With a background in consulting and process improvement, Jack Stephens is molding McKesson Medical-Surgical’s relationships with customers and suppliers.
Jack Stephens
Not long ago, the position Jack Stephens holds at McKesson Medical-Surgical was referred to as supplier management. Stephens’ title today is senior vice president product strategy and supplier partnerships. It’s more than just a word change.
In fact, it marks the latest stage of an evolutionary process begun when Joan Eliasek – currently president, extended care sales – was responsible for supplier relations. “Joan built an excellent foundation,” says Stephens. “We have a strong team with deep experience. Our goal is to be more strategic with our customers and our suppliers. It’s not just a matter of telling our customers, ‘We can offer you this product at the best price,’ or to our suppliers, ‘We want this product at the best cost.’
“It’s about understanding what will have the biggest impact on healthcare in the United States, and how to best deliver those services and solutions to our customers. It’s about looking back to our suppliers and asking, ‘How can we form tighter partnerships,’ so those suppliers decide, ‘McKesson is our best partner for growth.’”
Consulting background
Following a career that included consulting for Arthur Andersen, Booz Allen and his own firm, Performax, Stephens joined McKesson in September 2007 as director of process improvement. He held leadership positions in revenue management solutions, business processes and generic pharmaceuticals before assuming his current role in June 2016.
His experience in consulting and process improvement left him well-prepared for his work in product strategy and supplier partnerships, he says.
“What’s great about consulting is this: You come into a situation where, even if you know the industry, you don’t know the business, the players and the people. What that does is sharpen your skills at cutting through the non-essential information and getting right to, ‘What is the problem we are trying to solve? What is the true opportunity here?’ That calls for going deep quickly and understanding the customer, the suppliers and the business economics.
“I’ve tried to bring that approach to my current role, starting with understanding the customer – understanding their needs, preferences, the jobs they perform and how they perform them,” he says. “That informs the products we need to bring to market, the suppliers we need to partner with, the kind of deals we make. We understand how our customers value each characteristic of a product, including clinical preference as well as economics. Then we turn to our suppliers and take the same approach: We ask, ‘What are your needs? What are you trying to accomplish?’ Then we bring those two pieces together to form a solution. That’s what consulting is.”
A message to suppliers
Having a great team, a strong foundation and productive relationships with sales reps and suppliers has afforded Stephens the opportunity to learn the complex business of med/surg distribution. “That has been my No. 1 goal in my first year – to understand the customers and the suppliers,” he says.
He has a three-tiered message to suppliers.
“No. 1 is growth,” he says. “We are investing in growth, and that means growth for our suppliers too. No. 2 is a message of efficiency. We want to be an efficient partner, from the supply chain to the back office, including contract administration. And No. 3 is innovation.
“We value innovation and believe it can occur anywhere. We especially value innovation from our suppliers in the form of new products, solutions or programs,” he says. “It drives growth, and our customers love it.” So do sales reps, as innovation leads to more engaging conversations with customers.
But customers and suppliers aren’t the only sources of innovation, says Stephens, recalling a quote attributed to automaker Henry Ford, who reportedly said: “If I had asked people what they wanted, they would have told me ‘faster horses.’” McKesson can be a stimulus for innovation too.
“One of our roles is helping suppliers not just enhance current products or processes, but to think about things differently,” he says. “We want to get involved in the design stage; we want to help launch innovative products and services; and we want to help all the way into post-launch.”
What’s next?
After a year and a half of learning, Stephens and the McKesson Medical-Surgical team look forward to the year ahead. “Our focus areas are lab, pharmacy, health systems, HME and e-commerce, and we want our preferred suppliers to share in that growth,” he says. “We will invest in specialist sales forces and category product managers, add new products and solutions, and create new support resources on the back end.”
The company is preparing to launch a new manufacturer services program at the spring 2018 national sales meeting. An important contributor to that program will be newly appointed Senior Director of Supplier Marketing Jennifer Conner, who brings experience in lab, home care and med/surg marketing.
McKesson Medical-Surgical, its customers and suppliers face challenges ahead, says Stephens. But each offers opportunity for innovation. For example, this year’s hurricanes in Florida, Texas and Puerto Rico prompted the company to partner with a supplier to help physicians set up replacement offices.
Consolidation is another challenge – and, it turns out, opportunity.
“A textbook MBA-type analysis would tell you that supplier consolidation would harm distributors, because the manufacturers could exert more power,” he says. “But we’re seeing the opposite.” That’s true for three reasons.
“First, because more procedures are moving to the non-acute setting, when these companies combine, that opportunity becomes that much larger for them, so they are engaging us more than they have been before.
“Second, as these companies become larger, efficiency becomes more important to them. That forces us to be more efficient and to reduce our cost to serve.
“And third, as these companies grow, they invest more in R&D for non-acute innovation. I think that will end up being good for our customers, our reps and McKesson.”