Tie Your Work to Improving People’s Lives - Omar Ishrak, Former CEO of Medtronic

SHIV GAGLANI: Hi, I'm Shiv Gaglani. Today, on Raise the Line, I'm really privileged to welcome Omar Ishrak, one of the most influential figures in medical technology and healthcare in the U.S. and globally. He earned that role in part by being Chairman and CEO of Medtronic, the world's leading medical technology company, from 2011 to 2020, but he was also president and CEO of GE Healthcare Systems earlier in his career. 

Outside of healthcare, he serves as Chairman of the Board of Directors at Intel, and he’s also on the boards of the Cleveland Clinic and Asia Society. His tenure at Medtronic was marked by a focus on therapy, innovation, globalization, and economic value. He engineered the acquisition of Covidien, a $10 billion global manufacturer of surgical products and suppliers, the largest medical technology acquisition in the history of the industry. Over the last decade, he was responsible for bringing to market a long list of innovations to improve the lives of millions of patients around the world and help healthcare systems become more efficient. Omar, thanks so much for taking the time to be with us today.

OMAR ISHRAK: Great. Thank you. Thank you for that very kind introduction. I'm looking forward to the discussion.

SHIV GAGLANI: You obviously have a very impressive background in healthcare. Can you start by telling us a bit about how you got into engineering first and then the career within business?

OMAR ISHRAK: Well, I got into engineering because I took a degree in electrical engineering, which I just felt I wanted to do. From that, I did a Ph.D., actually, in the area of ultrasound imaging and that then took me into business. In the beginning, I wanted to do research but very quickly I realized that I wanted to know the impact that research would have on a product, on patients and people, and what value it would create for a company. So that connected me over time with customers and with business, and then that's how I eventually grew.

SHIV GAGLANI: You spent nine years as Chairman and CEO of Medtronic and retired just recently, earlier this year in April 2020, as well as stepped down as chairman of the board recently. What can you tell us about Medtronic, how it's evolved, your time leading the company, any highlights that you can share with our audience?

OMAR ISHRAK: I will first give a little bit of perspective on Medtronic. It's a leading medical technology company with over $30 billion in revenue and 90,000 employees, but most importantly, we touch something like 70 to 80 million lives every year, people whose lives are impacted through the application of Medtronic technology, impacted in a way that either extends their life or makes them recover from illness more quickly, or reduces the pain in some way. That's what Medtronic really is. In my time in Medtronic, really a number of things. The company has a storied history. It was formed in the late 1950s by someone called Earl Bakken, who not only enlarged Medtronic but essentially through that launched the entire med-tech industry. One of the greatest things that he did, together with his leadership team very early in the history of Medtronic, is he wrote this mission of Medtronic, which uses the words that we are basically a biomedical engineering company aiming to alleviate pain, restore health, or extend life for people.

That is just one tenet. There are actually six tenets in the mission, but what's very appealing about this is that this mission not only inspires and unifies everyone in the company -- which is quite a statement because 90,000 employees, everybody at anytime, anywhere in the world, you ask them what the mission and they know what it is, and it's not just today, that's how it's been for sixty or seventy years -- that's quite unique. Now, beyond that, the mission also guides us in terms of strategy, where we are and where we're not. We're biomedical engineering. We alleviate pain, restore health, and extend life. I mean, that actually says a lot. That means we change outcomes. 

It also has among a few other tenets, a set of guiding principles, operational principles, which has in it things like valuing all employees, “the importance of diversity and inclusion,” in its own words, the importance of being an important social citizen, the importance of making a fair profit. These are things that I certainly didn't create. All I did was follow them and maybe applied them to today's world. It was always something that struck me, that these 6 statements written in 1960 -- when the company wasn't even making any money and had less than 1,000 employees -- are as applicable today in 2020 as they were then, and I’m certain they will be in the future. 

So, my understanding of this mission and its application to the employee base and hopefully continuing the legacy of my predecessors and making sure that it's a platform that we can continue CEO after CEO, is perhaps the biggest thing for me. Beyond that, the company is now, I’d say, on a growth trajectory based on a very robust product pipeline which we had to invest in. It’s a global company, and so sustainability of growth is maintained by global access. I think it's a platform for the future, for future growth based on the mission and what we stand for. So that's basically my time in Medtronic. 

I think the only other thing I'd add is during this time, we also did the biggest acquisition in med tech, which was the acquisition of Covidien, which really almost doubled the size and certainly doubled the number of employees and grew the revenue base by a significant amount. That was, like I said, a major acquisition which has now been integrated and works very well with the rest of the company primarily because we felt that that acquisition would help us further the mission, and that's for patients. That is what was most important. That's like a bit of a summary of my time at Medtronic. I could obviously go on, but those are perhaps the key highlights.

SHIV GAGLANI: Well, that's pretty fascinating. I actually didn't realize that the same mission has lasted for over 50 years. Medtronic's definitely a company that's inspired me on my own journey. I was a biomedical engineer in college, and then as I mentioned before the interview, when I went to business school I had an opportunity to learn from Bill George about leadership.  He ran Medtronic as well, so it's definitely been a very exciting company to follow over the years and especially how you've grown it over the past decade. So, 2020 hit and COVID has changed everything. We'd love to hear your take on what are some of the things that COVID has revealed about our healthcare system? What are some of the lasting changes that you think will happen both at Medtronic, but also in healthcare in general, because of COVID?

OMAR ISHRAK: The one thing that does come through is that COVID is essentially a crisis and it's a global crisis and if nothing else, in its own way, it focuses people and the healthcare system particularly. Things that have been striking is the speed with which remote care has been adopted for obvious reasons. I think that'll stay. I don't know if it will stay exactly in the same form, but aspects of it will shape and accelerate the usage of that type of technology in healthcare. I think the other thing that also is very striking is, we've all heard about the vaccine and the speed with which that has also been developed also because of this very focused crisis-oriented mentality, but also the therapeutics. 

It's been remarkable to me how quickly the physician community both in the U.S. and around the world began to understand how to treat this disease. At that time, all we could do is treat. Even now, mostly. But the mortality rate has improved significantly since the whole pandemic first started. It's been very striking how physicians have understood this, formulated policy and shared it with each other. In that area of treatment, I think that'll remain. I think if we can learn how to work together more closely in the delivery of care, and at least keep some of these items that become highlighted during a crisis, I think that would be really very beneficial.

I think the other thing that also came out, and again, I don't know how to sustain it, but clearly, when an event occurs that requires this overriding priority then we learn how to cross company boundaries. We learn how to cross hospital boundaries, functional boundaries and create solutions very quickly. If we could at least take some aspects of that and translate that into our normal operations, I think we'd benefit a lot from that.

SHIV GAGLANI: Yes, we've heard a lot about the speed at which traditionally slow institutions – healthcare, education -- have changed because of COVID. We recently had Mike Alkire from Premier on the show talking about the healthcare supply chain and some of the ways that hospitals have had to work together to allocate resources. I know Medtronic was a leader being tapped by the government earlier on to supply ventilators and up-regulate production. You were on your way out in April 2020, but I imagine you probably were involved in a lot of some of those discussions.

OMAR ISHRAK: Yes. Very much. When the pandemic started, I was certainly in the middle of this whole ventilator crisis, if you like, and Medtronic was in the middle of it, and I'm glad to say that we took a good leadership role. We were pragmatic about what could be done and what couldn't be done. One of the most important things we did is that we open-sourced our ventilator platform and that enabled some level of production around the world to happen pretty quickly. New business models actually were invented through that and our own production went up rapidly.  But equally importantly, in the early phases when the demand was so great that there was no way in which anyone could fulfill all of that demand in that time, we learned how to allocate. 

Almost everyone was in a panic, and wanted every ventilator that there was, which clearly was not a practical situation.  So we had first to be very clear about our own motives, that saving lives was the most important priority and wherever the need was the greatest, we would allocate accordingly. That forced us to create an allocation mechanism based on the University of Washington models and then look at it across the country and also globally and go through that process. I'd say that that sort of focus on the importance of saving other people's lives and doing whatever has to be done to enable that taught us a lot. I think the company contributed in a way that, frankly, I'm pretty proud of. I think we did make a difference and we learned a lot as well and we created relationships with countries, governments, other companies that I think will last into the long-term.

SHIV GAGLANI: Yes, that's incredible. The reason we call this podcast Raise the Line is it’s all about how we increase healthcare capacity. Clearly, the work Medtronic was doing to do that, open-sourcing your ventilators, is a big part of how we were able to do that. Osmosis is a teaching company. We have an audience of millions of current and future healthcare professionals, as well as patients and family members. We love to fill in knowledge gaps as a result of this. Is there any topic that you would like us to develop as educators? Like if you could snap your fingers, have us build a course, what type of thing would you be interested in us building to educate either clinicians or the public or both?

OMAR ISHRAK: Well, let me touch on two topics. First is go back to our mission and the importance of a sense of purpose in a company, which we talk about a lot. But remember the Medtronic mission was written at a time in 1960 when people didn't talk about those things, but now we do, and it's appropriate and important. The sense of purpose must be something that has continuity, that has long-term sustainability. It cannot be, like, every few years you write a new mission and form working groups and then a few years later, rewrite it. A sense of purpose defines a company's motive. Almost always, that sense of purpose should relate to some kind of value creation somewhere because after all, the company is being paid for something, they get revenue. If you get revenue, you must be creating value, and understanding that linkage, I think, is very important.

I think that element of the importance of a sense of purpose in teaching, in business schools, and so on, I think is important. It isn't something that you can just read up on -- you can look at examples -- but it's worth thinking about and considering and learning and questioning each other as to what kind of sense of purpose is one that is sustainable and that stays over time. Every company should really have that no matter what they do. If you do that, then all the other elements that we talk about such a lot will follow -- everything from ESG metrics to why a company is worth a certain amount or charges for their goods a certain amount -- all of that will follow from what the sense of purpose is and what value you're creating. I think some kind of more formal material around that would be something that is probably valuable, and the Medtronic mission, I think, could be an example of a sustained sense of purpose that's been adopted by six or seven CEOs and maintained without any changes. If I were to say one thing, is that the success of Medtronic over the course of decades has evolved in many ways from that singular sense of purpose. 

The other item that I think is worth talking about – although there's a lot of work in this area, but one that requires more and more highlighting -- is value-based healthcare. At some point, the healthcare industry overall -- and I mean everyone, not just technology companies, but also providers, payers, governments, patients -- should look at value-based healthcare because in value-based healthcare, the fundamental principle is that you pay for an outcome, which sounds simple. 

But the difference between paying for an outcome and paying for the promise of reaching an outcome is actually profound because when you promise to reach an outcome and you get paid for it, you're actually not accountable for it. You've just made a promise. When you actually get paid for the outcome, you're accountable for it. When you start to think about it that way then you start to make connections with each other. In that way, I think healthcare can be something of a growth driver, which it should be, as opposed to an economic burden, which is how governments and people think about it, but it shouldn't. 

Improving somebody's life, reducing the cost of care because unnecessary things aren't done…if you can imagine that those things help the economy, it becomes an economic growth driver, not one that's simply a cost burden. And I think that change is something that the world has to go to, and value-based healthcare principles have to be used to go there, and some kind of sort of organized thinking around that -- which is more scaled than it is today -- I think is essential. There are a few organizations doing that but it's not accepted everywhere. I think to the degree that that can be made broader and more organized, I think would help a lot. Those are two areas that I think are worth considering.

SHIV GAGLANI: Yes. I would love to respond to both of those. I mean, the second one in value-based healthcare -- we recently had Vivian Lee on our podcast, who wrote The Long Fix. She's president of Verily and used to be CEO of University of Utah Health Systems. In her book, she talks a lot about value-based healthcare. I was shocked as to how little I was taught about this when I was a medical student at Johns Hopkins. Professionals, clinicians, aren't being taught as much about how healthcare is paid for, but clearly, value-based is where things hopefully will be going. 

For the first one, on the sense of purpose, that is a really important topic. Medtronic's obviously been a leader here. Another leadership role I mentioned that you have is as Chairman of the Board of Intel and Intel's Andy Grove passed on a ton of leadership lessons, including one that we've quoted many times this year with the crisis of COVID which is, “Bad companies are destroyed by crisis, good companies survive them, and great companies are improved by them.” I imagine, whether it's Intel or Medtronic, or hopefully some of the health systems, they will come out of this being even better because of the crisis.

OMAR ISHRAK: Indeed. Yes. Intel also has its own mission, which is not that dissimilar, except there it's using technology to make people's lives better, to make a difference in people's lives in a slightly different way so that people's lives can get so much better because of the computer. Virtually everything in the future will have a computer in it, and certainly it’s changed the way in which we do things. I think having a steady sense of purpose like that is pretty important for a company.

SHIV GAGLANI: Absolutely. I know we're coming up on time, so I have two last questions for you. The first is, given our audience is comprised primarily of students and early career health professionals, what's your advice to them about meeting the challenges of the COVID-19 moment and approaching their career in healthcare? 

OMAR ISHRAK: Well, we've talked about COVID-19 and the learnings from that…but I think focusing on patients. The role of the physicians and the people in the healthcare industry is to improve people's lives. One must never forget that. The link to an outcome, as opposed to an intermediate endpoint, is important. When people talk about things like selling healthcare data and all this kind of stuff -- which in my mind, is okay, one can create a business model like that -- but the data alone doesn't do anything. It's the usage of the data in changing an outcome that makes a difference in healthcare. So a line of sight to improving outcome, no matter what you do in healthcare, is important. That's one thing that I think people should always remember. Tie your work to how people's lives get better no matter what you do. 

The other thing that is also important in healthcare is this notion of working together with others, but at the same time, recognizing that healthcare is a granular effort. A cardiologist cares about the heart, not the brain. I mean, they understand it, but with nowhere near the focus of a neurosurgeon or a neuroscientist may have, or an orthopedist may have on joints. The point is that in each of those areas, one can build an entire career not just being a physician, but being a researcher. One can build an entire career just understanding some cellular mechanism in some portion of the body somewhere, and that's a life's work. It's not something that you just read somewhere. You have to actually work on these things, so the granularity of healthcare is extremely important. 

Another way of saying that is -- I'll take cardiologists as an example because it's a nice, easy one to relate to -- for the general public, a cardiologist is a cardiologist, but I think you and I both know that there's a massive difference between an electrophysiologist and interventional cardiologist, and you don't want to go to an interventional cardiologist when you have a cardiac rhythm problem. It's not that one is any more important than the other, but the fields are complex enough that it requires focus and understanding and they keep growing. So healthcare, in the end, is a granular area. You have to understand the details. You have to understand them in extreme depth, and you can build an entire career over an entire lifetime and just focus on one thing. One should never forget that. 

Now, to scale things, you may need to add things together at a different level, I understand, and things can have side effects. You need to understand about other things, but what's really struck me is how focused one really has to be to really move the needle in healthcare. These two things I would leave with the audience, that as they think about their careers in healthcare to remember these.

SHIV GAGLANI: I think that's great advice. Frankly, one of the reasons we even started Osmosis is that healthcare is different than other forms of education because it's way too vast, there's way too much information for any one person to know, which is why you have the specialists. It's high stakes, it affects people's lives directly. Number three, it's dynamic. A year ago today, most people in the U.S. probably didn't know what a coronavirus is, and now it's the only thing a lot of people talk about.  So because of those three reasons, we wanted to build a platform that was specifically designed for healthcare education. My last question to you is there anything else that we haven't covered that you'd like to be able to leave our audience with, anything about your career or about your thoughts and healthcare, anything else?

OMAR ISHRAK: Well, I think we've covered more or less everything. Maybe, the one thing that I will mention is to prospective engineering students who want to go into business. Engineering teaches you a lot of thinking processes. It teaches you structured thinking, cause and effect. It teaches you how to make approximations and trade-offs. I think applying that to business can have a lot of value. Learning how to communicate any invention that you made or any bright idea that you may have in simple terms that your customers can understand is something that's worth spending time on. I’d encourage engineers not to leave engineering, to keep their technical know-how, but don't be intimidated or think that business is not for you.  Not because it's a different career, but because it's an extension of your own career and one through which you can create even more value and impact more people than if you simply do the engineering. So do both is the one thing that I would leave with the audience, or just try to do both. If you are interested, don't be intimidated by it and go from there. Shiv, thank you very much for your very engaging questions and for giving me the time to share these thoughts with you.

SHIV GAGLANI: Omar, thank you for not only being on the podcast but, more importantly, the work that you've done to raise the line and improve healthcare capacity. With that, I'm Shiv Gaglani. Thank you to our audience for checking out today's show and remember to do your part to flatten the curve and raise the line since we're all in this together. Take care.