As we look at the companies that have emerged as leaders over the past decade, it is clear to see that they all have one thing in common: they all embrace innovation. According to a recent McKinsey report, 84% of executives say that their future success is dependent on innovation. Which is why, agnostic of industry or its legacies, no company can expect to thrive in the future without innovation being a critical component of their overall business strategy.
Given this imperative, why do so many new products fail? According to Harvard Business School professor Clayton Christensen, each year more than 30,000 new consumer products are launched and 80% of them fail. Nielsen’s data shows that more than 85% of new CPG products fail. This is also true in the world of Pharma. About half the drugs launched in the last 15 years underperformed analysts’ sales estimates by more than 20%, according to a recent report from L.E.K. Consulting. In fact, only one-fifth of new drugs reached $1 billion in U.S. sales, and more than half failed to hit even $250 million.
We would submit that a part of this underperformance is due to the way companies do research to find, develop, and validate new products and ideas. One reason is the research methodologies used through the product development process are primarily evaluative versus being inspirationally generative in nature. Second is the average research respondent’s inability to envision and respond to future-oriented concepts and constructs. On one hand, this approach results in generic ideas that appeal to the lowest common denominator today or might identify breakthrough areas but struggle to justify the ability to scale.
At Shapiro+Raj, we have found a way to solve these problems. First, by finding respondents who have the ability to discern the future. Then, using BE-inspired generative methodologies that help us define breakthrough ideas at scale. In this article, we will focus on how we identify the right respondents.
Introducing the Shapiro+Raj PROsician™ Model.
This model was inspired by the Diffusion of Innovation Theory (DOI), developed by E.M. Rogers in 1962. It is one of the early social science theories that explained how, over time, an idea or product gains momentum and diffuses through a specific population or social system. The result is the adoption of this new idea, behavior, or product. Adoption does not happen simultaneously in a social system. We now know that people who adopt an innovation early have different characteristics than people who adopt later. When promoting an innovation to any target population, it is important to understand the characteristics of the target population that will help or hinder adoption of any innovation.
There are five cohorts – innovators, early adopters, early majority, late majority, and laggards. As you can imagine, how an innovator or early adopter will react to an innovation is likely to be significantly different than a laggard. Which is why marketers need to identify them for each category/therapeutic area.
That is what we did. We spent the past 18 months to develop, test, and validate the S+R PROsician™ model. For this article, we will share our approach in the world of Pharma and use data from oncology as a therapeutic area. A similar framework exists across other therapeutic areas in the Pharma industry and in the consumer space, but we believe this Pharma example makes the explanation of the model a bit easier to understand if you are experiencing it for the first time.
We identified four discrete segments based on their level of interest in innovation, their openness to experimentation, and their commitment to staying on top of the latest developments in their specialty/areas of interest. Because this is about Doctors who deal with cancers, we defined them as follows:
Dr. Forward Thinker – research networkers who stay highly informed of medical research advances in the space. They are regularly consulted by their peers and use new therapies but only after they are convinced by the data (they make up 17% of Oncologists).
Dr. Go Forit – experimenters who use new therapies as soon as they learn about them and get access to them. They are creative in the way they approach the treatment with new choices. They look for data but are less engaged with the medical research community (they make up 18% of Oncologists).
Dr. Wait N. See – aware of data from new research but do not act on it right away. They prefer to wait until the new therapies become prevalent before they begin using them. A cautious and careful approach typifies them (they make up 13% of Oncologists).
Dr. Nono No – most oncologists who believe in the status quo and are highly resistant to change. They trust their experience and will not embrace something new until it is something old (they make up 52% of Oncologists).
As you can see from the data, over two-thirds of doctors who treat cancers (65%) are cautious/resistant to accepting innovative products, approaches, and options. In a traditional research plan where you would recruit respondents without this model, the odds of your innovative ideas surviving are extremely low. Because, in traditional research projects, the 35% most innovative doctors, Dr. Forward Thinker and Dr. Go Forit, who are critical to help frame and activate the future, are treated and questioned in the same way as Dr. See and Dr. No.
Key questions you need to ask:
Do you have the the right respondents to answer the critical business questions? Are your discussion guides developed with questions and techniques that address these types differently? Do your moderators use different techniques and tools with Dr. Go Forit than they do with Dr. Wait N. See? We know they’re not. The recruiting approach hasn’t changed. The learning model hasn’t changed. That’s why over 80% of consumer products and over 50% of new drugs fail.