An interview with Dr. David Pearson, e-Business Di

e-detailing? CRM? Wireless devices? B2B Marketplaces? e-supply chain? Online recruitment? e-clinical trials? All these terms are covered under the umbrella of e-Business. “e” today represents an array of new business opportunities for pharmaceutical companies to leverage their existing skills and customer relationships. But as attractive as e-propositions can look in concept, it is proving a major challenge to pharma industry executives to manage the way to the e-treasure. With the continuing uncertainty in the stock market environment for dot.coms, technology houses and telecomms, there is intense pressure to make the right decisions concerning the portfolio of e-projects to invest in. Without the luxury of a track record, the newly minted e-Business functions within pharma companies are on the firing line to demonstrate their ability to add value. If they survive this near-term battle for resources and successfully demonstrate the potential business impact offered by the Internet and new telecommunications, the companies that have embraced e-Business will have improved their competitiveness and be well-positioned for market leadership. Dr. David Pearson joined Novartis Pharma in the United States in 1985. His career has spanned most pharma business functions, several international markets and two stints in the Novartis headquarters in Basel, Switzerland. Early in 2000, David took the opportunity to help kick-start the e-Business activities of Novartis headquarters and, in October 2000, became the e-business director of Novartis Pharma in the UK and a member of the Novartis e-Business Board. In this article, David explains some of the e-initiatives he and his team have launched at Novartis, describes the excitement from seeing first results and speaks about the challenges he is facing. Could you introduce yourself? “I have 16 years experience with Novartis (the 1996 merger between Ciba-Geigy and Sandoz), fourteen of which have been outside of my native US. My career has been mostly within sales and marketing management (in the United States, in the Swiss market and in the headquarters) and general management (two years as Managing Director of Novartis Czech Republic). Sandwiched in-between were two project leadership roles in Clinical Development and M&A. In March 2000, I jumped at the chance to lead a headquarters initiative to define the potential for European e-Business operations. We were using the UK as a pilot for a lot of projects and in October 2000, I took the opportunity to move into the practical implementation side of the job and take the leadership of a new e-Business department in the UK.” Before joining the pharma industry, I studied Biochemistry and French at Rice University in Houston, completed a PhD in Molecular Biophysics at Yale University and finished my education with an MBA from the Sloan School of Management at MIT where I specialised in the management of technological change (little did I know how relevant this would be!). What kind of new skills do you require to be in an e-Business leadership role? Based on discussions with e-Business Directors across industries and countries, I believe that in 5 years we will look back at the current experiences and see that successful e-Business leadership required a new breed of manager with an impressive tool-kit of skills:

A thorough understanding of the pharma industry value chain and the potential points of leverage for e-initiatives

The people skills to create virtual teams, challenge existing ways of doing business and build competency through education and motivation

The managerial acumen to build business cases, assess financial and legal risk, manage project portfolios and secure resources

Competence in IT

Sensitivity to the company’s existing business environment, priorities and capabilities

Closeness to the customer

Leadership, resilience and pragmatism in the face of extreme uncertainty generated by rapid technological, organisational and business environmental change. I have been able to use my experiences at Novartis to build this tool set – now it is getting a real workout! Could you describe the e-Business team at Novartis? In the UK, we are 4 full time people, which can be considered as an average for the sector. The individuals bring a blend of experiences from pharma marketing and sales, NHS management, financial services and communications. We are supported by additional associates from within our IT department. More importantly, we have built an extended family of Internet champions within each department and the field-based teams – these people serve as amplifiers for our best practices and collectors of customer feedback. Worldwide, Novartis Pharma has more than 70 persons dedicated to developing our e-Business capabilities. Is the e-Business department a separate entity or is it integrated into the various departments? The e-Business Department was created in October 2000 and reports directly to the CEO. Our brief is to bring the best practices of e-Business to bear on the business priorities of Novartis Pharma UK. This year, an important part of our work is targeted at developing and integrating e-Business competencies within each department at Novartis. During the next 2-5 years, I expect a continued rapid pace of technological change and a substantial improvement of the ‘friendliness’ of our customer base towards the Internet. So I think that there will continue to be an important gatekeeper role for an e-Business Department going forward. You mentioned that it is important to have a pragmatic approach to “e”, what would actually be your definition of e-Business? As you know there are a million and one different definitions. My approach was to take a dozen of our e-people and put them in a room for an afternoon with Annie Tempest, a well-known artist and cartoonist. She taught us the basics of drawing and each of us created a picture of what we thought e-Business was about. These are being turned into a monthly calendar that will soon be hanging on the walls of 800 Novartis associates – a creative awareness-builder for the organisation and a challenge for each of us to understand how the Internet and telecommunications are going to influence our relationships with our customers as well as our organisation. Following this definition, what are your main initiatives? First our major initiative is to raise Internet competency within the organisation and reach e-readiness at the end of the year. We are conducting web conferences, e-days, and workshops to educate the organisation and using existing communications channels to spread the word. We have also had to invest substantial time in developing SOPs, legal briefs and e-governance tools. It is important to demonstrate the practical impact of the Internet to our organisation so we have implemented a first wave of activities including web-conferencing, e-procurement and e-detailing of physicians. We are focusing our efforts on several projects with substantial revenue generation potential and a couple that promise to significantly reduce the time-to-peak-sales for our new product introductions. Nowadays, do the projects need to be measurable and with short-term impact? Yes, Yes. Since last year when the dot.com crash occurred, our e-Business projects have had to compete with normal business projects for resourcing. Of the 20 projects we are working on, half will be implemented in the next 12 months and most of these will show positive returns within 12 months. In the case of projects focused on building customer relationships, we have a longer-term perspective. In the long term, what are your objectives? The integration of “e-thinking” into our business planning and daily routines. It needs to become second nature to think how the Internet can help in the daily job, how it can improve the relationships with the customers and how it can help driving competitive advantage. The e-Business team aims to make a difference in how we do business in the future – and to deliver a substantial value-added along the way. Can you explain your e-detailing initiative? In the UK, we think we are the first pharma company to be carrying out live e-detailing. A substantial market research project done last year identified numerous opportunities, but also highlighted major challenges that need to be surmounted before e-detailing can become a routine promotional tool. We decided to try it and learn. Where do you think ”e” will have the most impact? Over the long term, the financial impact will be greatest in those areas that substantially shorten our time to market for new products – many of these initiatives are lumped under the heading of e-clinical or e-marketing. In terms of business relationships, the Internet and electronic mail will become the dominant channels, but will always remain one among several options for our customers – I don’t foresee the end of face-to-face communication or of telephony. It now seems that direct-to-consumer communication will become reality in the UK within the next few years – this will open up an enormous range of opportunities to support the educated consumer and add value to the physician-patient relationship. Finally, inside companies like Novartis, applications of the Internet will become daily practice and will enable impressive productivity and job satisfaction gains. What are the drivers in the UK to accelerate the use of the Internet amongst physicians and healthcare managers? Time, training and prioritisation are, not surprisingly, the limiting factors in the adoption of the Internet by our healthcare customers. There has been some impressive strategic thinking within the NHS about the use of information technology and the Internet for achieving its commercial and communication priorities. However, there are many practical (and human) implementation issues at the user level that have been vastly underestimated and have led to a complicated and fragmented picture of Internet usage. Time and training will improve this situation. Could you describe a “Day in the Life of” your e-Business team? The intensity of the learning experience our team is going through has had a major impact on the design of our work environment. The e-Business team room is buzzing from 7:30 AM to 6 PM with team meetings, vendor presentations, personal Internet training and project demonstrations. We have equipped the room with high-speed Internet and Intranet connections and a presentation facility so that we have reliable facilities. We have team meetings at least twice a week to share experiences, review priorities and to evaluate new potential points of leverage for the Internet within our organisation. One of these meetings is the ‘Innovation Hour.’ This evolved from our need to find a time-limited way to deal with the incoming information flow from 20-30 vendors weekly. We eliminate 75% of the contacts during this hour and select the best and most relevant ideas for further presentation to our line functions. A further portion of our time is spent with our internal customers – we regularly update the other departments on our e-project priorities and listen to their business needs. We also make sure that we have regular contact with medical professionals, NHS managers and patients in order to understand how they want to interact with Novartis. We also play a leading role in our European e-Business initiatives and use our international contacts to identify best practices that could be applicable to the UK market. Finally, we stay in touch with Novartis management via twice-yearly e-Business review days with our executive team. What do you like the most in your job? I like to feel that I can make a difference within the organisation. I am very proud of the fact that our team has already had a significant impact on Novartis Pharma’s operations, capabilities and sales. What do you like the least or find the most challenging? The biggest challenges are in the details, the implementation itself. But this is what business is about. We would like to move faster on several fronts, but have realised that we need to bring the organisation up to speed on e-Business thinking first so that “e” becomes a natural element of our communications and technology mix. Lastly, there is the major challenge of picking out critical business information from the information flood that characterises e-Business. This task is compounded by the uncertainty of the viability of the business models of suppliers and sorting through a disturbing amount of misinformation. What do you think are the CSFs for the future? We review our objectives, success factor and project resourcing every six months in view of the pace of change in pharma e-Business. Taking a longer-term view, a think there are four CSFs requiring management attention:

A very good partnership with our IT department!

Integration of the Internet into our daily business thinking.

Innovation in partnership with our customers

Consistent resourcing of the e-Business function Change management is dependent upon a consistent message. The Internet in our organisation is yet to be viewed as critical to the business- it is amongst the top 10 priorities, but not the top 3. We have to balance our enthusiasm with the fact that there are other priorities. When you can combine both, like for a new product launch, the synergies are exhilarating.