companies are confronted with numerous internal and external challenges. In particular, newly established companies lack the functional and specialist resources that an established player has from the outset. A network of competent, independent service providers with different specializations provides a powerful and at the same time cost-effective solution to creating the organizational and structural conditions for successful establishment in Germany and launch of the products.
At the company level, the first steps include searching for a suitable location and setting up a subsidiary, for instance a capital company. Decisions also need to be made on the topics of distribution and logistics. The latter can pose a great challenge in gene therapies. Besides regulations under finance and labor law, there are specific topics for the pharmaceutical industry when founding a company: for instance, establishing pharmacovigilance, appointing information officers, creating approval procedures, or generating a wholesale license.
The product-specific and market-specific challenges with which even established players are confronted when launching a product in Germany consist mainly of a profound understanding of the market when deriving a launch strategy, and bringing about a successful product launch. Once the market mechanisms, treatment guidelines and relevant stakeholders are known, it is easier for companies to develop market access and price strategies and address the right target groups – from medical specialist groups to patient organizations to public health policy.
The time required and the complexity of these tasks are often underestimated. At the same time, the individuals responsible are making decisions with a great scope, decisions are then difficult to revise. Whether for orphan drugs or other new products: for companies abroad of varying sizes, collaborating with cross-functional teams of local consultants is worthwhile for successful entry into the German market.
A company like SpacePharma, supplier of automated testing procedures in space, has a very favorable point of departure: they have found an extremely innovative topic – without competition thus far – and have a unique product for which there is currently no market but a need. Backed with sufficient financing, they can further develop and implement their ideas for years. But market segments that are already developed can also be targeted successfully. This article takes a look at current conditions on the German market and provides useful tips for successful market entry.
Worthwhile sectors for investment on the German healthcare market
Germany, the world’s fourth-largest industrialized economy, spends EUR 4,213 per inhabitant on health. With a volume of EUR 344.2 billion, the German healthcare market is very attractive for companies from all over the world. High-quality medical equipment with a good price-performance ratio that keeps up with the trends in computerization, molecularization and miniaturization has the best prospects here:
- Besides the convergence of medical technology and information technologies, computerization includes the development of high-performance implants through improved hardware and software, model-based image processing, and the intelligent control of dialysis and ventilation systems.
- Molecularization includes, inter alia, nanoparticles that release drugs in a controlled fashion and the development of new functional biomaterials that imitate natural tissues.
- Devices meet the miniaturization trend that, for instance, enable an examination directly at the doctor’s office and the application of implantable micro-systems that work sensorially, by telemetry, or with a connection to nerves.
Other areas also promise high potential for suppliers from Germany and abroad. These include these fields of research into which most investment in Germany is currently going1:
- Imaging techniques, such as 3D imaging combined with navigation and representation of instruments or hybrid imaging procedures
- Prostheses and implants, like prostheses with sensors, actuators and control loops, fall detectors or biofunctional implants
- Telemedicine and model-based therapy, such as process optimization by deploying IT, Critical Incident Reporting Systems (CIRS) or
- Clinical Decision Support Systems
- Operational and interventional devices and systems, like the connection between instrument and data record, augmented reality or combined methods (endoscopy with imaging)
- In-vitro diagnostics (IVD), such as POC diagnostics with lab-on-a-chip systems or multi-array systems for complete analyses with small sample quantities
- Technology for “regenerative medicine”, such as artificial tissue models.
Specific features of the German healthcare market
The challenges on the German market are above all in competition, in reimbursement and with customers. The German market is widely distributed; relationships between suppliers and care providers are strong – meaning that even a company with a product with a persuasive USP has to face up to the competition.
About 58 percent of the market is financed by statutory health insurers; an additional 8.9 percent comes from private health insurers. The requirements from reimbursement are thus clearly defined. The German Technical Aids Register serves as the “gatekeeper” for reimbursement in outpatient care. Often, the new product does not match the product groups, and for that reason alternative sales channels must be developed.
In B2B business, the focus is on hospitals, doctors’ offices and pharmacies. Business with hospitals is complex since the decision-making processes – particularly for capital goods – vary greatly. A survey of 404 hospitals2 identified twelve different decision-making bodies: from the chief physician to the managing director to the IT, medical technology or purchasing department – and various combinations thereof. In addition, doctors’ offices are difficult to reach with a dispersed sales force.
The challenges – taking mobile apps and e-health solutions as an example
A large share of the companies that want to capture the German market come from the booming segment of mobile applications. Successes here are few and far between, as there is often a lack of business models3. Only a few approaches are promising for medical apps in Germany. One possibility is financing by statutory and/or private health insurers or the sale of the application to the end users. Selling to existing care providers is another option. Thus, for instance, providers of emergency call services are a sought-after target group for providers of monitoring apps (wearables).
Apart from the question about the business model, suppliers of mobile applications and those of other e-health solutions should have answers to questions that are crucial for success:
- What existing (medical care) process is improved by means of the application?
- What are the advantages for users in everyday use (e.g., real time savings)?
- How significant are the changes for users?
- How much effort must be expended for IT administration, data or decision management?
Many applications on the market reveal an alarming lack of knowledge about real medical care processes in hospitals, doctors’ offices or at home.
Step-by-step support for market entry
The decision on which market segment to position one’s product helps define the guiding principles for going forward, particularly what path one embarks on to the source of money. On the market for statutory health insurers, these guiding principles are the obstacles to reimbursement, while on the market for privately insured individuals it is customers’ own budgets.
The challenges, not just in the B2B segment, are in driving out the existing relationships between manufacturers and customers. Besides in marketing and sales, there are also often care concepts that have to be implemented together with the care providers, such as pharmacies or medical supply stores.
Figure 1: Market segments for positioning
For each step, you need competent support from the market – and that’s what the Healthcare Shapers offer: the network can provide experienced experts with the appropriate knowledge from development, approvals (medical technology), to market access with topics like reimbursement, market know-how, sales concepts and care models, to implementation.
1 Aachener Kompetenzzentrum Medizintechnik – AKM und AGIT mbH; Zur Situation der Medizintechnik in Deutschland im internationalen Vergleich [On the Situation of Medical Technology in Germany in an International Comparison], Feb. 4, 2005.
2 FAQ Consulting GmbH, survey of 404 German hospitals, 2011, for results ask the author.
3 mHealth App Market Sizing 2015 – 2020, Research2Guidance.
“You can not describe virtual reality (VR), you have to experience VR by yourself”. In line with this knowledge, the following article is addressing all “Healthcare enthusiasts” who like to become inspired during the search for innovative solutions in the healthcare sector. On this voyage of discovery through virtual worlds many further links and finds are deposited, which should animate the reader to test one or the other use case in his own business.
Virtual Reality – a revolutionary Technology
Although there have been numerous attempts in the 1990s to produce better virtual reality smart glasses with the development of computer technology, all attempts failed due to the inadequate immersion of users in the virtual world and the poor quality and performance of computers and displays.
Enormous progress in the development of high-performance computer processors and graphics cards has influenced a 19-year-old young man named Palmer Luckey and founder of Oculus, who decided to merge these components in 2012 to create an innovative head-mounted display (HMD). This enabled him not only to experience immersive gaming experiences in front of the screen, but to have the feeling that he himself was part of the virtual world.
Facebook’s USD 2.3 Billion acquisition of Oculus in March 2014 and the rapid development of the VR technology over the last five years have not only exploit new business opportunities for innovative and fascinating non-gaming business applications. Also very interesting case studies for medical applications and for the use in the healthcare became the focus of interest.
With the VR technology the users of VR goggles are teleported into another virtual world. The experienced feeling in this world – also called “the sense of presence” – is so strong with the new developed VR glasses, that this opened up completely new therapeutic, training and marketing approaches.
Many potential use cases have already been tested and implemented in the medical and pharmaceutical industry. Selected reference projects that have generated corresponding added value in various business areas are summarized below.
Applications for Virtual Reality
VR in healthcare focuses on three main aspects:
- surgical education and training
- medical and health prevention
- medical rehabilitation and psychological therapy
In the pharmaceutical and service sector, the current focus is on the areas
- product marketing
- company presentations.
Education and Training
- The experience of a surgery
- Make surgical interventions virtual. Simulate and train risky interventions in virtual surgeries, plan surgeries
- In-Device Experiences (functionality of a medical device such as a hearing aid, prosthesis or joint)
- In-Body Experiences (Understanding a mechanism of a drug, cellular functions and organs of the human body)
- Visualize point-of-care and patient perspective (in the nursing, in the clinic, or at home)
- Drug development and drug discovery
- Visualization of complex data
Medical and Health Prevention
- Relaxation applications
- Sports fitness and rehabilitation applications (virtual flights and bike tours, virtual tours for the disabled). Gambling elements (gamification) are used for motivation
Medical Rehabilitation and Psychological Therapy
- Exposure therapy (in case of phobias, post-traumatic stress disorder or to overcome fears
- Pain therapy (the pain center of the brain is distracted and the sensation of pain during treatment significantly reduced)
- Rehabilitation of stroke patients
- Nutrition counseling and exercise trainer (in case of obesity or diabetes)
- Gaming app for understanding and behavioral training of diabetes patients, reduction of the drug failure rate in children through virtual gaming concepts
- Parkinson’s simulation from the perspective of a patient
- Diabetes Voyager – Product presentation at trade fair booth (Novo Nordisk)
- Rheumatism – Patient experiences and product features (AbbVie)
- Dermatology – The flight through diseased skin layers (AbbVie)
- Biotech marketing (CAST Pharma)
- Recruitment – pharmaceutical companies present themselves through 360 ° videos
- Clinic tour – inspection of a clinic and presentation of services by means of 360 ° panorama photos
- Trade fairs – innovative storytelling at the exhibition booth
- Innovations and corporate image – visualization in VR creates new perspectives and insights, companies as innovative pioneers.
The Look into the Future
The first concrete implementations in other industry segments and in the areas of eCommerce, entertainment, corporate training and trainings suggest further areas of application: the virtual pharmacy, the virtual consultants, virtual home visits, the patient exchange in social areas with those affected and their own avatar.
There are many reasons why these applications are still in their infancy for healthcare. These include legal requirements (patient protection and confidentiality of data), the complex ecosystem with patients, doctors, therapists, health insurance companies, authorities, clinics and pharmaceutical companies, as well as the fact that the high-performance VR glasses are still quite expensive especially for the end consumers.
Recommendations for getting started in Virtual Reality
Despite these challenges, there are already numerous ways to find a quick and cost-acceptable way to get started with this new technology.
With so-called cardboards you can already try out a lot of VR content with your own smartphone. Even though the immersion and the sense of presence are very limited with these simple but inexpensive models, especially 360° videos can create great experiences and provide a whole new perspective for many situations. These glasses are used when you want to serve end consumers or online marketing and communication channels (such as YouTube).
With mobile, wireless, high-quality VR glasses such as the Samsung GearVR, the ZeissVR One, the Google Daydream or, in the future, the Oculus Go comes close to a perfect presence feeling in virtual worlds. Such wireless systems are primarily used at events, in marketing and sales.
For medical simulations and for real-time VR experiences with as much freedom of movement, the more powerful high-end VR goggles connected to a PC or laptop with a powerful graphics card are required. Market leaders for business applications here are currently the Facebook system with the Oculus Rift and HTC with the Vive. Corresponding ergonomic controllers allow the complete immersion in the virtual worlds with high interactivity with the own avatar hands.
User-friendly and intuitive software tools such as The Virtual Reality Suite allows interested users without any programming knowledge to create their first impressing VR experiences and VR presentations in order to test and evaluate potential value-added case studies.
The author has summarized further inspirations and numerous qualitatively described use cases from various branches in the study “New Dimensions of Reality” published in cooperation with KPMG.
Source: © Fotolia, chrombosan