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Stepping into the C-Suite? 10 Critical Questions Every New Life Science/MedTech CEO Must Ask
- philip bowler
- Oct 25, 2024
- 7 min read
Congratulations! You've landed the top job. But before you pop the champagne, there's a whirlwind of information to absorb to ensure your success as a new CEO in the dynamic world of life sciences and medical technology.
Here are 10 crucial questions to ask – and answer – ASAP to steer your company towards a healthy and profitable future:
1. Who are my REAL top customers?
Forget vanity metrics. there are 2 parts when looking into who really is your top customers. Part A: is using the usual 80/20 rule. Identify the 20% of your clients driving 80% of revenue. These are the customers who truly fuel your business as it is TODAY!. Understanding their needs and preferences is paramount, for your on-boarding. Are they large hospital networks? Government agencies? Private clinics?
But don't stop there. Part B: is to incorporate who is likely to be your top customer tomorrow. Analyze their growth potential. The Key is POTENTIAL. Are they ripe for expansion, or are they plateauing? Are there opportunities to cross-sell or upsell? Perhaps they are involved in promising research that could lead to increased demand for your products. This insight will guide your sales and customer success strategies, allowing you to allocate resources effectively and maximize customer lifetime value.
2. Who are my hidden gems (and who needs a new role)?
Dive deep into your talent pool. Who are your future leaders? Use "The Leadership Pipeline" principles to assess your team. Identify high-potential individuals ready for a "turn" in the pipeline – those who are ready for increased responsibility and can drive the company forward.
Equally important is identifying those who might thrive in different roles (or elsewhere). Perhaps a talented researcher is struggling in a managerial position, or a sales representative would be better suited to a customer support role. Honest and objective talent assessment is crucial. Your strategy hinges on having the right people in the right places, maximizing individual potential and overall team performance.
As the new CEO you have a liberty to look into both what they are spending their "time" on. What are their Skills needed for the level and what "De-railers" do they have. This is especially important for your Manager of Manger level look for where they are acting 1 or 2 levels below the level they should be.
3. How do we REALLY reach our market?
Go beyond basic marketing. To truly understand how to reach your market effectively, you need to dissect your go-to-market model with a critical eye, considering the unique challenges and opportunities in the life science and medtech sectors. The "Source of Volume" concept within the Big Picture Marketing framework provides a valuable lens for this analysis.
It prompts us to ask:
Where will our future customers come from?
What part of the Ansoft matrix do they fit into?
What is the "Source of Volume"? is it:
Stimulate Demand: Are you effectively stimulating primary demand for your product category? In the life science/medtech space, this could involve educating healthcare professionals about the benefits of a new technology or therapy, conducting clinical trials to demonstrate efficacy, or partnering with key opinion leaders to raise awareness.
Steal Share: Are you focused on stealing share from competitors? This might involve highlighting the unique advantages of your products, offering competitive pricing or superior customer service, or developing targeted marketing campaigns to attract customers away from rival companies.
Retain Customers: Are you prioritizing customer retention? In life sciences and medtech, building strong relationships with healthcare providers and institutions is crucial. This could involve providing ongoing support and education, offering loyalty programs, or developing customized solutions to meet specific customer needs.
Applying the Source of Volume Lens:
Registration: Navigating regulatory hurdles efficiently in each territory is essential for bringing your products to market. Analyze your current regulatory strategy through the lens of "Source of Volume." Are there opportunities to accelerate the approval process, allowing you to reach new customers faster? Could strategic partnerships or collaborations help you overcome regulatory barriers and expand into new markets?
Distribution: Evaluate the effectiveness of your current distribution channels in terms of their ability to generate new customers. Is your direct sales force reaching its full potential? Are your distributor partnerships strong and strategically aligned? Could a hybrid model, combining direct sales with online channels or strategic alliances, unlock new sources of volume?
Revenue: Analyze your reimbursement model and its impact on market access and profitability. How does your reimbursement strategy influence customer acquisition and retention? Are there opportunities to improve reimbursement rates or streamline the process, making your products more accessible and appealing to new customer segments?
By applying the "Source of Volume" framework to your go-to-market model, you can gain a deeper understanding of how to effectively reach your target market, acquire new customers, and drive sustainable growth. This approach encourages a more strategic and holistic view of marketing, ensuring that your efforts are aligned with your overall business objectives.
4. Are we built for scale?
Egress Australasia's Commercial Health Check can illuminate this. Assess the maturity of your systems and processes across six key pillars: Growth, Customers, Operations, People, Finance, and Innovation. Can your current infrastructure support your ambitions? Are your processes efficient and scalable?
Do you have the right systems in place to manage increased demand, expand into new markets, and adapt to evolving industry trends? A thorough assessment will reveal areas for improvement and help you build a solid foundation for sustainable growth. (https://www.egressaustralasia.com/maturity-assessment)
5. Where is the market REALLY going?
Personalized medicine, digital health, AI – these trends are reshaping life sciences and medtech. Is your strategy aligned with the future, or are you clinging to the past? Are you investing in R&D that will keep you ahead of the curve?
Consider the long-term implications of these trends for your business. How will they impact your product development, your target market, and your competitive landscape? Staying informed and adapting to these changes is crucial for long-term success.
utilize the framework from Blue Ocean Strategy to plot where you are within the market and your product.
6. What's the REAL strategy (and is it working)?
Don't blindly follow the old roadmap. Critically evaluate the existing strategy. Does it leverage your strengths? Does it address market realities? Is it delivering results? A fresh perspective can uncover hidden weaknesses or untapped opportunities.
Gather data and analyze key performance indicators (KPIs) to objectively assess the effectiveness of the current strategy. Are you meeting your growth targets? Are you maintaining profitability? Are you gaining market share? Honest evaluation will guide you in making necessary adjustments. Are you measuring the write things? and most importantly do you know what lever to pull that changes the metric being measured. again Blue Ocean Strategy can help here, to get you and your competitors mapped and know what strengths and weaknesses they have. Another tool I've found helpful is the business model canvas. although it's not a in depth tool it will elicit thinking and a good overview of the business.
7. What are our star products (and which ones are fading)?
Analyze your product portfolio with a critical eye. Consider clinical efficacy, market demand, reimbursement rates, and patent protection. Invest in your winners – those with strong market demand and high growth potential.
Can you optimize pricing and reimbursement strategies to maximize profitability.
Don't be afraid to phase out the laggards – those products that are under-performing or becoming obsolete.
Strategic product portfolio management is essential for maximizing ROI and staying competitive. One way to do this is to look at your products on 2 axis's.
Axis a) Where does it fit in the market. you can plot it using the same matrix shown in 5 above to do this where do they fit.
Axis b) What is it doing to the company margins at a Gross Margin level. classify the product into 2 buckets "Margin Contributing" or "Margin Diluting"
8. What are the REAL financial levers?
Beyond revenue and profit, understand cash flow, burn rate, and key performance indicators (KPIs). What drives your financial engine, and where are the opportunities for optimization? Dive deep into the financial statements.
Analyze your operating expenses, identify areas for cost reduction, and explore strategies for improving cash flow. A comprehensive understanding of your financial health will empower you to make informed decisions that drive profitability and sustainable growth.
"Always start with the Cash" understanding where the cash is going will highlight where to look in the P&L and then Balance Sheet.
9. What are the hidden risks?
Identify potential internal and external threats. From supply chain disruptions to regulatory changes, develop mitigation strategies to safeguard your company's future. Conduct a thorough risk assessment, considering factors like economic downturns, emerging competitors, and evolving customer needs.
Develop contingency plans to address potential challenges and ensure business continuity. Proactive risk management will help you navigate uncertainty and protect your company from unforeseen events. Does the board have a program for risk or is it an executive function. is it only product and patient risks. what's the boards appetite for risk do they have a risk appetite statement to guide the new CEO.
10. How can I leverage the board?
The board is your strategic partner. Build strong relationships, understand their expectations, and seek their guidance to navigate challenges and capitalize on opportunities. Regular communication and transparency are key.
Keep the board informed about your progress, challenges, and opportunities. Leverage their experience and expertise to gain valuable insights and make sound strategic decisions. A strong and collaborative relationship with the board will contribute significantly to your success as CEO.
Are they using Trickers model (Tricker, R. 1994 International Corporate Governance) for managing the CEO?
Ready to conquer the complexities of your new CEO role?
Egress Australasia provides expert guidance and support to help you succeed in the life sciences and medical device industry. Contact us today for a confidential discussion.
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