Executive Profile, Becton Dickinson and Co.

Health & Beauty Care Executive, October 12, 1998.

Jean-Luc Butel, 41 was appointed president worldwide consumer health care at Becton Dickinson and Co. (Franklin Lakes, NJ) in August. Previously, he was president consumer health care North America since January 1997, and president Becton Dickinson Japan since 1993. Butel was general manager microbiology since 1991. Prior to joining Becton Dickinson, he was with Johnson & Johnson for eight years, most recently as marketing director of ophthalmologic products, and previously as general manager of its China operation. Becton Dickinson posted sales for the quarter ended June 30 of $833.6 million, up 18%. The company had a net loss of $10.0 million -- including a $117 million restructuring charge -- which compared to net income of $70.1 million. The interview below, Butel discusses the company's objectives in consumer healthcare.

HBCE: What circumstances led to you being tapped for your current position?
JLB: There were three factors. First, Becton Dickinson runs a worldwide business, so they look for people who have international experience, which I have. Secondly, our division is quite unique in that it is the only business in Becton Dickinson that has both a medical and consumer orientation. The diabetes healthcare business is more of a medical business, even though we distribute through retail pharmacies, while our home healthcare business is a more typical consumer market. The company wanted someone who has been exposed to both sides, as I have been. Finally, we are undergoing a lot of change at the corporate level, and when I was president of Becton Dickinson Japan, we undertook a number of programs and initiatives which should prove valuable in implementing the current transformation. Also, Becton Dickinson tents to put executives in different roles in order to broaden their lines of expertise and bring new ideas to different positions. My predecessor, Ken Weisshaar, was appointed cfo, though he did not come through the financial side of the business.  

HBCE: What attracted you to the opportunity?
JLB: The corporation has a goal of doubling the sales of Becton Dickinson worldwide, to $5.6 billion, in the next five years, which is a huge challenge,  but also very exciting. It's much more interesting to manage growth than to manage a business that is being downsized. The consumer healthcare business is well positioned to achieve that goal. We have opportunities not only for geographic expansion, but also for new product introductions in both diabetes healthcare and home healthcare. 

HBCE: What were your marching orders when you were tapped for the position?
JLB: Becton Dickinson operates in a very decentralized manner. Each business head is given a lot of freedom and leeway, so I did not get any marching orders, per se. But I did get a couple of broad, general orders. One of which was to make sure we double the size of the business in the next five years. Becton Dickinson celebrated its 100th anniversary last year. We're now looking at the next 100 years, which we consider in terms of the next five years, the next 20 years, and so on. So my orders include making the necessary transformation. It is also my responsibility to make sure our division contributes to Becton Dickinson's main purpose, which is to help all people live healthy lives.

HBCE: Describe the consumer healthcare division as it stands today.
JLB: In diabetes healthcare, the bulk of our business is in insulin-delivery products, such as needles and syringes, where our worldwide share is somewhere between 75% and 80%. we are well aware that people don't like to stick themselves with needles, and we always strive to improve comfort by coming up with lower gauge and shorter needles so people can treat their condition with the minimum amount of pain. Our history in diabetes care dates to 1924, and we offer many other accessory products, such as alcohol swabs, lancets, lancers, glucose tablets, and other smaller product lines. On the home health care side of our business we have ACE bandages, Bauer & Black elastic support products, including arthritis-relief gloves, and Tru-Fit sports medicine products, which we acquired in December. We are also a major player in the thermometers business, where we are working on instant digital technology. We have also just launched a line of blood-pressure monitors, which fits well with our diabetes healthcare business, since many people with diabetes have high blood pressure. We can further leverage our position across within the diabetes and home health care markets. As for product line expansion in our consumer businesses, we are looking at introducing an ACE Junior product line. We are also looking at the fact that the fever-measurement categories are in need of consolidation, and we intend to play that role in the marketplace.

HBCE: What role does consumer healthcare play in Becton Dickinson's overall business?
JLB: We account for 20% to 25% of the company's sales, and are important because we are the only division that has direct, daily contact with the products' end users. Most of our other divisions sell diagnostic products for laboratory use. I think the position of the business has to be framed in terms the company's goal and mission. We intend to become the organization most known for eliminating unnecessary suffering, and in doing so, we want to become one of the best performing companies in the world. For our division, the issue of eliminating unnecessary suffering is critical. And, since many of the people that work in our division have conditions we treat, we are familiar with the issues involved on more than just a business level.

HBCE: How did the consumer healthcare division perform in the fiscal year just ended?
JLB: We met both our sales and profit targets. All the divisions are aligned to the corporate goals of 15% earnings growth, and double-digit sales growth. We did face a rather difficult year, however, like most other healthcare companies due to managed care and reimbursement issues, as well as the race to introduce new products ahead of the competition. Nevertheless, we had some significant accomplishments during the year, including the acquisition of Tru-Fit and the introduction of the BD A1c at-home diabetes test kit. In addition, we opened facilities in India and China to make diabetes syringes and needles. We would have liked to introduce more new products, but overall the results were very positive for the year.

HBCE: What else is impacting the business?
JLB: We saw a lot of new alliances that took place during the year in the diabetes healthcare markets. Those between Novo and Schering, and Lily and Dura, for instance could be a very important developments. We also saw consolidation on the distribution side, among both distributers and wholesalers. And more of the top retailers are joining their logistics warehouse operations with those of the major distributors. From a technology point of view, we're seeing other companies entering the market with painless products, even painless blood-glucose monitors. Also more large pharmaceuticals companies are looking seriously at the diabetes care market. Abbott, for instance, has gotten much more serious about diabetes care through their MediSense business. We understand they have a deal with Japan's Terumo in terms of marketing their diabetes syringes. Procter & Gambles is also raising interest in diabetes healthcare, through the program they have with Juvenile Diabetes Foundation. All this activity shows diabetes care is a very attractive market.

HBCE: What are your objectives for 1999?
JLB: To continue double-digit growth. We are also continuing to look at possible entry into the blood glucose monitor market. It would be a first or us, but it's an area where we feel we can have a significant impact. On the home health care side we want to continue bringing products to market that will enable people to manage their health at home, since getting access to doctors is becoming harder. The role of the pharmacist is becoming increasingly important, and we want to participate in that interaction. 

HBCE: Elaborate further on your strategies for accomplishing those objectives. 
JLB: We are working closely with our retail partners to move to managed care together. We have  compelling story to tell managed care entities about how we can reduce the cost of care and help ensure compliance with certain programs, especially in diabetes healthcare. The second area we are working on os accelerating our growth overseas, because we have products that are affordable to the population, even in less developed markets. We want to make sure we get the right level of distribution in those markets, and put together the right education programs to achieve those goals. In the healthcare business, we will continue to launch new products in 1999, where we will either redefine categories or create new ones. Although we did not, perhaps, pay enough attention to category management in the past, we have recently reorganized to better address the needs of our major retails partners on that front.

HBCE: Where do you see the fastest growth opportunities?
JLB:  In blood glucose monitoring -- because so many technologies are about to enter the market. The days using a meter, a strip, and taking blood from a finger are numbered, even though that segment of the market will remain important just because of its size. Alternative technologies will be very disruptive to this segment and will create a number of opportunities. Also, the home healthcare market is very fragmented; no single company dominates. There are electronic companies competing in this market which are very good electronics, bit not very well versed on the health care business. We are in a unique position because we are good at electronics and we know the healthcare business inside out. We're looking at growth rates above 20% in this area. 

HBCE: What categories will be natural extensions for your division?
JLB: The trend of people managing their health from home cannot be ignored. There are some common diseases, such as asthma and arthritis, where I could see Becton Dickinson playing a major role. With more healthcare being managed at home, the need for information grows. What are the download capabilities that people will need to have at home to communicate directly with their doctors or with their managed-care providers? Who will manage the information? These are the opportunities we are investigating.  

HBCE: Who are you keeping an eye on in the marketplace?
JLB: Procter & Gamble's goals is to double the size of their company in the next 10 years. Considering their size, that's not a small challenge, and I'm sure they're looking at home healthcare as a natural extension of their product lines. Tyco International has made a lot of acquisitions lately, and it remains to be seen where they will fro from here. There is also Roche-Boehringer combination on diabetes healthcare, which is a very innovative and formidable company; Novo is our direct competitor in some product lines. Besides watching our peers, such as Abbott, Johnson & Johnson, and Baxter, we also strive to stay at the edge of management thinking, and maintain very good relationships with leading universities. We have done a lot of work in the past with Harvard Business School in terms of examining cutting-edge management practices. Part of the transformation Becton Dickinson has been going through over the last two years was a result of that works.

HBCE: Complete this sentence: In three years the consumer healthcare division will be...
JLB: The organization most known for eliminating unnecessary suffering from diabetes. We also want to be known as the first company that provides true home healthcare products and services to the general population. And, again, we're looking to double the size of this division in the next four to five years.

HBCE: How is the organizational structure likely to change over that period?
JLB: First we want to be at the forefront of progressively managed organizations. We want to continue to have a very flat organization, because we think that is the best way people can express their talent. We want to give people the authority to make more decisions themselves. The progress we have made in empowering people to run their own businesses has been incredible, but we need more of that.

HBCE: What would you consider the most important issue facing you now?
JLB: Talent. There is plenty of capitol around, and, if you are not able to develop it in house, you can buy technology everywhere today. There race is for talent.