25th Anniversary series: 2002 – Diabetes 2020: Designing New Business Models for Prevention and Treatment
In 2002, a global healthcare company, with HQ in Denmark, decided to explore a new vision – of preventing or controlling diabetes. They realised that exploring such a visionary idea required more than conventional strategic planning. So they contacted an external research organization, who had previous healthcare experience, to help develop scenarios on health systems and new business models for the pharmaceutical industry.
An internal champion for the project, Bo Wesley, was chosen to work closely with the research partner, and to continue the integration of the scenario planning into the company’s traditional strategic planning approach.
The first phase of the project was an in-depth environmental scan that produced forecasts of future developments and included a broad-based scan of emerging trends in the worlds of healthcare, business, and society. These trends were developed into seven drivers by a steering group and the project team. Those drivers included:
- The Economy
- Diabetes Advances
- Corporate Social Responsibility
- Nutrition and Culture
- Healthcare Delivery
- Business Forces/Models
Three joint teams were set up to develop scenarios of the future based on some of these drivers. Once reviewed it was decided that a fourth scenario – the Visionary Scenario – was also needed.
The second phase involved the creation of four scenarios on the future of diabetes care which, rather than simply being forecasts or projections, allowed the company to also look at ways diabetes care could be transformed by visionary leadership :
- The Alpha scenario (Diabetes Managed/Business As Usual) was developed as an extrapolative scenario based on existing trends. In this scenario, Type 2 diabetes is still a global health challenge with terrible costs in both quality of life and health care expenditures. There are innovations that develop biomarkers, diagnostics and targeted therapeutics and the ability of Indian and Chinese companies to compete in diabetes care grows faster than anticipated. Other advances defeat type 1diabetes, with ways of automatically controlling blood sugar effective anti-obesity products help to stem the diabetes epidemic by 2030.
- The Beta scenario (Diabetes Mired/Apocalypse) was a one where global instability (conflict between militant Islamic groups and western nations; increasing terrorism) and stagnant economies cause a freeze in healthcare spending, except for the rich. This leads to an epidemic in diabetes complications, with over 300 million diabetics globally by 2020, and Type 1 diabetes proved too complex to defeat
- The Delta scenario (Diabetes Overcome/Utopia) was a transformational scenario where business, government and society come together to defeat diabetes. There is a ‘mind shift’ in society where people begin to shop not just for price and quality, but also for the contribution of the product and its producer to the environment and society. Much improved bio-monitoring systems capture the subtle biochemical changes that marked the progression toward disease states and people and policies wise up on obesity, with the fast foods industry providing healthier oriental food, healthy alternatives and added nutritional supplements such as medicinal herbs.
- A fourth scenario (Diabetes Cured/The Cure) was a visionary scenario that had improved R&D delivering new drugs, effective simulations and online patient communities that succeed in the prevention of diabetes. These advances eliminate Type 1 diabetes and dramatically reduce the number of Type 2 diabetes cases. Cheap home diagnostic kits are combined with the development of an effective weight loss drug. These advances end diabetes management as a medical specialty.
The third phase involved the incorporation of the scenarios into the company’s strategic planning process. First “sign posts” that would signal anticipated changes are underway were identified, and senior executives developed criteria for “safe investment bets” and “visionary bets” in order to distinguish between pilot projects aiming for incremental growth and those accepting high risk in order to achieve high growth. Next the senior management and the Board committed to being a leader in all phases of diabetes: prevention, detection, and treatment. As part of that resolution, the company would develop new expertise in areas vital to the prevention of diabetes. These included:
- Individual risk assessment, bio-monitoring and pharmacogenomics,
- Building knowledge about behaviour-shaping and living with diabetes,
- Partnering with key stakeholder groups, and
- Supporting health system change to promote prevention.
Strategic planning was supplemented with an ongoing, regularly scheduled scanning process to monitor drivers and trends identified in the report. These ‘signposts’ allow the company to see the occurrence of change and plan appropriately. Areas of critical importance for change–defined as areas with a high level of uncertainty, but large impact—were identified by the scanning team and passed onto the AFA team for further evaluation in follow-on signposting projects.
The scenario work was also integrated into the company’s training and talent development activities and became part of local strategy discussions throughout the organization.
The scenarios in some cases put pressure on the company’s existing strategy: the most visionary scenario required the company to lead in ‘defeating diabetes’ but this challenges the current business model, which relies on providing high quality insulin and systems.
Looking back from 2015, it seems that sadly we are nearer the Apocalypse scenario then the Visionary one. Certainly the global political and economic situation is pretty accurate, and the Utopian vision of reducing obesity seems a long way off. Diabetes appears to be endemic, but on the plus side its effects may be mitigated in part by better means of disease management, and the potential of wearable tech to make disease management even better.
Nonetheless the focus on integrating the scenario planning into normal business planning through signposts and training must have been a valuable tool in helping the company remain “a global healthcare company with 90 years of innovation and leadership in diabetes care” and provides an excellent example of how to use scenario planning in a practical and meaningful way.
Adapted by Huw Williams from an original case study by Bo Wesley and Jonathan Peck.