The Case
When Bob Palmisano left Bausch & Lomb in April 1997 to become CEO of Summit Technologies, Summit was in critical condition. Founded in 1985, the company was an early
pioneer of laser vision correction (LVC). But it had squandered a huge technical lead in the marketplace by failing to seek additional FDA approvals for the use of its technology
in multiple kinds of surgeries. Furthermore, it had committed a near fatal error by opening its own vision correction centers, thus cannibalizing relationships with the doctors
who bought its laser equipment.
While the company's technology was arguably superior to that of its major competitor, Visx, Summit gained a reputation as a "me too" player as its financial strength withered.
Its market share - at one time close to 100% - dwindled to 20%, with Visx gobbling up the balance. By the spring of 1997, Wall Street had all but dismissed Summit as a
contender.
Immediate CPR
Palmisano hired the New York-based I/R firm Investor Access Corp. (IAC) at the end of 1997 to help implement a strategy that would save Summit from imminent death. A well-
prescribed communication plan would play a critical role in renewing ties with various stakeholder groups as the company made progress toward the following goals: 1) to exit the
vision center business; 2) to rekindle clinician relationships and achieve "superior labeling" (i.e., FDA approvals for the use of Summit technology in additional kinds of
surgical procedures); 3) to redefine the company's mission, positioning it as "the refractive company"; 4) to regain technology leadership; 5) t o maintain financial
strength in order to compete vigorously; and 6) to boast the top management group in the industry.
Regaining Strength
Summit returned to the playing field in recovery mode and scheduled one-on-one meetings with targeted investors, as well as quarterly I/R teleconferences, as a means of
communicating its triage plan.
Meanwhile, to rebuild enthusiasm among its workforce, Summit implemented regular "all hands" employee forums to keep staffers apprised of its progress. In the fall of that
year, Summit divested itself of the vision center business. This sped up new FDA approvals and opened doors for a prospective acquisition that would enhance the company's
technological prowess.
Unfortunately, Summit suffered a setback in early 1998 with the loss of its incumbent PR manager. In April 1998, IAC president Mike Seely helped recruit I/R guru Kate Burnham
away from Reebok to join Summit as VP of corporate communication and I/R. "When I came on board, only two analysts were covering us," Burnham says.
Building Muscle Mass
As investors regained confidence in the business strategy set forth by Summit's new leadership, the company adjusted its messaging strategy, focusing less on recovery and more
on successes. Two major clinician conferences proved to be prime spots for scheduling face time with sell-side analysts. The company's 1998 annual report (themed, "WOW!") heralded
the growth of laser vision correction, and Summit's reemergence as an industry leader in the field, at the same time lauding the management team that put Summit back on the map.
Copies were mailed to all employees, as well as 15,000+ opthalmologists.
To build excitement at its 1999 annual meeting, Summit's PR team created a video, featuring celebrity and professional athletes who'd undergone LVC surgery. Soon after, the
company leveraged its market position by announcing plans to acquire Autonomous Technology, a manufacturer of state-of-the-art laser equipment. In August 1999, the company
completed a $60 million equity offering.
Summit's turnaround was heralded as complete when its PR team staged a "coming out" party at the American Society of Refractive Surgeons conference in May of 2000. Following
an analysts' dinner, the team introduced a new laser technology platform - the Autonomous LADARVision system. At the same time, company leaders announced a name change to Summit
Autonomous, Inc., and unveiled a new logo.
This big bang helped seal the deal on an even bigger coup. Two weeks later, Summit Autonomous was acquired by Alcon Laboratories, a subsidiary of Nestle Corp., getting 86% of
shares in a tender offer that ran during the month of June.
Peak Health
In the end, Palmisano's original vision proved better than 20/20. Research coverage of Summit among analysts quadrupled from 1997 to 1999, and institutional ownership rose from
less than 5% to more than 30%. At its lowest point, Summit's stock was trading below $5 per share, but by spring of 2000, it was resting comfortably in the 20's. (Summit was
sold to Alcon at $19 per share.) Today, production of its newest technology platform - the Autonomous LADARVision system - is sold out.
(Burnham, 781/672-0516; Seely, 212/679-0652)
Media Shy
Part of the team's initial strategy was to maintain a low profile in the press. Rather than contesting negative perceptions of Summit in the marketplace, Summit would lie low
until Palmisano's business strategy began to log results.
Eyeballing the Marketplace
Overall, the number of laser correction surgeries performed in the U.S. has jumped from 350,000 in 1998 to an expected 1 million in 2000.
Vital Signs
Summit Autonomous, Inc.
HQ: Waltham, Mass.
Employees: 300
Key Players: Bob Palmisano, CEO; Kate Burnham, VP Corporate Communication
and IR
Budget: Annual communications budget at Summit (including staff
salaries and agency fees) is "slightly more than $1 million."
Investor Access Corp.
HQ: New York, NY
Employees: 9
Key Players: Mike Seely, president