Crisis and the Sharp Edges of Leadership

I looked at the email asking me to meet with my manager and his manager Sunday night at the hotel where the Western Zone Sales meeting would begin the next morning. This was the first of three sales meetings in the U.S, with the next two scheduled in Chicago and Jersey City. They were planned as kick off and training meetings to start the new year. A month before I was promoted to lead the North American sales and service teams; responsible for over 450 sales reps and 1000 service engineers. My accountability was now for about half the company’s revenue, 1.5 billion and more than half of the profit. As I entered the hotel suite I had no idea how my life was about to change. I would go from leading the commercial team to deliver the sales plan to leading the team through a crisis. I entered the suite and sat on the couch as tenseness filled the room. A few niceties, then I was informed the FDA was mandating a recall of our very popular and important cardiac test called Troponin. In the first few seconds it seemed benign. We had hundreds of tests. I am not going to describe the intricacies of the test or the recall itself here, suffice to say it was a labeling issue on a very important test to physicians and our company.

What I am going to talk about is how our leadership team responded. How to manage a sales organization through a critical situation. What we learned on the fly and how we dealt with a spiraling crisis. We were about to anger and disrupt our customers akin to bees when you kick over their hive. The risk to the company was enormous. Through the following 2 years I felt the “sharp edges of leadership” and leaned heavily on 31 years of sales and leadership experience. I also at the outset, want to say this was not a one man show. I had great support from my leadership team above, below and sideways. While we did not see it at the time, this was an existential threat for the company to remain independent but that’s a story for another day.

To help you understand the impact of this recall let me use this analogy. Imagine you own a local Starbucks franchise and are told by the corporate office you can no longer sell anything but coffee. The label said coffee and so food, cups, lattes, etc., could no longer be offered. We advertise coffee and that is all we can serve. That is essentially what we were telling our customers. Our Troponin test label no longer met the criteria for what it was being used for. No one was harmed but the use and the formulation was no longer aligned to what was originally approved and until it was resubmitted for approval it could no longer be offered by our company. It may sound strange but healthcare is a highly regulated environment and the FDA operates with a high level of discretion. Our customers (diagnostic laboratories) had customers too (physicians) who were treating cardiac patients. This automated test was integral to their their labs, and the delivery of patient care. The scale and resources of the labs conducting this routine test 24 hours a day would be severely disrupted by this notice.

If this wasn’t hard enough – as a public company SEC regulations required us to tell the public first, then our employees and last health care professionals. Try explaining that.

The sales meeting was to begin the next morning at 8 am with a third of the North American sales team. We put out an urgent message for a mandatory nationwide teleconference at 8 am PST with all diagnostic commercial operations. Our intention was to tell everyone together on this call in front of the meeting at the hotel. We walked the reps through the press release out earlier that morning. We communicated to the sales team with confidence that we, and they, could handle it. We instructed each rep to identify and prioritize a list of the most critically impacted customers, those in large scale medical centers, and to contact each at a minimum by phone before the end of that business day. As I said, we operate in a highly regulated environment so we had to be very specific. Words mattered, so there could be no “ad hoc” communications. We prepared talking points and a script which would serve as the foundation of a playbook for the sales and service teams that was updated over the next two years as information changed. We told the sales reps and marketing teams at the meeting that the agenda was no longer the agenda. I remember throwing it in the trash to raise tension and signal we were serious and the expense and planning that went into these meetings were no longer relevant. Getting in front of, working with and keeping our customers was.

Beginning that day and over the next 2 years…..

For the next 12 months we offered daily teleconferences at 2 PM with optional participation, (mandatory if we had major developments to share). Reps could then hear directly from me and other leaders on developments, answering questions, listening and taking actions to support them to serve the customer. LESSON: Give your team a place they can go to hear and be heard with a regular cadence. Same time same place.

We planned field visits with reps to see key customers and planned communication meetings with the local teams to listen and share. LESSON: Get out and go with the reps to stand in front of the customers and take some arrows for them. Take that time in the area to host employee town halls. Be visible and show no fear.

We conducted an executive communication tour with me and other key executives, along with our CFO, CEO and CSO, bringing key customers together to inform and listen. LESSON: Schedule your C suite executives in front of your VIP customers. Choreograph it, but set the expectation that it may be ugly but will be controlled. Reps often feel the executives are insulated from the heat they get from customers. Show them they are not.

We changed the compensation plan for sales reps to insulate them from the financial impact of this crisis and implemented incentives to realign the sales team to saving customers versus getting customers. LESSON: Sales reps are driven by money, recognition and quota achievement. Make that out of reach and the risk of them leaving (with all their customer knowledge) is high. Figure out a solution that balances the needs of the moment and the future. Get the entire executive team involved. Caution: Sales reps will have lots of advice. Be skeptical, but listen.

We recognized the sales reps had the relationship with the customers and we needed to leverage that. We needed to use it to calm and assure the customers what was going on and what we were doing about it so they would not fire us. By maintaining the sales rep credibility, we engaged them as our primary communication channel and supported what customers saw as the face of the company. LESSON: This no time to reflect but rather it is a time to set the tone. They are watching your temperament. Be a thermostat, set the temperature.

We focused on our strength, the sales team. Listening to them, hearing them, keeping them informed. It was heated. They were angry and at the tip of the spear with customers. Timelines would be missed or miscommunicated and they had to manage it. I and my team, with other key executives made dozens of trips to step in front of the reps and take the fire. LESSON: Reread 1, 2 and 3 above.

Through it all we measured sales rep turnover, action items, commitments, timelines and customer retention.

The post script is we faced an insurmountable challenge and over time the outcomes were arguably successful. I knew we were making a positive difference for the customer, the sales team and the company. We did what we could with what we had. No trying, doing! Accountability, transparency, customer centricity, staying poised were our beacons. I remembered grounding people that…..” this wasn’t war, it was a business challenge and no one was going to die from it, although some may have felt they would.”

LESSON: Learn and see what you are capable of because adversity is what builds strength and character. I reflect back on that time with pride in the team, the professional managers I worked with, the sacrifice and the absolute importance of leadership. While the company was ultimately sold, the valuation was at the highest level in its history in large part because of the dedication of the commercial team to our customers.

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