Medical Device Daily Executive Editor

DANA POINT, California – When you get three longtime and highly respected medical technology executives to appear together as part of the same meeting session, it's natural to pick their brains on leadership and the outlook for the industry.

So moderator Steve Halasay, group editor of MX: Business Strategies for Medical Technology Executives, and members of the audience at the St. Regis Beach Resort & Spa did just that during the recent annual meeting of the Advanced Medical Technology Association (AdvaMed; Washington).

They had questions for John Brown, recently retired CEO of Stryker (Kalamazoo, Michigan) who continues as chairman of the company; Ron Dollens, president and CEO of Guidant (Indianapolis), who put off retirement to help steer the pending acquisition of that firm by Johnson & Johnson (New Brunswick, New Jersey) through to fruition; and Jack Wareham, chairman and former CEO of Beckman Coulter (Fullerton, California), who participated in an "Executives' Lessons Learned" session (Medical Device Daily, March 11, 2005).

For one, Halasay wondered whether the med-tech sector, particularly as it is losing such prominent CEOs as Brown, Dollans and Wareham, is in a "crisis of leadership."

Dollens' view is that it's a "crisis of leadership vs. management." He elaborated: "I find shortcomings in management skills."

For his part, Wareham said, "There's a difference between management and leadership." He cited the "change in environment," with greater "transparency" required at the executive level than ever before.

Brown is another fan of leadership as opposed to management. "Great leaders serve the organization," he said. "They get at the heart and mind of the organization."

Dollens chimed in that the most difficult part of a top executive's role is "the alignment part . . . getting the rest of the organization to go where you think it ought to go."

How that works out is the true test, he said: "Leadership is defined by the followers."

Dollens evoked the laugh of the day during the leadership discussion when he responded to Halasay's frequent mentions of a book on leadership authored by Bill George, former top dog at Medtronic (Minneapolis), Guidant's largest competitor. "If you mention Bill George one more time . . ." he sputtered. Turning to Brown, he said, "Now John, you write a book and I'll read it."

In Wareham's view, "the visioning is important, but more so is the perseverance" toward achieving that vision. "You have to sell it, sell it, sell it."

Another good measurement of effective leadership, according to Brown, is knowing when to step back and allow people to do their jobs. "When people are really hard at work, stay out of their way."

A key attribute, Wareham said, is to know your customer. "That's what we do [as leaders]," he said. "We anticipate our customers' needs."

With it being noted that all three of the execs on the panel had come up through pharmaceutical companies before moving into jobs heading med-tech firms, Dollens observed: "I think pharma does a great job of developing people."

That said, Wareham offered the view that companies such as those represented on the panel are getting large enough to offer developing leaders the kind of experiences he, Brown and Dollens used to get from pharma companies.

And it's a good thing, for, as Brown noted, "competition today is tougher than ever – it's a brawl every day."

He added that "the temptation to violate the rules is greater today than ever," and saluted AdvaMed for its Code of Ethics, which has been promulgated among both member and non-member companies.

Agreeing about the difficulties of leadership in the present climate led Dollens to observe that "having a CEO of a Fortune 500 company on the job for more than 10 years is going to be a rare exception."

Asked by Halasay the single most important question the three executives might ask of candidates for key company positions, Dollens said his would revolve around how the candidate would describe what he or she would do to be successful, while Brown offered two: "What do you want me to think of you when you leave the room?" and "What would your boss say of you if I called him or her?"

Wareham said he likes to explore the question of failure, which he said "happens to everyone who's any kind of a leader." He said he likes people to describe their failures and see how they describe their accountability "and what they learned from it."

Asked how the med-tech industry has changed over their terms as CEOs, Dollens noted: "When we were HIMA [Health Industry Manufacturers Association, the previous name of AdvaMed], it was all about FDA. Think about how that has changed – today, it is about CMS [Centers for Medicare & Medicaid Services], as well as the influence of Europe and Japan."

Wareham nodded agreement at the increased importance of CMS reimbursement vs. FDA product approval. "There is no question you can have technical successes [with products] and commercial failures."

Brown noted that one big change is that clinical practice "is going global. There's a group of elite clinicians in every specialty that is driving clinical practice" on a worldwide basis.

Asked if he expects more consolidation such as that being demonstrated by his company being in the process of acquisition by J&J, Dollens said, "Yes, I do. As [technological] complexity grows, market growth will be such a premium that everyone will be looking for ways to find it."

Mergers and acquisitions fit right into something Dollens said earlier – that one thing that irritates him about many smaller companies today is that "nobody wants to grow a company; it's all about the exit strategy."