Florence Joffroy-Black and Dave Sheppard, MedWorld Advisors03.04.20
It is often assumed C-suite executives are well-trained for every situation and have all the answers. While it’s true most leaders have had mostly positive experiences, are well educated, and are prepared to handle almost any business situation, it’s also a fact life seldom adheres to plan. Thus, it can be difficult to plan for the unexpected.
There is no playbook for fielding life’s curveballs, so C-suite executives are basically left to their own devices (no pun intended) when faced with a real life crisis.
At the start of 2020, this column addressed the need for strategic planning for the new year. But less than a month into the new decade, the global medtech industry—along with the rest of the world—was forced to contend with an unanticipated incident: the Coronavirus, a.k.a., COVID-19.
The China-born disease is already having a significant impact on medtech firms that have sales, operations, or supply chain presence in China. Many companies are grappling with supply chain disruptions and weak sales as authorities struggle to contain the deadly outbreak (nearly 2,000 people have died and over 73,000 have been infected with the illness as of mid-February). Boston Scientific Corp., for example, expects the virus to impact its Asia-Pacific sales by $10 million-$40 million, while BD (Becton Dickinson) anticipates a $20 million-$30 million headwind in its second quarter 2020 results.
Such unexpected setbacks necessitate a playbook that addresses the following key questions:
The chief financial officer (CFO) doesn’t have it any easier, as he/she must make financial plans based on moving and evolving revenue, supply, and cost scenarios.
It’s also challenging for the chief marketing officer (CMO) because that person must formulate sales budgets despite great uncertainty about product supply. The job becomes even more difficult if the company’s sales include China, since it is almost impossible to know right now if or when customers there will be available (or able) to purchase products. Global health crises like COVID-19 are rarely an opportunity for optimism, though: Although sales often rise from much-needed shipments of medical supplies and diagnostic kits, the public’s health is at risk, which is not a cause for celebration. On the other hand, lower sales can impact the entire organization and possibly even jobs. It’s a tough line to walk. Indeed, if the CMO predicts growth, the organization must try to meet that goal in light of a challenging supply chain scenario. Similarly, anticipated sales losses require the CEO and CFO to determine whether jobs should be cut to maintain financial stability. Experience, brainstorming, and evaluating both alternatives and eventual decisions can help companies budget for what is happening or what may happen during variable and unpredictable situations.
Beyond the C-suite—as with many life situations—those impacted by unexpected scenarios often are in a wide circle. The obvious “first line” parties involved with COVID-19 include (1) any employee in China (sales, marketing, operations, etc.); (2) any supplier in China; and (3) any employee traveling to/in China or Asia.
The “next level” parties impacted include any employee of the organization, because employees will have to adapt to changing circumstances. There may be evolving variability in operations, finances, sales, supply chain, and more. Obviously, any investor in the company is going to be impacted as well.
External impacts would include any supplier that has components manufactured in China. Medtech firms rely heavily on their suppliers to manage these kinds of unanticipated challenges, so there is some expectation that products will continue to flow freely through stockpiled inventory. But with the coronavirus outbreak skyrocketing around the same time as the Chinese New Year, there may not be adequate excess inventory.
Customers are another group of potentially impacted parties. As mentioned earlier, it’s clear customers in China may be impacted. However, operational and supply challenges could affect whether any customer receives his or her orders on time.
One of the most often overlooked parties impacted by unexpected incidents is the families of employees and C-suite executives. This group is comprised of key stakeholders, as they live with the company in some form every day.
Decisions, Decisions
With all these stakeholders (and others not mentioned) that need executive-level guidance and communication, how does the C-suite make decisions that keep the organizational ship steady while sailing through uncharted waters? As indicated earlier, there is no script for managing this kind of scenario.
Fortunately, most C-suite business leaders are trained as decision-makers. One of the unofficial requirements of C-suite membership, in fact, is the ability and courage to make tough decisions. Thus, while there is no playbook, executives have their own personal guidelines for making critical decisions. This is key because the organization needs leadership, decision-making, and communication skills during times of uncertainly.
To make good decisions, well-trained leaders know the first step is to gather data. Inputs are needed to be able to understand (1) what decisions need to be made; (2) how to make them; and (3) when they need to be made.
Beyond the evolving dynamics of affected countries’ changing health situations, the first important data is the stakeholder impact. Based on the potential impacts on all types of stakeholders, it will now be important to prioritize both stakeholders and impacts on stakeholders—relative to risks and plausible outcomes.
Once stakeholders are prioritized based on various likely scenarios, the next important question that must be answered is “what decisions need to be made?” It’s difficult for C-suite executives to make decisions during an unplanned event until they can answer that critical question. Interestingly, the best answer in this scenario is to identify more questions. It seems ironic but for many good business leaders, it’s actually intuitive, as experience has repeatedly proven the best decisions come from asking the right questions first.
In summary, the script for decision-making during unanticipated events involves understanding the evolving “information on the ground” (in the case of COVID-19, how fast the virus is growing, where is it spreading, and what government regulations/restrictions are being made). C-suite executives then need to understand who the stakeholders are so they can prioritize the potential stakeholder impacts.
At this stage, business leaders who know how to make decisions can begin to answer their developed questions with increased confidence.
Communication Is Key
Once company executives have decided on a direction, they must figure out how to gain stakeholder buy-in relative to the tough decisions being made. As with most key leadership situations, the script now turns to communication. Developing both an umbrella message for all stakeholders and specific messaging for each type of stakeholder is going to be critical for success in keeping the organizational ship “rowing in the same direction.”
From this stage onward, the mission critical activity is communication, communication, and more communication. To achieve stakeholder engagement in the current decision dynamics while navigating crisis scenarios, all good leaders know there is no other way than to stay in constant communication with all stakeholders. In a larger organization, it will be critical to ensure all levels of management are communicating with the C-suite to ensure outreach is happening on all levels—both internally and externally—and the message is shared throughout the organization.
To communicate their way through the current coronavirus scenarios, medtech C-suite executives will have to utilize their inherent leadership skills and discover the right script for their particular organizations. This scenario has not been easy. Hopefully it winds down soon. But if not, companies will have to continually adjust their scripts, re-assess stakeholder impacts, find the right questions to ask, and develop answers that evolve from those questions.
Then, it becomes simple—communicate and help the entire team to do the same.
Here’s hoping companies find the right script to manage COVID-19 and other unforeseen surprises this year and beyond.
Florence Joffroy-Black, CM&AA, is a longtime marketing and M&A expert with significant experience in the medical technology industry, including working for multi-national corporations based in the United States, Germany, and Israel. She is currently is CEO at MedWorld Advisors and can be reached at florencejblack@medworldadvisors.com.
Dave Sheppard, CM&AA, is a former medical technology Fortune 500 executive and is now a managing director at MedWorld Advisors. He can be reached at davesheppard@medworldadvisors.com.
There is no playbook for fielding life’s curveballs, so C-suite executives are basically left to their own devices (no pun intended) when faced with a real life crisis.
At the start of 2020, this column addressed the need for strategic planning for the new year. But less than a month into the new decade, the global medtech industry—along with the rest of the world—was forced to contend with an unanticipated incident: the Coronavirus, a.k.a., COVID-19.
The China-born disease is already having a significant impact on medtech firms that have sales, operations, or supply chain presence in China. Many companies are grappling with supply chain disruptions and weak sales as authorities struggle to contain the deadly outbreak (nearly 2,000 people have died and over 73,000 have been infected with the illness as of mid-February). Boston Scientific Corp., for example, expects the virus to impact its Asia-Pacific sales by $10 million-$40 million, while BD (Becton Dickinson) anticipates a $20 million-$30 million headwind in its second quarter 2020 results.
Such unexpected setbacks necessitate a playbook that addresses the following key questions:
- Who are the stakeholders?
- What decisions have to be made?
- What inputs are needed?
- How are decisions communicated?
- How can stakeholder “buy-in” be achieved?
The chief financial officer (CFO) doesn’t have it any easier, as he/she must make financial plans based on moving and evolving revenue, supply, and cost scenarios.
It’s also challenging for the chief marketing officer (CMO) because that person must formulate sales budgets despite great uncertainty about product supply. The job becomes even more difficult if the company’s sales include China, since it is almost impossible to know right now if or when customers there will be available (or able) to purchase products. Global health crises like COVID-19 are rarely an opportunity for optimism, though: Although sales often rise from much-needed shipments of medical supplies and diagnostic kits, the public’s health is at risk, which is not a cause for celebration. On the other hand, lower sales can impact the entire organization and possibly even jobs. It’s a tough line to walk. Indeed, if the CMO predicts growth, the organization must try to meet that goal in light of a challenging supply chain scenario. Similarly, anticipated sales losses require the CEO and CFO to determine whether jobs should be cut to maintain financial stability. Experience, brainstorming, and evaluating both alternatives and eventual decisions can help companies budget for what is happening or what may happen during variable and unpredictable situations.
Beyond the C-suite—as with many life situations—those impacted by unexpected scenarios often are in a wide circle. The obvious “first line” parties involved with COVID-19 include (1) any employee in China (sales, marketing, operations, etc.); (2) any supplier in China; and (3) any employee traveling to/in China or Asia.
The “next level” parties impacted include any employee of the organization, because employees will have to adapt to changing circumstances. There may be evolving variability in operations, finances, sales, supply chain, and more. Obviously, any investor in the company is going to be impacted as well.
External impacts would include any supplier that has components manufactured in China. Medtech firms rely heavily on their suppliers to manage these kinds of unanticipated challenges, so there is some expectation that products will continue to flow freely through stockpiled inventory. But with the coronavirus outbreak skyrocketing around the same time as the Chinese New Year, there may not be adequate excess inventory.
Customers are another group of potentially impacted parties. As mentioned earlier, it’s clear customers in China may be impacted. However, operational and supply challenges could affect whether any customer receives his or her orders on time.
One of the most often overlooked parties impacted by unexpected incidents is the families of employees and C-suite executives. This group is comprised of key stakeholders, as they live with the company in some form every day.
Decisions, Decisions
With all these stakeholders (and others not mentioned) that need executive-level guidance and communication, how does the C-suite make decisions that keep the organizational ship steady while sailing through uncharted waters? As indicated earlier, there is no script for managing this kind of scenario.
Fortunately, most C-suite business leaders are trained as decision-makers. One of the unofficial requirements of C-suite membership, in fact, is the ability and courage to make tough decisions. Thus, while there is no playbook, executives have their own personal guidelines for making critical decisions. This is key because the organization needs leadership, decision-making, and communication skills during times of uncertainly.
To make good decisions, well-trained leaders know the first step is to gather data. Inputs are needed to be able to understand (1) what decisions need to be made; (2) how to make them; and (3) when they need to be made.
Beyond the evolving dynamics of affected countries’ changing health situations, the first important data is the stakeholder impact. Based on the potential impacts on all types of stakeholders, it will now be important to prioritize both stakeholders and impacts on stakeholders—relative to risks and plausible outcomes.
Once stakeholders are prioritized based on various likely scenarios, the next important question that must be answered is “what decisions need to be made?” It’s difficult for C-suite executives to make decisions during an unplanned event until they can answer that critical question. Interestingly, the best answer in this scenario is to identify more questions. It seems ironic but for many good business leaders, it’s actually intuitive, as experience has repeatedly proven the best decisions come from asking the right questions first.
In summary, the script for decision-making during unanticipated events involves understanding the evolving “information on the ground” (in the case of COVID-19, how fast the virus is growing, where is it spreading, and what government regulations/restrictions are being made). C-suite executives then need to understand who the stakeholders are so they can prioritize the potential stakeholder impacts.
At this stage, business leaders who know how to make decisions can begin to answer their developed questions with increased confidence.
Communication Is Key
Once company executives have decided on a direction, they must figure out how to gain stakeholder buy-in relative to the tough decisions being made. As with most key leadership situations, the script now turns to communication. Developing both an umbrella message for all stakeholders and specific messaging for each type of stakeholder is going to be critical for success in keeping the organizational ship “rowing in the same direction.”
From this stage onward, the mission critical activity is communication, communication, and more communication. To achieve stakeholder engagement in the current decision dynamics while navigating crisis scenarios, all good leaders know there is no other way than to stay in constant communication with all stakeholders. In a larger organization, it will be critical to ensure all levels of management are communicating with the C-suite to ensure outreach is happening on all levels—both internally and externally—and the message is shared throughout the organization.
To communicate their way through the current coronavirus scenarios, medtech C-suite executives will have to utilize their inherent leadership skills and discover the right script for their particular organizations. This scenario has not been easy. Hopefully it winds down soon. But if not, companies will have to continually adjust their scripts, re-assess stakeholder impacts, find the right questions to ask, and develop answers that evolve from those questions.
Then, it becomes simple—communicate and help the entire team to do the same.
Here’s hoping companies find the right script to manage COVID-19 and other unforeseen surprises this year and beyond.
Florence Joffroy-Black, CM&AA, is a longtime marketing and M&A expert with significant experience in the medical technology industry, including working for multi-national corporations based in the United States, Germany, and Israel. She is currently is CEO at MedWorld Advisors and can be reached at florencejblack@medworldadvisors.com.
Dave Sheppard, CM&AA, is a former medical technology Fortune 500 executive and is now a managing director at MedWorld Advisors. He can be reached at davesheppard@medworldadvisors.com.