Knowledge Center: Publication
Healthcare and Life Sciences
Disruption in healthcare and life sciences: A view from the Nordics10/10/2019 Martin F. Holm
Healthcare and life sciences executives in the Nordics indicate that their companies are, compared to their global counterparts, somewhat insulated from the winds of change. Indeed, just 65% of Nordics leaders say their company is facing more pressure than it did 18 months ago, compared with three-quarters of industry executives globally.
However, more Nordics leaders expect disruption to intensify in the next 18 months, and they less often than their global peers feel prepared to handle impending disruption. Nordics executives say that organizational strengths—including the caliber of their people, their ability to manage complexity, their understanding of customer needs, and their ability to change regional strategic direction quickly—will help.
Sixty-five percent of surveyed Nordics leaders believe their company faces more disruptive pressure than it did 18 months ago, and 73% expect that pace to intensify in the next 18 months, compared with 82% of global leaders.
Nordics leaders see the top sources of disruption as being stronger cost containment, data analytics capabilities as a source of competitive advantage, and new technology (Figure 1). These views largely parallel those of global executives, which center on the growing importance of leveraging data, new entrants into the market, and increasing costs in the healthcare space.
Just 47% of Nordics leaders believe they are well prepared for this disruption (Figure 2).
Those who do feel ready to face disruption most often cite the caliber of their people and their ability to manage complexity, as well as their understanding of customer needs and ability to change regional strategic direction quickly (Figure 3). This is in contrast to global leaders who, after the caliber of their people, most often said they are prepared because of their innovative use of technology.
A smaller share of Nordics leaders, compared with global leaders, agree or strongly agree that their companies are a source of disruption (40% versus 53%, respectively), representing one of the largest disparities in our survey results (Figure 4). This may be in part because several Nordic healthcare and life sciences companies focus on fewer therapeutic areas compared with the largest companies, which focus on a broader range. It’s also likely related to the finding that just a quarter of Nordics leaders feel the company adapts and pivots at a faster pace than competitors, compared with 53% of global executives.
Despite the relatively few Nordics executives who say technology is preparing them to face disruption, among the 40% who consider their companies disruptors, two-thirds cite the innovative use of technology as the top contributing factor.
The vast majority of both Nordics and global leaders agree that their company’s culture contributes to their success (Figure 5). And indeed, a full 60% of Nordics executives say that their people always deliver what they committed to, which is more often than global executives say the same.
Despite that strength, cultural shifts are one of the top three areas Nordics leaders have focused on or expect to focus on to combat disruption; the others are organizational restructuring and reevaluating strategic goals (Figure 6). Global leaders also focus on reevaluating goals but more often focus on creating new functions and M&A—overall taking a more externally focused approach than Nordics executives.
Given the importance that Nordics executives at disruptors place on technology, it’s also good news that Nordics executives overall are putting a great deal of focus on digital investments to combat disruption: digital efficiencies lead the list, followed by superior management talent and leadership team and a tie between digital offerings and consumer experience/customer journey (Figure 7).
Despite executives around the world citing the caliber of their people as important, they all also rank leadership succession as the least of their priorities for combating disruption. That said, Nordics leaders are more often focused on a need for diversity than their global peers: 60% believe it is critical to have diverse senior leadership to maintain or build a competitive advantage, and an additional 35% believe it is important (Figure 8). Further, it seems that they’re defining “diversity” broadly: over half of leaders in the Nordics (53%) say their company has increased focus on hiring people from other industries to contend with disruptive forces.
Leaders at Nordic healthcare and life sciences companies expect to manage through disruption by building on their strengths—especially their people and knowledge of customers—and are beginning to fill in the gaps, including their relative lack of focus on technology. Their faith in their people and a focus on greater diversity and expertise from other industries bode well for these companies’ ability to manage the disruptions they see coming.
About the survey
The survey was conducted online in June 2019 and gathered responses from 86 senior executives in pharmaceuticals, biotech, medtech, and other areas of the healthcare and life sciences industry. For results from our global survey, see “Disruption today in healthcare and life sciences.”
About the author
Martin Holm (email@example.com) is a principal in Heidrick & Struggles’ Copenhagen office and a member of the global Healthcare & Life Sciences, Industrial, and Private Equity practices.