Read the Conversation
Meeting highlights:
- Brazil’s Market Importance: Brazil represents 40% - 45% of Latin America’s healthcare market, making it crucial for KARL STORZ’s global strategy.
- Direct Presence Transition: KARL STORZ shifted from indirect sales to direct operations in Brazil, investing in governance, partnerships, and key hires.
- Portfolio Expansion: The company expanded beyond traditional areas like urology to include ENT, gynecology, and more, offering broader healthcare solutions.
- Tech and Data Use: Despite data challenges, KARL STORZ leverages internal intelligence to ensure cost-effective, high-quality solutions.
- Workforce Development: Strong internal communication and training are key to preparing employees for the company’s growth and future challenges.
EF: What attracted you to the company and your current role?
TC: Receiving the invitation to join KARL STORZ was a pivotal moment, as it came during the latter phase of the pandemic in Brazil. They invited me to lead efforts in turning around the business in Brazil, which was truly exciting. For many years, we operated through an indirect sales model using a master dealer. However, our vision for Brazil was to establish a new governance model and transform it into a direct sales operation.
The opportunity to build this from the ground up was thrilling, even though it came with many challenges. Starting this operation from scratch, the alignment of the company's name, its products, and the ambitious projects made it a truly exciting journey in this new culture.
EF: How would you describe the strategic importance of Brazil to KARL STORZ as a global company? Why should the headquarters prioritize investing in Brazil over other regions?
TC: For me, the answer is quite straightforward. Brazil is a strategic market within Latin America, and for many global companies, it holds significant importance—not only due to the size of the market but also because of the structure of the healthcare system. Brazil has many attractive aspects that have been evident from the start, including a strong presence of highly skilled physicians across various specialties.
The Brazilian market is very compelling for investment and serves as a key strategic foothold in the region, often accounting for around 40% - 45% of the total market share in Latin America, depending on the industry and company. This makes investment in Brazil a very sound decision.
EF: What were the biggest obstacles in shifting to a direct presence?
TC: KARL STORZ has a long history in Brazil, spanning over 30 years. However, despite the strong product and brand presence, the organizational structure was not particularly robust for many years. Our primary challenge was to manage the transition from a master dealer model to a direct operation. This involved building the organization from the ground up—establishing departments, defining processes, and even creating a new business model.
Another significant challenge was navigating Brazil's complex bureaucracy, which required substantial investment. We had to be strategic with our resources to handle the extensive licensing requirements and regulatory hurdles. Additionally, establishing a comprehensive business model to cover the entire country meant forging the right partnerships to support our growth.
Talent acquisition was another critical aspect. Starting from scratch meant we needed to have a targeted hiring strategy, bringing in professionals with deep expertise and market knowledge to accelerate our progress during the early stages. These were some of the key challenges we faced, each playing a vital role in our journey of establishing a strong direct presence in Brazil.
EF: What initiatives are you undertaking beyond simply introducing products to help build more resilient healthcare systems?
TC: Let me put this into context. For many years, KARL STORZ in Brazil was known primarily for its video towers, imaging systems, and a portion of the urology and laparoscopy portfolio—nothing beyond that. However, KARL STORZ has a vast portfolio that spans many specialties. One of our key goals from the beginning was to fully leverage this portfolio in the market, expanding and reintroducing many of our technologies. This shift represented a major leap as we began engaging with a wider range of stakeholders and communicating the full scope of our solutions.
This approach allowed us to change the game significantly, demonstrating that KARL STORZ offers much more than what had been perceived for years. It positioned us well to enter various markets with diverse solutions. As we built this positive momentum, the next step was to ensure proper market access, as each specialty has different competitors. Our focus became creating a segmented approach to align our portfolio with the specific needs and current market conditions.
Of course, this process came with challenges, including economic factors and the phased adoption of our technologies. However, by expanding our market presence and introducing a broader range of products and solutions, we created more opportunities for interaction with different stakeholders. A key part of our journey was building this kind of environment for growth and innovation.
EF: When it came to building your product portfolio in Brazil, how did you determine where to allocate your resources? What guided your decisions on where to focus your efforts initially?
TC: Initially, we focused on the core specialties that align with our global priorities—these were the 'low-hanging fruit.' Then, we moved towards markets where we had a historical database and could identify significant potential or a strong alignment with our portfolio. This meant respecting our existing strengths in areas like imaging, laparoscopy, and urology while also expanding into new specialties such as ENT (Ear, Nose, and Throat), anesthesia, and gynecology.
We began combining solutions across these specialties to create synergies and broaden our offerings. For example, even within urology, KARL STORZ has solutions like instruments, consumables, and advanced technologies such as lasers. These are particularly important in the market, as they face limited strong competition in that segment. By identifying gaps in the market and focusing on strategic specialties, we were able to effectively expand our portfolio and presence.
EF: How are you using data to improve your operations? Additionally, how would you evaluate the willingness of physicians and administrators to adopt the latest technologies?
TC: Accessing accurate and comprehensive data has historically been a significant challenge in Brazil, particularly in the healthcare sector. While the public segment has more robust statistical data, the private sector presents greater difficulties in gathering reliable information. To overcome this, we often need to source inputs and insights from various companies that provide relevant data and then integrate these using our internal intelligence processes. This, combined with our long-standing expertise in the market, helps us make informed decisions.
However, it is far from an easy task, as data availability in Brazil is fragmented. For example, if you search online for the number of hospitals in Brazil, you might find four or five different figures. This illustrates the challenge of obtaining even basic or specialized information, requiring us to continuously update and refine our data sources, often on an annual basis.
My assessment of the adoption of new technologies by the Brazilian healthcare market is that this is directly connected to the existing medical environment and specialties. I believe that the Brazilian healthcare environment is very interested in new trends and solutions but only needs to be aligned with the resources required and available for implementation, bringing positive impacts to the health of the Brazilian population.
EF: The Brazilian healthcare sector often views health as a cost rather than an investment in the future. How do you see this issue, and what steps can we take to align stakeholders in viewing health as an investment rather than an expense?"
TC: This perspective often aligns with the economic climate. For instance, in 2023-2024, many key institutions in Brazil adopted a conservative investment approach, reflecting the country’s economic uncertainties. To address this, when introducing new technologies, it is crucial to demonstrate their cost-saving potential and the quality improvements they bring. However, cash flow remains a significant concern for both companies and customers, making it essential to present solutions that are tailored to the specific needs of each institution.
It is a complex process, as each customer’s readiness and willingness to adopt new technologies varies. Some are prepared to invest in high-tech solutions, while others prioritize more immediate, tangible benefits. Therefore, segmenting our portfolio to offer the right solutions to the right customers is key. It is difficult to provide a straightforward answer to the challenge of shifting this mindset, as it truly is a million-dollar question that requires sensitivity to the economic conditions and unique circumstances of each stakeholder.
EF: As you look ahead to the pipeline and future developments, what aspects are you most excited about in that area?
TC: I truly believe that KARL STORZ is at a pivotal moment with a promising future ahead. The changes and comments we have discussed highlight that, especially with recent acquisitions and our upcoming projects. These initiatives will elevate the company to a new level, positioning us alongside major players in the medical device arena.
What excites me is not just our product offerings but the robust systems and ecosystems we are building. We are moving beyond providing specific solutions for individual procedures to delivering a comprehensive environment for our customers. This strategic shift emphasizes the importance of software as much as hardware, allowing us to adapt to emerging trends in the market. I see this as a significant leap forward for the next few years, particularly in light of our recent acquisitions and initiatives.
EF: What strategies do you use to cultivate a culture of success and a growth mindset within your team?
TC: First and foremost, we prioritize strong internal communication to equip our employees with the necessary understanding of how crucial this transformation is for both the company and their careers. Given the changes on the horizon, we need to assess the skills and requirements essential for the next phase of our organization.
We are actively building a shared vision, encouraging our teams to cultivate mindsets that align with the demands we anticipate in the next three to five years rather than looking a decade ahead. To facilitate this, we conduct various workshops and forums to organize ideas and foster effective communication.
We also challenge our team members to prepare for the next stage by reviewing and refining our internal processes. This is an exciting time, as we witness significant movements both internally and externally. We recognize the need to adopt new messaging and approaches to respond to these changes and position ourselves effectively in different situations.
EF: What is your final message for our readers?
TC: Brazil is entering a new chapter for the company, where we are focused on delivering advanced technological solutions while adapting to the specific dynamics of the Brazilian healthcare environment. This balance between innovation and local market needs is crucial as we implement strategies that address current economic factors and meet the expectations of our stakeholders. By integrating cutting-edge technologies, we are set to revolutionize minimally invasive surgery, offering solutions that improve precision, patient safety, and surgical outcomes. Our comprehensive digital platforms will support an integrated patient journey across multiple surgical specialties, from preoperative assessments to postoperative care.
In this transformative process, we recognize that while technology is a key driver, the talent of our professionals is equally vital to our success. Their skills and dedication are essential to the efficient execution of our initiatives and the delivery of high-quality care. As we continue introducing new tools, processes, and projects, we remain committed to fostering individual and collective contributions within the organization. This combination of cutting-edge innovations and human expertise will ultimately allow KARL STORZ to stay at the forefront of the healthcare industry in Brazil and beyond
