An interview and discussion with Michel Darnaud, former President of Boston Scientific
During 2003-2004, the President of Boston Scientific Europe, Michel Darnaud, faced a critical decision: How to successfully roll out a new clot-resistant stent in the European marketplace against a gargantuan competitor with a product already in place. That competitor was Johnson & Johnson.
In the end, Michel made a decision that was counter to what executives at headquarters wanted. Those executives saw in their stent an innovation that cried out for a high price, a value play. Darnaud agreed that this device brought extra benefits to the cardiovascular market, but he believed that Boston Scientific needed to respect the geography, the market into which they would sell the stent.
“I was in charge of Europe for Boston Scientific and had a certain level of autonomy, and could make decisions on my own,” Darnaud recalls.
He knew the European market well, including how to market and price products. That said, he needed to carefully consider how to discuss the issues and negotiate with senior management back in the United States.
“I had to be creative in order to sell my approach to the product launch,” he says. “That required that I apply some creativity and not explain the entire story so I could get the approval of my strategy. My goal was to get the plan approved and implemented.”
In closed-door discussions he laid out the plan. At the same time, he believed – and argued to management – that at that moment the company lacked all the clinical data it needed to command a superior price over J&J’s stent pricing – for a very similar product. He also believed that by pricing his product lower than his rival, he would capture enough market share for headquarters to declare a launch victory.
Darnaud decided to act on this gutsy strategy.
“I believed that instead of going for a premium we needed to sell the product at just a few hundred Euros below the price J&J was charging at the moment – before that big company could adjust its pricing policy,” he says. “We gained 60 percent market share in six months, in part due to this pricing strategy. And once it worked, everyone was happy.”
This is not a decision for the faint of heart. But as Darnaud told me, he was never a “yes man.”
“It’s true I did something I was not supposed to as a key executive. But I did it and was successful because the strategy worked very well,” he says. “The strategy itself was not exceptional. Yet, I wanted to make the point regarding the pricing that would make our product succeed. So, despite the fact that I had marching orders, I felt they were not entirely the right ones.
What would he advise others in similar situations? In sum:
- If you hold the “informational cards,” act! This advice applies in many different situations, but it’s a very difficult call to make. When you are in charge of a project that you know very well and you feel strongly that you have devised the right strategy and tactics – and someone who possess only 10 percent of the relevant information tells you what to do – then you can disobey and do act on your superior information.
- Don’t cave in to pressure. By capitulating, you put yourself at risk and sometimes at huge risk by meekly doing “what the boss would do.”
- Ask for forgiveness later. If you have to apologize and ask for forgiveness, then do it – later.
How did his bold action affect the rest of his tenure at the company? He chuckles and says simply, “I had enough credibility in the company for me to keep going on for a while.”
Michel Darnaud is currently President, Cardiac Surgery, of Sorin Group, a medical devices company headquartered in Italy.