Live from Medtech MVP, Michael Mahoney, chairman and CEO of Boston Scientific Corp, sits down with Medtech Talk podcast host Justin Klein. They discuss Mahoney’s communications strategies to align expectations and convey intentions to shareholders, how to delegate and streamline decision making, and advice on doing better as a partner. Mahoney also shares which second order considerations (such as manufacturing) are important to keep in mind, as well as whether he’s a “war time” or “peace time” CEO and what challenges the industry needs to address today to create a better tomorrow.
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Episode Transcript
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Introduction (00:04):
Welcome to this special edition of the Medtech
Talk podcast.
In today's episode we'll hear afireside chat from the recent
Medtech MVP event.
Our host, Justin Klein, speakswith Michael Mahoney, chairman
and CEO at Boston Scientific, onexecutive insights on
(00:24):
leadership and success.
Let's listen in.
Justin Klein (00:29):
Good to see everybody here and Mike, thank
you.
This is great.
This is kind of a bucket listitem for me.
Michael Mahoney (00:36):
You have a small bucket.
If I'm in your bucket list, yougot to get out more.
Well, there's probably a.
I just want a good fantasyquarterback.
Justin Klein (00:48):
There's probably a hundred questions that I could
ask, ask you, I think we've gotabout 30 minutes, so we'll focus
on the hard ones.
I had requested some tissues uphere for you, some tissues.
Yeah, if this gets hard, youneed a break, just let me know,
but we'll dive right in.
So I would would say among yourpeers, you have done this will
(01:09):
be serious.
This is serious yeah we're goingright to it.
So I think you have done amongthe best jobs at communicating
your intent to shareholders andaligning their expectations with
your goals of being verydisciplined in terms of
operating the business, focusingon bottom line profitability
and growth, but also beingwilling to make investments in
(01:29):
the business, or evenacquisitions that may be
dilutive short to medium term toyour EPS, in the ultimate goal
of driving great top lineorganic growth.
And you've earned the right tokeep doing that, and I think a
lot of your peers have foundthemselves between a rock and a
(01:51):
hard place at times and figuringout how to navigate the
trade-off associated with thosethings.
You jumped into the business ata time when there was a lot of
work to do Is this for the samequestion.
Yeah, this is all the lead inand I'm just going to step down
and let you go.
My ADD you know.
Yeah, how did you figure outhow to message that, the
dilution and gross stuff?
(02:11):
Yeah, exactly, and positionthat not only with your board
but your shareholders and thenexecute on that in a way that's
allowed you to really, I think,stand out among your peers, hi
everyone.
Michael Mahoney (02:24):
I'm old.
Maybe that's why I've gottenbetter at it over time, but I
think early on we didn't, as thevery exaggerated intro which is
great by her but exaggerated onme laid out when I first joined
the company wasn't doing sowell and so we didn't have any
much credibility with WallStreet and portfolio managers
wouldn't meet with me, Activistswouldn't even meet with me
(02:47):
because things were a littlerough.
But anyway, essentially that'sjust earned over time.
And so we consistentlyunder-promised, even when
expectations were really low,and over-delivered a little bit.
So we consistently delivered onour commitments, which
eventually, over time, investorsgained confidence in us and
(03:08):
they began to trust us and wespent time with them and so
forth.
And then, as our company gotstronger and we had a bit more
of a balance sheet and we couldborrow some money and do
transactions in our ventureportfolio, that augmented our
organic R&D innovation, whichwas a whole separate topic.
That augmented our organic R&Dinnovation, which was a whole
separate topic.
(03:28):
But, truth be told, we've neverdone a deal and taken our EPS
guidance down, nor have we neverimproved operating.
The only year we didn't improveoperating income margin was
during COVID.
Every year since then, everyyear before that and after that
we've improved operating margineither 25 bps or 50 bps per year
.
And no matter what deal we'vedone, we've actually never taken
(03:49):
our EPS guide down.
And when you take your EPSguide down and you take your OI
margin targets down, you'reasking the shareholders to kind
of pay the price more.
So we've had a philosophy thusfar that even if we do a and our
most dilutive deals are earlystage companies that you may
have to bring on 50 or 60million of OPEX a year,
(04:12):
unplanned for for many years.
Um, so that comes down to, uh,just choice-making and
choice-making the business.
And as the companies get larger, there's people always say, oh,
there's, we've, we've rung outall the blood in the rock or
whatever the phrase may be.
There's always just decisionsyou can make either to reduce
(04:32):
G&A, cut S-G&A, stop thisprogram, because the company
you're buying has a potentialbigger impact.
And if we're not going to dothis, internal program, let's
spin it out to a third party, soit still lives.
Internal program let's spin itout to a third party, so it
still lives.
So most of the reason we haven'thad dilution on deals and EPS
degradation is we've made otherchoices because that venture
company we bought could be sostrategic that it's more
(04:55):
important than other choices wehave.
And companies that I thinkdrive down their EPS targets or
forget their margin improvementbecause of a deal, I don't think
they're making some of thechoices that they could make.
So investors like the fact thatwe're able to buy companies and
tuck them into the company andnot get off our course, Because
(05:16):
then if you do that, then you'remore unpredictable to the
investors and they're not surewhat's next.
And we've proven to them overtime that we're going to stay
the course with our growthtargets and our margin
improvement despite what weelect.
And we've proven to them overtime that we're going to stay
the course with our growthtargets and our margin
improvement despite what weelect, Because we elect to bring
the company in.
We don't have to, so we shouldelect to do something different
to offset it.
Justin Klein (05:32):
Okay, that's really interesting.
I think you've done a great jobIs that interesting at all.
I don't think it was veryinteresting.
Yeah, no, I mean I think you'vedone a lot.
Obviously, in great end marketsYou've moved the business into
some longer-term growthopportunities but continue to
sort of layer in newtechnologies that enable
innovation.
(05:53):
Some of these have taken a realinvestment, like Watchmen,
right, I mean that was a longbuild, a big lift.
Others, Fair Pulse, took earlyvision.
I think you actually maybepersonally led that investment
for Boston and worked with thecompany, you know, to help
position it for what's been avery successful acquisition.
But it's not just those two,right.
How do you think about whereyou're at today, Because you're
(06:15):
hitting on all cylinders, andhow do you keep this going in
this environment?
There's some specificstrategies you're thinking about
, or you know what's next.
Michael Mahoney (06:29):
Yeah, well, the key is, I think, to know that
you're not hitting on allcylinders ever, and that's
really the key Cause.
I think once people in teamssports team or your team or
small team once you think you'rehitting on all cylinders, it's
time for a new leader to come infor the business or division or
whatever it is.
Whether you want to run qualitywithin division, you run
facility, whatever it is.
So I think part of it we callit the winning spirit is we love
(06:50):
our employees and we celebratevery briefly, but it's
constantly what can we be betterat?
And we have divisions in Bostonthat aren't doing as well as
they should be and regions thataren't doing as well.
So I think it's important to wefocus a lot on those great wins
and they're doing terrific forus.
But we have this mindset thatyou just it's easy to say, but
you just want to look foropportunities everywhere all the
(07:14):
time and be kind of relentlessthat way and in a nice way, in a
professional way, but really,and I think when, if you have
that amongst the leadership team, then that permeates across the
company and so you have a greatculture.
But it's not looking at what wedid last week.
It's what are we doing today,in the next five years, 10 years
?
So how we do it.
(07:35):
To me and I've said this acouple different places for me,
the job's not super hard.
I think the startups that theperson who just presented here I
run a startup which I did along time ago is a really hard
job.
Art my job, I boil it.
I focus the most on our, ourtalent, our, our depth of
(07:58):
succession, the culture of thecompany and innovation and what
portfolio choice.
I spend the bulk of my time inthat area and I spend less time
because we have amazing peoplethat run global supply chain
operations supply chain qualityit so I spend less time because
we have amazing people that runglobal supply chain operations
supply chain quality IT so Ispend less of my time there.
So I spend more of my time onthe offense and we're constantly
thinking about how we make thequarter in the year.
But how do we make BostonScientific great seven years
from now?
And we really think a lot aboutthat and we invest a lot.
(08:19):
We have a lot of dilution rightnow and we could be far more
EPS stronger or have highermargins if we weren't investing
in things now that won't impactuntil 2029, 2030.
So we have a lot of money tiedup there.
So our job as leaders is tomake the company special for the
(08:40):
next five, three, five, sevenyears, not just the second
quarter of 25.
So we really think about ourportfolio that way and looking
ahead of what our, as you getbigger and bigger, we'll be
likely over 20 billion this yearand hopefully be 30 billion in
a few years.
As you get bigger, you needmore shots on goal, you need to
take some bigger chances and youhave to have the fuel to do
(09:03):
that.
My worst fear is becoming areally big company.
That's average grower.
That's my biggest fear.
Justin Klein (09:13):
Yeah, as you've grown and I've talked to some
members of your senior teamabout this interview opportunity
, one of the things that severalof them highlighted to me is
your decision-making process thebiggest fear is my daughter
getting married.
Michael Mahoney (09:27):
Sorry, I was thinking about it.
That's my second biggest fear.
I like her boyfriend, but it'snot.
I was reflecting.
Is that my biggest fear or no?
Justin Klein (09:37):
Second biggest fear she's interviewed you here
Doing good Well, thisdecision-making process and how
you've enabled a company and ateam that's growing, that's
large, to still be nimble andefficient.
Can you talk a little bit aboutthat?
How you guys processinformation, how you either
delegate decision-making orstreamline decision-making in a
(10:00):
way that does allow you to makethat a competitive advantage.
Michael Mahoney (10:02):
Yeah, I think one thing I tell our team and
they hate this, and I mentionedPeter Arduini is a good friend
of mine.
I went to the GE HealthcareLeadership Meeting the other day
because he's a good friend andI said, hey, boston Scientific's
a bureaucratic company and soare you GE.
And that didn't land reallywell with the audience.
And the reason I said that isbecause I do think it's a
(10:24):
competitive advantage that ourculture and our speed and so
forth, but it's not as good asyou think it is.
As the leader of the company,you like to think it's really
really good and maybe it's alittle bit better than some
others, but it's not as good asit could be.
And so the reason I bring thisup, I always tell our team if
we're not fighting bureaucracyevery day, it just creeps in the
(10:49):
bigger your company gets.
If you're not intentionallylooking to reduce meetings,
change things that you used todo, change up your cycle, have
fewer steering committeemeetings, it just gets bigger
and slower and slower.
And we may be slightly fasterthan some of our peers, maybe,
but we're not as fast as the VCcompanies, we're not as fast as
our Chinese competitors.
So there's more we can do.
So part of it to me is againthis mindset of if you think
(11:11):
you're quick and agile, you'renot.
You have to constantly,especially as companies growing
like we are, really we call itkill a stupid rule.
What stupid rule did you kill?
This month, okay, and justthings like that all the time,
yeah.
But anyway, on the morepositive side, I do think we we
talk about leaders and managersa lot in the company and
(11:35):
companies have both, but we tryto put leaders in jobs less than
managers, and I think it's amindset.
Leaders tend to want to makedecisions.
They want the decision.
They empower their teams, theytrust their teams, they allow
their teams to take a little bitof risk.
They're supportive when itdoesn't go well.
Managers tend to want to havemore steering committee meetings
(11:56):
.
They want to have a thickerappendix on the package.
They want to detail out everywho, what, when.
They want to review org chartsa lot.
So we try to find a mindset ofpeople who are comfortable
making decisions, who want tomake decisions and move more
quickly.
So we try to embed thatphilosophy across the company as
(12:17):
best we can, knowing that's notperfect, and then we do.
When it comes to M&A and ventureinvesting we have, I think,
probably a quicker process thanmaybe some competitors do,
because I'm very involved inthat and I know that as
companies get bigger and theperson who was presenting her
company for urinary incontinencewhich was really interesting
(12:40):
when that idea gets presented tosomebody in our urology
division and it has to go upthrough many people in finance
and legal and whole bit, ninetimes out of 10, the deal's dead
before you even hear about itbecause conservatism plays in.
And so we try to have a fasterprocess to look at venture
investments and M&A and ourteams get involved with it
(13:02):
quickly before too muchbureaucracy comes in, and we
actually occasionally review thedeals that the team never
presented to us to make surethat they're taking the
appropriate risk and looking atit, and we encourage them to do
so.
So I think and there's othercompanies I've been at in the
past, I won't name names but itjust took like six months to get
to a decision point and by thenyou kind of missed it.
(13:23):
So I realized that as companiesget bigger, there's a lot of
things that get in the way ofsmart risk-taking and we try to
hire leaders more than managersand try to reduce the time it
takes for some good idea,because there's a lot of
roadblocks to shoot that ideadown before it gets to the right
level.
So we try to minimize thosesteps.
Justin Klein (13:45):
Lots of reasons to say no.
Take some courage to say yes,and I think probably especially
true in a bigger company.
Your teams, that's great.
I appreciate your commitment tobeing involved.
Speaker 4 (13:55):
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Justin Klein (14:12):
With that experience you've had in
investing in venture-backedcompanies and acquiring and
integrating them, anyobservations about what's made
for a more successful experienceat any of those stages and I'm
sort of trying to pull it Adviceor things that we as investors
or entrepreneurs could do to bea better partner to you, either
(14:35):
during the early phase or?
Michael Mahoney (14:36):
Well, we love it.
We have a very large like 50companies in our venture
portfolio Love it.
We have a very large, like 50companies in our venture
portfolio.
We have a team small team atcorporate that helps organize it
.
But then we have people inevery division who are looking
for companies like that was justpresented, and those folks are
very more clinically orientedand they know what that division
wants or might need in thefuture or some disruptive thing.
(15:00):
And then we have this processthat's fairly nimble, I think,
to review it and say yes or no,and we only invest in VC
companies that we would like tobuy and knowing that many of
them unfortunately don't workout.
But we only do it if we haveintention to buy it.
We don't do it if we ownwhatever 19% of it.
But we want to make a nice, youknow, a nice, have a nice exit
(15:22):
and someone else buys it.
That's like failure for us,because we only do it because it
means strategic sense for us.
Yeah, so that's how we thinkabout it.
I, first of all, I respect verymuch all the VC companies who
are trying new things, and theVC companies that we bought have
been the biggest growth driversof Boston Scientific.
So one other little thing we do, unrelated to your question, is
(15:44):
a lot of times in a company theinternal R&D teams don't really
like the venture stuff,oftentimes because it's the
candy and the cool stuff thatthey want to do, and so what
we've done over the years iswhether to spin out within so we
might have a product insidethat just doesn't have the right
strategic priority or funding,and we'll spin it out and then
(16:06):
we'll maybe buy it back later ifit works out.
We have some good examples ofthat.
But sometimes fundamentally ina team and maybe just somebody
aware of the R&D teams don'tlove it when they read, hey, you
bought this company, thiscompany, this company Like, well
, what about our stuff all thetime.
So over time what we've provento our R&D teams is when we buy
a great venture company, that'searly stage and we're going to
(16:26):
augment that with the VC team,that talent and our R&D team is
going to be working on this forthe next gen and the next gen
and the next gen.
So it becomes a part of theirR&D capabilities.
So now the teams are actuallypushing us more internally.
But some companies they maythink of it as almost like a
competition.
I can do this myself, so that'snot maybe that's helpful, but
(16:49):
it's true, at least at companiesI've been at For the VC
companies I don't know One is welike to work with a CEO who is
transparent, who doesn'toversell, who you can trust.
And not everything is green.
We call it the watermelon.
What's green?
The circle, you know.
Red, yellow, green.
(17:10):
I'm colored by him, but it'sgreen on the outside and red on
the inside.
So we like CEOs to say hey, thisis really going well and this
is not going as well, and ifwe're a part of the investment,
maybe we can help them in someway, appropriately or about it.
Oftentimes you'll talk to a CEOand like they had the best FIM
ever in human history.
They had the best animal labever.
(17:34):
It's like come on, whenever youdo that, there's going to be
learnings from it.
Like what is your what's,what's not good with the product
?
So we really like CEOs who arebalanced and transparent and you
can trust them.
And then we like CEOs who haveawesome development teams.
That's the key.
Yeah, your development team iscritical.
And then obviously it typicallyhas to go to clinical trial and
have great clinical outcomes.
We also like some of the VCopportunities we have, like you
(18:00):
mentioned two of them,ferropulse and Watchman that
have turned out to be massivemarkets, and when there's a
massive market, we're morewilling and potentially
disruptive, we're more willingto buy it early, really early,
and take on that big dilution.
But if it's a product, that's anice product, but it's not a
huge market, then we're not aswilling to do that.
We want that one to be moremature because the market
(18:24):
opportunity is just not as big,and so part of it, I think, as
the CEO, is being practicalabout how big the market
opportunity really is and, basedon that, what stage does it
have to get to for a strategicto actually want to buy it, to
be practical about it.
I don't know if that's helpfulor not.
Justin Klein (18:43):
It is.
I mean, I think most of usprobably invest our time and
attention into generatingclinical evidence that validates
an innovation and ideallypositions it for commercial
success, right, right, and ifwe're going to a commercial
stage, we're driving evidence ofadoption and proof points and
you know the market opportunityitself.
(19:03):
Are there some other thingsthat you found to be actually
quite valuable that maybe aresort of second order
considerations, likemanufacturing or quality systems
or things that I think yourteam diligence as well?
Michael Mahoney (19:17):
Yeah, the first thing you hit is the biggest
one.
Yeah, Once the product's in aclinical phase is how robust is
their clinical study?
Or is the clinical studydesigned just to get approval?
Yeah, Like how robust is theirclinical study?
Or is the clinical studydesigned just to get approval?
Like, how robust is it?
Like Ferropulse, which we wereangel investor in, which has
been amazing for us, they did30-day MRI follow-up on the
(19:40):
first 100 patients, which isvery unique, to see if there was
any cerebral events and byseeing that in 50 patients we
actually had a call option tobuy it after the trial was fully
enrolled, which was like 400patients, and we bought it after
50 patients, even though thewhole trial even though we could
have waited, but we saw thisfirst 50 patients the fact that
(20:01):
they were doing MRI monitoringon it, which wasn't called for,
gave us so much trust in thosefirst 50 patients that we didn't
want to wait for the next 300because we want to ramp up
manufacturing.
So we actually bought it earlierthan we two years earlier than
we needed to.
So I would say the robustnessof the trial beyond just get to
get it FDA approved, because therobustness of the trial also
(20:22):
turned into the healthcareeconomics and great it's
approved.
We bought a number of companies.
Allaire, I think, was aMinnesota company, maybe Great
device to treat asthma, FDAapproved could never get
commercial coverage and soanything we can do in that trial
to help with commercialcoverage depending on what
business it is is a really bigdeal Because the commercial
(20:45):
coverage and reimbursement hasalmost become a higher hurdle
for us when we analyze companiesthan the FDA approval.
Justin Klein (20:51):
Yeah, yeah, I agree, it's really a long pull
in the tent.
Yeah, can we talk a little bitabout, as a personal interest,
the information that you rely onto lead to set a vision for the
company.
What are the things that youtry to make sure you're seeing
every day in terms of news orsources of information?
Michael Mahoney (21:13):
I don't watch CNN or Fox because they both
like make me depressed, so Idon't watch either of those.
I would say if you watch one,you should watch the other one,
then watch the other one, thenyou'll turn them both off.
But for me, I read the WallStreet Journal every morning and
I read the Boston Globe sportssection every morning and I read
(21:34):
the Iowa Hawkeye recruitingfootball section for five
seconds because they usuallydon't get many good recruits so
it's usually not that long read.
So that's what I do.
That, um, but I I love I thinkpart is being a leader.
You have to love what you do.
Yeah, and I really love, uh,it's in a weird way.
I love my family and my wife,but I love Boston scientific, I
(21:54):
love what we do for patients andI love the competition.
And because of that, um, I doread a lot of stuff.
I read a lot about ourcompetitors, I read a lot about
emerging trends.
I read a lot about emergingtrends.
I read a lot about and I alsovisit.
I spend a lot of time I don'tspend as much time in the office
as maybe you might think andI'm with our team a lot, I'm
with customers a lot, I'm atadvisory boards and I find that
(22:17):
I don't learn much new in theoffice and I always learn more
when I'm out with our customers,r&d engineers, our
manufacturing plants, becausepeople are very transparent on
what we can do to make thecompany better.
Justin Klein (22:29):
You've talked in the past, too, about figuring
out how to learn from your teamat all levels of the
organization.
Michael Mahoney (22:35):
Yeah, Say a little more about that.
Well, I'm pretty sure I had theworst GPA on our team, so not a
high bar that I brought to thetable.
I think it's just about justbeing.
It's a team sport and I thinkpeople enjoy it when their
leader is trustworthy andthey're open to new ideas and
(22:57):
they're open to pushback andthey're open to disagreement and
that's all basic stuff that youhear everywhere.
But I've worked at companieswhere the leader used to be that
way.
Then they got better or biggerand then they weren't, and you
couldn't give them bad news andyou couldn't disagree Certainly
couldn't disagree in public.
It was just safer not to.
So I think it's important tocreate a environment whether
(23:18):
it's a small company or bigcompany where your employees
trust you and they can bring youthe good and the bad and they
can disagree with you.
When I first joined Boston, itwas not that at all.
It was one person running themeeting and 10 people listening
on the executive committee, theneverybody getting the hell out
of there because they were safe,and that's the worst
environment you want.
(23:38):
You really want to bring outyour best of your people and you
can only do that if you're kindof a bit more humble as a
leader and knowing that theyhave great ideas and they
probably know that business abit more than you do anyway, but
you can offer freshperspectives.
But I think it just creates, andwe also do that across our
teams.
You know our divisions thinkabout their division 80% of the
time.
They think about BostonScientific, maybe 20.
(23:59):
But there's really goodcollaboration across them in R&D
and ideas and so forth, becausethey want to win it together.
But I think that culture is areally big deal, because once
we've all had bosses where youjust don't want, to it's all
green, yeah, and then you wantto get transferred to another
division yeah.
The other thing I mentioned alot to our employees is that
(24:21):
people talk about the cultureboss in scientific.
I think most CEOs think theirculture is better than it is.
I think most CEOs think theirbureaucracy is less than it is.
I always tell our employeesthat the job satisfaction of a
team is their immediate boss.
It's not what I say in Marlboroor Joe Fitzgerald or Harvard,
minnesota, it's their manager.
(24:41):
And so if you run a qualityteam of four people, their job
satisfaction is mostly tied.
Whether they stay or go, it'smostly tied to their boss, and
you'll have great bosses andshitty companies.
Employees will stay and youhave bad bosses and great
companies.
Employees leave.
So it's so much of it is on ourteams, cause they'll say, oh,
the culture of this that?
(25:02):
No, the culture is in your,wherever you are with your team,
cause that's the micro cultureof every company and that's
where the leaders have to be,and so they can't blame it on
the culture or whatever of somecompany.
It's their team.
They really can.
You can completely change thedestiny of your team with the
right attitude.
That's great.
Justin Klein (25:22):
Another concept we've kind of read about or hear
about in leadership is thisidea that there might be wartime
CEOs and peacetime CEOs and,depending on the environment,
somebody's style or philosophymay be better for the moment.
I'm curious if you see yourselfas either one of those, a
wartime CEO or peacetime CEO.
And, as a side, are we in medtech in a wartime environment
(25:46):
right now or a peacetimeenvironment?
Michael Mahoney (25:48):
I don't know.
War is pretty dramatic.
We have a lot of that going onin the world, for sure.
But I don't know, I think it's.
When I hear peacetime, my bodylikes the word peace, but my
body goes ugh.
That means like you're notdoing much, you're not changing
things.
So I had initial bad reactionto that.
War is a kind of aggressiveword, so I just think it's the
(26:08):
mindset of I don't think theindustry.
I think the industry is asstrong now as it's ever been.
Overall for MedTech, theinnovation opportunity is as
strong as they've ever been.
It's only narrowed by ourimagination.
The regulatory environment inthe US is pretty good with FDA,
despite some of the cuts thathave been made.
We talked to some of theircomments on to modify their
(26:31):
regulatory practices.
They kind of went from one endto the other.
So I think they're going tomove back more to the middle.
So I don't think it's anegative time at all for MedTech
.
All the AI capabilities, allthe new innovation, pulse field
relation on college there's allkinds of innovation.
That's not a shortage of that.
So I think it's a good time inMedTech and I think it's always.
(26:51):
There's always just choppy water.
Yeah, I think there's alwaysjust choppy water, and you just
have to whoever can navigate itthe best with a winning spirit
and with your teams.
We can't treat it like the US.
We have to be quicker and moreagile and experiment more.
In China, it's just the way itis, and do we all want China to
have the same rules for localcompanies as multinationals?
Yes, but it's a bit different,and so we have to figure out how
(27:14):
to play differently there.
So I think it's always kind ofchoppy, but that's the
opportunity to distinguishyourself personally and the
company versus the peers, and Ithink I lean more towards I
don't mind choppy, because or,if it's not choppy, make it
choppy, because that's when youdrive change, and I think when
companies just get stagnant andcontent, that's my biggest thing
(27:37):
Then then you become a three or4% grower.
Yeah.
Justin Klein (27:42):
Okay, last last questions, kind of, hopefully,
advice for all of uscollectively.
When you think about MedTechand our ecosystem, and whether
it's challenges where you'reseeing today or maybe you're
coming on the horizon, what'sthe thing that we should all be
focused on addressing today oras soon as possible, so that 10
(28:03):
years from now we're in a betterplace, versus kind of set that
aside and focus on what's alittle bit easier right now,
whether it's like the climatechange of med tech or something.
What would you encourage uscollectively to be mindful of
and really make sure we'reattending to?
Michael Mahoney (28:20):
Well, we talked about reimbursement.
I think that's one.
I think when you think of yourclinical studies, depending on
what product category you're in,the reimbursement's a big deal.
So we talked about that beforethe other one.
There's all these clinicalunmet needs and there's no
shortage of that, and there's somany VC opportunities and
companies to look at.
But one thing that we continueto see more and more is these
(28:42):
and this is not new news, soit's not breakthrough news here
these hospitals are challenged.
There's, despite, like in ourEP business, despite these
procedures being half the time,the wait list is still 90 days,
100 days, and you go to Europeit's six months, and some of the
products that we're creatingand our peers are creating are
even more complex proceduresthat are amazing for patients,
(29:05):
but they might be two hours inthe cath lab now, and so I just
think that the demographics thatwe have, the stress that
hospitals are under, I guess theword is productivity.
Is this always the clinicalunmet need?
But you have to bring aproductivity story to your
hospital.
Besides the clinical efficacy.
You have to bring aproductivity story to the
(29:27):
hospital administrator, and thehospital administrators love it
when it actually makes money forthe hospital.
If you have a productivity storyand it's on the good guy's side
for a hospital, then you've gota winner.
If it's okay economics for thehospital, but it's a three-hour
procedure, it's like good Godthey're cramming up the cath lab
for the next.
You can't do it.
So I think, and more and morestuff will go to the ASC for
(29:48):
sure, I think.
But I think we try to look atproductivity more now than we
used to Before.
It was always clinical efficacy, safety, meet the end points,
ease of use.
But I think this productivitystory because of the pressures
on hospitals and the demand forpatients isn't going to go away.
I think that's important yeahgreat.
Justin Klein (30:09):
All right, I'm out of questions Not really, but
this has been great.
Thank you so much.
Thanks for having me, justin.
Yeah, please join me inthanking Mike.
Welcome to this special edition of the Medtech
Talk podcast.
In today's episode we'll hear afireside chat from the recent
Medtech MVP event.
Our host, Justin Klein, speakswith Michael Mahoney, chairman
and CEO at Boston Scientific, onexecutive insights on
(00:24):
leadership and success.
Let's listen in.
Justin Klein (00:29):
Good to see everybody here and Mike, thank
you.
This is great.
This is kind of a bucket listitem for me.
Michael Mahoney (00:36):
You have a small bucket.
If I'm in your bucket list, yougot to get out more.
Well, there's probably a.
I just want a good fantasyquarterback.
Justin Klein (00:48):
There's probably a hundred questions that I could
ask, ask you, I think we've gotabout 30 minutes, so we'll focus
on the hard ones.
I had requested some tissues uphere for you, some tissues.
Yeah, if this gets hard, youneed a break, just let me know,
but we'll dive right in.
So I would would say among yourpeers, you have done this will
(01:09):
be serious.
This is serious yeah we're goingright to it.
So I think you have done amongthe best jobs at communicating
your intent to shareholders andaligning their expectations with
your goals of being verydisciplined in terms of
operating the business, focusingon bottom line profitability
and growth, but also beingwilling to make investments in
(01:29):
the business, or evenacquisitions that may be
dilutive short to medium term toyour EPS, in the ultimate goal
of driving great top lineorganic growth.
And you've earned the right tokeep doing that, and I think a
lot of your peers have foundthemselves between a rock and a
(01:51):
hard place at times and figuringout how to navigate the
trade-off associated with thosethings.
You jumped into the business ata time when there was a lot of
work to do Is this for the samequestion.
Yeah, this is all the lead inand I'm just going to step down
and let you go.
My ADD you know.
Yeah, how did you figure outhow to message that, the
dilution and gross stuff?
(02:11):
Yeah, exactly, and positionthat not only with your board
but your shareholders and thenexecute on that in a way that's
allowed you to really, I think,stand out among your peers, hi
everyone.
Michael Mahoney (02:24):
I'm old.
Maybe that's why I've gottenbetter at it over time, but I
think early on we didn't, as thevery exaggerated intro which is
great by her but exaggerated onme laid out when I first joined
the company wasn't doing sowell and so we didn't have any
much credibility with WallStreet and portfolio managers
wouldn't meet with me, Activistswouldn't even meet with me
(02:47):
because things were a littlerough.
But anyway, essentially that'sjust earned over time.
And so we consistentlyunder-promised, even when
expectations were really low,and over-delivered a little bit.
So we consistently delivered onour commitments, which
eventually, over time, investorsgained confidence in us and
(03:08):
they began to trust us and wespent time with them and so
forth.
And then, as our company gotstronger and we had a bit more
of a balance sheet and we couldborrow some money and do
transactions in our ventureportfolio, that augmented our
organic R&D innovation, whichwas a whole separate topic.
That augmented our organic R&Dinnovation, which was a whole
separate topic.
(03:28):
But, truth be told, we've neverdone a deal and taken our EPS
guidance down, nor have we neverimproved operating.
The only year we didn't improveoperating income margin was
during COVID.
Every year since then, everyyear before that and after that
we've improved operating margineither 25 bps or 50 bps per year
.
And no matter what deal we'vedone, we've actually never taken
(03:49):
our EPS guide down.
And when you take your EPSguide down and you take your OI
margin targets down, you'reasking the shareholders to kind
of pay the price more.
So we've had a philosophy thusfar that even if we do a and our
most dilutive deals are earlystage companies that you may
have to bring on 50 or 60million of OPEX a year,
(04:12):
unplanned for for many years.
Um, so that comes down to, uh,just choice-making and
choice-making the business.
And as the companies get larger, there's people always say, oh,
there's, we've, we've rung outall the blood in the rock or
whatever the phrase may be.
There's always just decisionsyou can make either to reduce
(04:32):
G&A, cut S-G&A, stop thisprogram, because the company
you're buying has a potentialbigger impact.
And if we're not going to dothis, internal program, let's
spin it out to a third party, soit still lives.
Internal program let's spin itout to a third party, so it
still lives.
So most of the reason we haven'thad dilution on deals and EPS
degradation is we've made otherchoices because that venture
company we bought could be sostrategic that it's more
(04:55):
important than other choices wehave.
And companies that I thinkdrive down their EPS targets or
forget their margin improvementbecause of a deal, I don't think
they're making some of thechoices that they could make.
So investors like the fact thatwe're able to buy companies and
tuck them into the company andnot get off our course, Because
(05:16):
then if you do that, then you'remore unpredictable to the
investors and they're not surewhat's next.
And we've proven to them overtime that we're going to stay
the course with our growthtargets and our margin
improvement despite what weelect.
And we've proven to them overtime that we're going to stay
the course with our growthtargets and our margin
improvement despite what weelect, Because we elect to bring
the company in.
We don't have to, so we shouldelect to do something different
to offset it.
Justin Klein (05:32):
Okay, that's really interesting.
I think you've done a great jobIs that interesting at all.
I don't think it was veryinteresting.
Yeah, no, I mean I think you'vedone a lot.
Obviously, in great end marketsYou've moved the business into
some longer-term growthopportunities but continue to
sort of layer in newtechnologies that enable
innovation.
(05:53):
Some of these have taken a realinvestment, like Watchmen,
right, I mean that was a longbuild, a big lift.
Others, Fair Pulse, took earlyvision.
I think you actually maybepersonally led that investment
for Boston and worked with thecompany, you know, to help
position it for what's been avery successful acquisition.
But it's not just those two,right.
How do you think about whereyou're at today, Because you're
(06:15):
hitting on all cylinders, andhow do you keep this going in
this environment?
There's some specificstrategies you're thinking about
, or you know what's next.
Michael Mahoney (06:29):
Yeah, well, the key is, I think, to know that
you're not hitting on allcylinders ever, and that's
really the key Cause.
I think once people in teamssports team or your team or
small team once you think you'rehitting on all cylinders, it's
time for a new leader to come infor the business or division or
whatever it is.
Whether you want to run qualitywithin division, you run
facility, whatever it is.
So I think part of it we callit the winning spirit is we love
(06:50):
our employees and we celebratevery briefly, but it's
constantly what can we be betterat?
And we have divisions in Bostonthat aren't doing as well as
they should be and regions thataren't doing as well.
So I think it's important to wefocus a lot on those great wins
and they're doing terrific forus.
But we have this mindset thatyou just it's easy to say, but
you just want to look foropportunities everywhere all the
(07:14):
time and be kind of relentlessthat way and in a nice way, in a
professional way, but really,and I think when, if you have
that amongst the leadership team, then that permeates across the
company and so you have a greatculture.
But it's not looking at what wedid last week.
It's what are we doing today,in the next five years, 10 years
?
So how we do it.
(07:35):
To me and I've said this acouple different places for me,
the job's not super hard.
I think the startups that theperson who just presented here I
run a startup which I did along time ago is a really hard
job.
Art my job, I boil it.
I focus the most on our, ourtalent, our, our depth of
(07:58):
succession, the culture of thecompany and innovation and what
portfolio choice.
I spend the bulk of my time inthat area and I spend less time
because we have amazing peoplethat run global supply chain
operations supply chain qualityit so I spend less time because
we have amazing people that runglobal supply chain operations
supply chain quality IT so Ispend less of my time there.
So I spend more of my time onthe offense and we're constantly
thinking about how we make thequarter in the year.
But how do we make BostonScientific great seven years
from now?
And we really think a lot aboutthat and we invest a lot.
(08:19):
We have a lot of dilution rightnow and we could be far more
EPS stronger or have highermargins if we weren't investing
in things now that won't impactuntil 2029, 2030.
So we have a lot of money tiedup there.
So our job as leaders is tomake the company special for the
(08:40):
next five, three, five, sevenyears, not just the second
quarter of 25.
So we really think about ourportfolio that way and looking
ahead of what our, as you getbigger and bigger, we'll be
likely over 20 billion this yearand hopefully be 30 billion in
a few years.
As you get bigger, you needmore shots on goal, you need to
take some bigger chances and youhave to have the fuel to do
(09:03):
that.
My worst fear is becoming areally big company.
That's average grower.
That's my biggest fear.
Justin Klein (09:13):
Yeah, as you've grown and I've talked to some
members of your senior teamabout this interview opportunity
, one of the things that severalof them highlighted to me is
your decision-making process thebiggest fear is my daughter
getting married.
Michael Mahoney (09:27):
Sorry, I was thinking about it.
That's my second biggest fear.
I like her boyfriend, but it'snot.
I was reflecting.
Is that my biggest fear or no?
Justin Klein (09:37):
Second biggest fear she's interviewed you here
Doing good Well, thisdecision-making process and how
you've enabled a company and ateam that's growing, that's
large, to still be nimble andefficient.
Can you talk a little bit aboutthat?
How you guys processinformation, how you either
delegate decision-making orstreamline decision-making in a
(10:00):
way that does allow you to makethat a competitive advantage.
Michael Mahoney (10:02):
Yeah, I think one thing I tell our team and
they hate this, and I mentionedPeter Arduini is a good friend
of mine.
I went to the GE HealthcareLeadership Meeting the other day
because he's a good friend andI said, hey, boston Scientific's
a bureaucratic company and soare you GE.
And that didn't land reallywell with the audience.
And the reason I said that isbecause I do think it's a
(10:24):
competitive advantage that ourculture and our speed and so
forth, but it's not as good asyou think it is.
As the leader of the company,you like to think it's really
really good and maybe it's alittle bit better than some
others, but it's not as good asit could be.
And so the reason I bring thisup, I always tell our team if
we're not fighting bureaucracyevery day, it just creeps in the
(10:49):
bigger your company gets.
If you're not intentionallylooking to reduce meetings,
change things that you used todo, change up your cycle, have
fewer steering committeemeetings, it just gets bigger
and slower and slower.
And we may be slightly fasterthan some of our peers, maybe,
but we're not as fast as the VCcompanies, we're not as fast as
our Chinese competitors.
So there's more we can do.
So part of it to me is againthis mindset of if you think
(11:11):
you're quick and agile, you'renot.
You have to constantly,especially as companies growing
like we are, really we call itkill a stupid rule.
What stupid rule did you kill?
This month, okay, and justthings like that all the time,
yeah.
But anyway, on the morepositive side, I do think we we
talk about leaders and managersa lot in the company and
(11:35):
companies have both, but we tryto put leaders in jobs less than
managers, and I think it's amindset.
Leaders tend to want to makedecisions.
They want the decision.
They empower their teams, theytrust their teams, they allow
their teams to take a little bitof risk.
They're supportive when itdoesn't go well.
Managers tend to want to havemore steering committee meetings
(11:56):
.
They want to have a thickerappendix on the package.
They want to detail out everywho, what, when.
They want to review org chartsa lot.
So we try to find a mindset ofpeople who are comfortable
making decisions, who want tomake decisions and move more
quickly.
So we try to embed thatphilosophy across the company as
(12:17):
best we can, knowing that's notperfect, and then we do.
When it comes to M&A and ventureinvesting we have, I think,
probably a quicker process thanmaybe some competitors do,
because I'm very involved inthat and I know that as
companies get bigger and theperson who was presenting her
company for urinary incontinencewhich was really interesting
(12:40):
when that idea gets presented tosomebody in our urology
division and it has to go upthrough many people in finance
and legal and whole bit, ninetimes out of 10, the deal's dead
before you even hear about itbecause conservatism plays in.
And so we try to have a fasterprocess to look at venture
investments and M&A and ourteams get involved with it
(13:02):
quickly before too muchbureaucracy comes in, and we
actually occasionally review thedeals that the team never
presented to us to make surethat they're taking the
appropriate risk and looking atit, and we encourage them to do
so.
So I think and there's othercompanies I've been at in the
past, I won't name names but itjust took like six months to get
to a decision point and by thenyou kind of missed it.
(13:23):
So I realized that as companiesget bigger, there's a lot of
things that get in the way ofsmart risk-taking and we try to
hire leaders more than managersand try to reduce the time it
takes for some good idea,because there's a lot of
roadblocks to shoot that ideadown before it gets to the right
level.
So we try to minimize thosesteps.
Justin Klein (13:45):
Lots of reasons to say no.
Take some courage to say yes,and I think probably especially
true in a bigger company.
Your teams, that's great.
I appreciate your commitment tobeing involved.
Speaker 4 (13:55):
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Justin Klein (14:12):
With that experience you've had in
investing in venture-backedcompanies and acquiring and
integrating them, anyobservations about what's made
for a more successful experienceat any of those stages and I'm
sort of trying to pull it Adviceor things that we as investors
or entrepreneurs could do to bea better partner to you, either
(14:35):
during the early phase or?
Michael Mahoney (14:36):
Well, we love it.
We have a very large like 50companies in our venture
portfolio Love it.
We have a very large, like 50companies in our venture
portfolio.
We have a team small team atcorporate that helps organize it
.
But then we have people inevery division who are looking
for companies like that was justpresented, and those folks are
very more clinically orientedand they know what that division
wants or might need in thefuture or some disruptive thing.
(15:00):
And then we have this processthat's fairly nimble, I think,
to review it and say yes or no,and we only invest in VC
companies that we would like tobuy and knowing that many of
them unfortunately don't workout.
But we only do it if we haveintention to buy it.
We don't do it if we ownwhatever 19% of it.
But we want to make a nice, youknow, a nice, have a nice exit
(15:22):
and someone else buys it.
That's like failure for us,because we only do it because it
means strategic sense for us.
Yeah, so that's how we thinkabout it.
I, first of all, I respect verymuch all the VC companies who
are trying new things, and theVC companies that we bought have
been the biggest growth driversof Boston Scientific.
So one other little thing we do, unrelated to your question, is
(15:44):
a lot of times in a company theinternal R&D teams don't really
like the venture stuff,oftentimes because it's the
candy and the cool stuff thatthey want to do, and so what
we've done over the years iswhether to spin out within so we
might have a product insidethat just doesn't have the right
strategic priority or funding,and we'll spin it out and then
(16:06):
we'll maybe buy it back later ifit works out.
We have some good examples ofthat.
But sometimes fundamentally ina team and maybe just somebody
aware of the R&D teams don'tlove it when they read, hey, you
bought this company, thiscompany, this company Like, well
, what about our stuff all thetime.
So over time what we've provento our R&D teams is when we buy
a great venture company, that'searly stage and we're going to
(16:26):
augment that with the VC team,that talent and our R&D team is
going to be working on this forthe next gen and the next gen
and the next gen.
So it becomes a part of theirR&D capabilities.
So now the teams are actuallypushing us more internally.
But some companies they maythink of it as almost like a
competition.
I can do this myself, so that'snot maybe that's helpful, but
(16:49):
it's true, at least at companiesI've been at For the VC
companies I don't know One is welike to work with a CEO who is
transparent, who doesn'toversell, who you can trust.
And not everything is green.
We call it the watermelon.
What's green?
The circle, you know.
Red, yellow, green.
(17:10):
I'm colored by him, but it'sgreen on the outside and red on
the inside.
So we like CEOs to say hey, thisis really going well and this
is not going as well, and ifwe're a part of the investment,
maybe we can help them in someway, appropriately or about it.
Oftentimes you'll talk to a CEOand like they had the best FIM
ever in human history.
They had the best animal labever.
(17:34):
It's like come on, whenever youdo that, there's going to be
learnings from it.
Like what is your what's,what's not good with the product
?
So we really like CEOs who arebalanced and transparent and you
can trust them.
And then we like CEOs who haveawesome development teams.
That's the key.
Yeah, your development team iscritical.
And then obviously it typicallyhas to go to clinical trial and
have great clinical outcomes.
We also like some of the VCopportunities we have, like you
(18:00):
mentioned two of them,ferropulse and Watchman that
have turned out to be massivemarkets, and when there's a
massive market, we're morewilling and potentially
disruptive, we're more willingto buy it early, really early,
and take on that big dilution.
But if it's a product, that's anice product, but it's not a
huge market, then we're not aswilling to do that.
We want that one to be moremature because the market
(18:24):
opportunity is just not as big,and so part of it, I think, as
the CEO, is being practicalabout how big the market
opportunity really is and, basedon that, what stage does it
have to get to for a strategicto actually want to buy it, to
be practical about it.
I don't know if that's helpfulor not.
Justin Klein (18:43):
It is.
I mean, I think most of usprobably invest our time and
attention into generatingclinical evidence that validates
an innovation and ideallypositions it for commercial
success, right, right, and ifwe're going to a commercial
stage, we're driving evidence ofadoption and proof points and
you know the market opportunityitself.
(19:03):
Are there some other thingsthat you found to be actually
quite valuable that maybe aresort of second order
considerations, likemanufacturing or quality systems
or things that I think yourteam diligence as well?
Michael Mahoney (19:17):
Yeah, the first thing you hit is the biggest
one.
Yeah, Once the product's in aclinical phase is how robust is
their clinical study?
Or is the clinical studydesigned just to get approval?
Yeah, Like how robust is theirclinical study?
Or is the clinical studydesigned just to get approval?
Like, how robust is it?
Like Ferropulse, which we wereangel investor in, which has
been amazing for us, they did30-day MRI follow-up on the
(19:40):
first 100 patients, which isvery unique, to see if there was
any cerebral events and byseeing that in 50 patients we
actually had a call option tobuy it after the trial was fully
enrolled, which was like 400patients, and we bought it after
50 patients, even though thewhole trial even though we could
have waited, but we saw thisfirst 50 patients the fact that
(20:01):
they were doing MRI monitoringon it, which wasn't called for,
gave us so much trust in thosefirst 50 patients that we didn't
want to wait for the next 300because we want to ramp up
manufacturing.
So we actually bought it earlierthan we two years earlier than
we needed to.
So I would say the robustnessof the trial beyond just get to
get it FDA approved, because therobustness of the trial also
(20:22):
turned into the healthcareeconomics and great it's
approved.
We bought a number of companies.
Allaire, I think, was aMinnesota company, maybe Great
device to treat asthma, FDAapproved could never get
commercial coverage and soanything we can do in that trial
to help with commercialcoverage depending on what
business it is is a really bigdeal Because the commercial
(20:45):
coverage and reimbursement hasalmost become a higher hurdle
for us when we analyze companiesthan the FDA approval.
Justin Klein (20:51):
Yeah, yeah, I agree, it's really a long pull
in the tent.
Yeah, can we talk a little bitabout, as a personal interest,
the information that you rely onto lead to set a vision for the
company.
What are the things that youtry to make sure you're seeing
every day in terms of news orsources of information?
Michael Mahoney (21:13):
I don't watch CNN or Fox because they both
like make me depressed, so Idon't watch either of those.
I would say if you watch one,you should watch the other one,
then watch the other one, thenyou'll turn them both off.
But for me, I read the WallStreet Journal every morning and
I read the Boston Globe sportssection every morning and I read
(21:34):
the Iowa Hawkeye recruitingfootball section for five
seconds because they usuallydon't get many good recruits so
it's usually not that long read.
So that's what I do.
That, um, but I I love I thinkpart is being a leader.
You have to love what you do.
Yeah, and I really love, uh,it's in a weird way.
I love my family and my wife,but I love Boston scientific, I
(21:54):
love what we do for patients andI love the competition.
And because of that, um, I doread a lot of stuff.
I read a lot about ourcompetitors, I read a lot about
emerging trends.
I read a lot about emergingtrends.
I read a lot about and I alsovisit.
I spend a lot of time I don'tspend as much time in the office
as maybe you might think andI'm with our team a lot, I'm
with customers a lot, I'm atadvisory boards and I find that
(22:17):
I don't learn much new in theoffice and I always learn more
when I'm out with our customers,r&d engineers, our
manufacturing plants, becausepeople are very transparent on
what we can do to make thecompany better.
Justin Klein (22:29):
You've talked in the past, too, about figuring
out how to learn from your teamat all levels of the
organization.
Michael Mahoney (22:35):
Yeah, Say a little more about that.
Well, I'm pretty sure I had theworst GPA on our team, so not a
high bar that I brought to thetable.
I think it's just about justbeing.
It's a team sport and I thinkpeople enjoy it when their
leader is trustworthy andthey're open to new ideas and
(22:57):
they're open to pushback andthey're open to disagreement and
that's all basic stuff that youhear everywhere.
But I've worked at companieswhere the leader used to be that
way.
Then they got better or biggerand then they weren't, and you
couldn't give them bad news andyou couldn't disagree Certainly
couldn't disagree in public.
It was just safer not to.
So I think it's important tocreate a environment whether
(23:18):
it's a small company or bigcompany where your employees
trust you and they can bring youthe good and the bad and they
can disagree with you.
When I first joined Boston, itwas not that at all.
It was one person running themeeting and 10 people listening
on the executive committee, theneverybody getting the hell out
of there because they were safe,and that's the worst
environment you want.
(23:38):
You really want to bring outyour best of your people and you
can only do that if you're kindof a bit more humble as a
leader and knowing that theyhave great ideas and they
probably know that business abit more than you do anyway, but
you can offer freshperspectives.
But I think it just creates, andwe also do that across our
teams.
You know our divisions thinkabout their division 80% of the
time.
They think about BostonScientific, maybe 20.
(23:59):
But there's really goodcollaboration across them in R&D
and ideas and so forth, becausethey want to win it together.
But I think that culture is areally big deal, because once
we've all had bosses where youjust don't want, to it's all
green, yeah, and then you wantto get transferred to another
division yeah.
The other thing I mentioned alot to our employees is that
(24:21):
people talk about the cultureboss in scientific.
I think most CEOs think theirculture is better than it is.
I think most CEOs think theirbureaucracy is less than it is.
I always tell our employeesthat the job satisfaction of a
team is their immediate boss.
It's not what I say in Marlboroor Joe Fitzgerald or Harvard,
minnesota, it's their manager.
(24:41):
And so if you run a qualityteam of four people, their job
satisfaction is mostly tied.
Whether they stay or go, it'smostly tied to their boss, and
you'll have great bosses andshitty companies.
Employees will stay and youhave bad bosses and great
companies.
Employees leave.
So it's so much of it is on ourteams, cause they'll say, oh,
the culture of this that?
(25:02):
No, the culture is in your,wherever you are with your team,
cause that's the micro cultureof every company and that's
where the leaders have to be,and so they can't blame it on
the culture or whatever of somecompany.
It's their team.
They really can.
You can completely change thedestiny of your team with the
right attitude.
That's great.
Justin Klein (25:22):
Another concept we've kind of read about or hear
about in leadership is thisidea that there might be wartime
CEOs and peacetime CEOs and,depending on the environment,
somebody's style or philosophymay be better for the moment.
I'm curious if you see yourselfas either one of those, a
wartime CEO or peacetime CEO.
And, as a side, are we in medtech in a wartime environment
(25:46):
right now or a peacetimeenvironment?
Michael Mahoney (25:48):
I don't know.
War is pretty dramatic.
We have a lot of that going onin the world, for sure.
But I don't know, I think it's.
When I hear peacetime, my bodylikes the word peace, but my
body goes ugh.
That means like you're notdoing much, you're not changing
things.
So I had initial bad reactionto that.
War is a kind of aggressiveword, so I just think it's the
(26:08):
mindset of I don't think theindustry.
I think the industry is asstrong now as it's ever been.
Overall for MedTech, theinnovation opportunity is as
strong as they've ever been.
It's only narrowed by ourimagination.
The regulatory environment inthe US is pretty good with FDA,
despite some of the cuts thathave been made.
We talked to some of theircomments on to modify their
(26:31):
regulatory practices.
They kind of went from one endto the other.
So I think they're going tomove back more to the middle.
So I don't think it's anegative time at all for MedTech
.
All the AI capabilities, allthe new innovation, pulse field
relation on college there's allkinds of innovation.
That's not a shortage of that.
So I think it's a good time inMedTech and I think it's always.
(26:51):
There's always just choppy water.
Yeah, I think there's alwaysjust choppy water, and you just
have to whoever can navigate itthe best with a winning spirit
and with your teams.
We can't treat it like the US.
We have to be quicker and moreagile and experiment more.
In China, it's just the way itis, and do we all want China to
have the same rules for localcompanies as multinationals?
Yes, but it's a bit different,and so we have to figure out how
(27:14):
to play differently there.
So I think it's always kind ofchoppy, but that's the
opportunity to distinguishyourself personally and the
company versus the peers, and Ithink I lean more towards I
don't mind choppy, because or,if it's not choppy, make it
choppy, because that's when youdrive change, and I think when
companies just get stagnant andcontent, that's my biggest thing
(27:37):
Then then you become a three or4% grower.
Yeah.
Justin Klein (27:42):
Okay, last last questions, kind of, hopefully,
advice for all of uscollectively.
When you think about MedTechand our ecosystem, and whether
it's challenges where you'reseeing today or maybe you're
coming on the horizon, what'sthe thing that we should all be
focused on addressing today oras soon as possible, so that 10
(28:03):
years from now we're in a betterplace, versus kind of set that
aside and focus on what's alittle bit easier right now,
whether it's like the climatechange of med tech or something.
What would you encourage uscollectively to be mindful of
and really make sure we'reattending to?
Michael Mahoney (28:20):
Well, we talked about reimbursement.
I think that's one.
I think when you think of yourclinical studies, depending on
what product category you're in,the reimbursement's a big deal.
So we talked about that beforethe other one.
There's all these clinicalunmet needs and there's no
shortage of that, and there's somany VC opportunities and
companies to look at.
But one thing that we continueto see more and more is these
(28:42):
and this is not new news, soit's not breakthrough news here
these hospitals are challenged.
There's, despite, like in ourEP business, despite these
procedures being half the time,the wait list is still 90 days,
100 days, and you go to Europeit's six months, and some of the
products that we're creatingand our peers are creating are
even more complex proceduresthat are amazing for patients,
(29:05):
but they might be two hours inthe cath lab now, and so I just
think that the demographics thatwe have, the stress that
hospitals are under, I guess theword is productivity.
Is this always the clinicalunmet need?
But you have to bring aproductivity story to your
hospital.
Besides the clinical efficacy.
You have to bring aproductivity story to the
(29:27):
hospital administrator, and thehospital administrators love it
when it actually makes money forthe hospital.
If you have a productivity storyand it's on the good guy's side
for a hospital, then you've gota winner.
If it's okay economics for thehospital, but it's a three-hour
procedure, it's like good Godthey're cramming up the cath lab
for the next.
You can't do it.
So I think, and more and morestuff will go to the ASC for
(29:48):
sure, I think.
But I think we try to look atproductivity more now than we
used to Before.
It was always clinical efficacy, safety, meet the end points,
ease of use.
But I think this productivitystory because of the pressures
on hospitals and the demand forpatients isn't going to go away.
I think that's important yeahgreat.
Justin Klein (30:09):
All right, I'm out of questions Not really, but
this has been great.
Thank you so much.
Thanks for having me, justin.
Yeah, please join me inthanking Mike.
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