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If the swirling headwinds of Covid, sputtering supply chains, labor shortages and, of course, inflation, have proven to be the challenge of a lifetime for many CEOs, just imagine what it’s been like for Tom Polen.
Newly minted as chairman and CEO of $20 billion global medical technology company BD in 2020, Polen became leader of one of the most important health organizations in the world just as the pandemic struck. From Covid tests to the syringes used to inject vaccines into billions of arms, BD—and Polen—found themselves at the epicenter of all-things-Covid, while at the same time having to continue to provide every imaginable type of medical equipment used inside almost every doctor’s office and hospital in the western world. That IV tube in grandma’s arm? It’s likely made by Polen’s people.
It’s about as complex a CEO job as can be imagined, leading 75,000 employees—and millions of customers—though a time of chaotic, high-stakes change, but it was one he’d trained for. He started at BD in 1999 , worked at Baxter Healthcare for a few years and then returned to BD in 2009, serving in a variety of leadership roles, including president of several worldwide business units within BD’s Life Sciences segment and later as president of the BD Medical segment. In 2017, he led the strategy for the $24 billion acquisition of C. R. Bard, Inc. and was named president and chief operating officer of BD before becoming CEO.
In a recent conversation with Chief Executive, we asked Polen to dive deep into the details of how he does what he does, everything from tackling inflation and strengthening supply chains to growing a “growth mindset” at every level of his organization while keeping everyone “hyper-aligned” on the big picture. He obliged. What follows has been edited for length and clarity.
Two years into the CEO job, what have you learned about being a CEO?
People often actually will say, “Wow, Tom, what a tough time to become a CEO,” because within six weeks of becoming CEO, the pandemic struck. I actually would say what a tremendous opportunity to make an impact in that window leading one of the world’s largest medical technology companies. I couldn’t be more proud of how BD’s responded in helping to support healthcare in those first six weeks when the pandemic struck. I remember we said, “Well, we need to help get the world vaccinated. We need to help get the world diagnosed, and we need to help them get well.”
Over the last two years, we’ve helped deliver over 2 billion vaccine doses around the world. We made 2 billion additional syringes just to deliver Covid vaccines. We developed one of the first two rapid tests in the world for Covid and made hundreds of millions of those tests. We now have over five molecular tests for Covid. We have three point-of-care rapid tests, including an at-home test. And then we ramped up production where 90% of anyone going in a hospital to be treated for Covid is touched by our products, helping to get people well.
So, from fulfilling our purpose and kind of the idea of a crisis is a tremendous opportunity not to develop but to reveal one’s character, which we said right from the beginning. We couldn’t be more proud of how we’ve responded.
What surprised you, though? The CEO job is a different job—it can be surprising at how different it is than being the SVP or the something else of a division.
Probably the biggest thing I learned was just the importance of the voice of the CEO in setting the tone. Certainly, a crisis really shows that. When the world’s uncertain, the CEO role is a tremendous responsibility for communication.
For example, on the Covid assays, when we were developing those, it normally takes us three years to develop a new rapid test—we did it in three months. We pulled the best and brightest from across the company, and we said, “We have to get this done in three months, not three years because that’s what the world needs. It’s never been done before, ever, but we need to make that happen.”
Watching the energy and the enthusiasm and just unleashing the potential of the organization when they really felt that the company was backing them and was taking away any fear of failure, any concern, and allowing them to focus on being their best.
What are the big challenges you see in the business in the coming months, and how are you attacking those challenges?
We’re not facing any challenge that the rest of the world isn’t facing. Primarily, we said several years ago that there are two things that we didn’t see any company in the world escaping, and that’s inflation and supply chain challenges. But at the same time, we declared very much internally and externally that while no company was going to escape inflation and supply chain challenges, we were going to be the best in our industry at navigating those, and that’s what we’ve been doing. We very early on [created] an inflation taskforce and a supply chain taskforce for how we’ll navigate those.
Give us a tip about how you’ve organized to get through some of these issues. How have you handled it?
We’ve trained thousands of associates through formal training on [building a] growth mindset, which is the fundamental principle at BD—that there’s nothing that we cannot accomplish, but there are just things that we haven’t chosen to do yet. So, BD associates strongly believe that there’s nothing we can’t do, there’s just things we haven’t done yet. And that’s a very important premise to have when you face a challenge, right? Before you go into a war room, if you don’t have that fundamental belief, you’re not gonna get to a good outcome because there’s going to be nonstop walls put up.
How do you go about developing that growth mindset? What’s in that program?
We partnered with a group, the NeuroLeadership Institute in New York, who have built the best group of science around how do you create growth mindsets in organizations, and how does that unleash capabilities and power. We put people through training on a growth mindset—what it is, what it looks like. We celebrate it and recognize it. I’m a big fan of, certainly, you get what you measure, but even more so, you get what you celebrate, and that’s more fun and it’s more powerful.
We have metrics and we measure a lot of things, but the power of celebration is even stronger in an organization in terms of driving culture. We’re constantly pointing out growth mindset: “Hey, here’s something that happened in this business that we can all learn from,” and then we share those stories nonstop. That’s who’s up on stage, that’s who’s at town halls, and we’re telling growth mindset stories constantly in the organization. People can see that people who do well, this is what they do.
That’s how you drive culture and how you promote. We’re very, very careful in every promotion announcement that we make. Why exactly is that leader being promoted? And pretty much every announcement involves some aspect of growth mindset and a story about that leader and how they displayed it and connecting that to people doing well in the organization. You have to holistically make it ingrained that this is what we talk about and who we are. Once people have a fundamental understanding of it and then see it in action, it’s amazing how fast the flywheel moves.
How about navigating inflation and the supply chain challenges?
A few things or advice that I would give the CEO in terms of navigating supply chain and inflationary challenges, first off is, it’s not something that can be delegated. We are proud of having looked ahead and around the corner. Probably we got out ahead of others in recognizing that supply chain challenges not only were going to come, but we believed that they were going to persist.
The same thing in inflation. We very early on took a position that this wasn’t just about to occur, but that it wasn’t going to go away in a short period of time. That’s prudent as a healthcare provider. We have an obligation to make sure that we’re positioned to navigate those [challenges]. You can’t delegate that.
The level of change is not insignificant, and which again requires the CEO. Someone once said to me, “Remember, Tom, the last time there was inflation, the majority of your organization was in high school,” and this is very uncomfortable. This is the first time the majority of the organization have had to lead through this, and so it’s going to feel entirely new. You can’t just communicate “here’s the direction” and then expect that folks would know a playbook. That’s not going to work. You really need to be leading from the front and recognizing that there’s cultural change that’s happening.
We’ve brought in, for example, professors of economics from University of Chicago to run training sessions and hold education events for our associates on what is inflation? What does it mean? And exactly what actions the companies need to take to thrive in that. When I first thought of the topic, I thought, “I wasn’t expecting that I would need to bring in professors to help.” But those types of things have been really important. Understanding the dynamics of why it’s important, for example, to understand cost of the inventory you’re putting in the warehouse versus what you’re selling because that’s really what matters, or how inventory has to be managed even more tightly in an inflationary environment given the higher costs.
Is that taking down the number of SKUs that you’ve got? Instead of 19 different colors, maybe you’re really only going to get by with 5 next year—that kind of thing?
You’re telling our BD 2025 strategy. It’s focused around growth and transforming the company around three forces that are reshaping healthcare, but the second element of our strategy was always simplification. We had established a program called Project RECODE, which really has three elements rooted in the fundamental belief that we believe complexity kills growth. Complexity does three things: It makes it difficult for customers to do business with the company, it makes it difficult for associates to get work done, and it diverts money away from more value-creating activities. Otherwise, it’s fantastic.
So, we wanna get rid of complexity in every corner. Project RECODE, what it’s focused on doing is simplifying our manufacturing network, including moving production closer to where the distribution of those products is. The second one is simplifying our portfolio. We have a very large portfolio, we’re eliminating 30% of our portfolio, rationalizing those.
We have over 50,000 SKUs. We had 7,000 different versions of IV sets or a Foley catheter. You don’t need that many. We’ve been very systematically rationalizing that, which not only improves productivity in our plants, it helps reduce stock-outs and improves supply for our customers. And ultimately, it improves quality for our customers because the fewer SKUs we can ramp up automation, which helps reduce quality risk in our industry which is imperative.
How do you do alignment? You’ve got an enormous organization, you’re in so many different lines of business. How do you get everybody singing from the same song sheet? How do you interact with your direct reports, and then how do you make sure that that’s cascading down?
I’d say there’s three layers or four layers that I have that drive hyper-alignment, and we constantly use the term hyper-alignment. The first is, I’m a very big fan of white papers. So, when I came into the role, we wrote a 20-page white paper on BD 2025 which reflects on the past and clearly articulates where we’re heading and the strategies we’re executing and why. And every year, I update a new chapter reflecting on the prior year and our goals for the next year related to BD 2025, any changes that we have to make because of how the environment’s evolving.
But that’s very powerful for the CEO to take the time to do that, sharing that with their leadership team, getting their leadership team’s input, and editing the white paper. That’s a way to get the leadership team hyper-aligned. I’ll call that the first level. That’s really, really important, that process of writing a separate white paper. Every year there’s a new white paper that is this year’s update to BD 2025. The true north isn’t changing, but it’s reflecting, “Hey, inflation is persisting, we’re gonna need to do this differently, or the supply chain, we’re gonna do this differently, or we’ve now moved past this phase, we’re now in the second phase of BD 2025.” So, that’s one.
Next is we cascade those down into what we call KDGs, our key driver goals, and those go across the company. Again, they’re all hyper-aligned under growth goals, simplification goals, and our empower goals, which is the third element in BD 2025. Those are the metrics that we review every month in our operating committee. Those are cascaded through to every business.
At the same time, our key driver goals are broad across the company. We call out 10 things in those key driver goals that we call our needle movers. On my weekly leadership team check-in calls, we go through our key driver goals or our needle movers every single week. “Were are we standing?” Because we’re saying, “These are the 10 things we have to get done this year, and if we don’t, we’re not going to be on track to deliver our transformation.”
This isn’t outcomes. This isn’t, “where are we on profitability?” This is, “what are the underlying behaviors and activities that are driving the profitability?”
Correct. Where are they standing exactly? Not just the metric. We’re not reviewing the metric and key driver goals, it’s the progress and the activities. It all goes back to the white paper, to the broad KDGs, to the very targeted subset of those needle movers, and then the operating mechanisms that are used across the organization. We have our monthly operating committee that drives those through every region. Every business has those specific goals that hyper-align into the key driver goals. If you go to any BD business or region, everyone’s goals will align to grow, simplify and empower, everyone’s goals will align back to the key driver goals, everyone will have a similar operating mechanism that ends up rolling up from a cadence.
The corporate operating committee is the third week of every month. It starts with an end of week one review at a certain level, another group of the organization has week two to do that, so by the time it hits where I’m reviewing it, I don’t want to just hear numbers; I want people that have had time to work through and if there’s an issue where they’ve been able to start problem-solving and having a discussion. So, we give people time before we’re reviewing the performance to be able to synthesize it and take action on it.
Everything we talk about from a town hall perspective, it’s constantly tied back to grow, simplify and empower. It’s not just an internal communication if you were to read our analyst decks or see any discussion with investors or our earnings calls. It’s all the exact same. There’s no differentiation. What we talk about internally is the same thing as what we talk about externally.
What’s the thought going into the year ahead that you’ve been giving to your leadership team about persevering in the face of all of this change?
Maybe two things. One is it is important when people are running it at the pace that we’re running to just step back and reflect. I think probably most organizations, when they really step back, there’s a lot of pride to be had in what organizations are doing through these times, and actually how their organizations have responded, and that’s something we’ve been spending more time doing. One thing I find is that leaders often aren’t doing enough of that in this environment.
For us, for example, we’ve been outperforming the broader S&P, the MedTech index by quite a bit this year because of our ability to navigate a challenging environment, to help support our customers, and the growth that we’re driving through our innovation pipeline. You’ve got to take time to let folks know and step back and understand, here’s where the company stands. Here are the outcomes of all the hard work that you’re doing. Celebrating. Again, getting back to celebrating—making sure that with everything going on, that you’re not letting that celebration slow down, that it’s actually more important than ever to be celebrating and recognizing associates in this point in time.
The other big component of culture change that we’re driving is servant leadership. Measuring leaders on how successful their organizations are. The idea that we’ve communicated very clearly is that leaders are at the bottom of our pyramid, associates are at the top. That’s more important than ever, not just in a challenging environment, but in a very tight labor market.
The last thing I’d say is we’re a very purpose-driven company. People join BD, nothing against t-shirts and tennis shoes or other things, but what we do saves lives. I often say inside of BD there’s a lot of really cool technology out there, iPhones, electric cars, lots of really exciting things that people love and want. But as soon as someone or their loved one gets sick, the only thing that almost anyone in the world wants is for them or their loved one to get well. And that’s all that matters, and that’s what we do. And it’s that purpose that for our associates gets people to go through walls and challenging times.
