11 Minute Read

The past year has brought changes to a wide variety of industries, but perhaps none more so than the world of healthcare. Recently, Peter Grimm, President of Cipher, appeared on the SCIP Intellicast Podcast to talk about the changes of the past eighteen months, and to offer advice on how companies––in any industry––can prepare for disruption.

The podcast was guest hosted by Maureen Nail, Director of Global Competitive Insights at Abbott. Previously, Maureen spent years in the CI function at Pfizer and also sits on the SCIP Advisory Board

“Too often disruption is viewed only as a threat, Peter challenges this conclusion, walking us through how to see the opportunity in disruption.”

- Maureen Nail, Director of Global Competitive Insights, Abbott 

The conversation was wide-ranging, and touched on several concepts competitive intelligence professionals should keep in mind as they brace their organizations for future disruption. 

COVID-19: The Great Accelerator

The events of the past eighteen months have been unlike anything any of us has ever experienced, particularly in the healthcare industry. Many people view COVID-19 as this great disruptor, but Peter believes it acted as more of an accelerant for existing trends.

Trends like telehealth are here to stay; it’s up to incumbents to react and meet consumers where they’re at.

The barriers to adoption for new technologies like telehealth have been lowered, simply because there was no other option. Now that this has happened, trends like telehealth are here to stay; it’s up to incumbents to react and meet consumers where they’re at.

Embracing Disruption Requires a Mindset Change

Disruption is an intimidating topic, with a huge scope and all kinds of complexities. For organizations to understand it and envision their future, Peter argues it’s necessary to break things down into manageable pieces. 

It’s easy to get drawn into internal sentiment and miscalculate the organization’s actual position in the market.

First, organizations should take a self-critical, introspective look at their business. Organizations should conduct a vulnerability assessment and focus on where their core competitive advantages lie. It’s easy to get drawn into internal sentiment here and miscalculate the organization’s actual position in the market. This makes it important to work with an external vendor to ensure an objective view. 

Secondly, Peter applies a model developed by Deloitte: Patterns of Disruption. The model summarizes the characteristics of the nine patterns that disruptive organizations tend to follow. By identifying which apply to your industry, you can better understand how to react. 

Plans should include a response to current or near-term trends immediately, and start to prepare for longer-term disruptions that could fundamentally change the market landscape.

Once organizations have a better grasp of what disruption might look like, it’s time to start formulating plans. Plans should include a response to current or near-term trends immediately, and start to prepare for longer-term disruptions that could fundamentally change the market landscape. Identifying these early, and continuously monitoring trends, forms a central part of the modern CI professional’s responsibilities.

Monitoring Disruption is an Ongoing, Recurring Task

Once disruptors have been identified, it’s important to include reporting on them as part of a deliverable that’s discussed on a recurring basis by the leadership of the firm. Discussing potential disruptive forces on a quarterly or monthly basis is hugely powerful from an organizational psychology standpoint and helps organizations to overcome the inertia that frequently holds them back. 

This requires a mindset shift. Too often, CI teams are seen as the bearers of bad news. But monitoring disruptive forces enables CI teams to identify major market opportunities and define strategies that enable their organization to capitalize on the trends of tomorrow. 

Monitoring this is hard. There isn’t a database in the world that will tell you when a new disruptor will reach critical mass; this requires a lot of nuance and analysis work. 

But a lot of tools exist to help CI teams in this regard: prediction markets like HUUNUⓇ Futures that can size trends and predict adoption rates, or a comprehensive M/CI platform like Knowledge360Ⓡ that helps organizations to monitor market trends and developments. 

Disruption is a threat to every organization.

Disruption is a threat to every organization; not just those in healthcare. By implementing the strategies discussed in this podcast, organizations can take steps to future proof their businesses and ensure they remain relevant for generations to come. 

The Complete Guide to Market and Competitive Intelligence

Full Episode Transcript

Maureen Nail

Welcome to the SCIP Intellicast, a podcast about strategy, intelligence, and leadership. Our guest is Peter Grimm from Cipher. Peter’s professional background includes time at Deloitte and experience as a counter-terrorism analyst at the U.S. Navy. 

He’s now President of Cipher, a leading provider of market and competitive intelligence software, predictive market research, and consulting services. Welcome, Peter!

Peter Grimm 

It’s great to be with you.

Maureen Nail 

I’m looking forward to this discussion, and I’m going to focus on a topic that’s a particular interest for me, and I’m hoping that through this discussion you can help me and also some others. 

Something I’ve been grappling a lot with lately is disruption, which I know is a hot button issue. COVID-19, I think, revealed a lot of areas of opportunity. It’s shifted the way consumers buy things, how we go out to eat; all sorts of different things in our lives. And yet, I feel like I can’t wrap my head around all the changes that COVID has effected. So I’d like to dive into this topic a little more, and maybe we can focus on a particular industry of interest to me, healthcare.

Peter Grimm

All industries have been impacted by COVID-19, but the healthcare industry has seen more changes than most. But I don’t know that there are any new changes happening purely as a result of COVID; what we’re seeing is an acceleration of changes that were already happening.

Telehealth was already emerging before COVID, but the adoption rates have skyrocketed as the barriers came down as a result of the pandemic. Even looking at clinical trials and how those are conducted, and the progress that’s been made in the last 18 months; it’s just incredible. 

So bottom line, and you might feel differently, but I think a lot of these trends were already happening. But man, have they accelerated over the past year and a half.

Maureen Nail

I agree. Maybe it’s not truly disruption, but certain trends have certainly been spurred along by COVID. You raised the issues of telehealth and clinical trials. Is there a particular area of healthcare that you think COVID has sped up in terms of change that’s representative of disruption or some other transformative event?

Peter Grimm

Whenever we talk about disruption, it’s important to keep in mind that there are many factors that go into it. You have to think about consumer behavior, demographic shifts, and maybe most importantly in healthcare, the regulatory environment. 

 

If you take the example of telehealth, one of the key barriers that’s been holding back adoption has been the regulatory requirements: how do healthcare providers stay HIPAA compliant? How do physicians prescribe medication without actually seeing the patient in person? There were all sorts of regulatory considerations. 

 

What COVID did in a lot of cases was almost overnight, a lot of those regulatory barriers went away, because there was simply no choice. We couldn’t wait around to get a full review from all the various government agencies that would normally look at these things. On the other side, you have the individual consumer. Patients had to overcome whatever reticence they had about seeing their Doctor over a telehealth platform because they simply had no choice.

 

A lot of people were forced to try new things, and when they did they found “Hey, this actually works pretty well. This is really convenient”. 

Maureen Nail

How do you think pharmaceutical companies or healthcare providers could enable telehealth, or enable the products they prescribe to be prescribed in virtual environments?

Peter Grimm

You know far better than I do all the specific requirements around certain drugs and therapeutics, so I’ll just share a personal example. My oldest son has a chronic condition and we go to see his specialist once a quarter. It’s always been in person; we have to drive 20 minutes to go to the hospital to see this specialist. Before COVID, that wasn’t really a big deal. 

 

But during COVID, we’ve been visiting him virtually, and the specialist would make adjustments to my son’s medication, which is in effect the prescription. It’s a fairly sophisticated medication, and pre-COVID, it’s not something that doctors would manage on the basis of looking at your face on screen. But over the past year, they have, and I think in this instance, that’s here to stay.

 

Once restrictions started being eased here, the doctor asked us to come back in for an exam. But now, we only need to go see him once a year; the other three quarterly visits are just virtual check-ins. And that’s here to stay.

 

I don’t think the value of a physical exam at the doctor’s office has changed, but maybe it doesn’t have to be as often. As to your question about how companies adapt to that: there are all kinds of options and opportunities. 

Maureen Nail

How do you think a healthcare company would think about it as they prescribe drugs, and incorporate telehealth into what they currently do?

Peter Grimm

You have to think about it like anything else; you have to adapt to where the patient is. There’s a whole variety of options around that. And you’re seeing it on the payer side of the equation too. 

 

All these big players are wrestling with the question of telehealth, and whether telehealth appointments should be reimbursed differently from an in-person visit. It presents a whole load of opportunities on both sides of the equation.

Maureen Nail

It’ll be interesting to see how it evolves. It’s undeniable there’s been a lot of change in the past year. Some of it we could call disruption, and some of it, like you said, is existing trends that have been accelerated by COVID. 

 

Let’s dive into some examples. We could talk about Amazon, the great disruptor. What do you do when someone like that is coming into your market? As a CI person, how do you predict that and prepare for such a disruptive force to come into your industry?

Peter Grimm

That’s a great question, and it’s something we spend a lot of time working on with our clients. There are a couple of pieces to it. 

 

If you think about disruption, it’s this massively broad and complex topic that’s difficult to wrap your head around. So, we break it down into manageable pieces by thinking about the process and phases. 

 

One process that’s worked pretty well for us is to start by looking introspectively at your own business. It’s a vulnerability analysis, looking at the existing value propositions, and it’s possible to apply a couple of different models to quickly get to a critical assessment of your sources of competitive advantage. That’s important because it helps you scope this massive issue of disruption.

 

So once you’ve nailed down what it is that truly helps you win in the markets in which you compete, then you can start thinking about how disruption happens. There’s a lot of great writing out there about this topic, but my favorite is Clayton Christensen. If you read The Innovator’s Dilemma, and some of his other works, he’s got a great theory about disruptive innovation. To be clear, that’s only one type of disruption. 

 

There’s a study that was done by my former colleagues at Deloitte where they looked at a whole host of disruptive companies as case studies and explored what they had in common. They came out with nine patterns that disruption trends tend to follow. That’s really useful as a framework for us. If someone is coming into a market, I need to understand which of these patterns they’re trying to follow. Are they trying to shorten the value chain in this industry, or are they unlocking assets from adjacent markets, like an Uber? Once you figure out which pattern of disruption they’re following, the answers become a lot clearer. 

 

By overlaying those two pieces of analysis you can get to a place where you can really wrap your head around the problem. And then you see things a lot more clearly, and the strategic choices that are available to you become much more clear too.

Mauren Nail

I love that idea of having a systematic approach. And then obviously you can come up with some plans of action, right? I assume you would follow up with some scenario analysis as a next step?

Peter Grimm

Totally. When we do this with clients, oftentimes we’ll come up with a set of the highest priority things to address, and build them into a risk management framework. What’s most likely will have the biggest impact, right?

 

We also use time as part of that prioritization exercise. We identify which of these trends, or shifts, or disruptions is happening now. It’s important to take action quickly because we might have a gap we need to fill, or we might be a little bit behind the curve and need to catch up and close the gap. Some of the trends might be a little bit further out or less certain, and we’re talking about how we can be ready for them in three to five years.

 

This gives us time to plan, and that's really, really important. Even if you do all of the best intelligence work and the best analysis, it’s still very challenging to react, and you still have to make really painful decisions. You might have to cannibalize one of your most profitable lines of business in order to position for the future – that’s really tough. 

 

So, the more time you have, the more foresight you have in this process, the more you are able to get the organization to turn and position for change. 

 

On top of that, you have a number of trends that are much further out and could be fundamentally transformative if they come to pass. But it’s too early to say if they’re going to happen, when they’re going to happen, and what that world will look like. But there are things we want to watch for. There’s great technology out there that automates a lot of that monitoring process, checks it periodically, and includes it in exercises like quarterly reviews with management. 

 

As you continue to pay attention to these disruptors, you can understand whether you need to start a planning activity around this, or identify a trigger point where you need to start implementing plans you’ve developed. It’s really about integrating it into the strategic leadership of the business on a recurring basis. 

Maureen Nail

Those are all heavy lifts, right? It can be really challenging to get everyone on board and adjust where the ship is going to ensure you have enough time to adapt.

Peter Grimm

Critical to that, in addition to having enough time, is making this process part of the routine reporting of the business so that leadership is hearing about this on a recurring basis, whether it’s every month, or every quarter. The change that you see over time in these disruptors can be really powerful from an organizational psychology standpoint of overcoming that inertia.

 

This is the best data you can produce. There’s not a database out there that you can buy that’s going to tell you when a new entrant is going to reach critical mass. This is the best method, but it doesn’t happen overnight. 

 

Maureen Nail

I agree with you that this is the best way to establish the right mindset in an organization, whether you’re working internally or as a consultant. It has to be a regular engagement; annually, semi-annually; whatever makes the most sense for that client.

Peter Grimm

The impact alone of seeing the change over time tends to set the conditions for decisions to be made. It’s true in the national security world. If you look at the traditional indicators and warning intelligence, there’s a ton of information that’s been written about how important the organizational psychology of that is.

 

The other piece of advice to share with people is that disruption sounds negative. It sounds like a threat. And I just used the term vulnerability analysis, so it sounds very defensive. 

 

But when this is done well, the ultimate purpose of this work is to create opportunities. Often, this comes from a place of identifying real opportunity and the pain points that the organization will have to overcome to be successful. It’s important that as part of a routine, leadership hears about the opportunities that are coming, and the options available to them.

Maureen Nail

Like you said, working in CI, I always feel like I’m coming to leadership with negative news; some new threat that’s coming from a competitor. But I really like the idea of flipping it a little and identifying areas of opportunity. As companies, we always need to be moving forwards, growing and innovating. It’s great to be able to find areas of opportunity where we can grow and stay ahead of the competition, rather than always focusing on fighting an external threat.

Peter Grimm

Absolutely. For those like me, who came into competitive intelligence from the national security world, it’s a real shift. In the intelligence community, it’s beaten into your head from Day 1: you do intelligence, you don’t do policy. You don’t make recommendations about what to do with the intelligence, you just tell us the facts.

 

This is not the case in our world. If you go to management and only share facts, that might be the last time you get to sit down with them. You need to bring a plan that outlines the opportunities and the areas in which the company can capitalize. 

Maureen Nail

That’s a really great nugget. Any other nuggets before we wrap up? You’re full of them, and I want to make sure we don’t miss any!

Peter Grimm

I think we covered the key pieces. There are a lot of tools available to help with this process. There’s prediction markets, there’s tools that can help you monitor the environment, but unless you have an overarching framework and the right organizational psychology, your chances of success are much lower.

 

The other last thing I would say is that when you take a critical look at the business and carry out a vulnerability analysis, it’s important to have someone from the outside to help lead that. We’re all in different organizations, and we all hear what we’re telling the market. We hear all the marketing speak about what sets us apart, but many times, that might not be the real truth. Finding that requires asking some hard questions, and that upfront vulnerability analysis is critical to making sure you can be successful in understanding disruption.

Maureen Nail

I agree with that. The CI professionals inside an organization are supposed to be impartial truth gatherers, but sometimes our colleagues won’t believe the outputs of exercises like vulnerability analyses unless they come from an external source. 

 

Pete, I want to thank you. This has been a great conversation for me, I wrote down a ton of notes, and I appreciate your time. I also want to let everyone know, please go to SCIP.org to learn more about these best practices and access our training and resources. 

 

And Pete––I’m sure––will be more than happy to take questions also. If anyone is interested, reach out to him at Cipher. They’re a great company, and a great external partner to work with in conducting these types of activities.