Hope Brandicourt is good at disaster management
A true test of any leader is not how they handle success but how they deal with the inevitable hurdles that get in the way of success. This is why Diabetic Investor is beginning to wonder whether Olivier Brandicourt, the new CEO of that soap opera turned three ring circus, understands the situation he’s walking into. While it may be hard to imagine the situation at Sanofi (NYSE:SNY) seems to be getting worse by the day.
This disarray could not happen at a worse time as the company is in the midst of two critical product launches, Afrezza and Toujeo. Launches which if you believe the reports coming out of the company, and we do, aren’t going all that well. Yes in pure Sanofi fashion they are micromanaging these launches as management seems to be lurching from one strategy to another. Sales goals keep changing while management continues to burden the sales team with ever more “training”.
Keep in mind this is the same sales team that our good buddy and Wacky award winner Serge publicly threw under the bus, literally blaming them for the failures in the diabetes franchise. Failures which were created by management, a management team which is also depleted given the many departures right before and then after Viehbacher was beheaded by Serge and his fellow board members.
Whether management realizes it or not, and quite frankly we don’t think they do, the launches of Afrezza and Toujeo are tough enough as it is and don’t need the additional burden of management interference. Even in these lean times sales teams are still valuable when bringing new products to market. Yet it doesn’t help much when these teams aren’t supported by management or given the tools they need.
This is why many are beginning to wonder whether Brandicourt is doomed before he collects his first paycheck. It’s well known that he was not the board’s first choice to replace Viehbacher nor was he the second or third option. No disrespect to Brandicourt as he does have a long and distinguished career but the harsh reality is few internally believe he has what it takes to turn things around.
Creating more uncertainty is how much independence Serge and the board will give Brandicourt. As everyone knows Serge while acting CEO was very vocal about what Sanofi should and should not be. It’s also well known that a reason for canning Viehbacher was his lack of communication with the board. Or put more accurately Viehbacher wanted to run the company for the benefit of stakeholders while Serge and the board were more concerned with pleasing the French government, unions and media.
Looked at realistically Brandicourt doesn’t have too many positive options given what he has to work with. We doubt the board would allow Brandicourt the freedom to be bold nor do we see them allowing him the latitude to make major changes to the organization. The fact is Sanofi is bleeding from the jugular something a band aid won’t fix, yet this might be all the board allows. The diabetes franchise needs a major overhaul from top to bottom if it stands any chance at all of surviving over the long term. This is not just an overhaul of management and changes to the sales organization but should be extended to their diabetes pipeline.
While this will just kill the French what Sanofi needs most of all is to be Americanized and that doesn’t mean replacing the wine in the cafeteria with Miller Lite, although that would be a good start. What this company needs more than anything is actually one of the few things Serge said that we agree with, what Sanofi needs more than anything is accountability. That metrics commonplace at American companies, like return on investment, mundane as they may be should become part of the Sanofi culture. Decisions should not be based on gut instincts or to please non-Sanofi stakeholders. As simple as this sounds it won’t be easy particularly at Sanofi as this would be a dramatic departure from the past.
Keep in mind this is a company who invested almost $30 million in social media and had no metrics in place to judge whether or not this money delivered any real results. This is also a company that came up with the crazy idea that special lunch bags would sell more Lantus. And the topper of them all, and there are many, might just be their belief that when Apple changed the connector port on the iPhone that patients would pay more money to purchase an attachment so they could use the way cool and now way dead iBGStar.
Diabetic Investor cannot nor will we speak to any other area than the diabetes franchise yet given the importance of the franchise it cannot be ignored. The fact is if Brandicourt doesn’t act and doesn’t act quickly this franchise will not survive. As we noted above a band aid will only delay the inevitable. The way we look at it anything short of a major overhaul will ultimately put Brandicourt in the uncomfortable position of managing from one disaster to the next. Not exactly the best way to build stakeholder value but in the end it might be what stakeholders have to live with.
