Return to youth
I am old enough (just) to recall the early years of the medical communications industry. I recall my involvement in it as a client and as an employee of one of the best early businesses, Gardiner Caldwell Communications, with significant pride. I remember a conversation with the leaders of that great company about the strategic market goals of the business. I had recently joined the company and was looking forward to significant wisdom from them.
Their answer, as leaders of a rapidly growing and consistently profitable business surprised me. They were not interested in the market as their business was growing rapidly and consistently over the years. Their focus was on finding the right resources to support clients and maintain quality.
I expected market-based insight and clever strategic comments, not an operationally-focused approach. It took me a long time to realise that their perspective was completely right. But is it right today?
They were right for the right reasons
Their perspective on the business did include a view of the market. However, they did not articulate it that way. Regardless of their comments, their actions and focus said volumes about their market. Their concerns were focused on the resources needed for their growing business and they were not concerned about the market. With hindsight it is clear why.
The medical communications market was clearly growing rapidly, pharmaceutical companies were shedding jobs and departments fast and calling on agencies to do more and more. No one measured the market, they still don’t, and it was simply obvious that it was growing rapidly.
Of course, what we were experiencing was a new market with all the characteristics that define new markets, rapid revenue growth, new entrants, strong strategic drivers, low barriers to entry and low regulation. My bosses were struggling to keep up with a growing market and rightly focused their attention on managing the operations of the business to a high (the highest?) standards.
“I expected market based insight and clever strategic comments, not an operationally-focused approach.”
I was wrong for the right reasons
With hindsight, given the level of maturity of the medical communications market at that time, I had not asked the right question of my bosses. Entrepreneurs like them don’t think in those ways. However, the desire to understand a market and to understand the maturity of the market, your position in it and to look for a way forward to the future are all good things to focus on.
My bosses rightly had other priorities, but there comes a time in all industries and businesses when the questions I asked are the most appropriate. So, I actually asked the right questions, perhaps it was just the timing that was wrong. Their business was young, in the full bloom of youth and in a new, rapidly growing, market. No wonder they were working so hard just to hold on to the quality of the business. Of course, it can’t stay that way forever.
Does gravity always win?
All markets and businesses, in one way or another, go through the stages of youth, maturity and old age. Some do it quickly, some take a long time, some stay a long time in one phase, some a shorter time. However, all markets and businesses grow old and die eventually. Miraculously, unlike the rest of us, businesses can sometimes reverse the process and regain their youth and vitality. It is not an easy thing to do, but it can be done. It is sometimes called “reinventing the business” and most of us will be able to think of a few examples. Therefore, the process of a business growing old is not inevitable, business leaders can do something about it!
It is interesting to note that if you take any oldish market and look at the top 10 companies today the list is usually very different to those of 50 years ago. Why is that? Those companies looked so powerful back then. I appreciate that companies differ in their resources so some may have disappeared because of this. However, the reason for the demise of many businesses is because they grew old when their competitors didn’t, or they failed to find the new, youthful markets. So, these are not philosophical concepts, they are often the difference between success and oblivion in business.
“I am sure you can recognise a young, vibrant market and spot the fast growth, low regulation, many new entrants, rapid service or product development.”
What do these phases of business look like, how do you recognise a business phase? I have given a few pointers below, but it is obviously more complex than I have space for here. However, I’m sure you will get the idea. And of course I am not the first to make this analogy between the phases of life and businesses. Many cleverer people before me have applied this logic to business. The Pathway to Prime programme is one very good example.
What about the phases of markets? They can be described in similar ways. I am sure you can recognise a young, vibrant market and spot the fast growth, low regulation, many new entrants, rapid service or product development. You will probably also recognise the early market companies, remember Nokia in the early mobile phone market or, of course, Gardiner Caldwell in medical communications. Old markets have low growth, often large amounts of regulation, little innovation, slow change and few if any new entrants.
Are we there yet?
What about your business? What about your market or market segments? I can’t speak for a specific business, and perhaps the table above will help you consider where your business is at today. However, in general I visit a lot of medical communications companies that are in the mature to old age phase of their life. In my experience one of the key features of these companies is a complacency based upon past performance. The “If it isn’t broke don’t fix it” attitude or, as I heard recently the “We’ve been successful for many years and will continue to be successful” attitude.
“Youthful companies look forward not back.”
Youthful companies look forward not back. Where do I see the youthful companies? Mostly in the electronic space, they have more customer focus, are creating new products and services and tend to be (even the big ones) lean in their management structure, they are moving rapidly into new markets and their managers stay close to their clients.
Where is ‘there’?
Where do you want to be? The management gurus tell us that the key to long-term success is a youthful business. In youth you look for the opportunities and market segments for growth, you have the resources and decision-making capabilities to get there and you have the energy and vitality to move quickly. It might be argued that one of the key roles of business leadership is to keep, or move the business towards, youth and energy within the business.
Focusing on markets is obviously important. However, without the youth to do something about it a market focus becomes a paper exercise, not a business driver.
You’re so vain
How often have you heard advisers suggest to business leaders, CEOs and senior managers, that they should be more focused on vanity and the search for youth? I guess, not too often. However, if the statement is applied to the business they lead, the advice is excellent.
Leaders should be constantly vigilant for the signs of creeping middle age, they should make sure the business works out and stays lean, doesn’t acquire too much fat and can still respond and make decisions in the face of a changing world. They should look forward not back, stay in touch with their clients and customers and, above all, encourage the people in their organisation to be youthful too.
“An opportunity to talk with customers who wanted to discuss some important market issues was turned down in favour of internal priorities.”
How soon is now?
Why is this important today? In the view of this writer the medical communications market is starting to display the signs of encroaching middle age. The signs are: a perceived slowing down of market growth (I know it is still growing, but not as fast as it was, and I hear some managers saying, “My market’s fine” and that’s the point – you’re not looking at the whole market), increased regulation across many sectors, the involvement of corporate organisations with a focus on leverage and EBITDA not markets, the slow development of innovative ideas, and a mild complacency about the future based on the experience of the past.
If this trend continues and the market moves into full-blown middle age, it will be a much more challenging place to be. New factors such as price competition (not really a big issue to date despite the rise and rise of procurement departments) will become evident and life will get very tricky.
Youthful companies will spot these things happening, respond at the right time (perhaps not now) in the right ways and find growing, youthful, market segments that they can rapidly move into and exploit. Their resources will help them compete with the new companies. Middle-aged companies will respond, if at all, more slowly and old companies will not do these things. They will use their resources in a price war and ultimately (perhaps many years hence) suffer consistently worsening margins, and perhaps declining revenues.
My bosses at Gardiner Caldwell were absolutely right all those years ago. Their youthful approach was correct then and is correct now. Granted, we may need to focus more on the market than they did. Nevertheless, it is their youthful can-do, flexible, dynamic, always visiting clients, rapid adoption of new ideas, willingness to learn, decision-making style that will help today’s businesses prosper in the developing medical education market.
So youth is where it is at. Corporate youth is essential to the future success of your organisation as your business is moving into a market that is consolidating, growing more slowly, having more regulation thrust upon it and is beginning to consider price as a key driver, or perhaps the only driver, in decision making. Seek out youth, define it in your organisation and defend it from the inevitable forces of middle and old age.
The next article from Chris Stevenson will be published 16th August
About the author:
Chris Stevenson is a managing partner at CSC Solutions, a strategic consultancy offering insight in marketing and communications to the pharmaceutical industry. CSC Solutions specialises in the design, moderation and execution of strategic marketing advisory boards, and CME strategic consulting.
+44 (0) 1625 826906
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