The most important product launch of my career should have been faster.
But spreadsheets got in the way.
In 2001 I was CFO of a company launching a drug for use in a hospital procedure to treat heart disease. We had just gone public. The difference between a half billion dollar market cap and a two billion dollar market cap was how fast our revenues grew.
Our drug was a good drug. It reduced clinical events. It reduced the need for other more expensive drugs. It reduced bleeding complications. It reduced the average patient’s length of stay in hospital.
But it was very expensive. And we were replacing a drug that was very cheap.
Fortunately we had three things going for us:
- A CEO with a great clinical mind who had embedded value throughout the development process
- A terrific Director of Medical Affairs, an MD with healthplan experience who didn’t mind speaking in dollars and cents
- And a great value proposition that quantified how much money our premium priced product would save a hospital buying it.
A value proposition that was so good that it became a Harvard Business School case study.
As a recovering Spreadsheet-Aholic, when I saw our value proposition, I felt like my ship had come in. Here was a quantitative argument about how our high priced product could save our customers money. And that made me happy because dollars and cents was a language I could speak. As CFO of a company where somebody else always got to present our clinical benefits, it was a relief to have something to talk about other than astronomical R & D and launch expenses. We were delivering benefits to patients and value to hospitals. As far as investors were concerned, I was the good guy, saving the health system some money. Not the CFO who couldn’t control costs.
Our product’s value was all there in an elegant Excel spreadsheet.
A spreadsheet we had paid consultants six figures to produce. A spreadsheet that flashed with macros every time you changed some data. I didn’t play much pinball in college, but the flashing lights were almost that good.
But it was a spreadsheet so complex that only the consultants could alter it to incorporate new findings and approaches. And only for a fee.
There was no way I was going to touch that spreadsheet. I was probably a top quintile spreadsheet guy. But there were too many bells and whistles. I was bound to screw it up. That spreadsheet and its formulas were too fancy for even me to follow.
So I built my own spreadsheet. Just so I could make sure the answers were right. Good news. They were.
We launched our drug. And our Director of Medical Affairs went on the road. From one hospital to the next. Crisscrossing the continent. To be at every Hospital Pharmacy and Therapeutics Committee meeting. She had more confidence using the spreadsheet than I did; she was definitely top decile. She could present the spreadsheet. Listen and respond to the discussion. Enter the hospital’s specific numbers. Adjust the value proposition to the objections of the skeptic in the room.
Then she would wait for the flashing lights…. And voila! Our expensive drug still saved the hospital money. She was good. Our drug was good. But she was really good. And our drug started to get approved for hospital formularies. One hospital at a time.
Pretty soon our Medical Science Liaisons (MSLs) understood the value story. Soon after that, our better reps understood it as well. They all wanted the spreadsheet. To accelerate the drug launch. To accelerate their commissions. But they weren’t top decile. Or even top quintile. And spreadsheet flexibility for MSLs and reps made the legal and regulatory people nervous. The MSLs might turn off the flashing lights by accident. They might change numbers they shouldn’t. The reps might deliver inconsistent messages. Or say something that was out of bounds.
So the spreadsheet stayed off limits for the MSLs. And the better reps had to juggle Hospital Committee meeting times that our Director of Medical Affairs could make. One delay after another.
And our drug launch was a straight line. Gently rising, but a straight line. No acceleration. No exponential curve. Kind of like the increase in altitude, hiking east to west, in Kansas.
I was CFO. I was the one who got to reduce our revenue guidance to the Street. It was an ugly conference call.
Because of that spreadsheet.
Don’t get me wrong. Eventually the drug took off. It is still selling plenty today. But the launch should have been faster.
A dozen years later, I paused to think about how that drug launch might have been better. If only…
If only we had an understandable tool that could make quantified value accessible to more members of our team:
- Easy to follow
- Easy to use
- Easy to avoid mistakes
- QA’ed messages
- Customized but QA’ed materials to leave behind
- Gathering data from each unique hospital discussion
- With just enough flexibility to allow a broad team to have effective, tailored conversations. Without going to jail.
If only we had dodged the un-scalability of spreadsheets. We had great value propositions that should have gone viral. In a high quality, controlled, compliant, customizable form with sources provided, consistent graphics and messaging that others could understand and use.
If only we had launched the drug in a different decade. So that we could have deployed cloud software. Leveraging our value propositions with collaborative tools. Tools that support and sustain B2B companies that create, communicate and capture customer value. Cloud software for value propositions is better than spreadsheets. And exponential product launches are better than hiking across Kansas.
For additional information on the problems with spreadsheets, read our most recent white paper by Michael Dunne – 8 Ways Spreadsheets Undermine Profits, Growth & Customer Value for B2B Enterprises.
About the Author:
Peyton Marshall is CEO of LeveragePoint. Previously, he served as CFO and Acting CEO at PanacosPharmaceuticals, Inc., CFO of EPIX Pharmaceuticals, Inc. and as CFO of The Medicines Company through their initial public offering and the commercial launch of Angiomax®. Previously, he was an investment banker in London at Union Bank of Switzerland, and at Goldman Sachs where he was head of European product development. He has served on the faculty in the Economics Department at Vanderbilt University. Dr. Marshall holds an AB in Economics from Davidson College and a PhD in Economics from the Massachusetts Institute of Technology.