The last couple of weeks have been an eye opener of sorts as TSB is traveling the U.S. talking to many of your peers to get a pulse on the industry. It has become evident that management in most companies still don't get it. Since the market crashed and nearly burned in late '07 thru most of '08, the oracles of the industry are still stuck in that proverbial time warp. 20% growth use to be the norm, but as Don McLean once sang, "bye, bye Miss American Pie." The insanity of the industry is closely tied to those CEO's that are still attempting to manipulate their stock portfolio's and promise the Street that they are will be the next billion dollar baby. How can anyone run a company that has so much tied into the current and future valuation of their own stock? Are they making prudent decisions based on potential technologies? Let's face facts, this isn't a new phenomenon, the NY Times (that socialist publication) has had numerous articles on this topic dating back to 1996.
What is it about our society and American business people in general. That's right we're talking about the golden oracle theory, I said it, therefore, it must be true. Just look at today's talk shows and hear them debate the economy. "Sales aren't what we expected." "Stores opened on Thursday night, and sales were still not up to expectation." Just because you opened Kmart, JC Penny's, Target, or Walmart 12 hours earlier doesn't mean that people that shop at those stores are going to spend more, all they are going to do is look for a better deal. And this brings us to the gist of today's blog. The spine industry is no different than the insanity that prevails on a daily if not monthly basis in this country. The golden oracle theory holds true. Don't believe it, listen to the insanity.
What is it about our society and American business people in general. That's right we're talking about the golden oracle theory, I said it, therefore, it must be true. Just look at today's talk shows and hear them debate the economy. "Sales aren't what we expected." "Stores opened on Thursday night, and sales were still not up to expectation." Just because you opened Kmart, JC Penny's, Target, or Walmart 12 hours earlier doesn't mean that people that shop at those stores are going to spend more, all they are going to do is look for a better deal. And this brings us to the gist of today's blog. The spine industry is no different than the insanity that prevails on a daily if not monthly basis in this country. The golden oracle theory holds true. Don't believe it, listen to the insanity.
A Regional Manager that works for a highly esteemed and beloved favorite of the Street recently stated, "I received a 30% increase in quota, our ASP is going south, my sales team has increased the number of cases from 2011 and I am still short of quota year to date. Even if I finish at 98.6% my CEO and VP of Sales are not going to be happy." Or, "my CEO and VP of Sales called with two days left until the close of the month and asked if we could call Dr. Famous and ask him to book a few cases." That has to be one of TSB's all time favorites. What is it about things dick heads that makes them believe that just because you have a surgeon that is a loyal customer, that they are just going to pull a couple of patients out of their ass and get you those numbers? These aren't isolated situations. There seems to be an epidemic in the industry. Do any of those oracles understand how much the landscape has changed since they were out in the field? Whatever happened to the oracles that made grandiose promises of increasing the business 300 or 400% at some of the smaller companies within the industry? As Ray Davies once sang, "everybody's a hero, everybody's a star," until reality sets in. Some of these oracles are walking the concrete down on 125th St, or in Southern Cal licking their wounds. What has happened to the companies that have burned through $20-$25 million of investment capital and are struggling because the person at the helm of the ship has no experience. What has happened to all that foreign capital that some were waiting for? Nada. Bupkus. Even the Captain of the Costa Concordia knew when to jump ship with the bella donna. What happened to some of those companies whose CEO claimed that they were offered $18 million only to exclaim, "if someone is offering me $18, then my company must be worth at least $45 million." Today, they are scratching and scraping a mere existence. How do some of those investors really feel? Were they taken for a ride?
Happy Days no longer exist. Richie and the Fonz have been replaced by Reality Television, deep down everyone wants to be like the Spine Executives of Orange County or Montgomery County. Hey maybe TSB should trademark those names and bring that concept to the cable networks? Borscht and Hariyali Kebab will be on the menu, it would be pretty funny. Some people wonder why there hasn't been more written about spine, but the question must be asked, what is so new and innovative that it warrants the attention of TSB? Zimmer is going to train regulators in China? Regulation? How about some quality control lessons for our Asian brethren? How about teaching them about ethical business practices? If there ever was a Xerox culture, welcome to China. Medtronic buys 80% of China's tier one hospitals? Has anything really changed. Nuvasive's most innovative technology this year was the Houdini Rod Bending System, the now you see it, now your don't system, increasing the price of their implants? Innovation in procedural tools doesn't necessarily warrant an increase in pricing or necessarily will increase your sales volume. It may even make the case go ten minutes faster, but as an accountant what's the difference if hospital operating rooms are run on fixed costs. Could it be that the spine industry is hanging on to the last vestiges of its stellar past? Could the rise and fall of spine be equated to Pompeii?
Maybe "the secret" is understanding current market conditions and having the innate ability to adjust rather than continue doing the same things over and over. Maybe fewer MBA's and more worker bee's would suffice, especially on the corporate level? Maybe fewer bullshit artists running these companies would better serve the BOD and stockholders? TSB has beaten the drum on POD's, POC's, and Consultancies to the point of ad nauseam. Today, we hear the biggest and baddest CEO preempt a quarterly earnings report by informing the same analysts whom placed him on a pedestal that his companies revenue is in sequential decline due to factors out of their control. What world was this person living in? We hear of other CEO's laying off employees due to the Affordable Care Act, which is nothing more than political theater, considering that the real owners are left wing sympathizers. Talk about responsibility? Maybe some of our highly esteemed oracles should learn that the same way the Street nearly sucked the life out of our economy, they will eventually suck the life out of this industry.
This isn't what is known in media circles as "blow job" journalism, if you want that, go to OTW or OrthoWorld, it's up to the people that run the very companies that make up the spine world to adapt or perish. Maybe being realistic is too simple. Maybe aligning your quotas and expectations in addition to respecting your employees knowledge, dedication and hard work is too simple a formula, but then they don't teach that to MBA's because its all about the numbers. Maybe the commitment that you show your employees has more to do with the success of your organization, than pandering to the shareholders who live in a world of short term results but expect long term viability. So in closing,
When Black Friday comes, I'll stand down by the door
And catch the CEO's when they dive from the fourteenth floor
When Black Friday comes, I'll collect everything I'm owned
And before my friends find out, I'll be on the road
When Black Friday falls you know its got to be
Don't let it fall on me.
When Black Friday comes, I'll stand down by the door
And catch the CEO's when they dive from the fourteenth floor
When Black Friday comes, I'll collect everything I'm owned
And before my friends find out, I'll be on the road
When Black Friday falls you know its got to be
Don't let it fall on me.