All Jokes Aside, Kriwet Quit with Grace

Last week, Carla Kriwet became the shortest-serving CEO in medtech history.

Wait, let me qualify that statement. In my research, I was unable to find a record of any medtech CEO stepping down after less than two months. So, unless someone can correct me, I’m declaring Kriwet’s two months at the helm of Fresenius Medical Care to be an industry record.

The official line from the German dialysis company is that Kriwet left at her own request and by mutual agreement due to strategic differences.

I'll admit, I had some fun at Kriwet's expense as I workshopped headlines for that news story. With short leadership tenures top of mind, thanks to Liz Truss recently becoming Britain's shortest-serving prime minister, I couldn't resist referencing Truss. Later, when the story appeared in MD+DI's newsletter, I teased the story with a "Well, That Didn't Last Long" headline.

But all jokes aside, what really stuck out to me as I researched Kriwet and her two-month tenure at Fresenius, is how she exemplified the notion of quitting with grace.

"In this short time, I have met a fascinating company with a very positive corporate culture that works every day to make patients' lives more worth living," Kriwet said in the news release announcing that Helen Giza is to take over for her as CEO. "The company has great growth potential and is about to undergo a major transformation. I thank my whole team for the great support and wish the company all the best."

The quote strikes me as genuine. Oh, sure, I have no doubt there is a lot more she didn't say that could have given us insight about what really went down between her and the management supervisory board, but Kriwet chose the high road and focused on the positive aspects of her time there.

More telling to me is the quote from Michael Sen, head of the supervisory board.

“In a fundamentally sound industry Fresenius Medical Care now needs to sharpen its focus on the operational turnaround, further drive performance improvements, and focus on its core. We are delighted that Helen Giza will take over as CEO. She is ideally suited to lead Fresenius Medical Care for what lies ahead. During her tenure with the company, Helen Giza has gained thorough expertise in renal healthcare and has a deep understanding of the company. I am very much looking forward to continuing working with Helen Giza in her new role. On behalf of the supervisory board, I would like to thank Carla Kriwet, and we wish her all the best for the future.”

Being the crusty old journalist that I am, I have become pretty good at reading between the lines of press releases. So, let’s break down Sen's quote and what he isn't saying (but likely implying) in that statement.

First, Sen refers to the company's need for an operational turnaround. Indeed, the dialysis company is undergoing turnaround efforts, dubbed the FME 25 transformation program. Here’s what we know about that program, based on Kriwet's prepared remarks during the company's third-quarter earnings call, which happened to fall just one month into her time at Fresenius.

Kriwet said the FME 25 program is on track to deliver "much needed financial transparency and simplification." She added that the company is transitioning into a global operating model centered around its business segments, care delivery, and care enablement. Those plans are on track to deliver €500 million of earnings before interest and taxes by 2025, she said.

The program was designed to address labor, inflation, and supply chain challenges. Specifically, Kriwet mentioned optimizing the company's manufacturing footprint, optimizing shared services, using automation, transitioning basic operational tasks to low-cost locations, eliminating operational duplications, allocating capital to growth areas with higher profitability, and exiting unprofitable businesses.

Beyond that, Kriwet understandably wasn’t ready to talk strategy details after just one month on the job. Given that she and Fresenius parted ways due to “strategic differences,” it’s safe to say her ideas for righting the ship were met with opposition from Sen and crew.

Let’s go back to Sen’s canned quote in the release.

“…We are delighted that Helen Giza will take over as CEO. She is ideally suited to lead Fresenius Medical Care for what lies ahead. During her tenure with the company, Helen Giza has gained thorough expertise in renal healthcare and has a deep understanding of the company.”

In other words, Giza drank the Kool-Aid and asked for refills. Unlike Kriwet, who might have spent the next two years going toe-to-toe with the board, Giza will toe the line.

When sailing in rough seas, it’s common for companies to bring a new captain on board and task them with turning the ship around. But for the turnaround to be successful, the board must step back and let the new CEO do the job they were hired to do.

In the case of Kriwet and Fresenius, it is all too likely that the board just wasn’t going to let her do what needed to be done. Better to jump ship early into the voyage than end up dead in the water later on.

Pedersen's POV publishes every Monday. Email [email protected] (please put “POV” in the subject line).