Advice You - Business

In many family businesses, there's a great deal of confusion between ownership and management. They are not one and the same.

I began to figure this out several years ago when I bought

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

some IBM stock. I wrote a letter to the president of IBM explaining why I felt that they should place less emphasis on their mainframe computer business and spend more time marketing PC'

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

s. I received a nice form letter from the shareholder relation's department; I’m sure IBM’s president probably receives a lot of unsolicited advice from stockholders.

In my consulting p

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

actice, the following are several questions I have been asked by business owners:

Q. Should the daughter of the owner who stands to inherit a portion of her father's company have any sa

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

y-so in the management of the company?

A. No, unless she also is a member of the management team.

Q. The owner's daughter married one of the company's outside salespeople. How long s

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

ould the owner's new son-in-law continue to work in the business before he's promoted to sales manager?

A. Until he has earned the respect of the other members of the management team an

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

d until he becomes the most qualified person for the job. It's extremely demoralizing to other employees when family members are shown favoritism.

Q. My two sons each own 25% of the bu

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

siness. One is an outside salesperson and earned $92,000 last year in commissions; the other is a buyer and I pay him $51,000. The buyer son says that I am treating him unequally. How

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

o you recommend that I respond?

A. The rule in family matters is to treat kids equally, but in business the rule is to treat the kids equitably. Pay offspring who work in the business

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

on the basis of their value and contribution to the business.

Q. My daughter, still a 25% owner in our business, used to work here full time as our retail store manager, but now that sh

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

has two small children, she only comes in occasionally to work on special assignments. When she comes in the store, the store manager who replaced her says she still tells the retail sa

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

les staff what to do. When I spoke to her about it, she said that --as an owner -- she feels she has the right to say anything she wishes to anyone she wishes. What's your opinion?

A.

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

Violating lines of authority is one of the biggest mistakes an absentee owner can make in a family business. She is totally out of line when she usurps the new store manager's authority

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

She should never issue a directive to an employee who reports to another manager. If she observes something that the manager needs to know about, she should ask the manager’s permissio

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

n to make a suggestion, and not make it as if she were still an authority figure.

Q. My brother and I are 50/50 owners. I am CEO of the company and my brother has been sales manager fo

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

six years. Our sales have gone down for two years in a row and our market share has plummeted. What should I do?

A. Whether your sales manager is an owner or hired hand, the sales ma

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

nager is accountable for achieving the sales budget. Unless you're prepared to see sales deteriorate further, give him a deadline to get sales moving in the right direction. If he fails

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

to meet the goal the two of you agree on, you have little choice but to replace him.

SUMMARY

Owners who do not work in the business should be rewarded by receiving their fair share of

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

ny declared dividends. And if the business is sold, absentee owners are certainly due their share of the proceeds. But ownership and management are two completely separate issues.

To k

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

eep their jobs, owners who are also managers should have measurable goals to achieve just like any other employee. Owners can't be fired as owners, but as managers, they certainly can be

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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Storage and warehousing can be a dangerous business if important safety rules are not adhered to.

The Internet present more challenges and opportunities to develop loyalty through a branded experience.

Reading my Sunday newspaper yesterday reminded me of how Career Fairs do little to substantially increase local employment. Three special interest groups benefit the most, not the unemployed looking for work. You could hold Career Fairs for the unemployed every other week in Flint, Michigan and it still would not affect their depressed economy. It is likely that when people benefit from these Career Fairs it is more by accident than design.

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Advice You - Ownership versus Management: Be Sure There Is A Difference

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