IMS Health: Moving From Vendor to Strategic Partner
For this project, the central question was: How to move past management conflicts and address strategic uncertainty?
By using futures. In the mid-1990s, IMS Health’s top executive team was divided over strategic decisions they needed to make about new acquisitions, sales and investments in operations. The company was facing great pressure to increase sales even as the pharmaceutical industry saw a stream of consolidations that reduced its base of clients purchasing health information services and technologies. A larger context of high uncertainty and rapid change – not unlike today’s – involved a looming reform of the U.S. health care system that left the management team with little certainty about how it would affect their customers in the future.
Newly appointed CEO Tommy Bowman hired Jonathan Peck from AFA to help them address these challenges.
Jonathan and AFA colleagues led the IMS management team in an exploratory journey. They began by developing a set of four scenarios that described alternative futures for health care and the pharmaceutical industry that reflected the expectations, aspirations and fears the executive team projected into the future. They then conducted a visioning workshop which created a deeply shared vision about what the executive team wanted IMS Health to strive towards.
AFA encouraged the IMS team to think about their challenge (increasing sales) in terms of a larger success. What contribution to health could they make that would make them an unchallenged leader? What would be an audacious, yet plausible, picture of success that would energize the team to strive to achieve it? What strategies would turn their customers into partners?
One aspiration that stood out was that IMS should be considered as a strategic partner by its clients rather than a vendor. The futures process gave IMS a context for their services, and CEO Bowman subsequently said that when he subsequently met the CEO of a major pharma company, he was able to share a strategic view that drew this CEO into an extended conversation. Tommy could sense the CEO was more inclined to view him as an equal. Afterwards he discovered that while he was meeting with the CEO “my guys were selling more than ever before to his people.” He later looked back on the vision work that he initially viewed with skepticism as a key reason why his company increased their sales.
At the end of the process, the IMS team also addressed their strategic planning with a new, fresh mindset galvanized by a shared picture of success and informed by the systematic exploration of alternative futures. The vision helped create commitment among a divided team – so much so that both Tommy Bowman and Ana Maria Zaugg, an IMS top executive, later confessed to AFA that although they started out in the visioning process as “non-believers,” they were highly impressed by its positive outcomes.
Former senior VP Bob Merold, the executive who initially contracted with AFA, described how the vision spread through the whole company as AFA and the executive team held a series of town hall meetings that brought in people from every division and region. “Everybody had confidence we knew how to succeed,” he told AFA. “We had unity and consistent messages. Everyone in the organization had a common purpose within a year. It turned the company into a high performance company.”
The futures work also identified new lines of business that would open as emerging technologies took hold. The IMS executive team and AFA identified new customers and partners that would complement the existing business. Instead of “coasting along”, as Ana Maria Zaugg puts it, the company was able to sustain a high rate of growth for the next 15 years. Over the years, many of the executives who left for other companies took their understanding to grow other businesses that have had a large impact on health care.
The question we invite readers to consider is what challenges do you face in your organization that you need to turn into opportunities? AFA can help you answer this question in ways that can inspire your team to turn your organization into an unchallenged leader in your sector.
“The scenarios gave us the confidence to be more proactive.”
Ana Maria Zaugg, former VP Strategic Business Planning
IMS Health is a global provider of information, services, and technologies for health care. It was founded in 1954 as a market research company which rapidly specialized in providing services to the pharmaceutical industry. Throughout the late 1970s, 1980s, and 1990s, IMS successfully launched multiple data management products based on information and communication technologies. Such tools ranged from customized virtual data reports, to automated sales reporting, to knowledge management.
Contact us to learn how we can help guide you to your future successes.