A Road Map For Transitioning From A Research-Focused To Commercialization Mindset
By Jerry Janis and Anna Ivashko, Clarkston Consulting
An organization spends years completing research and development (R&D), conducting clinical trials, and navigating regulatory hurdles — and then it’s time to prepare for commercialization. As the timeline for commercialization closes in, it’s necessary to best position the organization for a successful launch. Where to start?
At once, organizations must consider how to launch their first product and prepare to subsequently scale operations to meet forecasted growth of product sales as well as the launches of future products. For a life sciences CEO and their leadership team, this requires shifting the organization's mindset from one focused on R&D to a wider lens focused on commercialization.
As an overall approach, we recommend three key considerations to facilitate that mindset transition:
- Identify which operations must change significantly in the transition from R&D to a commercial focus.
- Define which new systems the changes in operations drive, ensuring the strategy accounts for the decision to outsource or scale up various functions.
- Envision your go-forward culture and what values you will use for motivating, incentivizing, and driving success on the path to commercialization.
Identify Which Operations Must Change Significantly In The Transition From R&D To A Commercial Focus.
Transitioning from an R&D-only organization to one on the path to commercialization requires building or sourcing the capability to sell competitively.1 This includes increasing the scale and (often) complexity of your supply chain, enabling full GxP practices, and building a robust quality management program ahead of process performance qualifications (PPQs). Further, as organizations prepare to generate revenue and receive payment, sales functions will need to be developed, including in some cases a robust distribution model for each new market. It’s equally important to clearly define and understand the separation between the newly formed commercial operations and the preexisting clinical and medical functions to ensure compliance.
As the breadth of operations expands, be ready to update the organizational structure to better support these changes with the complementing leadership and talent pool. For example, a company might decide to split their patient services, government affairs, and market access teams into distinct departments; shift pharmacovigilance from the clinical to medical function; establish stand-alone quality functions apart from manufacturing; or separate medical affairs from commercial operations.
From an operations standpoint, business processes may need to be redefined, thus requiring the updating of policies and procedures to ensure adherence to regulatory requirements. These organizational and operational changes will prompt the need to revise roles, responsibilities, and accountabilities accordingly.
The technology and digital infrastructure may also be very siloed, especially by business function or capability, highlighting the need for a broader view of the technology landscape to support cross-functional collaboration and data integration for measuring enterprise performance.
Define Which New Systems The Changes In Operations Drive, Ensuring The Strategy Accounts For The Decision To Outsource Or Scale Up Various Functions.
Many organizations start their journey as a virtual pharma. Somewhere down the path to commercialization, organizations must determine which capabilities are essential to their “secret sauce.” Some may aspire to build in-house capabilities that provide a differentiated service and ultimately drive competitive advantage, while others may opt to outsource functions. If there’s a long lead time to secure talent or you’re looking to build a team with specific expertise, outsourcing may be faster and more cost-efficient. For example, an organization may debate whether to insource its call center-based care management team or outsource. They’d need to analyze the cost to resource, maintain, and flex as needed, and then determine if an outsourced provider that possessed specific expertise to maintain a talent pool would be a better investment of time and resources.
The strategic decisions to in-house vs. outsource will determine the road map for implementing strategic technology platforms.2 To ensure those are built for scale, this may mean abandoning initial investment in siloed systems that were fit-for-purpose at a point in time and no longer serve the organization today. Assessments will likely include an in-depth comparison of enterprise systems, such as SalesForce and Veeva for customer relationship management (CRM), and back office enterprise resource planning (ERP) platforms, such as SAP and Oracle, in addition to the integration of third-party systems.
Organizations often prefer to implement software as a service (SaaS) cloud-based solution where possible rather than investing in an on-premise path forward. Regardless of the route selected, be cautious of associated per user, maintenance, and transactional costs. We’ve seen clients realize that these costs seem to grow exponentially in relation to the growth of their organizations – in extreme cases, the cost of a quality management system (QMS) can double in three years.
Regardless of an organization’s decision around outsourcing, an emphasis should be placed on integrations that support collaboration across internal functions or with external vendors/partners to enable data sharing and analytics needs. To do so, organizations should invest in a data strategy and governance model to set them up for success.
Envision Your Go-Forward Culture And What Values You Will Use For Motivating, Incentivizing, And Driving Success On The Path To Commercialization.
As organizations move down the path toward commercialization, they must determine which parts of their mission, vision, and/or values must evolve with the transition from R&D. While some companies maintain the science at the core of their organization even post-commercialization, they must enable a shift in mindset that expands to include the new functions created by the company to support commercialization.
From a culture perspective, many pre-commercial companies have been at the R&D stage for several years — even decades — and view their colleagues as “family.” It is great to build upon that culture, but be sure to welcome new talent and encourage new points of view to be debated and seriously considered.
In client interactions, we’ve discovered that many new executives joining life sciences organizations as they commercialize have encountered difficulty integrating into the leadership team. Often the leadership that “got us here” has a history of tight-knit collaboration. As new personnel onboard, the existing leaders need to ensure they foster a wider lens of acceptance and openness to the points of view of the new leadership that will “get them to commercialization.” This includes engaging and building the loyalty of their new leaders. It is important to value the organization’s legacy, but there’s also a need to be open to new ideas and crafting a new chapter.
Lastly, ensure the right incentives are in place to drive success. This requires some balancing of how to be competitive while also being a cohesive and collaborative team. Incentives can drive various types of behavior, including the use of enabling technology and collaboration in creating an omni-channel experience for the healthcare provider (HCP). Ensure incentives are in place to recognize both sales and home office contributions as well.
As organizations move toward commercialization, they must remember what worked in the past is not indicative of what will work in the future. To support the operational and technology changes, a strong change management program should launch to complement these efforts. The scope should encompass leadership advocacy, tailored and multi-channel stakeholder communication, and a continuous learning program focused on optimizing the utilization of new processes and technology solutions.
Ensuring Successful Commercialization
It is truly an exciting time as life sciences CEOs and their executive leadership teams find themselves ready to commercialize their first product. However, shifting the mindset to that of a commercial organization is imperative for success.
There is a need to acknowledge that the status quo cannot be maintained and that a broader focus is necessary to support commercialization. Once it is recognized that change is an imperative, organizational leaders must determine what to hold close and build in-house vs. what to outsource and benefit from external expertise while continuing to evolve the go-forward culture.
References
- Patel, S. (2022, June 8). Capability Building for Emerging Commercial Biotech Companies. Clarkston Consulting. https://clarkstonconsulting.com/insights/capability-building/.
- Mackiewicz, L. (2023, September 18). Moving From Clinical Stage To Commercial? 4 Steps For An Outsourcing Strategy. Outsourced Pharma. https://www.outsourcedpharma.com/doc/moving-from-clinical-stage-to-commercial-steps-for-an-outsourcing-strategy-0001
About The Authors:
Jerry Janis has more than 30 years of experience in the IT industry, including roles as chief strategy/information officer and in management consulting, focusing on strategic planning and IT transformation at major integrated healthcare systems. Janis collaborates and advises life sciences and healthcare system executive leadership teams to define their strategic visions and align priorities that leverage market opportunities, address industry challenges, and drive value for their consumers, employees, and organizations.
Anna Ivashko is a manager at Clarkston Consulting with 14 years of experience in the life sciences industry. Ivashko has supported businesses in both developing digital strategies and managing their implementation. She is experienced in commercialization, digital strategy, patient and physician experience, and digital health technology implementation.