Are the inmates running the asylum?

Are the inmates running the asylum?

In a few weeks we should get our first glimpse of the strategic vision Olivier Brandicourt has for Sanofi (NYSE:SNY). While we have no idea what this vision might be we do know that it better be a good one as the rank and file is on the brink of a major revolt. Rarely has Diabetic Investor experienced such outrage by the Sanofi sales team. Frankly we cannot print the words these people use when describing how they are being treated by management. What we can say is that unless something is done and done soon Olivier will have a full blown revolt on his hands.

Listen we know that sales people love to complain, this as they say is the nature of the beast. However this is one time when the complaints are justified.  When these people state that management is totally clueless they aren’t kidding. When they state formulary access is critical they are 100% correct. When they say that physicians ae reluctant to prescribe Afrezza they 100% correct. When they say that Toujeo is only incrementally better than Lantus they ae 100% correct. When they say that management is to blame for the poor performance of these two drugs they are 100% correct.

Unfortunately when they say that it is the sales team which will be beheaded they are also 100% correct. This also is the nature of the beast as management, especially at Sanofi is not held accountable for their mistakes. The simple fact is management has not given the sales team the tools they need to be successful. Management is not paying attention to what’s happening in the real world preferring instead to live in some sort of fantasyland.

When Olivier first took over we noted that of all the items on his list, improving employee morale should be near the top of that list. A task which based on the level of discontent is getting tougher by the day. Keep in mind that everyone at Sanofi knows that Olivier was not Serge’s first choice to be the new CEO. That the job was offered to and turned down by several very well qualified candidates. The harsh reality is from the moment Olivier walked in the door he was already handicapped.

To be fair and even the sales team acknowledges this, cuts were inevitable. As we have noted many times given the dynamics of this market companies like Sanofi can no longer afford to employee an army of field sales reps. That the role of the sales team, once vital, has changed and while still important is no longer mission critical.

Still management shouldn’t be blaming the sales team for the poor performance of two drugs which had obvious issue before they came on the market. Issues which could have been somewhat mitigated had management pushed harder for better formulary access combined with more realistic expectations. We always wondered whether management really believed the manure they were shoveling to investors. Yes we know part of managements job is to make the best of a bad situation but at as they say you can put lipstick on a pig but it’s still a pig.

The real question is can Olivier get out from under the mess he inherited. Can he somehow turn this dysfunctional unit into something resembling a somewhat functional unit? Will he take the bull by the horns and do what needs to be done or will he merely have a mass beheading? The reality is reducing headcount as necessary as it may be is just one of many steps that need to be taken. Olivier would gain some serious street cred if he besides reducing headcount he also beheads some of the management team too.

This would show the rank and file that things really are different and that accountability is more than just a word at Sanofi.

To be honest Diabetic Investor isn’t sure even if Olivier wants to do what needs to be done that he will be allowed to do it. Recently he acknowledged that like his predecessor something needs to be done with the cost of plants and operations in France. Which pits Olivier squarely against France’s unions, unions which nearly shut down the country when Viehbacher tied to reduce costs.

Olivier also must garner the support of Serge and the board, a group which seems more concerned with not offending anyone than having a well-run global pharmaceutical company. Serge can talk all he wants about accountability but at the end of day its action not words that count.

The bottom line here is that Olivier and Serge must decide what’s more important being liked or doing right. Experience says they will chose the former.