Michael Onuscheck takes Alcon Back to the Basics to Move Forward

PODCAST EPISODE 279

Click here to watch the video version of this podcast.


When Alcon spun out of the grasp of Novartis, the company’s relationship with physicians around the world needed repair, according to Michael Onuscheck, president, global business and innovation at Alcon. “There was a separation between what the company was doing, and what the physicians and the community really needed us to do as leaders in the industry,” he said.

In this episode of the OIS Podcast, Onuscheck tells host Ehsan Sadri, MD, that he sat down with physicians and listened to them to learn how to rebuild the relationships and restore customer value. He says Alcon’s responsibility as a leader in the segment is to understand what physicians need, and turn their ideas into products.

Onuscheck discusses his path to Alcon, including a decision to target his career toward technologies that lead to immediate perceptible outcomes for patients. He says it’s “pretty unique” to work in a field where patients experience such an immediate difference after a procedure.

He also outlines his current strategic responsibilities with the company, determining:
• Where to take the company.
• Where to make investments.
• How to continue the growth trajectory shareholders expect.
• What start-ups to consider for potential M&A or BD&L deals.

The discussion includes the effect of COVID-19 on the eye-care market, the importance of mentorship, and, finally, some pearls for start-ups to consider, such as:
• Determine where strategic gaps exist.
• Be sure there is intellectual property behind the ideas you consider.
• Have relationships with other companies, investors, and mentors.
• Don’t be afraid to kill a project if it has a problem that can’t be solved.

Click “play” to hear these valuable insights from Michael Onuscheck!

Transcript:

Ehsan Sadri: Hi everybody, this is Ehsan Sadri, ophthalmologist here in Newport Beach, California. Also, general partner, and founder founders of Visionary Ventures, I absolutely delighted to see my good friend, haven’t seen him in person and get him on a podcast. He’s super busy. Michael Onuscheck, who’s at Alcon. President of Alcon. And global now I saw a promotion there, buddy, how are you man? I missed you, how’s everything going?

Michael Onuscheck: Well, things have been it like everybody, we’ve kind of been busy trying to just manage through the COVID situation. Obviously, it’s been an exciting year for everybody. And hopefully, you know, the customers that use our con products feel like we’ve been supporting them through all these these very difficult times. But it’s been an exciting time to I mean, a lot has happened since we spun out at Novartis. And maybe we can talk a little bit about some of those experiences over the next period of time.

Ehsan Sadri: Yeah, we were, you know, you and I met, when in Orange County, as we as you were just alluding to it. And you, you just basically came and took over the business and with your experience, about scientific and just really the the tempo and cadence changed when you came? And I think, you know, you can tell it’s a testimony we talked about in this podcast by leadership. And one of the things that I think is exciting is how did you change Alcon’s direction in such a big company established company, given that it was within Novartis? And then you know, how did you do that step? Want to talk about that? And let’s talk about the spin off, because I think a lot of it is exciting, what do you sort of have brought to the table and what you’ve done, and in my own practice, I can tell you that the pan optics and the vivat II lens has just blown up and just given such great visual outcomes to patients. So you know, a lot to start with, and then we’ll dive in and your background. Yeah. For those of you don’t know, Mike?

Michael Onuscheck: Yeah, well, look, I think it all comes down to the fact that our Alcon and our Alcon’s brand is super strong. I mean, it’s one of those things where the partnership and relationship with physicians around the world, it kind of been fractured, to be honest, there was a separation between what the company was doing and what the physicians and the community really needed us to do as leaders in the industry. Yes, the question, what did we do or what was I a part of doing it was actually sitting down with the physicians and listening to them, along with Mike Ball and David Endicott and the US leaders and international leaders to really understand what is it that we stopped doing, that started to erode the relationship and the value that we were creating for our customers. And then, you know, really, for me, it was just consolidating those talking points and bringing back to the organization and really saying to the organization, we have an obligation as Alcon to lead this segment, our responsibilities are to really understand what the physicians need. And then we need to take those ideas and we need to turn them into products. And we also need to rebuild our relationship with major organizations, ASCRS, AAO, US FDA. You know, the European competent authorities, we just had to get back to the basics of running a really good medical device company. And I think that that’s what we we journeyed to do, and that’s what actually has happened.

Ehsan Sadri: I mean, when when, you know, and I think that’s for people listening it, you know, I think that’s a monumental task, because Alcon is not small. Right? And and you’re talking about an era where now you’re spinning off of Novartis? How do you translate that? Can you give us a little bit about in the war room, what that looks like, Is it picking the right team? Did you have to change a lot of team members? How did you make sure people have allegiance to your vision? And what do you want to see happen?

Michael Onuscheck: Yeah, well, the one thing I can tell you is anybody who’s been in ophthalmology or optometry, knows how unique this segment is, I mean, the relationship between the patient and physicians is unique. And the relationship between a company and physicians is unique and the reason it is, is because we get perceptible outcomes, right? The moment that the patient gets off the table, they have a different experience and they normally break down in tears hug their physician has the physician surround, hug their rep. You know, it’s pretty unique. You don’t get that when you’re sticking in coronary stents. And so creating a vision as a leader is actually quite easy. It’s just actually executing then against what it is that you as a leader are speaking to. And so for us, it was getting our r&d organization out with the customer, getting our r&d organizations and our marketing organizations to speak together about what’s most important. And then making some really hard decisions, right? We spend somewhere between seven and 9% of our revenue every year in research and development. That’s a stack of money, it’s actually the largest eyecare investment, greater than any other organization, or most of the organizations combined. So if we don’t actually focus those resources and dollars, on the right target projects, we’re wasting value, we’re not creating the type of value that we can. And so as we worked our way through our own list of priorities and new products that we wanted to develop, we started to come on good ideas like PanOptix and Vivity. And then we ran exceptionally strong clinical trials. We used patient reported outcome instruments that helped us understand how the patients are going to experience the lenses. And then when we told the clinicians about these lenses, their experiences with the new technologies were very similar to what we got in a patient reported outcome. So they felt like, we finally have a trusted partner who’s telling us the truth, both the good things and the bad things about these technologies. And now we have confidence to go put them into our practice. And all of that creates positive momentum, right? When you start to win, the organization gets behind some of these concepts around collaboration and working hard together.

Ehsan Sadri: Got it. So tell us this, Mike,for people who don’t know, you. Tell us a little bit about your background, you know, we like to kind of when we bring guests on. Almost everyone knows who you are. But for those of you don’t, where did you grow up? And you know, I know you went to Jefferson, and then you you know, you were in a command industry, but tell me little by your background, your schooling.

Michael Onuscheck: Yeah, look, I grew up in Western Pennsylvania. My father was a steel maker, and my mother was a nurse, right? So somewhere in the mix of that is where my personality emerged, right? I grew up, went to school in western Pennsylvania, played college sports, and went to a division three school. So that’s like, you know, okay, that’s like a really good club team. But the reality was, I graduated with a degree in business administration and psychology. My, you know, the business component. I’ve always been interested in how you build a business, how do you build a company, the psychology pieces, how do you actually influence people to go do things yet that are is really oriented towards what the overall objective is. And you know, I graduated University. My first job I was hoping to get out of this steel industry because I worked in it all through high school and college. My first job was selling chemicals to the steel industry is like, are you kidding me? And it was with Pfizer. So I thought, you know, I’m going to work for Pfizer, one of the great pharmaceutical companies, here’s your job offer, oh, by the way, you’re going to go sell dirt now, you know, to the steel industry. And it all worked out for the best because I happened to meet a really nice girl who was Pfizer pharmaceuticals. She’s like, what are you doing in the steel industry? And I said, I don’t know when she said once you get into healthcare, and I actually started as a sales rep for a startup company called dannic. And Danek was a spinal reconstructive company. I was at $28 million. When I joined it, I mean that the whole industry is about $300 million. When I joined it in the early 90s. Today, it’s Medtronic acquired as Sofamor Danek. It’s their spinal reconstructive group and it’s probably still the largest spinal risk constructed group in the world. That’s how I got into healthcare. And it and to be honest, the moment I got into healthcare, I knew that this was the right space for me because it aligned with my core values. It helps people it’s just it’s a rewarding, fantastic career. And you’re dealing with really smart folks every day. And that’s what makes it fun, right? It’s the intellectual challenges of running a company but also having really smart customers that you get to work with every day.

Ehsan Sadri: So that so you go into Pfizer and your now sales, learn sales, you’re actually naturally gifted sales was probably didn’t need to do that. But how did you end up in eyecare? What was that was their roles. I think, you know, I know you we’re in neuro for a while. Tell us how you ended up in eyecare.

Michael Onuscheck: Yeah, it’s kind of a, it could be a really long story. The reality is, is that, you know, I went to another startup. So after Medtronic acquired us, I went over and I started to work in cochlear implants and cochlear implants actually restoring hearing for the Deaf. And there was a neural program that was running behind that, which was spinal cord stimulation, and deep brain stimulation. All three of those things have perceptible outcomes for patients. I mean, you see a Parkinson’s patient who can’t drink a cup of coffee turned on their deep brain stimulator, and they can drink their coffee, I started to really decide that my career was always going to be targeted towards these perceptible type of technology. And although Boston Scientific, eventually sent me over to Europe to run Europe, the Middle East, Africa and Russia, I would call it kind of longed for that engagement with the physician, that engagement around r&d and things like that, and my son was ready to come back from Paris, my wife wasn’t ready to come back from Paris. But you know, when you have kids who are in high school, and he wanted to have a kind of a high school experience that we’ve enjoyed in the United States, he was pretty convincing. And so I started looking, Alcon had an opening in the surgical franchise, and you know, you think about the great brands in healthcare, and you’ve got Johnson and Johnson and Medtronic. And then you have Alcon. Well, I, I always thought Alcon was, you know, a really good company. When I got into ophthalmology and optometry, I realized Alcon’s brand was way stronger than any other segment I’ve ever seen. Stryker, Medtronic, and J&J really don’t have an every, every physician knows Alcon. And I’ve never experienced that in my life. And so coming over to this organization, and being a part again, of something that is a perceptible outcome for a patient was really important to me. And then the other part of it is, is that Alcon is super complex business, the surgical business is complex. The vision care business is a consumer goods business, the over the counter part, and the contact lens part. And at one time, the pharmaceutical part was a part of Alcon too, and I thought, look, if I’m gonna grow my career and develop learning consumer goods and learning pharma, it’s a really good third leg and for our second, third leg of the stool for my career, and so coming over really made it interesting.

Ehsan Sadri: So, so now, you, Alcon tell us about your position now. So as your global role, and how things are going, you know, compared to before when you and I first met, and you had to steer the ship in the back in the right direction, but you’re alluding to, how are things now what is exciting for you now at Alcon?

Michael Onuscheck: Yeah. Well, when I first came out, we had a lot to fix, right? We were overburdened with a lot of things, and we weren’t really close to the customer. My role today is, you know, now that we’re an independent company, we’ve got an executive committee that, you know, reports up to the board, I report to the CEO. Both the franchise presidents report up to me, so both vision care and surgical franchises report up to me, all of our R&D, all of clinical, all of regulatory right, so and what it has been is my job is very strategic, it is about where do we want to take this company? What are the places where we’re going to make investments? How are we going to continue the growth trajectory that our shareholders expect and anticipate? And then how do I bring that into a strategic plan? Also, with the external look of all the potential m&a that we could do all the BNL and deals that we could do all the startups that are out there? How do we cobble together a plan? That gets us to be a $10 billion company in 2025-26? Right. And so, you know, my responsibilities are really how do you Marshal all of those ideas into things that will start to produce 100 million dollar ideas and 300 million dollar ideas to keep us growing? And it’s a ton of fun, right? I mean, I might have the best job in the company, because I get this big budget with all these levers. And I also get to have these fantastic relationships with physicians around the world who are guiding on some of our decisions and what we’re doing. And we get to see the productivity of those conversations in the way that the company has kind of turned around over the last five years. So it’s a blast.

Ehsan Sadri: Yeah, I mean, Must be, especially when you go in the right way on the curve, right. So along the way, Mike, tell us about, can you tell me like, who are some of your mentors? And you know, friends and people you learn from and, you know, and also number two, are you mentoring any young people now yourself?

Michael Onuscheck: Yeah, look, I think mentorship is incredibly important. And I have both personal mentors and professional mentors. On the personal side, they’re the people who, who keep you on track and keep you grounded, to be honest, right? As you start to ascend in your career, you can conflate how good you are at what you do. And the reality is, is I’m just still the guy who was pushing a broom in a steel mill. So those people remind me of that every day. They also challenge your character, like, are you giving back? Are you actually developing others to be leaders in the segment and in the industry. And that is something that I really enjoy. But I think that mentoring and developing people is one of the foundational things that we as leaders are supposed to do. My job is not to lead this organization, and not have somebody who can easily replace me when I get when I move on or when when I retire. My job is to develop that leader because I care so important. We need great leaders across segments. So I do do a ton of mentoring. The the professional relationships are also mentoring opportunities, right? I mean, I, you don’t come in to ophthalmology and optometry, from neurosurgery and cardiovascular, I think you’re gonna be able to do this right? You need some people who kind of put you under your, their wing, and they coach you through the optical system, which is way more complex than I ever thought it was. When I thought about, you know, can I read it near? Or can I read a distance, right? That’s all I needed, right? The reality is one of the most complex organs in the world. And that’s why it’s such a fun place to work. And so those relationships, those mentorships, are really between, you know, physicians and me. And then me and physicians who have really good ideas, right, I get to talk to a lot of physicians who come up with really good ideas. And I also get to steer them as to, you know, how do they protect their idea? How do they think about is this actually something that a strategic or anybody really would value? I can coach them and, and have those conversations as well. And really, hopefully, what I’m coaching them on, and what they’re coaching me on eventually turns into something brilliant for patients. So it, I love it, and it’s one of the parts of the job that probably connected you and I when we first started talking, because you’re an innovator, and you’ve you’ve you’ve driven your practice and grown your practice, and you do things that others don’t do, and you take huge risks. And it you know, it’s rewarding, and eventually it pays off.

Ehsan Sadri: I appreciate Yeah, I mean, it’s chemistry, it’s you, right? I mean, we it’s either there or not there I when you meet a friend like you, and I think that’s the other thing that I find in an interview and just interviewing people, but just many people, it’s just their chemistry and you can that translates into their team really wanting to execute for them and kind of run through the brick wall. Ultimate, as you know, it’s leadership. And it’s, you know, what do you guys have done is incredible, since you took over how they’re you just feel the momentum. As a customer, you feel it, you see the products coming out and in different spaces. There’s a lot of headwinds, as you know, but you know, I think what do you think about COVID? Are you doing? Are you doing any strategic changes? Do you think things are gonna come back? Are you doing virtual? What does that look like? I know, you said everyone’s coming back to work. But do you see a hybrid model? Is it been, helpful? You know, surgically, as you know, we were just talking earlier, we’re very busy. But it’s hard to have the staff to help you manage the ship as they, you know, I’m like, how can one two months behind? And so I’m like, actually operate on Saturdays, you know, and Tina is like, What the hell’s going on? What is he? Like? I got it. You got it. We got demand. We got to take care of this and this. Yeah. But what are you doing on your end to take care of the demand?

Michael Onuscheck: Well, look, I think the COVID is actually accelerated a lot of conversations that we’ve been having for a long time, right. The challenge that we have is we have a massive population of patients who need to read it. We’ve got a narrowing of the funnel, so we’ve got a smaller physician base than than what the demand actually is. So one of the Things that we have to think about, and that we’ve been thinking a lot about in the strategic planning process is how do we ease the burden for the physician and the patient, to have the right patients flowing into their practices and into the surgical arena? Where were you are practicing? How do we make sure that they’re getting screened properly and treated properly as quickly as we can. And so remote diagnostics and you know, digital health systems, right? Nobody wants to stay in their office to do their preoperative workups on patients until seven or eight or nine o’clock at night. But that’s where the data is, we need to make sure that that data actually resides in the cloud, you can pull it down, and you can work on it after the kids are asleep, or, you know, as you’re having your morning coffee, you can prep yourself, and you can do that work that you traditionally would have to do in the office. So we see an evolution towards both improved diagnostics, simplifying the workflow in the office, and then connecting all of that stuff to the infrastructure in the cloud, so that you can use it wherever you are, and push it down to the operating rooms that you might be going to and we know many of our physicians operated two or three different centers, how do we make sure the data is at the right center at the right time to so we’re working on all of those things. And then from our standpoint, you know, I actually think that COVID is going to help us move more quickly to have conversations like this, otherwise, I’d have to hop on a plane fly to Southern California, you and I sit down for an hour meeting, and then I spent another three hours flying home, right? We can zoom now, or we can do these type of calls. And we can get information much more quickly. So I’m excited about that potential. But I also miss those personal interactions and that relationship building, it’s so important. And so I hope that we get to a balanced blend of those two things, because that’s what makes it precious, right? It is about building relationships and trust. And I think that that’s where the human connection comes in. And we’re really good ideas eventually become really good products in the marketplace.

Ehsan Sadri: So I can you know, we touched on that the portfolio that you have right now in the next few years. Are there additional things, you know, if you want to pass on to the the new, younger, Mike, that’s coming up the ranks and you think as both in the startup world, but also in a you know, joining us strategic like we talked earlier, what is this? What is the strategic look for in a startup? What is that? What are some pearls for the young entrepreneur? To make sure they pass the grade? Right? What are your advice there?

Michael Onuscheck: Yeah, look, look at and it starts with, we can’t do everything, right. I mean, Johnson and Johnson, Alcon, B&L, Zeiss, we’re not going to invent everything. So we need the startup companies to be really successful. I think what they need to start with is, what are the strategic gaps that strategics have? Where can we add value? Where can we create value? Where can we target, you know, disease states that are currently not targeted? If you look across the alcons portfolio, you’d see a rather large gap in our glaucoma portfolio, you’d see a rather large gap and what can happen for dry eye patients. myopia isn’t just a massive opportunity that’s out there. So start with something really strategic and important. The second thing I would say is source your ideas. And as you go through that, make sure that you’re winnowing them down to something that has intellectual property that can sit behind it. IP is incredibly important, a strategic look at something because they don’t want to buy it and then somebody knock it off quickly. So that intellectual property component is an important component. And then I think the third part is, have relationships with companies and investors and mentors, as you go through that process and listen to them. I can’t tell you how many times I’ve had conversations with people who have a really good idea and things that I want to invest in long term. But I keep telling them the one problem that they have to solve and they don’t go to solve that problem. They’re like, we’ll deal with that later. It’s a little frustrating because we know what we’re going to have to do on the other side, we’re going to have to find a way to get it reimbursed. We’re going to have to find a way to commercialize it. We’re going to have to deal with the cost of goods listen to the folks who are your potential targets, and, and take on board their advice. And sometimes that means you have to kill a project because you can’t solve a problem. But I will tell you, if that is the case, your investors would appreciate you killing it early than dragging on an investment for a really long time, where they don’t actually see their return. Right. So it’s hard to kill projects. As a startup, I had to do it when I was with Advanced Bionics and there were a lot of engineers who were upset by it. But the reality was, is if I didn’t kill that one project, we would have never been able to build a deep brain stimulator, which was ultimately a growth driver and a value creator for our company. So make sure you’re listening to strategics and mentors.

Ehsan Sadri: And that’s really, it’s really good advice. Really good advice. I mean, there’s so much there, for those of you listening. And you know, Mike is so open and been very, like transparent. And, you know, a lot of people, he texts or email me and they say, you know, what, do I need to do that? That’s really refreshing, because it’s hard to understand and also get out of your own way. I think that’s another thing I would probably add to that is, you know, I, what I found is, a lot of people are married to the project. Right? They feel like they’ve invested so much time and capital. And they don’t want to hear that you have to shelve it. But sometimes you’d have to do that and move on and and maybe stumble on something better. So we could talk for a long time, my brother and I just want to thank you for your time and obviously you are it is, and I look forward to see you in person. No more zoom calls with you.

Michael Onuscheck: Yeah. Ehsan, look, I appreciate it. Thanks OIS, for having me on today. It look we this is how we get things done now, unfortunately, but I look forward to seeing you and I wish you all the best with your practice and all patients that you’re serving right now.

Ehsan Sadri: Thank you, my brother.

Michael Onuscheck: All right, take it easy, bud!

Ehsan Sadri: Awesome.

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