FSG is a nonprofit consulting firm specializing in strategy, evaluation, and research. The firm was founded in 2000 as Foundation Strategy Group by Harvard Business School Professor Michael E. Porter and Harvard Kennedy School Senior Fellow, Mark Kramer. Today, FSG works across sectors in every region of the world—partnering with corporations, foundations, nonprofits, and governments to develop more effective solutions to the world’s most challenging issues. FSG’s ideas are frequently published in journals such as Forbes, Harvard Business Review and Stanford Social Innovation Review.
This blog originally appeared on FSG's shared value blog.
We see that many companies need to fundamentally re-think their business as they start working on shared value. I had the chance to experience this first hand while recently working with a major pharmaceutical company’s Indian affiliate. This company has set aggressive growth and leadership targets– and quickly realized the need for innovative thinking about its market approach to achieve these goals.
India’s economic growth has led to better health for its citizens; for example, infant mortality has decreased by approximately 50% since 1950. However, the Indian healthcare market remains ripe for shared value efforts, as large health inequalities prevail - gender, caste, education, and geography are strong determinants of health outcomes. The Government of India (GoI) recently committed to battling this inequality by increasing public health spending to 2.5% of GDP by 2017 – but this target is still far below the 5% amount recommended by the WHO. Despite increased public spending, Indian health will remain largely dependent on the private sector.
Our work with this particular company focused on finding novel ways to increase access to diabetes treatment in India; currently, only 40% of diabetes cases in India are diagnosed – compared to 73% of cases in the US . Treatment and adherence challenges also prevail – only an estimated 10% of patients seeing a general practitioner accept insulin treatment at their doctor’s suggestion. With estimates that the diabetic population will exceed 100M by 2030, this growing societal need must be addressed.
FSG’s on the ground research aimed to confirm our hypothesis that a large untapped market for diabetes treatment exists in India and to identify how the company can move the most significant barriers facing these under-treated patients. For example, since many patients do not monitor their blood glucose, doctors lack the data necessary to adjust treatments. Patients’ low education about adherence leads to complications and higher costs for the healthcare system. Overburdened general practitioners, who care for more than 90% of diabetes patients in India, do not have the time required to counsel patients on this complicated disease. While these barriers exist for even the most educated diabetics, they are greatly magnified among lower-income patients.
A major part of FSG’s role in helping clients in this process is asking the right questions to evaluate potential solutions to complex social problems. We are not experts in the Indian diabetes market, but by asking the right questions and framing the shared value opportunities, we came across a group of internal stakeholders that had the answer: the regional sales teams.
These key employees are at the pulse of the diabetes market; however, their roles require that they respond to immediate needs and are oftentimes forced to ignore longer term considerations. The sales teams actively participated in FSG’s stakeholder interviews with doctors, diabetes NGOs, and healthcare innovators – allowing the sales teams to think beyond next quarter’s sales targets to the systemic issues affecting the diabetes market and how the company could address them. Some of the systemic issues the sales teams will help address include encouraging patient health-seeking behavior, better supporting doctors in their diabetes knowledge, and increasing patient touch points for diabetes monitoring and adherence.
One unintended outcome of the research was a new cohort of shared value ambassadors – the sales teams – who were fired up, excited to think about the long term – specifically how the company can continue to innovate and reinforce its position as a values-driven company.
The experience confirmed the fact that the most powerful shared value forces lie within a company and this force must be harnessed to achieve a shared value vision. The sales teams brought forth many key learnings throughout our shared value market research such as how to speak with the opinion leaders who represent the underserved, how to uncover existing innovations in this space, and how to consider the benefits of implementing a shared value strategy for the many stakeholders it will involve.
This specific company will continue to evolve its approach to shared value – a long term perspective does not mean things will be cast in stone. Rather, they will strike a balance of devising shorter term quick wins to validate shared value while also maintaining a sense of flexibility to longer term strategies in order incorporate learning along the way. Most importantly, they will use shared value as a cornerstone to its future vision– being a leading player in improving the access and quality of diabetes treatment in India.
By Melissa Scott, FSG Consultant (Melissa is currently based in FSG's Mumbai office, building FSG's presence in India. She brings social sector consulting, financial analysis, and market research skills to FSG.)