MDDI_Medical Device & Diagnostic Industry

MDDI, July 2016

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From the Editor MD + DI MEDICAL DEVICE AND DIAGNOSTIC INDUSTRY JULY 2016 | 7 H ow do you develop a groundbreaking med- ical device? If you work at a small com- pany, the answer is put in a lot of blood, sweat, and tears (not to mention some of your own cash and probably a lot of sleepless nights). But if you work at a big medtech company, innovation is just an acquisition away. That's probably an oversimplification, but you get my point. Innovation in medtech these days typically starts from the ground up. The dirty work, in many cases, is done by a scrappy startup with a novel idea and the guts to chase it. As soon as the concept starts to show promise, one of the big guys swoops in to gobble it up, commercialize the tech- nology, and reap the rewards. What I don't understand is this: If small compa- nies working with a skeleton crew and a shoestring budget can churn out disruptive innovations on the regular, why can't the biggest medtech companies, with their billion-dollar R&D budgets and world- class talent, do the same? The problem seems to be the suits. Executives at big companies have to keep shareholders happy, and as such they're often unwilling to step out on the limbs that lead to innovation. "Large companies are very, very risk averse," Giridhar Thiagarajan, an R&D engineer at Bard Access Systems (a division of CR Bard) explained while speaking on a panel at the MD&M East con- ference last month in New York City. "And usually innovation, at least new concepts and things like that, takes money and takes time, and usually that doesn't float well when you look at it from a man- agement perspective." Consider, he said, a project that's an incremental innovation that's going to cost $2 million versus a novel design that would be a big step forward but might cost $10 million and require a clinical study. "The company's going to go for the low-hanging fruit first just because everybody's bonus structure, promotions, everything is tied to that. Once the low- hanging fruit dries up, then they'll address the big- ger projects." The problem with that kind of thinking is that with our healthcare system rapidly evolving to in- centivize real innovation over incremental improve- ments, there will be less and less demand for that low-hanging fruit. So how can big companies get back to the busi- ness of breaking the mold? "The only way to break through and really be innovative and be creative is to really explore new spaces and connect dots that no one else has really connected before," said Bruce Rutter, founder and CEO of Metaphase Design Group and moderator of the MD&M East panel. "It takes a lot of guts to do that, and I think organizations that are really good at it have a culture of accepting wild and crazy ideas and really letting them germinate." In some ways, big companies are starting to catch on. Case in point: the design centers that are cropping up at some larger firms. Also called innovation centers, these facilities typically eschew traditional office furniture like cubicles in favor of elements like beanbag chairs and communal ta- bles. You might even find a Rubix cube. The aim is to create a safe space intended to foster creativity. But while the intentions behind them are good, de- sign centers miss the point, as readers told MD+DI's sister site, Qmed. "You can't just drop R&D teams into a snazzy new office space and have them innovate," one anony- mous commenter explained. "You have to clear the decks and allow the teams to focus, without the dis- tractions of their everyday projects." In some cases, the big ideas are already there; it's just that employees at big companies don't have permission to pursue them. Rutter recommends putting a jar in your office, and anybody who pooh- poohs a moonshot idea has to put in a dollar. If saving money is the suits' primary objective, it just might work. 2 Why Is It So Hard to Innovate at Big Medtech Companies? Jamie Hartford Editor-in-Chief

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