What is an appropriate eulogy for SmithKline Beecham Clinical Laboratories (SBCL), soon to be acquired by Quest Diagnostics Incorporated? I would venture to say that even SBCL’s most aggressive competitors would acknowledge that it is a fine laboratory organization, noted for quality, integrity, and consistent service to its clients.
Despite those characteristics, SBCL no longer survives as free-standing business. It is important to recognize this fact because a primary function of any business is to survive and continue into the future. On some level, at some point in time, SBCL’s opportunity to succeed as stand-alone business enterprise slipped away. Despite the resource base of a $1.5 billion per year business, its executive team didn’t weather the storms of managed healthcare and corporate politics within the SmithKline organization.
I ponder the consequences of SBCL’s disappearance as an independent laboratory company. This development affects a sizeable number of laboratories in the United States. For example, it is recognized that SBCL provides more reference testing to more hospitals than any other laboratory provider in the country. Many hospital labs are concerned about this merger. They recall the effects of other acquisitions and how interruptions in reference testing services affected their hospital laboratories.
Next, consider those laboratories, both hospital-based and commercial labs, which compete against SBCL for physicians’ office testing. Obviously many are sharpening their sales swords and hoping to capture big chunks of SBCL’s business should Quest Diagnostics make any miscues during efforts to integrate, consolidate, and restructure its two parallel lab systems.
Against this background,what is an appropriate eulogy for SBCL? I would be out of character if I didn’t choose to emphasize the fact that change is now the dominant shaping force in the laboratory industry. We can quibble about whether SBCL’s business strategies during the last ten years were the best ones.
But we can’t quibble about the fact that change was a constant theme. It was radical change, It was intense change. It rendered many good management plans worthless almost overnight.With SBCL’s disappearance as a major player in the lab industry, maybe the appropriate eulogy is to remind ourselves that strength can only come from renewal and renewal can only result from a willingness to recognize change, accompanied by a bias for acting upon that knowledge to provide stability for the laboratory and its staff.