Healthcare marketing risk management: An objective approach

Dr Kapil Mohan, Healthcare Management Professional, speaks about how healthcare providers can manage marketing risk by way of synergising overall business operations

Dr Kapil Mohan, Healthcare Management Professional, speaks about how healthcare providers can manage marketing risk by way of synergising overall business operations

Dr Kapil Mohan

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.

201509ehm21Managing this complexity gets more expansive and costly by the day in comparison to gross revenue, which results in a wide range of uncertain factors or risks when changes threaten the organisations’ ‘go-to-market’ strategy. Additionally, as a healthcare organisation seeks answers for failed initiatives and/ or lost opportunities, it leads to assignment of blame and costly changes. Many a times this leads to replacing the associated agency/ vendors or reassigning responsibilities via organisational changes, where responsibility for driving top line revenue is assigned amidst complex operating environments. Typically, these are all too narrowly focused and many a times lead to additional complications.

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

201509ehm22Performing risk assessment requires defining and consistently applying an approach that is tailored to suit the organisation. A multi-tiered platform of business objectives, key result areas and/or key performance indicators, risk factors, and control factors should be developed in concert with the traditional marketing process of strategy development, marketing planning, execution and evaluation. Responsibilities in the risk assessment process are assigned to those parties who can provide meaningful perspective on relevant risks (not only line management but also cross-functional representation). Sources of input are determined based on available information (such as prior assessments, KRAs, lessons learned). Output requirements are established based on the specific requirements of sponsors and other stakeholders (senior management, the board, regulators, stockholders, or business partners). This platform connects the marketing strategy with multi-functional execution within the company. The tiers of indicators reflect the cascading of top level management objectives with the day to day management of marketing programmes and supporting operational activities.

201509ehm23Understanding of the business objectives relevant to sales and marketing function, in scope for risk assessment, will provide a basis for subsequently identifying potential risks that could affect the achievement of objectives, which reflect the core strategy that the organisation is adopting with respect to each Key Result Area (KRA), wherein performance has a critical impact on the achievement of the overall strategic mission.

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.

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