Gary Tubridy (GT): Hello, Gary Tubridy, here, as Senior Vice President of the Alexander Group at the 2018 Chief Sales Executive Forum. I’m here with Mike Iskra, president of North American commercial operations at Ortho Clinical Diagnostics. Mike, welcome.
Michael Iskra (MI): Thanks, Gary.
GT: Tell me a little bit about Ortho Clinical Diagnostics.
MI: Ortho Clinical Diagnostics is a clinical laboratory diagnostics company. We’re the fifth largest in the world. We primarily service hospital laboratories and clinical laboratories, and provide them blood testing equipment. We’re the number one market share leader for transfusion medicine and blood banks.
GT: How have your customers in that business changed in recent years?
MI: There’s a lot of change in health care, as everybody knows. A lot of it’s trying to drive down cost, but in health care, you can’t sacrifice quality, so all of our customer are trying to find ways to take cost out of this system without affecting quality. The health care doesn’t work if you’re not delivering quality health care. They’re feeling a lot of that pressure. What that’s showing up as, particularly in the United States, is consolidation. We’re seeing a lot of IDNs, or Integrated Delivery Networks, emerge and continue to expand and grow, where smaller hospitals are joining partnerships to partake. They’re trying to leverage that into better purchasing agreements, and lower prices, frankly, for them. But it’s also making decisions a little bit more complex because you’ve got a lot more stakeholders involved.
GT: More stakeholders with different kinds of agendas.
MI: Absolutely. A few years ago, a lot of our decisions were driven by the clinical utility of a product, and would it deliver, and that decision was made in a hospital laboratory by laboratory leaders. Today, that’s a decision that’s being made by a vice president of ancillary services, somebody who’s overseeing more of a corporate view, and a cost view, than the actual users of the equipment.
GT: Has the changing customer and the elongated buying process, has that changed how you package your products together, and how you position them?
MI: It does. We’ve seen this evolution over time, and you hear a lot about moving from selling products and futures and benefits to selling solutions. We’ve been on that track for some time. We’ve added things like automation into our capability, the ability to connect random various pieces of equipment together into one operating system. We also have another challenge for us that we’re dealing with, and our hospitals are dealing with, is their labor pools are shrinking. There are less and less people coming in, and so again, not just the quality, but helping them be more efficient, more productive. If you have a talent, and you need their brain to help interpret results and manage things, the last thing you want them doing is spending time moving tubes around a laboratory.
GT: Their challenge is an opportunity for you.
MI: Absolutely. It is. The better you can help your customer meet their challenges, the more opportunity there is for us.
GT: Mike, how is this changing how you organize the sales force?
MI: It’s a lot of change, and we have to continuously look at changing the sales organization. For us, a few years ago, we started putting a team in that are health system executives more focused on these IDNs and understanding what their corporate needs were, so to speak, selling at a higher level, without forgetting the value we’re delivering to the end user in the laboratory. We started with about 10 people focused on that, looking at the top 100 IDNs in the market, health systems in the market. We’ve now doubled that.
GT: Multi-tiered selling, yeah.
MI: That, for us, is a team that has to take point. When we have a health system decision, while we have various people calling on the individual accounts that are members, the HSE, or House System Executive, has to take control, and now we have a complex sale to manage. It’s complex for our customers, but it’s also complex for us internally, and they really are the ones that are in charge of putting a strategy together. That wasn’t something that we had to do a lot of in the past, but today it’s critical.
GT: Is there a different relationship between sales and marketing today to extend our connectivity with the customer earlier in the buying process?
MI: It’s evolving. That connectivity, the tie between sales and marketing in our industry, in our businesses has always been pretty strong. For us, marketing in the past has been highly focused on sales support and product management. We’re seeing now more and more marketing has to take a more active role in strategic efforts focused on segments. You can’t have the same approach for the entire market. You need to adjust. That’s a change that we’re making. The other piece that’s been highly relevant to a lot of things we’ve looked at here at the conference is the transformative, or digital, marketing, other ways to reach our customer. That’s where our industry, I think, has lagged, and what we’re seeing is marketing’s opportunity is to be in the digital space to reach out and have touch points with our customer well before our salespeople arrive to make it easier for the salesperson.
GT: We talked earlier about the customer success function, which takes service out of the realm of break-fix and into, “Let’s help you do your job better.” How’s that evolving at Ortho Clinical?
MI: Quite a bit. Service is a strength of our company. Ortho has a long history of being known for excellent customer service, and over the last three years, we’re fortunate, our service team is in our commercial organization. It’s under the revenue leaders. It’s all in one team, sales, marketing, service, customer service. We put it all together because anybody who touches the customer has an impact on our revenue. Service, for our business, is critical. We sell a piece of capital equipment. The relationship just starts after we sign the deal, and now we’re relying on our field service engineers, and our technical resources to deliver to the customer what they thought they were buying, and so that’s critical. We’re fortunate our team’s been number one in North America for the last three years. We’re rated by an independent party, and it’s something that our customers highly value and is recognized, and frankly, we think is a differentiator, and for me, in charge of a commercial organization, in charge of a revenue line, that’s critical. Because if our customers aren’t satisfied, they don’t renew. And if we have customers that are satisfied, when new ones are looking and checking us out, they’re talking to our current customers. This has become a real strength for us and is a key driver for how we plan to keep growing our revenue.
GT: You’re kind of in charge. You’ve got your hands on the controls of all of the levers in the revenue production factory. How has that job changed in recent years?
MI: It’s by integrating those things. Instead of treating each as an independent function and capability and managing it tightly within its own walls, it’s, “How do we get these things to work together?” For us, it really is a matter of stepping back and not looking at it from the company out, but looking at it from the customer in. If we’re not effective, we won’t deliver what we promised. That’s the change, and I think that’s a big part of my role is looking across those things, and making sure that we have them working well together.
GT: Yeah. What’s in your agenda for 2019?
MI: More growth, period. For us, I mean, it’s very simple. It is growth. You know, we talk about this, the revenue leader. What you want out of revenue is a lot of different things. For us, it is driving the top line. It’s very clear, that’s our opportunity as a company, and so we’re looking for ways to better keep our current customers, how we expand with our current customers, and then, frankly, how are we going to take customers away from our competitors.
GT: Mike, good luck in your 2019 endeavors, and thank you very much for joining us here.
MI: Great.
GT: Appreciate it.
