Orthopedics was blindsided by the unexpected pandemic. What’s next? Nobody knows, but there will be another one. There will be unexpected winds in the future – financial, regulatory, competitive, patents, pricing pressures, lawsuits, etc.
How will your company respond these unexpected winds?
Let’s apply Nasim Taleb’s principles to the resilience of orthopedic companies. There are three types of orthopedic companies – Fragile, Resilient, and Antifragile. Let’s look at three examples and how these three companies weathered unexpected lawsuits.
“Wind extinguishes a candle and energizes a fire.” –Nasim Taleb
A Fragile company is like a candle that blows out after a gust of wind comes up out of nowhere. Fragile companies have a hard time dealing with unexpected events.
A good example is Acromed that ultimately capitulated. Acromed was served up $100M in lawsuits over off-label pedicle screw use. After 15 years and reaching the top of the spine world, Dr. Steffee (founder and owner) folded up his tent. He agreed to sell his company to DePuy and to settle roughly $100 million in lawsuits.
A Resilient company is like a torch with a fuel reserve. An unexpected gust of wind my temporarily reduce the flame but after the wind passes, the flame returns to its original state.
A good example is Sulzer Orthopedics that fought back and survived. Sulzer Orthopedics was served up a $1.3B class action lawsuit after selling defective acetabular cops, but they survived the lawsuits, changed their name to Centerpulse and were acquired by Zimmer.
An Antifragile company is like a bush fire. An unexpected gust of wind “energizes” the flame. Antifragile companies actually benefit from unexpected events.
