Understanding the Differences in Revenue Models
Since Isolde targets the medical diagnostic side of the genetic-tech market, her revenue model is focused on the items needed to run tests rather than the testing machines themselves. This model responds to the market because the machines for these diagnostic tests are so expensive that medical customers are unable or unwilling to pay for them; thus, in this market, the SAM for machines is dramatically limited. As a result, Isolde has identified that there is more money to be made off of the materials needed in the process of testing. In contrast, since Emanuel targets the research side of the genetic-tech market, his revenue model is centered around the machines that research labs need in order to conduct their research. This model responds to the particularities of the market because, in this market, customers are not afraid of such high machine prices. Since these machines have higher margins and customers are willing to pay the high prices, in this market, there is more money to be made off of the machines themselves.
Flexibility and Strategy need not be Mutually Exclusive
While these revenue models align with the different markets, I agree with Peter’s intuition that the merged company needs a single revenue model as a way to ensure that their sales team can operate as effectively as possible. It is particularly troubling that customers report being confused as they are contacted by two different sides of an apparently merged team, and this alone should prompt the development of a new strategy. However, outside of the question of how to best merge, I also thought it was curious that Isolde and Emanuel suggested that establishing organizational strategy would inherently undermine the ability to be flexible and respond as the needs of the market changes. I think that this is an overly simplistic view of what it means for an organization to be flexible. By developing processes by which the revenue model is consistently reevaluated based on customer feedback, there is likely a way to create a single strategy while maintaining flexibility.
Ensuring an Equitable Conversation about Merging
If I had to scaffold the meeting in order to ensure a fair interaction between both department heads, I would likely start by asking each to present a report about the current structure, strengths, and weaknesses of their department. Especially since it seems like they have different forms of verbal communication, I think that through the development of a written report, they would both be given a more equitable chance to communicate the specifics of their department. One thing I would ask both to prepare as a part of this report is a review of how they might be able to monetize their services, as this seems like a strength of both teams upon which the company is not currently capitalizing. I would also ask that both presentations end with time for both me and the other department head to ask questions to ensure that all three of us have a holistic view of each of the departments. Only after we are all on the same page and the data about each department is available, would I begin to discuss the viability of each respective revenue model in the merged venture.
