Podcast

Episode: 484 |
Thomas Breuer:
Thomas Breuer, Owner at Breuer Partners:
Episode
484

HOW TO THRIVE AS AN
INDEPENDENT PROFESSIONAL

Thomas Breuer

Thomas Breuer, Owner at Breuer Partners

Show Notes

Thomas Breuer is a McKinsey alum with over 26 years of executive line level experience in the medical devices industry. He has held management positions in various International markets and regions, including Hollister Incorporated. He has also worked on a broad range of management consulting assignments in the U.S., Europe, and Latin America with McKinsey. You can reach Thomas through his website at www.breuerpartners.com, or through Umbrex.

Key points include:

  • 05:50: First line role in Mexico
  • 11:48: Starting his own consulting firm
  • 13:45: A case study
  • 18:24: Creating his own subsidiary

One weekly email with bonus materials and summaries of each new episode:

 

  1. Thomas Breuer

SPEAKERS

Thomas Breuer, Will Bachman

 

Will Bachman  00:01

Hello and welcome to Unleashed the show that explores how to thrive as an independent professional. I’m your host will Bachman and I’m here today with McKinsey LOM Thomas Brewer, who has been around. And Thomas, welcome to the show, I think that you are going to start with a Marvin Bower story.

 

Thomas Breuer  00:22

Thank you very much. It’s a pleasure to be guest in your podcast will be part of Umbrex. As a young consultant, just fresh from graduating from the Harvard business school at age 23, I joined McKinsey in New York. Into my great surprise it Marvin Bower did, personally every Saturday morning, training of all new associates. And it’s sad enough, all not so new associates, including some of the partners. And through this kind of training, he basically imported highlights. So I’ll share a few of them with you. And then some amazing story many years afterwards, on some encounters that I had, with Marvin Gaye, some of the highlights of what he said were always do the right thing, the ethical way, in the best interest of the McKinsey client. Which is not necessarily the case, in today’s business world, and for so many people. Second, he said, always look first, at the big picture from the point of view of what is best for the company and the stockholders, as if you were the CEO, but look always not just at the short term, but the long term. And he also said, always be fact base and understand all the different forces that work in those days strategy. And being a generalist was the key demand. Not like today, specialization in international in those days was something rare. So those were some nuggets. Then, when I left McKinsey after 10 years, because I wanted to be a line executive in a healthcare company. I met when I was VP of Asia, in Latin America, for Baxter. In O’Hare. Airport, I met passing by somebody, they said, Well, I read, you know, this person what it was Marvin Bower, and as we passed each other, he said, Tom, how are you? How are you doing? Now that was Marvin Bower for you? Well, can you every person in some of her personal life in there were not just a number to each one was a valued asset of McKinsey. And he did his personal best to nurture it and do the best for each associate. So it was an incredible experience. I was 10 years with McKinsey. And that experience was worth 2030 years. So somewhere else, in my humble opinion.

 

Will Bachman  03:27

Wow. Now, Marvin was basically involved. He was sort of the second involved in really building McKinsey as a firm, obviously, listeners know that. And I think he started in the 30s, or something. So when he was leading these training sessions for associates, this was what in the late 60s early 70s. Went, what’s the timing of Yes, yes. I mean, so he had been with the firm for 30 years. So he was like, basically the managing director of the entire firm and he’s coming in on Saturday morning to lead associate training that is, as crazy. Tell us a little bit about the training, would you go through case studies or you know, was it role model role role playing exercises, what was the training like when you when you went through it?

 

Thomas Breuer  04:13

Well, he he basically talked the worst Nene cases, but more he would give the background he will never say what company? No, he would say what industry that type of assignment and the way to look at it, okay. In that way, he he was he won’t get too into the specifics. They were confidential but said well, when somebody calls us and says it’s this the CEO that we want you to do for he will explain how he would handle that situation. How McKinsey under his guidance they handled it in so it through that you learn these different lessons that I mentioned him then, interestingly enough, it wasn’t just new associate, this is the thing that surprised me Memorial Day at the beginning. He just had the new associate. But then he had sessions for everybody several times several Saturdays per month, where he had a source. I’ve been a long time and partners. This was amazing.

 

Will Bachman  05:25

That’s incredible. Yeah. So you, you know, before we start recording, you kind of walk me through your incredible career you were at Baxter, and just tell the story of of your first day you started there, I think in strategy role, but then you got assigned to Mexico. Tell me that story of about when your first line role in Mexico?

 

Thomas Breuer  05:50

Thanks. Well, yes, at the time I was, when I left McKinsey, after being 10 years, they’re first in New York, then in Paris, in their European practice, and then help them to open up Latin American Mexico, he joined Baxter as assistant to the VP of international. And the deal was, wherever in the world, an opening came up to be a general manager. The understanding was that you would accept it and go there and not cherry pick. So God knows what country would come up. Well, after one year of being assistant to the VP of international, the first one came up, and it was Mexico. So he calls me into the office and says, Tom, I’ve got good and bad news for you. Which one do you want me to start with as well started with a good news. She says, Well, the good news is, as of today, you are the new general manager for the three banks or companies in Mexico. So well, that’s fantastic. Thank you very much. So he says, Now let me tell you the bad news. We’re in deep trouble in these companies. So if you don’t fix it, within a year, I’m firing you. So what do you say Tom? Well, at that point, you know, married English wife with two young, very young children. I said, sure. I’ll do it, Bill. As long as you support me in whatever I got to do there to fix the ship. He said, You got my promise to do so. So that’s how I started my career at Baxter. Yes. What was

 

Will Bachman  07:47

it like? Opening up Mexico and Latin America for McKinsey. I went to I went, I did my last semester of business school in Mexico. And you know, in my experience, it was a culture where it’s really important kind of having personal connections with people. You know, this was graduate school from last semester, my MBA and people would talk about, like, where they went to high school, right? As opposed to even where they went to college. So it seemed to be really important. You know, who you knew? What was it like coming in as an outsider? Um, you did speak Spanish, obviously, I know, you grew up in Ottawa. But what was it like coming in as an outsider, how did you open up new clients there? Did you hire local Mexicans to join McKinsey? Or how did you build the practice?

 

Thomas Breuer  08:40

Yeah, no, is this very good question? Well, the it was a team of three people that opened it up an American i No, Austria, person and myself. That was it. There was no staff whatsoever, not even to present a makeup presentation, nothing. So at the beginning, I think you we just did it ourselves for the very beginning, okay. Using some of the McKinsey contacts in the sense that there were clients that had good experience, good clients, and they were multinational, and they needed help in Mexico. So we thought that this is the way things would start. But that was not the way it worked. Basically, we did a lot of letting people know by writing articles and making certain phone calls that we existed and what my case was good at. And so at the beginning, we had some very interesting clients, not the normal McKinsey client, for example, one, it was a supermarket. This was a very rich lady that was a widow. She inherited this huge supermarket chain. And she didn’t know what to do. And she and she inquired and heard that McKinsey was very good in this area. And then she contacted us. So that was one of our first clients, which was unbelievable. Her house had a swimming pool, in it in the sun, it would revolve around the sun. Okay. So it was an unbelievable experience. So that was one case. And then, as we started getting more more clients, then we also hired some Mexican associates. In Little by little, we build it, but at the beginning, we did our own presentations, okay. In, in those in those days, even with, you know, slides. So it was an incredible experience. Yes. And then, of course, the office grew a lot in then, you know, everybody benefited from that. Yes.

 

Will Bachman  11:31

So you left McKinsey, you joined Baxter, you were with Baxter, I think for about 20 years. And then in 2002, you started your own firm and focused on medical device and life science industry. Tell us a bit about about the firm that you run.

 

Thomas Breuer  11:48

Thank you for asking that. Yeah, it Brewer partners in company is totally focused on medical technology companies in life sciences companies. And to help them to improve significantly their sales in profits. And that’s basically what we do. But internationally, we have

 

Will Bachman  12:19

new partners, you have your members of your firm based where,

 

Thomas Breuer  12:23

yeah, we have 14 partners in some are based in the US, some are based in Europe, some in Latin America, some in Asia, in some in the Middle East, and in Africa. So it’s it really is a global company. And we have most of our clients are on the one hand us clients in for them. Everywhere outside of the US is international. But we have a fair amount of clients that are European, and for them, the US and international, as is other parts of the world, you know, Asia, Latin America. And we’ve also worked at not just for the companies that manufacture, but also for private equity companies when they want to evaluate companies that they are considering, or whether they’ve made acquisitions, and they want us to be part of their team. And also mergers and acquisitions. companies that specialize in that, ask for our help in evaluating or doing the due diligence, both in the US and abroad.

 

Will Bachman  13:39

Yeah, walk us through a case study of a sample project that your firm’s done.

 

Thomas Breuer  13:45

Sure. We have two business models. One is the normal fee for a project base. So an example of that in the other module is a success fee in the if I can if we have enough time. I like to give a a case of that kind of project. Yeah, definitely. If it weren’t for fee like project is, for example, we had a major multinational medical device company in the US up the field. And they contacted us, saying that the President of that key international region was very unhappy with a share of market that they had in that important region. And that there had to be a way to do much, much better. And so I tried very hard to convince him that it should be a successful project. But I was unfortunately not successful in doing so. So it was a theme project. In the reason I say it is unfortunate because in our three year involvement with him in this project their share of market went up by a factor of five times. So the project, you know, it was it was profitable, good partners, but not as profitable as it could have been. In what, what we did in that case was, you know, the normal thing of analyzing the key facts in the forces at work, you know, it was for their own company, a what was the share of market in other regions, including the US in why? And for their competition in the different regions? How well were they doing and why? And then what are the key factors for success and lessons learned from that? Well, then we help them to develop a new strategy, a focus in a few countries. And, for example, if they didn’t have subsidiaries at that time, and then basically, this was very important to hire in those key countries, employee of our client to be the sales manager in that country working with a distributor. In that way, he could have much more control of what’s going on and give much more advice. And more importantly, he will be part of the key relationships, be it with customers government or other entities in this worked extremely well. And then we created an action plan for each one of those countries in this was not done. I had a solo, we like McKinsey does is with a client team. And I convinced the president of the division that it was very important to just have not just some more bodies. But if people that were really good, including among them, whoever he thought right now might be the head of that division. If things turn out well. That was a hard choice for him because it was a valued team member, but he did appoint him. And he was with some of his colleagues part of the team. And as things started to work out, first, it was a good way to evaluate him. And he turned out to be very good. He then named him head of the division. So in the first in the second and third year, involvement was less. But they continue the work. And after three years, they achieved a good result. So that I thought was a very interesting experience. And not dissimilar to what I did at Hollister when I was director of international sales for 20 years before retiring in 2002. Form Brewer partners, which is you focus with exclusive distributors in key countries. And then you develop the business with the objective in mind after X time to create your own subsidiaries in taking different steps. And that’s what we did.

 

Will Bachman  18:18

Tell me more about that. So creating your own subsidiary. Talk to me about

 

Thomas Breuer  18:24

Yeah, yeah, that is easy to talk about very tough to do. Because obviously, for the company, they’re relatively new in the country. So I totally So the approach we took is, we formed a team within the company. At that time, when I was director of those geographies. I was deeply involved. But so was somebody like, at that time, even the VP of international was personally involved, which was important. And then for the different for the different functions. We had a team member involved, finance, in the logistics, the legal aspects. Everybody had their jobs. So this was not a full time job where we had the job and on top of this job, and then basically, we went and worked with different distributors to have an amicable parting of the ways because they benefit a lot and there was very good relationships. I mean, they didn’t like it, but when you have a distribution agreement, it normally is for X number of years renewable, but there are minimal annual purchase quarters. So anyway, by doing this in the country, we started basically, like we did In my case, with a small team, you start by hiring a good general manager, a good VP of Sales and Marketing in a good financial manager. And that’s it. And then you work. In other words, there was a transition period with a distributor, which is good for everybody. And then you create a strategy and action plan on how to get there. And some of these distributors turn out to be sub distributors for parts of the business. So that’s how we build it as a business. And rather than trying to do all kinds of country at once, this was like in stages, okay.

 

Will Bachman  20:44

Walk me through. So help educate me a bit on how this typically works. So take a, you know, a medical device company, that is not some global medical device company, but you know, some modest, moderate size, and they have a product that, you know, could work in other markets, they don’t have the sales force to get into that market. How does it typical arrangement work with a distributor? So just, maybe, let’s say that’s a US based medical device company that’s invented a device, they have their own sales force in the US, let’s say, and they’re selling it and they want to enter? I don’t know, Germany, or Australia? How would it work partnering with the distributor? What’s the typical terms? And how does it work? Okay,

 

Thomas Breuer  21:37

very good question. Okay, the, yeah, the first thing that we work out is understanding very well, why our clients in the market in the next three, let’s say us, why are they successful? Okay, and what are the keys to the success? In second, what are the main issues and problems that they encounter, not just now, but also when they began and went through the different phases of growing to where they are. So there’s a lot of lessons learned, and then it to get the, actually the owner or the president of the company to firmly back this up. So that we’re not just dealing with lower in the organizations where they might not be as enthusiastic as spending time on something that doesn’t benefit them directly. Okay, so that’s on this end, on the other end, knowing the key factors for success, we develop criteria for what would make a good distributor, okay. And then we do a search of of different companies within that country that fit that criteria, and then evaluate it. So let’s say that we’ve done that and we have the top two, or let’s say, this one that really stands out, okay, so the way we work with them is, is that we explain to them the potential how well it has worked in other countries, okay, in the base country, in another country, or if it’s the first country International, just about the US, and what the market potential could be in that country, and what shares could be in three to five year period. And then, in them, we help them, we asked them to please do what we call a mini regulatory plan, in a mini marketing plan, the mini regulator and then a me legal plan, you know, I’ll go into each one of these, the mini regulatory plan is, well, you need approval from the regulatory authorities in that country in order to be able to sell, so therefore there is a process and then they have to be good at it. And, and know how to do this or work with consultants in that country that will get the job done well and quickly. So. So that’s one key element. The second one is a mini marketing plan, which is, well, I know that you normally do things this way or that way. But we know it because we shared with you what works well for our client in this specific product and industry. And by the way, they have to be exclusive for this work, we don’t allow them to have a competitive product, okay. And then they themselves, analyze the market and come up with a mini marketing plan. Normally, it’s a given take because the first version that comes back is not particularly good. When sometimes we’re surprised, because they need to learn, for example, is it direct to consumer? Is that very important these days in not just working with hospitals and professionals, or a combination thereof? In World Competition is there in? Why are they successful or not successful. So anyway, we work together with them to create a mini marketing plan. And then on the legal side, we give them an exclusivity, this is very key, they have to be exclusive for three minimum or three years renewable. Because if they’re not exclusive, they’re not going to invest in they’re not going to give priority to your product. That’s my experience, or 30 years in international. Okay, now, the other side of the coin is, well, how do we know that they talk a lot, and they don’t deliver. That’s why the contract has minimal annual purchase quotas, which are not aggressive, but they are only a conservative percentage of what the market analysis shows that it’s reasonable to achieve. So therefore, it’s not something that you’re trying to do that they are totally stressed, or they’ll never achieve it, it’s something that if you’re a good history will they will achieve, therefore they’ll invest in then it can be renewed. Normally, it renews in so we have distributors for different clients, that we’ve been working over a decade. So that’s how we do it. And then after that, we engage with them as partners, not just emails, or once in a while in a phone call. We talk to them in depth calls, at least once a month at the beginning every week. And also emails back and forth, is so that they’re on the right road in a lot of back and forth, we learn from them. Because if we chosen, they are good in their country, and we learn from them, and they learn from us. So every server, including our clients, shares all their things with us, we then share it with the different groups in everybody helps. So let me give an example of one of our you see, we had a terrific idea that our client, this client that I talked about, said, wow, if it works for him, I wonder if this will work well in the US. So what it was is direct to consumer. So his client said, I’m going to go to a direct response TV, even though it’s expensive. I’m going to pilot this in a small city in my country and see if it works. Well. He did. And it worked extremely well. So then I’m going to do it in more small cities, worked extremely well. Well, then he went to regions, then he went to national, who then gave him the local rates because they wanted to be competitive of all the budget you spend. So then our kind of us, oh, my goodness, is that works in that country. Why don’t its pilot this here he did, in today, at least, at least a 40% of his sales come this way. So this is basically how we work. So it is a step by step. And that’s why we have these long term relationships with the clients and with the distributors doesn’t mean that we don’t take short term projects we do. That’s not the way we look at things.

 

Will Bachman  28:49

Now these distributors, you say they’re exclusive, but they I imagined they typically are selling a variety of medical devices, just not something right in that same category. Exactly, exactly what you said exactly. Because they would have relationships with procurement officers of hospitals or at the government health care purchasing organization, or however that market is structured, the exact

 

Thomas Breuer  29:17

exactly as you would describe it, yes. And if it’s direct to consumer important that market, they would have had some good experience in it and not the neophyte. Now, if you’re a neophyte, they can hire good, direct to consumer consultants. Okay. And we’ve had some districts that have done that, that said, look, the market is moving this way. I need to be good at this. And they had some very good consultants, local ones, to help them do this.

 

Will Bachman  29:47

How do you identify the even sort of selection set of distributors in a given market? Are there good databases where you can look up your Germany or the Czech Republic or Australia and say what are all the distributors medical device distributors in that market? Or is it more just one by one? Like research or knowing the industry? How do you even identify the set of the consideration set of companies to think about talking to?

 

Thomas Breuer  30:21

Yeah? Well, that’s a very good question. This is a very tough part. It’s a combination of all the different things you mentioned, Sam is you just basically know already, because of your contacts in that country, okay. Whether they are a candidate, or they can recommend to you somebody that has that profile. So for example, we just for one of our clients, somebody that we had worked with, in Germany before. I called him and they said, Look, we’re looking for somebody in Germany, in the so he found the German company that way for us for a client. And then another one that we had worked in Germany, and we said, look, do you by any chance, no, somebody that has this kind of profile in the Nordic countries? And he said, Well, you’re in luck. I do. And so he gave me, you know, that contact, and now we’re about to sign him up for another client of ours. But sometimes it’s more difficult. So we need to do our own Google search. Many times that doesn’t work. In then we have to try and do some market research companies, we haven’t had good experience with, frankly, the ones that do the report, because they talk a lot in detail a lot. But when you say okay, it takes one country, all the ones that you say you’re so good, in, answer at least one of these five questions with specifics. And you know, something for tourism, we got zero back. So maybe some of the Umbrex individual consultants that have experienced in that industry or in that country, could be helpful in that. So it’s what you said it’s a little bit of all of that.

 

Will Bachman  32:26

Fascinating. You said you had another sanitized case example, this one where you went at risk on your fees?

 

Thomas Breuer  32:35

Yes, yes. No, this is a very interesting one. At the time, we started with them, it was a small company. So it was out of the question that they would pay for a fee. There was a small retainer for a couple of months while we learned about their business. And then it was successful. So then we basically try to identify which countries, Europe would be the ones, okay, for that specific country in that industry, because the healthcare systems are good. And it’s not just price. It’s the quality of life, environment, etc. Even though this product compared to the alternatives, it produced 60 to 70% savings compared to the the others. But it was new, it was a new. So the real competition in that case was, you know, the lack of knowledge, you know that the competition is ignorance, okay. Patients, consumers don’t know that this better alternative exists. So we selected a few countries in in Europe, to target. And by the kind of process that you mentioned, we were contacting different people as one example for that industry. We went to the patient Association in that country, also to the Doctors and Nurses Association to see what companies advertised in the website, and magazine. And then we wrote to each one of them an email, and one immediately called back and said, I’m very interested. So we call him next day. And when he heard this, he was we were very lucky. They were totally dedicated to this industry that we’re talking about this segment. And so after he heard that, he said, you know something God smiled at me when you called me today. And within three weeks, we had a signed agreement with him and he placed his first order, which was not a small one. In right now he’s a star distributor and performer. So that’s one extreme. Okay. And we’ve got others extreme where it’s taken us more than a year or two or more to identify a good distributor. Yeah. In basically the way we are compensated is all the purchases that these international distributors make from our clients, we get a percentage from that. Nic percentage,

 

Will Bachman  35:44

yeah, so that aligns your incentives with with your with your client.

 

Thomas Breuer  35:49

Yes. And he’s a very good CEO and owner, because when there’s a bit a big bid, and he has to lower his prices, he’s willing to lower the prices. In in those cases, we participate with him. We did, for example, reduce his prices by 20%. To win a big bids. We reduce our commission by 20%. In that way, everybody’s aligned.

 

Will Bachman  36:15

Tom, if folks want to find out more about your firm or reach out to you, where would you point them online?

 

Thomas Breuer  36:24

Thank you for asking. Okay, one way would be to send me an email. It is tongue TLM. At Brewer partners, that’s b r e u e, our hearts nurse with nslds.com all togethers. Another way would be our website, which is www. Brewer partners.com. And the third way would be plus one micelle 847-624-1011. And the other way is to reach via Umbrex. And we’ll

 

Will Bachman  37:06

Fantastic. All right. Well, we’ll include that info in the show notes. Tom. It has been great speaking with you today. Amazing what you have done in your career, and so exciting that you’re still building your firm. Thanks so much for joining.

 

Thomas Breuer  37:23

Well, thank you very much for inviting me in. It’s a privilege to work with you will then with Umbrex

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