Tag Archives: Focus

How do you Maintain Focus on your Core while Expanding? Six Considerations

Interview with Clark Avery, President & CEO, Aesyntix Health

Situation: We’ve established a strong core business and it is time to diversity. Our principal growth opportunity is complimentary to but a different business model from our core. What are best practices for maintaining focus on core business while developing a new opportunity?

Advice:

  • First and foremost, be emotionally and strategically ready to make the bet and commit to action.  In doing so you must “know thyself.” Specifically, taking a long look to determine whether you tend to overanalyze or are too quick to pull the trigger. Understanding your tendencies will help in the steps below.
  • Establish the prerequisites for pulling the trigger. For us we had to determine the:
    • Level of operating stability for the core business that will allow you to split focus.
    • Level of financial stability and predictability that will support both core and expansion efforts.
    • Level of organizational and process stability that will allow you to take on the new opportunity.
  • Understand and define the differences between the old game and the new game.
    • What are the financials of the growth opportunity? How do they differ from your core business? Are there conflicts that must be resolved?
    • Can you launch an innovative solution to differentiate the new offering?
  • Gather enough understanding of market need that you will satisfy with the new opportunity so as to be able to address it effectively.
  • Establish a sound execution strategy and timeframe for launching the new business.
    • Some/many of your decisions will be wrong. You need the resources to tolerate a learning curve while running fast towards your goal.
  • Draft a leadership development plan of both the core and new business before you start. This plan must define the skill sets and growth needs of each business.

You can contact Clark Avery at cavery@aesyntix.com

Key Words: Diversify, Opportunity, Focus, Stability, Market Needs, Execution, Leadership Development   [like]

How do you Respond Strategically to Market Uncertainty?

Interview with Kevin Moser, CEO, Dfine, inc.

Situation: The medical device industry faces uncertainty due to potential changes in reimbursement, increased regulation accompanying health care reform, longer FDA approval timelines and the economy. How does this impact strategy for an early stage medical device company?

Advice:

  • First and foremost it puts a premium on focus. We compete in a market dominated by large incumbents. When introducing new products in the past we would have blanketed the market to maximize early market share. Now we are being much more selective in terms of where we compete and putting more effort into targeted geographies.
  • This focus is accompanied by more caution and control of spending. We will only hire a new sales rep, for example, if we are assured that there is a significant customer base in the market that rep will serve.
  • Similarly, we are being much more cautious in our capital equipment decisions, and if an employee leaves we do not automatically replace that individual.
  • In terms of price planning, where in the past we would have counted on annual price increases, we now plan for the potential of prices decreasing over time to reflect new pressure on reimbursement and cost containment. As another example, in 2012 there will be a new tax on medical device companies. We assume that this will reduce our margins where in the past we might have passed it on to the buyer. Reduced margins will also impact our new product investment strategy.
  • The big change in long-range planning is that we are focused on slow, sustainable growth – maintaining both gross and net margins and profitability. This is a major change from five years ago when our focus was on maximizing rapid market penetration for new products. We want to be self-sufficient financially and thus avoid having to rely upon future fund-raising rounds.

You can contact Kevin at kevinm@dfineinc.com

Key Words: Medical, Device, Reimbursement, Regulation, Health Care Reform, FDA, Focus, Product Introduction, Spending Control, Hiring, Pricing, Growth  [like]