I was recently asked to do a presentation at Second Home in London’s trendy Spitalfields (it’s also the base for my work at LEO Innovation Lab). The brief was to present about innovation in the pharma industry to individuals who work in a large corporate environment.
Whilst I was developing the slides, I was thinking about how innovation happens in the pharma industry and it occurred to me that more often than not, pharma innovation is often attempted in an already crowded space.
Think about it, you are a VP or senior director for one or more pharma brands – your main goal is to ensure the integrity of the brands and products that you offer. Ostensibly, if you are a patient-focused organisation, this will be to ensure patients can receive your product appropriately. In this scenario, it’s almost guaranteed that any innovations that occur are in service to the brands.
To me, this misses a trick. Pharma companies and brands need to be thinking more widely about generating value for customers (and you can make your own call as to who ‘customers’ are), because otherwise you are stuck in the ‘red ocean’ filled with competition and the same old same old face-to-face and digital marketing tricks. Innovation is super-difficult to do in this setting.
From Red to Blue
Blue Ocean Strategy was initially created in 2005 by W. Chan Kim and Renée Mauborgne of INSEAD (the book is very good by the way). Essentially, the authors argue that business in the red ocean, which is the place where everyone plays, is difficult and provides diminishing returns.
The authors think that to create long lasting “brand equity”, companies need to create a new market for their product (the ‘blue ocean’) – somewhere untouched that allows first-mover advantages and the space to make lasting headway.
To me, Blue Ocean Strategy fits perfectly as a model for innovation in the pharma world. I said it at Spitalfields, and I stand by this opinion – we need to find new things: new business models, new technologies, new oceans in order to grow and to disrupt the industry.
If we continue to swim in the red ocean, then we can’t really avoid the sharks…