Dr Kapil Mohan, Healthcare Management Professional, speaks about how healthcare providers can manage marketing risk by way of synergising overall business operations
Organisations face internal and external actors and influences that make it uncertain whether, when, and the extent to which they will achieve or exceed their objectives. The impact this uncertainty has on the organisation’s objectives is ‘Risk’.
Healthcare provider organisations today face significant challenges when contemplating change to their strategies, execution processes, information and people. Operations, logistics, finance, human resource, sales and marketing environment is increasingly more complex as they strive to position for changing consumer tastes and preferences, channel proliferation, demands of innovation, accelerating technological breakthroughs and the increasing intensity of competition. This necessitates a change of attitude and direction by some companies to incorporate more attacking and defensive measures in the planning and implementation of their marketing efforts.
Progressive marketing organisations recognise that managing risk is the responsibility of the entire marketing organisation. It is not compartmentalised within different functions or assigned to a single position but rather seen as a key practice for developing and executing the marketing plan. Until recently, this idea of end-to-end risk and performance management as a key activity in the marketing organisation has been practically unheard of. But, increasingly, senior management is looking to marketing to enable, if not drive, short and long-term business growth, while improving accountability, transparency, and speed to market.
Ten most common concerns for Marketing function
- Insufficient knowledge of customer’s attitude and behaviour
- Failing to segment the market in the most advantageous way
- Lack of marketing planning process
- Cutting price rather than increasing value
- Failing to have market-based product evaluation
- Misunderstanding the company’s marketing strengths and how they relate to market
- Narrow, short-term view on advertising and promotion
- Tendency to view marketing as only advertising or sales
- An organisation structure incompatible with marketing structure
- Failing to invest in future, particularly in human resources and technology
Effective risk management allows marketing to take on the myriad go to market obstacles necessary to facilitate business growth within this complex environment, to achieve business objectives. Properly configured and executed, it provides an opportunity to improve business returns with greater quality, resilience, and predictability across the enterprise.
Risks and controls – marketing
Although there may be a variety of objectives any healthcare organisation may have defined, major KRAs of sales and marketing function comprise of standardisation, organisational structure, budgetary controls, business strategy, revenue and profitability, brand and communication, differentiators and innovation.
Based on KRAs assigned, the designated owners should develop a preliminary inventory of key risk indicators (KRIs) that could impact the achievement of the organisation’s objectives. ‘KRIs’ refers to prior and potential incidents occurring within or outside the organisation that can have an effect, either positive or negative, upon the achievement of the organisation’s stated objectives or the implementation of its strategy and objectives.
KRIs must be identified from the information obtained through interviews, workshops, surveys, process flow reviews, documentation reviews, questionnaire/s, self-assessment exercises, industry practices etc. or a combination of such data-gathering techniques. Through facilitated workshops, risk practitioners can guide line management and cross-functional staff through the process of analysing objectives, discussing past events that impacted achievement of those objectives, and identifying potential future events having such impact.
There are many more such (classes of) risks, so a comprehensive risk identification needs to be done; after the risk is identified, it should be categorised and prioritised and key controls for each risk should be defined and implementation of such controls monitored.
The overall business objectives and the functional objectives should be clearly defined/ identified and then key risks for the concerned domain would need to be factored in, to ensure we plug all significant gaps. Formulation of risk and control for marketing function, is in itself a complex affair as one size doesn’t fit to all. Nevertheless synergising overall business and functional objective with an agile and measureable marketing plan/strategy is the big challenges and critical successes factor. It is always better to take a professional help than to be penny wise and pound foolish. Finally, the efficacy of such defined controls should be tested on a regular basis.