Medical Device Link.

A crisis is a terrible thing to waste. You probably know that phrase, famously uttered by Rahm Emanuel, the tough-as-nails and notoriously profane politician chosen by President Barack Obama to serve as his White House Chief of Staff. I know this sounds a bit Nietzschean, which is really not what I’m going for, but I am intrigued by the idea that a cataclysmic event can also have a cleansing, positive effect. I was reminded of this once again by a recent post on Don Sull’s blog (www.ft.com/donsullblog). Sull is professor of management practice in strategic and international management, and faculty director of executive education at London Business School. He knows a thing or two about business matters.

“The downturn has exposed flaws in business models such as newspapers,” writes Sull. “Identifying basket cases after they have collapsed is easy, but by then it is too late to save them. The trick is to [identify] the weak spots in a damaged business model before it collapses, while management has the resources and time to fix it.” He then cites the ways in which some industries may be marching toward a cliff they don’t see coming because of complacency, entrenched self-interest, a deeply rooted resistance to change or what have you. To test your industry’s mettle, he suggests imagining yourself 10 years from now when, for the sake of argument, that industry’s business model has given up the ghost. “You write a cynical blog post explaining why it collapsed,” he writes. “Don’t shoot for balance, but instead emphasize the weak spots that killed the industry.” For example, here is his obituary of the pharmaceutical industry.

“Spend billions on large research and development labs that produce me-too products. Invest additional billions on an army of salesmen who pester busy doctors to peddle their wares. Charge exorbitant prices in the face of ineluctable pressure to cut medical costs. When this doesn’t work, merge with competitors suffering from the same problems, adding all the complications of a large merger. Hope for the best.”

In similar fashion, Sull takes apart book publishers, fast-moving consumer goods manufacturers and emerging market conglomerates in his blog. He spares the medical technology industry, but that’s not necessarily because it is beyond reproach. (Reread the preceding paragraph, and tell me that you don’t see at least one trait that med-tech shares with big pharma.)

To be sure, EMDM has consistently trumpeted the robustness of medical device manufacturing and the associated supply chain even during these turbulent times. Our industry’s resilience is real. For proof, you need look no further than the remarkably successful MD&M and MEDTEC trade shows in California, Germany, the United Kingdom, Japan and France organised by Canon Communications since the beginning of the year. Meanwhile, nonmedical manufacturing events are treading water, at best. So, the timing couldn’t be better to put the med-tech industry’s business model through the Sull ringer. Pretend it’s 2019 and the medical manufacturing model is in dire straits. You are the cynical blogger enumerating the causes of the collapse. Go to our blog at medtechinsider.com, where this editorial will be posted, and boldly post your summation in the comment box.

Did I mention that a crisis is a terrible thing to waste?

norbert.sparrow@cancom.com