• Nick

Drugs and charity make better business

Drugs and charity

Save the Children and GSK have formed a partnership to improve health in some of the world’s poorest countries. The two organisations will collaborate both in the development of affordable treatments and also in the building of healthcare infrastructure – through training more healthcare workers.

Responses vary – ‘it’s a cynical CSR exercise’, ‘it’s just a smokescreen whilst testing experimental new drugs on a defenceless population’, ‘it’s an unforgivable move from Save the Children’ through to ‘let’s give them the benefit of the doubt’ and ‘what a bold, brave, new way to do business’.

I’m a fan of John Le Carre. It was only recently that I realised quite how much his Constant Gardener had shaped my thoughts around big pharma. When we first went to visit GSK in their Brentford offices it was a bit of surprise to find that that a) it wasn’t Blofeld’s lair and b) they weren’t performing Boys from Brazil style experiments and c) they were absolutely committed to altering their core business model to deliver positive impact.

Good business delivers positive social impact

What GSK are up to is astonishing and we should applaud them and learn from it. Because what it shows us is that there’s absolutely no conflict or trade off between good commercial practice and positive social impact when an organisation is crystal clear about its purpose. And that a fundamentally collaborative – as opposed to competitive – approach is the new model for business.

Improving the quality of human life, not sweating patents

GSK knows that the old “sweat the patent” model is finished. Rather than squeezing as much as they can out of the old model they are actively and imaginatively seeking new ways to do business. One of the most promising is their concentration on access – improving health infrastructure in some of the poorest countries in the world, concentrating not on margin but volume – getting medicines to the most number of people affordably. The Save the Children tie up may have got the publicity but in reality it is just one of many for GSK. 

There’s a lot to change – both internally and externally. The business model, the culture, perceptions. And of course (like Barclays) all of this change will come about against a drip of constant reminders of the past (e.g. the $3bn fine). It takes real leadership and bravery.

This isn’t the Constant Gardener. It’s a global business reinventing itself from within, and turning its scale to the benefit of millions of people.

Purpose – not CSR

The only way it can work is by having a strong, guiding, well articulated sense of purpose. By purpose I mean what the business exists for, what it does for the world – not something self serving like “return to pre-crisis levels of profitability” but something big, outward looking and motivating like GSK’s “improve the quality of human life”.

With a strong sense of purpose, business is the most powerful force for positive impact we have. It has resources and reach that states and NGOs do not. And making business profitable makes it self sustaining – not reliant on aid or donation.

Sustainable positive social impact has to derive from the core business activities – when you see a business shifting its core like this you realise just how far from CSR (or even worse “CR”) this is. This is not about charitable, volunteering, philanthropic activities – it’s about fundamentally changing, however painfully, however publicly, the core business. It’s an organisation wide effort not the remit of a single department.

Clear purpose that goes beyond self interest is the foundation for new growth. Not only will it attract smart new talent (some of the people working in GSK’s DCMA would never have joined the ‘evil pharma’) but it will open up new market opportunities – by meeting previously unmet needs, allowing the business to get into new areas of business (e.g. building infrastructure), and pointing the way to smart new collaborations with others who share the same purpose. And when businesses collaborate there’s no limit to what they can achieve.

Collaborative business that goes beyond self interest

Partnership is nothing new in business – but partnership with purpose is.

First, an example of what we are not talking about. The iBeetle.

hope that’s not Apple maps…

This VW/Apple mash up – rather than the STC GSK tie up – is something that deserves a cynical response. Two brands, both (let’s be honest) losing a little lustre, getting together to serve their own interests. It’s all a bit Travelling Wilburys. (Btw VW has form in this, as anybody who was around for the Golf Rolling Stones will remember).

Much more laudable, and remarkable for meeting both social needs and delivering commercial aims are these: Post Office and Bank of Ireland, providing current accounts for the unbanked; Vattenfall and Volvo, the (sadly now defunct) collaboration to accelerate adoption of electric cars; M&S and Oxfam, encouraging us to be less throwaway with clothing (shwopping).

And unlike the VW/Apple tie up – all of these are hard. All are non-obvious tie-ups that expose either party to some form of business and reputation risk.

And of course the most exciting stuff is even harder to put together: the collaborations between business, governments and NGOs to achieve significant advances, for example the use of Berlin as a vast lab for electro mobility, or  m-Pedigree – the use of SMS technology to prevent counterfeit drugs in Africa.

everyone wins (except the counterfeiters)

This is a glimpse of a much bigger future – where entrepreneurs, business, governments and NGOs all come together to achieve something that was a) simply not possible before b) creates only winners.

Imagine what could be achieved – at scale and speed – say by a bank dedicated to creating new businesses, or an energy company obsessed by renewables, or a global health player intent on building a better health system.

It is purpose led growth. It is good business.

#ibeetle #constantgardener #bigpharma #savethechildren #mpedigree #newbusinessmodels #nickkeppelpalmer #gsk

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