In Person: Medtronic’s technology scout looks for the next big thing
Much like a baseball scout looks for the next great phenom with a radar-busting fastball, Dr. Stephen Oesterle travels some 250,000 miles a year to find inventors, companies and research that could be relevant to Medtronic.
Star Tribune (Minneapolis) (MCT)
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MINNEAPOLIS — When trying to visualize what Dr. Stephen Oesterle does at med-tech giant Medtronic, a baseball analogy helps.
Consider Oesterle an international scout, scouring the planet for new technologies that push the envelope of medical devices beyond what Medtronic does now. In much the same way a baseball scout looks for the next great phenom with a radar-busting fastball, Oesterle travels some 250,000 miles a year to find inventors, companies, researchers and institutions that are developing technologies that could be relevant to medicine and to Medtronic.
He then encourages Medtronic to pursue partnerships, financial investment or collaboration that will someday benefit the Fridley, Minn., company’s product portfolio and, by extension, its financial fortunes.
Oesterle’s big-picture job, in which he sometimes plays devil’s advocate, is critical to Medtronic’s fortunes. With more of Medtronic’s $17 billion in annual revenue coming from overseas customers — and an estimated 70 percent of the company’s growth coming from outside the United States — staying attuned to innovation is vital to helping Medtronic maintain its world leadership position.
“Innovation is global,” Oesterle, 61, said. “And I think the next decade will be the most fruitful in medical devices.”
Some of the technologies to enter Medtronic’s product pipeline during Oesterle’s decadelong watch include a “patch” insulin pump that is disposable, a pacemakerlike device that delivers a pulse to the sacral nerve to help control bowel movements for people with fecal incontinence, and a replacement aortic valve that is implanted with a catheter without open-heart surgery.
His position is senior vice president for medicine and technology. It splices the role of chief medical officer, which exists at many medical-technology companies, with someone who has the technological chops and connections to recognize Medtronic’s Next Big Thing — either inside the company or out.
Oesterle looks at internal operations and research and development. He visits every Medtronic business unit, from the United States to India and China, every quarter. Sometimes, he asks the question: “Should we be doing this? Or should we be letting somebody else do it?”
Because Oesterle said 20 percent of innovation comes from small companies, he visits the little guys, too — from the Minneapolis-St. Paul area to Israel to Switzerland to Ireland.
Medtronic, he said, has a minority stake in about 70 companies, and Oesterle is on the boards of 10 small startups.
Because innovation comes from the military, from universities, from large multinational giants like IBM, Apple, Microsoft and Cisco, he makes connections there, as well. And, because the people who invest in ideas are among the best-informed, Oesterle knows and meets with venture capitalists and private-equity partners from around the world.
He has 8,000 people in his contacts file, and not one of them is from Medtronic.
Dr. Glen Nelson was the first person at Medtronic to have the job — although he was also vice chairman and a member of the company’s board of directors, positions of authority that Oesterle does not have.
Nelson said the job is much more than a scout.
“The role of a person like Steve is to keep people’s sights set out over the future, so they are not ignoring what is coming,” Nelson said. “You have to spot the big opportunities and the big innovation, sometimes even cannibalizing your own products.”
Nelson said the job sometimes involves advising that certain products or projects be shut down or shifted if the promise doesn’t appear to be panning out.
“If you don’t have somebody like Steve in a company, you don’t have anybody sort of raising their hand to say ‘Wait a minute,’ ” he said.
Yet that person also must have the vision to stick with an idea, sometimes years before its commercial success is assured.
“Steve is able to gain the confidence of the senior management that his vision and insight is valuable,” Nelson said.
Medtronic CEO Omar Ishrak was not available to comment, but former CEO Art Collins said Oesterle’s recommendations were an important factor in business decisions he made.
“I wanted him to challenge the status quo,” Collins said.
“As I told Steve on numerous occasions, I didn’t think the business units would always follow his advice. But at least he would get them to think in a different way.”
Oesterle was an interventional cardiologist of national renown when Medtronic hired him more than a decade ago to take over after Nelson’s retirement.
He had worked as a consultant for medical-device companies and established scholarships to train cardiologists from developing countries.
When Medtronic approached him, Oesterle told the recruiter he already had a dream job. “I was having a good time, minding my own business,” said Oesterle.
But it’s hard to say no when Medtronic — and its $1.5 billion research and development budget — comes calling. Collins persuaded Oesterle to come to Minnesota to hear him out.
Oesterle took the job.
There have been trade-offs. As a physician, Oesterle cherished his relationships with patients and their families. But he’s learned his role at Medtronic can make an imprint on the health of millions.
“I realized this could be the most interesting job a physician could have.”