Interview with Glenn Sblendorio
Interviewer: Andrew Zezas, SIOR
Following is the transcript of a CFO Studio interview between Andrew Zezas and finance executive, Glenn Sblendorio, President and Chief Financial Officer of The Medicines Company.
Visit www.CFOstudio.com to read about this interview and to watch the entire on-camera interview.
Keys to Transitioning from CFO to President
Zezas: You’re watching CFO Studio and I am your host Andrew Zezas. I have the pleasure of being joined today by Glenn Sblendorio, President and Chief Financial Officer of the Medicines Company. Mr. Sblendorio holds a BBA in Accounting, Pace University and an MBA in finance from Fairleigh Dickinson University. He completed the Harvard Finance Management Program. Mr. Sblendorio sits on the board of directors of both the Medicines Company and Amitech Therapeutics. His previous experiences are having held high level of executive positions at EyeTech Pharmaceuticals. MBM Capital, Sony, and Roche. Mr. Sblendorio is a recipient of 2012 NJ Biz CFO of the Year Award. The Medicines Company founded in 1996 is publicly traded on the Nasdaq as symbol MDCO. It’s a global company based in New Jersey with operations in 24 countries. And, as a leader in providing acute care hospital medicines, the Medicines Company’s lead product Angiomax is one of the top selling acute cardio vascular drugs used to treat patients from having heart attacks. Mr. Sblendorio is here today to share his views on the keys to transitioning from CFO to President. Glenn, it’s so nice to have you here on CFO Studio.
Sblendorio: Thank you Andy, so nice to meet you.
Zezas: Glenn, I understand that The Medicines Company has a unique business model. And it’s primarily based on outsourcing and something you guys call “Hiring High.” Tell me about that. Share with me the unique challenges.
Sblendorio: Sure, let’s talk about the model first. As you mentioned, the company was founded back in 1996. It was a venture capital start up. It was a clean sheet of paper. I was actually involved in helping draft that plan.
Zezas: Oh wow.
Sblendorio: And the plan was very simply to put together a biopharmaceutical company that would go out to big pharma companies and find assets that were put on the shelves, specifically drugs that could be developed cost effectively. With that also, you would have to have people to do that, great project managers, and also great leaders in the respective field. Roll that forward a minute and talk a little bit more about the “hire high.” Today the company, hopefully this year is on track to do close to $700 million in sales. We have about 500 people.
Zezas: Wait, give me that again. $700 million in sales, with over 500 employees. That’s tremendous.
Sblendorio: So that’s the “Hire High.” That’s the “Hire High.” So we go out and we higher great doctors and clinicians. And really what we are hiring is great lawyers and great accountants. What we are hiring are not only great professionals but great project managers. It’s been a core competency, core objective of the company to find the right people and pay them quite well. Our average salary is about $250,000.
Zezas: 250 average, is that typical for pharmaceutical company?
Sblendorio: That’s very high, so that includes your base salary, your bonus and your benefits. That’s on the high side when you average it out.
Sblendorio: And that reflects the “hiring high.” Human resources we call Human Strategy.
Zezas: Human Strategy
Sblendorio: Human Strategy, because it is a key strategy of the company, to be sure we hire the right people. From a CFO’s prospective, if you think about it, is a huge investment, so if you hire somebody and they last six months, I mean, it’s always bad for the company. But here where the investment is so significant. A long leave time to try to find these people with high salaries. So that’s the “higher high”, it’s the core principal our CEO makes sure every time we go out and hire somebody that we are hiring not only the right individual but we are hiring at the right level as well.
Zezas: So you are wearing the hats of CFO and President, stay with the “hiring high” what particular challenges do you have, have experienced as CFO in the “hiring high” model?
Sblendorio: Again, and it comes back to really just the CFO hat, an executive as well, the “hiring high” is that big investment. Salaries and benefits is the largest single cost on our P&L. If you add up commercial cost, manufacturing, this is the largest single cost as a CFO, you want to be sure that, and I know this is people, but that this investment is a good investment.
Zezas: That’s actually a pretty serious statement as a pharma company that your greatest single cost is your human assets. That says a lot about your company. All good, all good.
Sblendorio: Thank you.
Zezas: So, alright, on your dual role as CFO and President, your also responsible for business development at The Medicines Company. Given your finance background, I’ll ask you a question in prospective of CFO, is business development what the CFO should be doing, is the CFO the right person who should be doing that at a company like yours?
Sblendorio: Not because I do it, but I think it is the right person. A few reasons why; what in our particular case, I mentioned the business model of going out and acquiring assets, either acquisitions, licensing, things of that nature. As a CFO it is an investment so first and foremost, you got to run the numbers, do the models, make sure your assumptions are right. That’s more in a classical CFO prospective. But, I think you need to have an appreciation of the business as well.
Zezas: Especially if you do business development, sure.
Sblendorio: And I think as a CFO, if you are doing your job right, you have a good appreciation. The second reason is I think finance executives tend to be very good project managers. You go through a process of diligence, contract negotiation, overseeing that even though we are in a technical business, where there is a lot of science and medicine, we have some great people doing the actual work. I think as a CFO overseeing that process is again a core competency. And finally after you acquire the asset, there is always the little task of integration. And I think CFO’s or Finance executives do a great job with that. So I think with this particular case, I think a CFO that understands your business, understands your products, good person to run the business development.
Zezas: Right, business development. And business development is one where good project management skills are essential and most people don’t think about it that way.
Sblendorio: That’s absolutely right.
Zezas: I would agree with your assessment. So Glenn, last year you were promoted from CFO to CFO and President.
Zezas: In retaining your CFO title, which is very unusual, I find it very interesting, was your promotion from CFO to President a planned event by you or by others, or did the board actually seek you out and propose it to you?
Sblendorio: I think it was a few things. First I would like to say that, in a growth company you have some great people in finance and as I rose up through the ranks, they have as well, but we’ll talk about that maybe later so it creates opportunities. I think it was a planned event. The first thing the board decided was to open up an opportunity for me to join the board of directors, which I did prior to the promotion. I had been taken on an increased responsibility, in terms of operations, manufacturing, business development I already had. And then the next logical step was the move to President. I think it was partly retention, not that I was looking to go anywhere, I love the company. But it was a great move for retention, for career growth for me at this point of my life. So I think it was a little of both. I think it was planned and in a couple steps.
Zezas: Okay, so let’s stay with that, CFO to President, is a trend, and CEO, is a trend we are seeing more often, but CFO to President retaining the title of CFO is very, very unusual. What special skills does a CFO bring to any organization when he or she becomes a President?
Sblendorio: I think if you do your job right as a finance executive, CFO, you want to spend time understanding your business. That means getting out, meeting with customers.
Zezas: Not just the spread sheet side of it?
Sblendorio: No, the spread sheet is the boring part. But getting out seeing what customers want and you know, you mentioned before, in our particular case, the customers are hospitals, so it is everything from meeting the pharmacist, to the nurse, to the doctor, to the people in the c-suite. That’s important, I think meeting your vendors are also important. You get out and in our particular case with the outsourcing, vendor support for us is very important. That could be a manufacturer, that could be a provider of services as relates to research and development. And, probably very important if you want to transition from a CFO to a President/COO, you need to understand your organization, which means you got to get out, understand the people do, understand the dynamics, the culture, and you might say that’s natural but I think that’s very important that you have all those aspects.
Zezas: So you are really talking about a 360 degree view. You’re talking about what’s behind you in terms of manufacturers and vendors, who’s in front you, the customers and clients perhaps, and then the organization itself.
Zezas: Wow. So then tell me how the role of president compares or differs from the role of CFO.
Sblendorio: You know Andy…it’s interesting. I think it was with its challenges and complications, I don’t want to say but it was almost a natural transition.
Sblendorio: Because, over the years I took a lot of pride in really getting to know the company, understand the company, understand our business model. And I felt it was a natural transition to me.
Zezas: Well the best CFO’s that we’ve seen are those who view their CFO role as being more of a COO role and it sounds to me like you have always done that.
Sblendorio: Yeah, well don’t forget we’re a public company, so you have to be diligent as a CFO you got responsibilities to the shareholders. So you can’t neglect that. But you’re right, I think understanding the company, integrating yourself into the organization is all a part of it.
Zezas: Glenn, The Medicines Company, based here in New Jersey, 24 countries, and going through a global expansion, how is that working as a company that is relatively young from New Jersey?
Sblendorio: I’d love to say it’s simple but it’s not. We’ve had our challenges, especially outside of the U.S., in Europe. It’s going to be interesting and I’m going to come back to a common issue, people. About four or five years ago we had a great opportunity to re-acquire one of our key assets in Europe.
Sblendorio: Angiomax, we had partnered it out early on, we had an opportunity to take it back. And it was an opportunity to start the global expansion of the company. So, we bought the asset back put the best of transition plans in, and we started and stopped a couple times. It was complications largely with organization. I think we knew the markets generally. But it did take some work and we had to go through a couple rounds of people before we got it right. And you can’t expect to manage that company from Parsippany, you really do have to have a local presence, we are headquarters in Zurich outside the U.S. And I think we got it right now. After four years, a little slower than we thought, so we had a nice little plan of two years to get up and running, it took closer to three to four. On track. Next hurdle for us is Asia, huge market everyone talks about the emerging markets in India and China and you need to be there for the long term. So we have a small footprint there, we have some people. We are actually selling some product in India, which is fantastic. We just finished some clinical research in China but need to be there for the long term. I think that we are a little bit more diligent in our process and a little bit more careful about people, but the next big area of growth for the company.
Zezas: And you seem excited about both?
Sblendorio: They’re both terrific, I mean, I know Europe because I lived there years ago. I traveled there a lot. I had an opportunity to spend some time in Asia when I was with Sony. But Asia is just exciting beyond belief because you are seeing growth that is unprecedented.
Zezas: Yeah, I can only imagine. Glenn, characterize your management style for me.
Sblendorio: I think one, as you get older, and unfortunately we all get older, you need to listen first. I learned to listen much better. I would hope that’s the case. But, listening is very important and then I think it is a collaborative style. You mentioned before, I just had a fantastic opportunity to finish a management training program at Harvard, and it was great, it really even, you think, you know there is always an opportunity to learn and I learned a lot, a lot of it was about leadership. So what I learned about leadership was that in addition to being collaborative to be open to communication making sure there is alignment, I think alignment in a growing business is very important. Transparency, ya know in creating an environment where people feel they have the opportunity to grow. So, I hope it’s a style and one of the reasons I think it does work, I’ve been able to retain a number of folks with me as I went from company to company. Some of the folks I have today have been with me before and they’re still here today.
Zezas: Well that says a lot about them, it says a lot about you.
Sblendorio: It does.
Zezas: Glenn, is there anyone in particular who was influential in your career and did they teach you anything specifically?
Sblendorio: There actually was a very long time ago, a CFO at Hoffmann-La Roche in Nutley, a guy by the name of Marty Stadler. I was quite young then. I had an opportunity even as a young and up and coming, I won’t even say executive, a young and up and coming finance person, accounting person. I had an opportunity to work with him on a number of projects quite closely and what he taught me in addition to being a good account at that time was also to be very analytical. And really be sure you had your analytics and your facts and your assumptions right in digesting a problem a business problem. He also then supported me in a trip a reassignment to Europe. I had an opportunity to go with my wife and my two young children.
Zezas: Oh wow.
Sblendorio: And live in Basel, Switzerland working for Roche and that was life changing, to do that in the mid to late 80s to have a global experience. I will never forget that and I learned a tremendous amount from that.
Zezas: Wow, nice to have a great mentor.
Zezas: Glenn, tell me about your typical day at The Medicines Company?
Sblendorio: There are no typical days. Everybody says that. No, in a growth company and I really mean they probably are very few typical days. You have your agenda for the day, you have your projects for the day but when you are a growing organization every day is different, it comes with different challenges.
Zezas: That’s not a bad thing?
Sblendorio: It’s not a bad thing, but I think you have to be prepared for that. And, whether you are a finance executive, an executive in any area, you have to be flexible and accommodating because if you are not, being in a growth company is not the place to be as opposed to a more well-established mature company. So, although there may be a so called typical day, they’re all different and that’s what makes it fun, quite honestly.
Zezas: Glenn, for those who aspire to become CFO or president of an organization, what advice would you give them?
Sblendorio: Get to know your organization, get to know your people, go beyond the spreadsheet, go beyond the financial reporting, go out and visit customers, that is a life changing, no matter what the business you’re in, and we happen to be in a life changing business. Get out there understand your customers, understand what they need, understand your people, your vendors, understand your peers, other executives that you work with. I think take with that some leadership competencies, listen alignment, good communication transparency. I think it’s absolutely essential that if a financial executive wants to move to President, CEO, COO those are some key criteria for them.
Zezas: Those are great words to live by. I have one last question before we go. What does Glenn Sblendorio do when he is not President and CFO.
Sblendorio: There’s no down time. I love to spend time with my family, so I do that. We travel, I have three children, one is 26, one is 24, and one is 19.
Sblendorio: So we are all off doing different things, but I like to play golf, but not well, but I like to play.
Zezas: You like to play not well.
Sblendorio: Yeah, I think that’s the way it goes. I still play some softball and any type of sport and travel. Down time is very important so I like to spend it with the family.
Zezas: Glenn, this has been great, you’ve given us some good insight, you’ve had a tremendous career. I wish you continued success and I want to thank you for appearing with us on CFO Studio.
Sblendorio: Thanks for having me. I appreciate it.
Zezas: It’s been wonderful.
Zezas: This is Andrew Zezas, your host at CFO Studio, with Glenn Sblendorio with The Medicines Company, saying thank you very much for watching. We’ll see you again real soon.