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There is no doubt that from mid 1980s to late 1990s, Hoechst was exceptionally successful. Big volume brands were built and grown and sustained. Hoechst also stood firm against the wave of generic competitors and preserved its status.
There are lessons to be learnt in this process. I have shared several things in various blogs and would like to summarize. It is a pity that the business schools in Pakistan rely on copies of foreign case studies only for teaching. There are numerous cases in Pharma that I can site, that were worth writing a case study. These were lost in time along with the opportunity to learn from them.
Last week I read an article by Walter Frick, Senior Editor of Harvard Business Review “A 40-Year Debate Over Corporate Strategy Gets Revived by Elon Musk and Warren Buffett”, HBR May 09, 2018. It is a thought provoking article and I wish to quote the following paragraph from it.
However, as early as the 1980s, strategy theorists began to warn that competitive advantage wasn’t static — that today’s advantage may not be sufficient tomorrow. “For any company in any industry, the key is not to get stuck with a single simple notion of its source of advantage,” George Stalk Jr. of BCG wrote in HBR in 1988. “The best competitors, the most successful ones, know how to keep moving and always stay on the cutting edge.” In fact, he continued, competition is so dynamic that speed is a critical strategic weapon.
The key is to keep moving ahead of others. One major success factor of Hoechst was that it kept moving ahead of competitors, first against other innovators and then generics. It was through a stream of innovative ideas and different work patterns.
I want to highlight some key points.
- Focus. Hoechst stayed on course and did not lose focus.
- Outward Focus. We believed that the place-to-be was market, not office. Everyone traveled and worked in the field. There were no long meetings and clueless discussions. It is my firm belief that only business guarantees the survival of a company. Operations are support. Achieving operational excellence and not having enough business will not make the organization survive. The business is in the marketplace; not in the office. Altogether too much time is wasted in office at the cost of market activity in some organizations who lament low achievement. We maintained Outward Focus at all times.
- Customer Focus. Tariq Umar used to go to the extent of saying that his salary was paid by the customers. It is a manner of saying it, but it is a fact. Customers ensure sustenance, growth and prosperity of the company and they have to take precedence over every other thing. I was talking to my old colleague Masaud Ahmed. He retired from Sanofi couple of years back. His last position was Director Sales and he brought new energy and growth during his six years tenure. He told me that he had requested not to keep meetings from Tuesday to Thursday because he would be out in the field on these three days every week. The time in the field was primarily customer visits.
- Product Focus. There was a lot of thinking and discussion-on-the-go about any new information about product. New published studies were looked into and were discussed with the customers. We did not do many focus groups, but we did have an array of very knowledgeable and very kind customers with whom we discussed new studies and new ideas. Their advice was always practical and valuable.
- Strategy Focus. We did things strategically and rationally, not randomly. The core strategy group discussed, developed and refined ideas which were applied by all team members. We were aware that we had to stay ahead in the game and must keep bringing new ideas. Tariq Umar used to generate the most ideas about strategy which were discussed. Some were adopted, others were dropped. It was all in a day’s work.
If you look at the above ‘foci’, they are actually inter-related and inter-connected. One thing leads to the other and a network of ideas and actions is created which helps to stay ahead in the game.
To be continued……
Waiting for comments and posts.