Building Commercial Centers of Excellence: A Q&A With David Davidovic
In a career that’s spanned more than 30 years, independent life science executive David Davidovic has held an enormous range of commercial excellence roles—from sales and marketing to operations—at companies like Merck, Genentech, and Roche. His advisory practice now focuses on helping clients develop and implement effective brand, marketing, commercial capabilities and launch strategies. In our latest expert Q&A, Davidovic talks about assessing new technologies, making fast decisions, and building commercial centers of excellence.
How has technology changed the work of commercial and operations teams?
There are a lot of new technologies in life sciences—new, precise drug targets in many diseases (including rare ones), new diagnostic techniques, and new tools for patient engagement, data analytics, and visualization. It’s easy to get seduced by all this novelty and innovation, but unless you cover the fundamental questions, they are just shiny objects. Why do you want to do that? What are you trying to achieve? What is driving the change? I like to think you still need to apply the same core practices and principles. In fact, in some cases, companies have scaled back large planned transformations once they went back to core principles.
What are the core principles, in your view?
Who’s the customer, what does the customer care about, and what are we doing about it?
Those are the things that haven’t changed—our understanding of the market and of the customer. Of course, customers have changed, and the dynamics of the market have changed dramatically, but that’s where it all starts. Your approach should be outward-in as opposed to, here’s a new tool or hit trend and I’m going to find a way to deploy it.
What are some of the other challenges facing life science commercial teams?
Clients are struggling to be agile. When I say “agile,” I’m not talking about “capital A” Agile processes that have come in from the software industry and help develop and iterate solutions quickly. I mean “agility,” i.e., the ability to make fast decisions and act on them. I don’t know if it’s insecurity, inexperience, or lack of organizational clarity, but, for example, I often see this desire for everyone to want to be involved in a decision, and also to keep looking for the perfect set of data and for the perfect proof. People need to be granted the accountability and be able to make decisions where there’s incomplete and ambiguous data.
This is where experience helps, I imagine.
If you do something long enough, things become intuitive. But what’s happening now in many life science companies is that people rotate through jobs very quickly, doing something for a few months to a year, in jobs with very narrow scopes, and then moving on. There’s nothing wrong with that, but it makes it harder to develop both deep and broad expertise.
One of the benefits of my own experience, when applied to advisory and consulting projects, is that I can get from point A to point B much faster because I’ve seen firsthand what’s been done, what works, and what doesn’t in many different situations. So I try to take a very practical, experience-based approach when I present potential solutions, rather than going through months of interviews and analysis just to get back what’s already known.
You’re currently helping a biopharma client of ours create a commercial Center of Excellence. Can you talk about the process of finding the right balance there between centralization and decentralization?
Commercial models are in constant flux; I don’t think there’s one that’s suitable for every company in every situation. Centers of Excellence are the perfect example. Companies create them, and then a few years later, they move things back into the functions; a few years after that, they bring them back together. In that sense, a Center of Excellence is not a cure-all. It’s a place for some commercial capabilities to sit and provide unique and deep know-how, and the trick is finding a balance, as you say.
What capabilities do you think are best-suited for Centers of Excellence?
I usually look for things that require specific expertise that can only be built over a long period of time. Let’s take forecasting. It takes a long time to become good at it. And if forecasting sits within brands, people’s responsibilities are constantly changing, and it’s hard to build that experience.
The nature of the company matters, too. In a multi-brand company, Centers of Excellence make it easier to balance resources, share best practices and techniques, and build institutional expertise. If you have completely independent groups of people doing similar things for each product, you will end up with inefficiencies, utilization peaks and valleys, and conflicting directions, and you’ll likely be re-inventing the wheel all the time.
What capabilities are more effective when they sit closer to the brand?
Tactical and strategic planning. But core brand teams should also be accountable for the use, application, and outcomes of work done in Centers of Excellence—and the Center of Excellence needs to be accountable to the brand for direction, funding, priorities, relevance, and more. Say, for example, that analytics and insights have been centralized in a Center of Excellence. The Center of Excellence will produce findings, analyses, insights, but the brand team should own the application of those findings in strategies and the tactics. Just because a capability sits in a Center of Excellence outside the brand, it does not mean the brand can take a hands-off approach.
What other trends will be important for commercial organizations?
This isn’t a new trend, but I think core brand teams are behind when it comes to dealing with the changing landscape or ‘ecosystem’ of healthcare decision-making. Physicians used to make all the decisions, and now patients, payers, and other stakeholders are much more involved. But what capabilities are companies building to support that evolving model?
The market access organization, for instance, has become incredibly important. In most companies, it’s a separate Center of Excellence, but unfortunately often with only indirect or single point-of-contact links back to the brand. Expertise in pricing, market access, value and reimbursement, and advocacy are very much in demand, and the demand is currently higher than the supply.
You’ve had a long career. What do you enjoy the most about working independently as opposed to in traditional roles?
In the independent consulting space, there is such great variety in the kinds of challenges we see out there. Also, we are open to operating differently and have different ways of contributing to a company’s success. In some cases, being in an advisory role is sufficient for a client. In other cases, clients want someone to do it all for them. Fundamentally, however, I enjoy helping companies build things that will live a long time, like culture, competencies, and organizational structures. Working on product launches are also very satisfying, of course, because at the end of the day, you’re reaching more patients and helping them.
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