Friday, August 28, 2009

So Where is Medtronic Going?

Medtronic reported that during the first quarter of 2010 they had 7% growth in hardware and a 1% decline in their revenue for INFUSE. The question that the Spine Blogger must pose is how does such a conservative management team work to invigorate and reestablish innovate leadership? The only way to reestablish innovate leadership would be to overhaul the management team, doesn't the word innovate mean to make changes in anything established? As stated in a previous blog, this organization is starting to show its age. Years ago this company was a market leader, today, hospitals, surgeons, and distributors are attempting to distance themselves from an organization that once was well respected, innovative and set the bar for the spine industry.

Obviously, there will be those readers that run to their defense. The company is still the market leader, controlling an estimated 40% of a zero-sum market. Yet, where were they five years ago? Having been involved in various litigation (whistle-blowing and patent infringement) that has resulted in a public relations disaster, this company spends more time in court and defending itself in the press than it does in the research and development arena. Maybe their business model is litigating to recoup the cost of the Michelson litigation? There is nothing innovative about acquisitions, it simply results in buying revenue and hopefully garnering a larger share of the market. Unfortunately, when you are a publicly traded company, yes you are a slave to some analyst, an organization is forced to implement strategies and policies that change the culture and the mystique of a company.

So those of us in the industry are sitting back and monitoring what this once respected company will do next? The Spine Blogger wants to know what its readers think?


  1. I think that Medtronic (as well as the other large companies) has given up their ability to be innovative a long time ago and traded it for the easy way out "acquisition".

    The problem is that when they gave up on internal innovation they also forgot that a major component of making innovation successful was including the culture it was made in.

    So these companies acquire and then either assimilate (sorry for the Borg reference) or release and replace key people with their own. And since these people were not part of the culture the product stagnates and lives a short life and they look towards the next acquisition (or suite).

  2. More time in court than in the R+D arena? Medtronic spends more $$$ annually on R+D than Stryker Spine's annual revenue.