Five Organizing Principles for New Product Planning Success

Five Organizing Principles for New Product Planning Success

New product planning fails more often than it succeeds. Prescient’s Global Head of Advisory looks at why this happens and outlines a structured approach to fixing the problem.

SEPTEMBER 2020

Dr. Debasish Talukdar

New product launches have taken an entirely new meaning with the COVID-19 crisis. The race to develop a vaccine is an exemplar of new product planning (NPP) on steroids – companies navigating, in a matter of months, through complex decisions that would normally take years. The lessons to be learned here only serve to reinforce the best practices in NPP as we, in Prescient Advisory, see them.

NPP is the primary value creation endeavor in biopharma; all other functions, from brand planning to launch planning, are about value capture. Getting NPP right is a mission-critical capability that, when mastered, can provide a competitive advantage to biopharma companies.

NPP is also where pharma meets biotech and competes with it, the former being divested of its major advantage – commercial muscle. Yet both biotech and pharma have struggled to maximize the value of NPP. Biotech is prone to “reckless devotion” to their own products and assets. Pharma suffers from silos that, even in the most innovative organizations, slow the speed (and quality) of decision making.

At its most basic level, NPP presents a “buses and roads” issue. Which roads (i.e., disease areas) should we take? Have we boarded the right bus (i.e., assets that will help meet our ambition)?

To solve the “buses and roads” problem, one need only answer five questions:

1. What is our corporate vision and ambition?
2. Which disease areas have we chosen as being strategic?
3. Do we understand the key success factors in the target disease areas?
4. Do we have beliefs about or proprietary knowledge of the disease biology that helps us evaluate assets?
5. Are we armed with the market and customer insights required to define the hurdles that stand in the way of our asset’s success?

At the same time, NPP processes in biopharma operate as “highly complex systems”.

The Stacey Matrix

The pharmaceutical NPP process often operates at the realm of chaos – imposing distinct competency requirements in order to successfully execute.

Based on our experience advising NPP teams (on what is variously called disease area strategy, commercial product strategy, etc.), we have identified five organizing principles that are key to running a high-performing NPP team and process. Together, these principles provide structural guardrails, operating within which may improve NPP success rates and multiply pharma value creation.

1. Start at an “above product” level

Begin with a clear vision of what your company wants to achieve with this new product: This should be anchored in the company vision, areas of strategic focus, views on (target) market evolution and your own point of departure.

2. Operate with necessary but not sufficient information

By design, NPP operates in the realm of uncertainty. The error bars on forecasts will always be large – at best, they serve as directional inputs and are indicative of trends. Customer insights are necessary yet offer strong value in feeding add-on improvements, each necessary to protect and grow profits by sustaining a competitive moat. However, they seldom provide ideas for breakthrough innovation. You also need some level of customer insulation, especially for your R&D teams.

3. Deploy a wide variety of tools that are fit for purpose

The “known and unknown matrix” is a key entry point to understanding the knowledge you have, where the gaps lie and where you will be operating in uncertainty.

“Unknown Knowns”

Hidden knowledge, biases and/or instincts

“Known Knowns”

Facts (let’s not argue about them ☺)

“Unknown Unknowns”

Fog of ignorance

“Known Unknowns”

Gaps in knowledge

Your toolkit must be varied and specific to address unique challenges.

Facts establish strategic foundations, while an awareness of knowledge gaps (the “known unknowns”) provides a clear direction for data gathering. You must not overlook the “unknown knowns”, as it is important for an organization to understand its knowledge and biases. You will sometimes need to jump into the complete unknown, and place bets, but that is best done after you have performed a thorough horizon scan for any blind spots or early signals previously missed.

As the COVID-19 pandemic has swept across the world, scientists are not just filling gaps in knowledge but also placing bets, while fully trusting their own capabilities, proprietary knowledge and even biases in how they operate.

4. Act in a self-aware and adaptive manner

You must be alert and flexible but be enabled by a clear decision framework that allows you to operate with freedom within defined guardrails. Self-awareness and agility are crucial for any business, especially when the ground realities can change quickly, such as in hyper-competitive areas like oncology.

Ensure that you have contingency plans based on clearly defined triggers in the market and competitive landscape, and that you are ready to (re)allocate resources based on the pivots as you understand them. This is the kind of self-awareness that can make a huge difference to the success of NPP.

5. Be led by people, processes and ways of working that help bring the organization together

Highly effective NPP teams are led by people, processes and ways of working that help bring the organization together at the seams. NPP leads are people who thrive in collaborative settings and are adept at running processes for early, continuous buy-in. NPP processes run best when there is a clear understanding of decision roles among participant stakeholders. Finally, NPP teams should operate in proximity to the CEO office or be led by a senior leader, as their decisions are at the heart of value creation in pharma.

NPP is the engine that fuels innovation and steers it, navigating through uncertainty and the need for stakeholder alignment. Following the five organizing principles and implementing them on the ground will ensure NPP delivers.

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