11 Must-Haves for Health-Tech CEOs today.
This article is for board members of health technology ventures, private equity or venture firm partners needing to select CEOs for their portfolio health-tech companies. Use this checklist when evaluating and ranking candidates. It could save you significant time, money and resources. And possibly the venture itself.
Leading a health-tech company is a complex and demanding role that requires a unique set of capabilities and experiences - broader than that of other industries. Let's explore what a health-tech CEO must deliver to ensure venture success.
Health-tech defined
Health-tech, short for "health technology", encompasses a broad and evolving field that integrates technology and solutions in the healthcare and medical industries. It focuses on leveraging technological advancements to improve prevention, diagnostics, therapeutics, treatment and patient monitoring to enhance and streamline the delivery of healthcare, improve health-economics and patient outcomes, while empowering individuals to take control of their health. Health-tech can encompass a wide range of applications and solutions, including medical devices, digital health, health IT, telemedicine and tele-health, heath analytics, AI and machine learning tools/solutions, health and wellness apps, genomics and personalized medicine and remote patient monitoring solutions to name a few.
Healthcare systems are reaching a breaking point
Healthcare systems in the United States and the European Union face a variety of challenges that have raised concerns about their sustainability and the possibility of reaching a breaking point. While there are significant differences between these systems, some common issues contribute to the strain on both. Here are some key factors contributing to the challenges in healthcare in the US and EU:
Within such a challenging context, health-tech organizations and they CEOs are facing an uphill battle, but also a significant opportunity to help evolve or disrupt the current ways of doing things and achieve the critical improvements needed to help impact human health for the better. Based on the experience we acquired from supporting over 200 brands in the health-tech space over 20 years, here are the top 11 critical success factors for heath-tech CEOs today.
1 Patient-centricity
Health-tech CEOs should be obsessively dedicated to improving patient outcomes and quality of life. They must ensure that their products are designed with the patient in mind and that they provide real value to healthcare professionals, patients, and caregivers. A patient-centric approach not only drives ethical and responsible business practices but also fosters long-term trust and success. That foundation will help CEOs get through the seemingly insurmountable obstacles ahead because they know who they're fighting for, giving them the drive and determination needed to succeed.
2 Winning vision and strategy
Numerous highly educated and brilliant technology-focused founders continue on as CEO for years, sometimes with great success. The challenge is to be able to evolve from being the CTO and CPO to becoming a true end-to-end CEO, with at the core the ability to craft a vision and strategy that do not rely only on science and technology.
Successful science/technology-centric founders that succeeded include Anne Wojcicki ( 23andMe - former client at my first agency venture), Eric Topol, MD ( Scripps Research Translational Institute ), Sean Duffy ( Omada Health ), John Doerr (Nuna Health), Nat Turner ( Flatiron Health ), Ali Parsa ( BABYLON HEALTHCARE INC. ), Daphne Koller ( insitro ), Dr. Jonathan Bush (Athenahealth) and Jeremy Sohn (Civis Technologies) to name a few.
Others were not as able to identify matching market need or winning go-to-market paths for their technological solutions.They include Zeebo (wearables), Omaha Health (digital platform for diabetes management), Juicero (home juicing), Misfit Wearables (wearables for fitness tracking), Scanadu (handheld medical tricoder), MC10 (wearables for health metrics) and Butterfly Network (Handheld ultrasound).
These examples emphasize the importance of understanding markets, pain points, needs, and the broader healthcare landscape when developing and marketing health technology solutions. A successful health-tech venture requires a balance between innovation and addressing the practical needs of users, healthcare professionals, payers and regulators, to develop vision and strategy.
3 Constant Innovation
Innovation is at the heart of the healthcare industry, and health-tech CEOs must build an organization with innovation at the core. This involves encouraging research and development, staying abreast of the latest technological advancements, and creating an environment that promotes creative problem-solving from every functional area, including product strategy and business system, to maximize differentiation and relevance.
4 Regulatory compliance
Health device companies operate in a highly regulated environment. CEOs must not be experts but they must be well-versed and supported in regulatory requirements and ensure that their organizations meet all the necessary standards. This includes maintaining strict quality control, adhering to international guidelines, and navigating the often complex process of gaining regulatory approvals for new products.
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5 People management
CEOs can learn to develop a talent strategy but in the end, the culture and values they establish is what will make or break it. Equally as important, charisma and attitude are foundational elements that will help build a successful team. Despite what executive leadership firms will tell (or sell) you, these can't be taught.
6 Market access and commercialization
A crucial aspect of a CEO's role is ensuring that innovative health devices reach the market and fulfill their intended purpose. This involves developing effective branding, brand experiences, marketing and sales strategies. But before that, and most importantly, CEOs must design a clear and winning path to commercial success through (1) a pragmatic multi-stakeholder plan (including payers, healthcare providers, technology partners, therapeutic sponsors, regulators and patients) and (2) a winning B2C and/or B2B strategy.
The biggest mistakes we have seen our clients make is to over-simplify their go-to-market strategy and omit to do deep market-needs understanding, market conditioning and/or regulators, payers and/or technology partners early engagement. For consumer health, the biggest mistake was to assume a B2C strategy was going to be the path that allows for fast scale-up without realizing the marketing investment that would require - Ga?tan Fraikin
7 Financial management
CEOs are not CFOs, but they must be adept at financial planning, budgeting, and resource allocation. Successful CEOs should also be able to secure the necessary funding for each stage of corporate development, to fund research and development, manufacturing, infrastructure, marketing and everything else needed to scale and to ultimately reach profitability.
8 Weighted risk management
Risk taking is a the core of any successful health-tech venture development. But risks must be carefully managed (risk mitigation, contingency planning) based on cost-benefit analysis for the organization. The ability to categorize and take risks quickly and not be frozen by the "what ifs" is what differentiates successful CEOs from the rest.
9 Uncompromising ethics
Health-tech CEOs must lead with the highest ethical standards. They are responsible for ensuring the safety and efficacy of their products, and this requires ethical decision-making at all levels of the organization. Building and maintaining a reputation for integrity is crucial in an industry where trust is paramount. There's no room for bending the truth or data. Remember Theranos, Outcome Health, uBiome, Zenefits and others are examples not to follow.
10 True delegation
To be successful, Heath-tech CEOs must build a solid leadership team of true leaders, to collaborate with and delegate to in their respective functional areas. The ideal balance point between full delegation and micro-management is to be determined and adapted in real-time, based on the confidence and confort in each relationship. Respect, sound judgement, common sense, open communication, allowing mistakes to happen, accountability and ownership will help build a symbiotic and trust working relationship that ultimately, will help with delegation and drive business forward.
11 Communication and negotiation
Health-tech CEOs are the face and the voice of the organization. Being the smartest person in the room without being able to make a case for change and bring everyone along for the ride, energized and unconditionally, will not do much good. A natural born communicator, with strong negotiation skills is part of the required package to run such a venture. When doubts arise and the future becomes unclear, the difference between an energized team and a talent bleed lies with communications and negotiation skills. Those can be learned to some extent, but will never match natural innate skills.
Takeaway
The heathcare space is one of the most challenging there is which requires a better equipped CEO than in other industries. Your successful health-tech CEO role is complex and with significant breadth and depth. It requires someone with knowledge and experience, but not so much that it builds blinders and dogmas. Each stage of development will also require a different skills set but those can be supplemented at each stage with a strong leadership team. A balance of innate skills and capabilities, with proven experience is the recipe for success. No CEO will be best in each of these 11 critical success factors but they will need to cover as many of them as possible. One more thing: make sure you like the person and enjoy working with them. That will make things much easier and more rewarding, and ultimately, more successful. Interested in preparing for the biggest hurdles you will face as health-tech CEO, read "13 Hurdles Health-Tech Ventures Must Overcome to Win in Healthcare ".
By Ga?tan Fraikin, Health-tech CEO in residence, Board member and investor | www.addictive.health | [email protected]