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Digg It - When Good Companies Go Bad - Part 3, the Killer B's
Change, make that constant change, is the way of the world. A double edged sword, change provides opportunity on one edge and creates outdated services, products, processes, marketing and manufacturing methods with the other. Companies slow to embrace change and adapt as conditions shift ultimately face a cri
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
ses of financial viability and survival.
Whenever a company is in decline/distress, among the usual suspects one can find: declining profits, trouble complying with loan covenants, customer complaints on the rise, customer defections, talent loss- high turnover, absence of short and long term planning, suppl
Whenever a company is in decline/distress, among the usual suspects one can find: declining profits, trouble complying with loan covenants, customer complaints on the rise, customer defections, talent loss- high turnover, absence of short and long term planning, suppl
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
er problems, failure to adapt to new technologies, reduced working capital, and changing accounting principles; just to name a few. The number and mix of problems will vary from company to company.
So, several of the more common trouble signs have emerged and your business is in trouble. Surely as summer fol
So, several of the more common trouble signs have emerged and your business is in trouble. Surely as summer fol
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
ows spring the killer B’s are not far behind.
Who are these killer B’s? They are yet another scourge affecting good companies when things turn bad. Their names are: bureaucracy, backstabbers and bookkeepers*. (*Accountants would have spoiled the alliteration and killer B’s theme.)
Once a successful business
Who are these killer B’s? They are yet another scourge affecting good companies when things turn bad. Their names are: bureaucracy, backstabbers and bookkeepers*. (*Accountants would have spoiled the alliteration and killer B’s theme.)
Once a successful business
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
reaches eighty to one hundred employees a bureaucracy evolves. Slowly at first, usually the first outbreak is in H.R. Under the guise of managing growth it extends it’s tendrils into accounting, operations, sales and finally the whole organization.
So long as the enterprise is growing and financially healthy
So long as the enterprise is growing and financially healthy
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
the bureaucracy is akin to a benign tumor: everything circulates through it, but no real harm is done. The friction it causes is outweighed by the semblance of order it tries to maintain. Besides, success is the order of the day and the ‘crats are powerless in its glow.
Comes the downturn, perhaps sales slip
Comes the downturn, perhaps sales slip
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
a little or a new competitor takes the stage; literally any change is a signal for the ‘crats to act. In their sense of the company, things are wrong and they simply know that there is nothing wrong with any policy, ergo the problem must be the failure of people to strictly adhere to all policies.
Now, every
Now, every
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
company starts with a simple set of policies and guidelines and then someone does something stunningly stupid. A policy or policies are written and implemented to prevent any variation of this stupidity from recurring. On the other end of the behavior spectrum someone tries a new tactic in sales, operations o
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
accounting and it does not produce the desired results (in more ways than one.) Not only is the experiment a failure in some aspect, it engenders new policies designed to prevent a recurrence. These in fact operate to stifle innovation. Like barnacles on a cruise liner, policies accumulate day after day and
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
ct as an increasing drag on performance.
The ‘crats, freed by the downturn, begin to inflict policies with a vengeance. Overlay this with the external problems the enterprise is facing and positive actions slow dramatically.
Fear of layoffs is tangible. Few are willing to act decisively, let alone aggressiv
The ‘crats, freed by the downturn, begin to inflict policies with a vengeance. Overlay this with the external problems the enterprise is facing and positive actions slow dramatically.
Fear of layoffs is tangible. Few are willing to act decisively, let alone aggressiv
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
ly in the face of the troubles for fear of being singled out for the next round of cuts. At this stage the backstabbers ply their trade in an effort to eliminate the competent.
Key players and contributors quickly find even the most sagacious actions are second guessed and become grist for the rumor mill. Po
Key players and contributors quickly find even the most sagacious actions are second guessed and become grist for the rumor mill. Po
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
itive activity slows to a snails pace as people go into holding patterns waiting for someone else to be laid off.
As if this internal mix was not bad enough, the bookkeepers make a grab for control. Cash is tight and they ‘control’ the cash. Mind you they are not responsible for the activities that actually
As if this internal mix was not bad enough, the bookkeepers make a grab for control. Cash is tight and they ‘control’ the cash. Mind you they are not responsible for the activities that actually
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
roduce cash; but, they are the guardians of the check books.
Since the problem is financial, the bookkeepers posit that they are the only constituency able to grasp its complexity. When the only tool you have is a hammer everything begins to look like a nail. The tools available to the bookkeepers are financ
Since the problem is financial, the bookkeepers posit that they are the only constituency able to grasp its complexity. When the only tool you have is a hammer everything begins to look like a nail. The tools available to the bookkeepers are financ
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
al, not operational or any of the other necessary disciplines that make the enterprise run. The lack of cash creating the financial crisis is a serious problem, but it is also a symptom of underlying problems in other areas of expertise.
Suddenly there are layoffs, cutbacks on travel and other expenses. Now,
Suddenly there are layoffs, cutbacks on travel and other expenses. Now,
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
each expense needs the blessing of the bookkeepers. The few positive initiatives now face additional scrutiny and delay. While the financial folks are a necessary part of any successful restructuring/turnaround they are ill suited to lead the effort. All constituencies, inside and outside the company, will ne
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
d timely, accurate financial reports upon which to base decisions vital to the enterprises future. They will also need timely, appropriate action in all disciplines to complete a successful turnaround.
In a turnaround situation the killer B’s are precisely that- company killers. In a survival threatening cri
In a turnaround situation the killer B’s are precisely that- company killers. In a survival threatening cri
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
is it is not unusual for the most seasoned manager to freeze up. A survival threatening crisis is significantly different from years of running the business in good times and bad. Immediate action is needed, focusing on stabilizing defined situations threatening the immediate survival of the company (e.g. cal
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
ing bank loans, negative cash flow, death of the CEO,) and in the event management is temporarily unable or unwilling to function under the current stress.
At this stage a Turnaround Specialist is needed to provide the interim management necessary to stabilize the situation. The killer B’s will be redirected
At this stage a Turnaround Specialist is needed to provide the interim management necessary to stabilize the situation. The killer B’s will be redirected
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
either to providing positive actions for the company or to the nearest exit. The three initial stages of a turnaround involve:
1. Assessment
2. Ability to stabilize the chaos
3. Action in the form of developing a Recovery Action Plan
The Turnaround Specialist brings an outside, objective view of the comp
1. Assessment
2. Ability to stabilize the chaos
3. Action in the form of developing a Recovery Action Plan
The Turnaround Specialist brings an outside, objective view of the comp
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
ny’s performance and identifies problem areas affecting results. Lack of cash flow/profits is often the immediate problem that precipitates the Specialists retention, but as troublesome as these problems are, they are also symptoms of other underlying problems which have to be quickly identified and redressed
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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