Best practices or next practices?

Should brands mimic successful tactics of competitors? Does isomorphic mimicry work through a cross-pollination of best practices? Or should we build next practices instead?

Preeti was in deep thought. She had worked hard on creating a new marketing campaign for an important brand she managed. She thought she had checked all the boxes and had confidently presented it to the business unit head who heard her out patiently before saying “how do you know this will work? Has anyone else done this?”

Preeti found the question strange. For a man who always wanted to do ‘something new’, the boss seemed risk averse and wanted to ‘validate and de-risk’ the plan as much as possible. The two things seemed like opposite poles and Preeti wondered how to travel the distance to make them meet.

These are common day-to-day things that come up in the life of a marketing professional. Under pressure to differentiate in a cluttered category, marketers spend days to come up with a plan that is ‘different’ only to be asked if there are lessons to learn from a competitor. 

Economist Lant Pritchett calls this ‘isomorphic mimicry’, an unthinking adoption of outwardly successful campaigns done by other brands. While Pritchett used the term in the context of poor countries trying to copy policies that succeeded in rich countries, the term fits quite well to describe what we struggle with in pharma marketing.

I first encountered this mimicry while supporting countries in the EU that struggled with big brands losing patent protection. They felt they had to learn from Emerging Markets that sold many generic medicines. The ‘cross pollination’ simply didn’t work. For example, negotiating value adding services (as a way to avoid big discounts) with large drug distributors worked well in Latin America, but simply didn’t work in the UK or Germany. Similarly, setting up pharmacy-focused sales teams that worked very well in Brazil, simply didn’t work in India.

The reason was a total mismatch between expectations and the actual capacity of the country to execute and implement. Pritchett calls them ‘capability traps’.

With many companies that I advise, I have struggled to explain the distinction between ‘best practices’ and ‘next practices’. What works for company A may not necessarily work for company B. Why? There are several reasons - the simplest being culture, organisational structure and its market outlook - or what we call - customer centricity.

Culture 

A company that focuses on creating thought leadership through science, struggled to launch generics as an expansion/growth strategy in India. The field force never bought into the competitive nature of the generic market. In a few years, the strategy completely flopped and had to be called off. Managers and sales colleagues hired from generic companies had to eventually be severed, sometimes, painfully.

Another collaboration required a global company to sell generic brands sourced from an Indian player in international markets. The idea was thought to be synergistic because the global corporation had a strong operational presence and brand equity in those markets, but lacked the width in portfolio. It had to be called off because the existing company culture simply didn’t support agility, selling expertise and nimble decision making that was required to be successful in the category. The inertia was too much to overcome. 

This is an overbearing reason why a majority of mergers and acquisitions that seem to work on spreadsheets, fail miserably when the rubber hits the proverbial road.

Organisational structure

One of the most important factors for transformation requires failing fast, learning quickly and building better. Large incumbent pharma companies simply do not have the organisational structure to support this kind of behaviour. Due to regulatory overhang, decision making is centralised. This structure prevents the system from being nimble and agile. For example, a successful omnichannel approach requires content to be refreshed, repurposed and retargeted in real time. I find it safe to say that no marketing team in the Indian pharma industry has been able to achieve this. 

In the last few years, companies hired talent from content companies like Netflix, technology players like Google, logistic champs like Amazon and marketing orgs like HUL and Nestle. Needless to say, they all fled within a few months. Hiring tech talent doesn’t help transformation. Creating a structure that supports next-level thinking does. This requires a much deeper analysis, understanding and action from management to redefine their value proposition and build around that. This is not easy at all considering that the organisation for the future has to be built at the same time as delivering on the financial objectives of the current fiscal. The pressure is overwhelming. 

Market outlook

At their core, the pharma business is about manufacturing and distribution. At best, companies trade. They rarely build brands. This is not to take away from the fact that mega brands have been built in pharma, but that is more the exception than the rule. The focus has always been about internal operations, efficiency and bottom line bulking than creating value for customers. It is not to say that the two are mutually exclusive. Value creation for customers for sure can build better margins, but this requires an excruciatingly laborious process of identifying the right customer groups, segmenting and targeting them and then spending years to glean insights from their behaviour, which feeds into building better products and services for them. This dynamism is missing today ironically at a time when it is easier to do than ever before.

These and several other reasons make companies and the challenges they face, unique to them. The culture that they foster, the talent they possess in the rank and file, the structure which supports their operations, often determine their market outlook. 

In all probability, Preeti had built her marketing plan keeping the culture, the organisation structure and its capabilities in mind. She had worked hard on creating a next practice. Why her manager wanted to compare it with a best practice eluded her. Just because something worked for a competitor did not mean it would work for her brand and the team that promoted it. If only more people in the industry learned from Preeti.

The favourite reason for digital marketing in India Pharma still seems to be “everyone is doing it”.  Isomorphic mimicry didn’t work for countries. It will not work for brands and companies as well.