Medtronic takes hunt for new technology to ends of the Earth (FN.com)
When trying to visualize what Dr. Stephen Oesterle does at Medtronic, a baseball analogy helps.
Consider Oesterle an international scout, scouring the planet for new technologies that push the envelope of medical devices beyond what Medtronic does now. In much the same way a baseball scout looks for the next great phenom with a radar-busting fastball, Oesterle travels some 250,000 miles a year to find inventors, companies, researchers and institutions that are developing technologies that could be relevant to medicine and to Medtronic.
He then encourages Medtronic to pursue partnerships, financial investment or collaboration that will someday benefit the Fridley med-tech giant’s product portfolio and, by extension, its financial fortunes.
Oesterle’s big-picture, sometimes-devil’s-advocate, job is critical to Medtronic’s fortunes. With more of Medtronic’s 17 billion in annual revenue coming from overseas customers — and an estimated 70 percent of the company’s growth coming from outside the United States — staying attuned to innovation is vital to helping Medtronic maintain its world leadership position. “Innovation is global,” Oesterle, 61, said in a recent interview. “And I think the next decade will be the most fruitful in medical devices.”
Some of the technologies to enter Medtronic’s product pipeline during Oesterle’s decadelong watch include a “patch” insulin pump that is disposable, a pacemaker-like device that delivers a pulse to the sacral nerve to help control bowel movements for people with fecal incontinence, and a replacement aortic valve that is implanted with a catheter without open heart surgery.
His position is senior vice president for medicine and technology. It splices the role of chief medical officer, which exists at many medical technology companies, with someone who has the technological chops and connections to recognize Medtronic’s Next Big Thing– either inside the company or out.
Oesterle looks at internal operations and research and development. He visits every Medtronic business unit, from the United States to India and China, every quarter. Sometimes, he asks the question: “Should we be doing this? Or should we be letting somebody else do it?”
Because Oesterle said 20 percent of innovation comes from small companies, he visits the little guys, too — from the Twin Cities to Israel to Switzerland to Ireland. Medtronic, he said, has a minority stake in about 70 different companies, and Oesterle is on the boards of 10 small start-ups.
Because innovation comes from the military, from universities, from large multinational giants like IBM, Apple, Microsoft and Cisco, he makes connections there, as well. And, because the people who invest in ideas are among the best-informed, Oesterle knows and meets with venture capitalists and private equity partners from around the world.
He has 8,000 people in his contacts file, and not one of them is from Medtronic.
Dr. Glen Nelson was the first person at Medtronic to have the job — although he was also vice chairman and a member of the company’s board of directors, positions of authority that Oesterle does not have.
Nelson said the job is much more than a scout.
“The role of a person like Steve is to keep people’s sights set out over the future, so they are not ignoring what is coming,” Nelson said. “You have to spot the big opportunities and the big innovation, sometimes even cannibalizing your own products.”
Nelson admitted the job sometimes involves advising that certain products or projects be shut down or shifted if the promise doesn’t appear to be panning out.
“If you don’t have somebody like Steve in a company, you don’t have anybody sort of raising their hand to say ‘Wait a minute,'” he said.
Yet, that person also must have the vision to stick with an idea, sometimes years before its commercial success is assured. One example of sticking with it involves Medtronic’s deep brain stimulation products, which were seen by some in the company in the 1980s as unlikely to do well, Nelson said.
“It takes vision and then it takes consistency to carry those through, because those opportunities are not binary,” he said.
He added: “Steve is able to gain the confidence of the senior management that his vision and insight is valuable.”
Oesterle said he is uncomfortable talking about projects he recommended Medtronic mothball, in part because a key part of his job is developing relationships with the leaders of the various business units.
He said that’s his biggest challenge. At a company with autonomous businesses that make their own decisions on projects, he can only influence their choices.
“How do you go to people responsible for profit and loss and convince them to try to change their strategies or alter them?” he asked. “I have to have credibility withthem.”
Medtronic CEO Omar Ishrak was not available to comment for this story. But former CEO Art Collins said Oesterle’s recommendations were an important factor in business decisions he made.
“I wanted him to challenge the status quo,” Collins said.
“As I told Steve on numerous occasions, I didn’t think the business units would always follow his advice. But at least he would get them to think in a different way.”
At first, reluctant
Oesterle was an interventional cardiologist of national renown when Medtronic hired him more than a decade ago to take over after Nelson’s retirement. At the time, he was working at Massachusetts General Hospital as director of invasive cardiology services. He also was teaching at Harvard University Medical School. He had previously developed and directed programs at Good Samaritan Hospital in Los Angeles, Georgetown University and at Stanford University.
He had worked as a consultant for medical device companies and established scholarships to train cardiologists from developing countries.
In many ways, Oesterle’s resume made him a perfect candidate for the job.
But when Medtronic approached him, Oesterle told the recruiter that he already had a dream job.
“I was having a good time, minding my own business,” said Oesterle, who also was regularly running in the Boston Marathon.
But it’s hard to say no when Medtronic — and its 1.5 billion research and development budget — comes calling. Collins persuaded Oesterle to come to Minnesota to hear him out.
“His reputation was beyond reproach. One of my biggest challenges was to entice a very successful practicing physician to leave the practice of medicine and, as Steve would say, come over to the dark side,” Collins said in an interview.
Oesterle admits he was intrigued. But he had to also persuade his wife, Adrienne, to make another move with two young children — after insisting they were settled.
He need not have worried. Adrienne, a former nurse, has family in Chicago and after learning more, welcomed a chance to be closer to them. She said she has fallen in love with the Twin Cities, and their children have grown up here.
And what about his quarter of a million miles of travel each year?
“We work together,” she said, noting that he has pushed and prodded a demanding schedule over the years to make it in time to hockey games and school events and family time.
She, too, finds his job fascinating and says it fits the curiosity and thirst for knowledge that are “part of his fiber.”
There have been trade-offs. As a physician, Oesterle cherished his relationships with patients and their families. As a teacher, he loved bringing life-saving knowledge to a new generation of doctors. But he’s learned his role at Medtronic can make an imprint on the health of millions.
“I realized this could be the most interesting job a physician could have.”
James Walsh –612-673-7428
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