Sunday Op-Ed Piece

Since most of our readers acknowledge that they follow TSB not only for the content, but primarily for the passionate discourse exhibited by many of our bloggers, we thought it would be interesting to get your take on what has made some spine companies successful and why have some companies floundered in what now seems to be eternal misery?  We all know that IP is one of the most important ingredients in developing a successful start-up. Without innovation and a targeted market, raising capital in today's economy is a moot point.  In addition to the aforementioned, assembling an "empowered" and knowledgeable management team may be the most important ingredient in defining ones success or failures.  Ever work for someone that had what TSB calls the "ADD Spine Business Plan?"  Ritalin and Lovaza would probably not help.  Getting a group of people to understand a plan/objective and remaining focused maybe the most underrated aspect of any business.  Yet, without acknowledging the market and competitive realities, any new venture may be doomed for failure.  So again, TSB asks the question, why have some companies failed while others succeed, sometimes in spite of themselves.

How do ventures that have raised millions have gone on to fail in our market?   Whether our readers agree or not, "process" may be the most important element rather than results.  Unfortunately, for the better part, many investors along with the people that steer a start-up fail to grasp that concept.  Most successful ventures, and by successful TSB means those that actually effected their strategy, reveal two important patterns.  Useful change tends to be a multistep process that creates power and motivation to overwhelm all sources of inertia, and the process is never employed effectively unless it is driven by "high quality" leadership, not just a great management team.

Regardless whether costs are high, products are mediocre, or customers are exhibiting shifting requirements, progress and process may be paralyzed by egotistical leaders, bureaucracy, parochial politics (an all-time favorite), a low-level of trust (ever work for one of these people), lack of teamwork, a lack of focus.  In our haste for the Holy Grail, many CEO's and their boards have derailed many a companies by their petty insecurities.  Do companies like Vertebron, IST or Applied Spine bring back memories?  And what does it say about the leadership and business acumen of many a CEO when one looks at the attrition rate within the industry.  Some will obviously argue that market forces are things that companies and its management team cannot control, yet, TSB differs with that opinion.  It is precisely for this reason that many of these companies have failed,  a leader is like a great conductor of a symphony being able to guide his or her orchestra through the process which usually ends in a great result.  By paying attention to the details, the whole is greater than the sum of its parts.

How many of you have worked for a company that has developed a decent product only to fail for its own inadequacies?  Their inability to respond in a timely manner, their inability to address system short-comings?  Could you think of a few?  Today's business environment demands more large-scale change whether it be vis-a-vis a new strategy, restructuring, mergers or acquisitions, and new product development.  Some of these decisions need to be made quicker in a less than economic environment requiring sacrifice.  Unfortunately, many of these companies have failed to take a conciliatory approach, nor are we a very sacrificing society, but that's what awaits many of us including the companies, hospitals, surgeons, and sales reps.  

Reality has brought many companies back down to earth.  The days of 40% commissions are over,  the days of 20% growth will be far less, unless you are buying products from one of the many companies that have been started by former distributors and/or their physician colleagues.  Realistically, TSB sees a trend in the field, whereas more and more of these small companies are surviving by utilizing every legal resource available to them.  Namely POD's, for the obvious reasons.  And if the big boys are predicting below average expectations, how do some of these smaller ventures continue to show growth, considering that we do play in a zero-sum marketplace?   How many of these ventures were originally positioned to be flipped, only to hear their CEO's now claim that their objective all along was to grow a company and organization, while they move along at a snails pace?   The people that run these companies will argue that their organizations can succeed with incremental change.  A 2% improvement here, a 3% reduction somewhere else and you are growing.  In the short-term that may be true, but how long will it take to get where some of these people claim they are going?

What we are witnessing today is change in the internal structure in many of these companies, surviving on fewer rules and employees.  So in closing TSB wants to know what our bloggers think, have many of these companies failed because of their inability to be risk tolerant, transparent, too slow to make decisions, a failure to empower and trust their employees or as TSB likes to say, were the market conditions bigger than the both of us?