People who work in marketing are ten a penny - easily replaced. People who have technical skills aren't easily replaced at all. I guess that's why.

Exactly right, too - the doer should have more value than the talker.

David Didsbury Very controversial statement, Everyone has a value, it really depends on who's doing the looking!

Julie Omohundro If R&D is the last to go, it may be because that's an area that the device industry has been unwilling to offshore in a quest for cheap labor.

Manufacturing...they've about wrung that one dry already, I think?

So maybe that leaves marketing as the next area being eyed for its potential to get "lean"? It does seem like marketing of medical devices is changing, with less direct contact with lots of providers and more with a limited third-party payors. Perhaps this suggests, rightly or wrongly, a need for a small marketing workforce?

I might also think that layoff strategies may vary from company to company, depending on its competitive environment, long-term strategic plans, etc.

Dave Gaisser Neil, look at it the other way around. What happens if you eliminate R&D first?

A case in point: A past client failed to meet sales projections. After evaluating their budget, the chosen route was to reduce R&D staffing, a modest sized cost center. Unfortunately, this meant that innovation stopped and no new products were released for several years, further impacting revenues. They ultimately cut Marketing since they had little new to promote. It was only after they restored R&D and reinvigorated their product pipeline that revenues improved.

As Julie notes, it will vary from company to company. A large established company may well survive a cut to R&D, but a new or growing company would likely benefit more from keeping R&D intact and trimming Marketing costs .

Neil Thompson Dave, you're right. R&D tends to be the rising tide that lifts all boats.

well, if it's not viewed as a partnership - failure is the likely destination. Trimming marketing to focus on R&D - who's driving strategy. A well designed product that misses pricing needs, or does not meet market demands? Or trying to sell a product that was poorly designed, cheaply manufactured. It's a partnership - sink or swim together. Placing value on one over the other is likely an ego driven discussion.

Marketing is the engine that pulls the rain however ;-)

Michael Lehmicke It hasn't been my experience that Marketing is always affected by cut backs before R&D. I worked in R&D for many years in a company where there were never any lay offs. I learned that this is actually a bad thing when taken to this extreme. Today I work for a very large multinational where periodic lay offs are taken as a fact of life. They tend to affect a business unit or sub unit that is not doing well rather than a particular functional group.

Some of the answers to this post have revealed a common prejudice among R&D professionals - that what they do is more important or more "real" than marketing. I used to have this blind spot, and it cost me. I have come to agree with Scott's sentiments - put your ego to the side and work with your partners if you want to succeed.

Suggesting that people who work in marketing function as "talkers" is myopic at best. However, I agree that Marketing and HR / Training professionals are the first to go. If the organization is AS A WHOLE bloated and overweight, then cutting off a leg or an arm does not fix the situation—it just handicaps what's left. What's more, where R&D's technical skills are often narrowly specific to the industry or product family, I have found that Marketing and HR / Training professionals much more quickly resume gainful employment after layoffs.

R&D has typically been the blood line to growing the business. Ask any rep, new products mean new business. If I have one doctor and sell him 1 widget, will he buy 2 from me? In days past, new products always meant a price increase. Different flavors of "Devices" usually meant add on sales. This is not the case today. Go look for a medical device company that is not investing in new products and I'll show you flat sales and a loss of market share. Good marketing can only cover for a lack of product for so long. Marketing in the traditional sense in Medical Device is slightly different but very important when done correctly. Marketers, do fairly well compensation wise as compared to the R&D side. From a business perspective, cut the higher priced guy when sales are slow and get out new products ASAP.

Kyle Nevala I believe it's simpler than who's more valuable. It's Money. [Downstream] Marketing drives the revenue, i.e. responsible for strategic efforts to bring in front end dollars, i.e. meeting sales projections. If revenue projections aren't being met, someone has to be blamed, and it ain't going to be the [sometimes late] project timeline (engineers)..."cause the FDA isn't approving our product". Besides, why would engineers be responsible for sales (VP Eng asks)? Rotate out the marketing team that isn't meeting the numbers and rotate in a new team who says they can, and the cycle continues.
Meanwhile, at the next Board muster. 'Oh, new marketing team, great, they should blow this out of the water. New talent is always good. Oh, VP Marketing, you have 18 months to prove it, or you'll be looking for a job too. Oh, don't forget, B-Ball will still be Thur nights.'
Anyone ever read Jack Welch's book on managing business? It's a classic.

Scott Yasi I believe this is simple R&D holds the genuine value of the company whether one believes it or not everything from R&D will be sold to the highest bidder for the information based on its value. Contracts and severance packages get expensive once those individuals leave and so they don’t want them offshored tell they have every bit of information that pertains to the value in the company. These individuals may also play a big role in mergers as well.

Rainer Moosdorf MD PhD The optimal ranking during the development of medical devices should be first to experience the market needs, then second to develop the best possible product and then third to bring this into the market.

G M Butcher Given your location, am surmising the question relates to start-ups rather than larger, more established companies. If that is the case, then the viewpoint of not recognizing reality should be considered. That is holding out hope that the device can still be versioned before money disappears.

Roger Cepeda, JD, MBA, RAC My experience has not been that any particular function is the "first" to go. If a company exits a current product line, sales, marketing & manufacturing for that product would be "first" to go, and R&D may be untouched. Conversely, if a company changes its mind about pursuing something in the pipeline, then R&D would be the primary casualty. At big organizations, I've seen across-the-board cuts unless there has been a specific target announced, such as consolidating facilities, eliminating lower-margin products, or reducing headcount at a headquarters site. In M&A, layoffs are inevitable as overlapping operations are eliminated to hit "synergy targets."

I don’t have any statistics one way or the other, but under normal working circumstances all of the departments are important to the success of the company. The “lifeboat drill” of a layoff implies that something has to change to save the company or improve performance. Medical devices being a highly technical market, I would guess that losing your technical skills and specific product knowledge would be harder to replace than marketing, assuming you eventually right the ship.

I don’t like cuts when it comes to a person’s livelihood but these are well stated facts of medical device industry.

Functional teams, no matter marketing or engineering, need to demonstrate values and outcomes to business.

What is sometimes forgotten is that it's a marketing professional's job to sell product.

John Jones I don't mean to be crass in my statement, simply factual... Marketing people are easier to replace than R&D folks. The product is the center of the universe for the company and if you lose your technical folks, you have nothing left. You can drop the marketing folks and the customers for your product will not notice they are gone but if you lose your technical folks, they will notice and lose confidence and it will spiral down from there.

Neil Thompson Jill Roughan I know you worked in biotech, but I suspect the same scenario applies in biotech as in medical devices. Do you think marketing is targeted first during layoffs? If so, why?

I'd almost flip this on it's head, although it's certainly more complex than that. As the regular R&D guy / CEO at start-ups, I often lean toward the technological side and have empathy for this, but I've seen so many teams make the mistake of holding on to what they call their investment in special sauce (that constant R&D) when they already have a perfectly marketable product. Investing in a strong marketing team with a product that sufficiently (if not perfectly elegantly) fixes some of the customer pain points can engage customers, generate revenue, and stave off the impending deficit. R&D budgets have the benefit of being more flexible and often more predictable, turning on and off with phases and gates more easily than most endeavors. Plus, if you're doing things well, your R&D team can supplement your sustaining engineering, sales support, and other teams, (or self documentation) so you can keep them actively engaged in company success during times of reduced funding.

In my opinion it varies based on the organizations’ needs. You need to have best people in the right positions who will give you optimal gains. When a company is struggling, it’s all about short-term direct sales benefits from the position itself versus positions that are considered “nice to haves” versus “must haves.” I’ve seen engineering people get let go first and I’ve seen marketing people let go first. It really all depends.

Maybe its more simple than that....you can't market something that you don't have, but you can develop something that hasn't hit the market....

Beluh Mabasa Ginting Marketing is highly dependent on the results of market research and development conducted by R & D. The R & D section should be able to implement the process of designing and developing new products either in creating or enhancing the value of a product by referring to the existing product competitors in the market by doing post market surveillance.

My experiences are it is common across industries to cut marketing first. It’s usually because when you are considering layoffs you are trying to plug holes in the sinking ship.

Cole Stryker McCann Having worked R&D, in the oil and gas industry which has been in a downturn for 4 years, it wasn't until year 4 that we ran out of backlog and budgets. while the rest of the company was making huge reductions because of lack of new contracts, we were pretty insulated.

In our engagements with medical device and some pharma companies, so much of this shakeup appears to depend upon general company strategies being inclined toward a more sales or product development focus. Every company we've analyzed go through volatile cycles with respect to marketing needs as product landscapes continue to meet ever evolving needs of patients, regulators, facilities, and businesses themselves.

Still, we're seeing more sales absorption of marketing divisions in companies that have generally shallower product pipelines, and more direct alignment between mkting and R&D for companies with deeper R&D pocketbooks.

We've also found that, unless digital health is part of the pipeline, mkting depts in med device have recently been receiving, on the whole, less resources per dollar spent than direct sales (this is a bit more difficult to analyze when marketing is not, at least in name, organizationally separate from sales - something one of my groups is investigating ).