Novartis has been seeking to drive healthcare innovation at a speed not previously seen in pharma, as it explores digital technologies ranging from smart assistants and artificial-intelligence-enabled chatbots to telepresence and holoportation,1 alongside its more traditional focus on therapeutic advances. Here, Robert Stevens, Head of Digital Strategy and Medical Innovation, US Clinical Development and Medical Affairs at Novartis, talks to McKinsey’s Ivan Ostojic about managing partnerships with technology innovators, and how these efforts are helping to transform the Medical Affairs organization and its engagement model.
McKinsey: How do you see the medical engagement model evolving over the next five years?
Robert Stevens: I’m very excited and optimistic when thinking about how the Medical Affairs engagement model will evolve over the next several years—but I would point out that I view the Medical Affairs function as one that’s been constantly adapting to meet the demands of the changing healthcare landscape. Very importantly, we have to pay closer attention to the needs of healthcare practitioners (HCPs) from multiple angles, such as assessing their learning behaviors and preferences. Several published surveys have shown that physician morale continues to decline while medical education overload makes it virtually impossible for healthcare professionals to stay up to date. So, all stakeholders, including pharma, have an obligation to improve the situation for healthcare professionals. By embracing the power of big data and digital, we can jump from a state of constant evolution to a transformation whereby highly credible scientific data, digital tools, and experiential learning all improve how pharma engages with HCPs.
McKinsey: What external innovation is driving this evolution? What are you most excited about?
Robert Stevens: There has been an explosive growth in entrepreneurialism fueling an external ecosystem of digital health start-ups. Many of the start-ups I’ve met with were started because one of the founders encountered a problem in the healthcare system and was compelled to take the initiative—and risk—to make a difference. This becomes particularly exciting to me when thinking futuristically about the role of disruptive digital technologies such as “voice tech” or “digital virtual assistants,” and the advent of “audio” or AI-enabled smart chatbots—and how they can offer the opportunity to optimize the way all stakeholders experience and integrate with healthcare. For instance, we’ve seen the progression from paper charts to electronic medical records (EMR): will EMR now progress to voice like Alexa or other digital virtual assistants? How will spoken content, such as podcasts and similar media, create new opportunities for Medical Affairs and other functions to reach HCPs and patients? And how about AI-enabled chatbots that can streamline so much of the inefficiency in our healthcare system? There is no doubt in my mind that both voice and audio are new horizons with significant runway to completely transform customer-centricity and disrupt how pharma has previously engaged with customers.
One other thing that really excites me is the way some of the more aggressive disruptive technologies are poised to transform how we have customer interactions: for example, telepresence or holoportation. These technologies have the potential to significantly change the paradigm for Medical Affairs as well as other functions. They will fundamentally change how we interact with one another because you could literally have people from different cities sit around a table in holographic avatar format. Holoportation has the opportunity to help pharma optimize its spend while providing a dynamic way to engage with customers for scientific discussion in a way never done before. We need to dream big and be curious—having that innate curiosity to experiment will ultimately separate one company’s digital success from another.
McKinsey: How are you responding internally to this shift? What internal innovation are you driving?
Robert Stevens: Big Pharma needs to reevaluate how it can engage with digital start-ups, which are size-wise a small fraction of Big Pharma’s scale. This is crucial because start-ups are lean and their resources wear multiple hats, whereas in Big Pharma we have a plethora of functional expertise and resources; however, sometimes we get in our own way when trying to innovate. Big Pharma has resources that a start-up clearly doesn’t have so, when trying to partner with them, we can no longer use legacy thinking or apply procedurally cumbersome processes. In leading the digital transformation of Medical Affairs, I’m advocating for and striving to exemplify the behavioral change and start-up mind-set required to mirror these start-up companies: we have to be flexible, less risk-averse, and more entrepreneurial in our collaboration. We have created a medical innovation board where different functional stakeholder leaders field innovative pitches and provide constructive real-time feedback to our employees so they can drive innovation at a speed not previously seen.
I view digital transformation as essentially behavioral transformation, so getting the organization to change its behavior and adopt new ways of doing things is paramount for our success. A good example is our partnership with the digital start-up company, Figure 1—essentially a native-to-mobile app. They have over two million worldwide users and over two billion cases uploaded—a great example of a dynamic, highly engaging platform that healthcare professionals have embraced. Prior to finding them, some Medical Affairs teams would partner with the larger, more well-known platform players to post unbranded, nonpromotional, educational content. This was essentially a default strategy because teams can be reluctant to change, but I pressed our organization hard to think about whether that’s how healthcare professionals are truly consuming content nowadays. And it’s not: everyone is on their smartphone constantly checking email, texts, and social-media posts. The start-up company Figure 1 has allowed us to deliver highly scientific, unbranded, nonpromotional educational content to HCPs in a way congruent with how they consume content. And it was gamified, too, through deploying medical case-based quizzes. For us, partnering with Figure 1 was essentially an inflection point where driving digital transformation became a matter of driving behavioral transformation. And that’s how we drive our digital journey: putting our customers first.
Success in digital transformation is much like Robert Frost’s poem “The Road Not Taken”—taking the path less “traveled by” (or chosen), or the one others may not see, is where the real transformative opportunity is found. It’s about not fearing failure or getting lost in the pressures for transformation; instead it’s about placing bets based upon having innate curiosity, sound intuition, performing practical due diligence, and meeting people where they are—or where they are heading. It is having an innate ability to make abstract connections and establish causal relationships that people may not see; this is what makes someone successful in a digital or innovation role. As an example, we’ve been developing a model for some time with Audible, an Amazon company, to address the problem of windshield time: the idle time our field-based associates have driving around to visit HCPs, hospitals, and other institutions. Perhaps they are listening to music or making phone calls, but there’s an opportunity there to offer them the option for self-development and learning. We signed an enterprise deal with Audible to offer audiobooks to our field associates to enhance their skill sets, whether it be listening to audiobooks on leadership, influence, management, self-development, or HBR [Harvard Business Review] must-reads. We’ve even included audiobooks on digital, big data, and AI.
More generally, storytelling as a skill is vital for getting people in an organization to rally and support digital transformation efforts. If you can’t tell a good story either to grab people’s attention or challenge them to think differently about how to do things—like partnering with a start-up—you won’t get much traction, and any traction you might get may be out of obligation. That’s not leadership. Effective storytelling, if done well, can propel digital transformation that otherwise might get stuck in the vast ocean of organizational projects and workstreams.
McKinsey: How important is external innovation? How do you work with the external ecosystem to integrate their innovation into the new model?
Robert Stevens: External innovation is incredibly important for several reasons; first, it’s inspirational to see the level of innovative passion coming from digital start-ups and that’s because it mirrors our own innovative passion to bring life-optimizing or life-saving treatments to patients. I feel uniquely positioned to help drive our digital transformation. I am an innately curious person who seeks to make abstract correlations or identify outside-the-box causal relationships between problems and possibilities. Once those potential relationships are found, my passion for innovation is fueled by a relentless tenacity that remains focused on overcoming hurdles and obstacles. In order to bring forth real digital innovation, one has to get the organization to buy into the vision especially when placing bets on which start-ups will be optimal partners. This is done by exhibiting accountability and empathy because, in order to drive change, we have to bring people along with us who otherwise might not have the same risk tolerance or interest in change.
I’ve also spent over 15 years in clinical procurement evaluating hundreds of companies, so when I look at digital start-ups I can quickly assess opportunity, avenues, and possibilities that align to our strategic objectives, even when the start-up might not see it. One example is a start-up that offers an AI-enabled virtual administrative assistant. I saw an opportunity for it to make a positive impact for our Medical Science Liaisons (MSLs) by giving them virtual admins to drive more efficiency, making them more productive—so the MSLs could spend more time educating HCPs and less time with low-value-add tasks. We’re currently running a proof of concept with them to assess impact.
McKinsey: How difficult is it for large companies to work with these partners? Are there barriers you see on both ends?
Robert Stevens: While generally pairing a large company with a much smaller company may seem like a tugboat towing a canoe, the concept of “difficulty” is a matter of commitment. If a large company has the desire to truly drive transformative innovation, “difficulty” is a mind-set and not a limitation. Again, I point to how digital transformation is very much a behavioral transformation. That said, there are necessary barriers on both sides that are just reality, but I would prefer to call them safeguards or guiding principles. We have a very high bar and stringent obligations to all our stakeholders (whether shareholders or patients) for information security, data protection and privacy, project validation, fiduciary responsibility, and risk mitigation. All those elements come into play when dealing with digital start-ups. Equally, start-ups have to be very cognizant of balancing their investment, cash burn, and resource allocation when they engage with large companies. If they aren’t smart about it, they can very easily deplete resources without successfully commercializing their asset. They have to find the right balance and look for the right large companies which are just as committed to innovation as they are, so that they can collaborate effectively. If I were a start-up and I had multiple large companies coming at me, I’d be really selective and focus on fewer relationships that offer deeper potential versus trying to form too many partnerships at the expense of depleting resources and focus.
McKinsey: What is the target model and what changes do you need to drive to be more agile and to embrace better external innovation within a new medical model?
Robert Stevens: The digital strategy model is maturing. Where previously it might have been thought of as a nebulous abstract luxury of Big Pharma, at Novartis it has become a defined group with aggressive objectives and accountability to transform how Medical Affairs does what it does—whether that is innovating how our MSLs incorporate experiential education2 into their HCP meetings or pairing a medical team with a digital start-up that could help them optimize their strategic educational objectives. The other thing that I think sets us up for success is that digital and IT are not in the same function: digital does not report into IT. Within Novartis US Medical Affairs, we are a stand-alone function responsible across all disease areas, and we partner with IT. It’s the ideal model and structure: it keeps us deeply rooted in our Medical Affairs objectives, while allowing us a white space to ideate and innovate, and partner with IT when needed for system integration and so on. The other important characteristic of the right model to deploy in Medical Affairs is finding the balance between partnering with start-ups and, equally important, larger tech players such as Apple, Amazon, and Microsoft.
McKinsey: Taking a step back, what impact do you expect?
Robert Stevens: I anticipate that medical will have increased prominence in forming the future of the pharma industry and healthcare itself. Medical’s impact, when supported by a robust digital and innovation strategy, becomes exponential, especially as our customer base changes. The HCPs of tomorrow grew up with texting, playing video games with amazing graphics, and were early age adopters of mobile tech. Their expectation for how they prefer to consume content, whatever it might be, is different than how it was just a few years ago. We have to pivot to meet them where they are, and only by doing so will we be able to continue to thrive and optimize outcomes for our patients.
McKinsey: In closing, when it comes to driving digital transformation, what are one or two important things leaders like you, and your peer companies, should be aware of?
Robert Stevens: An important step change needed in organizations pursuing digital transformation is to identify—and separate—reactive innovation from proactive innovation. I consider that a core responsibility of anyone in charge of a digital innovation group, because what we need more of are proactive innovators who can identify abstract correlations and causal connections that can propel our business forward ahead of the competition (as opposed to reactive innovators who are primarily just reacting to buzz). Pharma’s pursuit of digital transformation right now is at the cusp of the transition from “me too” digital strategies to more specialized strategies. Just as the generation of “me too” drugs is over and we focus more on specialized medicines, the same applies for approaches to digital. It’s a race to market for the most dynamic and digitally profound, innovative, engagement models.