July 2013 S. Benjamins & Co Newsletter: Real Innovation at Work
Innovation has become the “buzzword” of the day! There is so much talk about how to foster creative workforces, re-invent customer experiences or take smarter risks to grow your business. My friend and trusted colleague Rob Reindl, VP Coaching at Edwards and now l
Sherry Benjamins: What is it that led you to innovation and helping organizations look at things in new ways?
Stan Rowe: I’ve always had a bit of an entrepreneurial and creative side when it came to new products. Early in my career at Johnson & Johnson, I worked on alternative drug delivery systems. Even at such a modestly low level, I was very interested in the experimental side of things. One of the reasons why I left the pharmaceutical industry was that I found the variables too confining. So I moved into medical devices where your only limitations are physics!
What I’ve found in medicine is that the true breakthroughs sound preposterous to the establishment. The larger the innovation is, the more resistance you’re going to encounter. That energizes me to think preposterously. I grew up with the preposterous. My father was a NASA engineer who lived with the preposterous every day in making rockets to be sent into the space and then to the moon. Possibility was everywhere and for me, this was very formative.
SB: How did you launch your company Percutaneous Valve Technologies (PVT), which was acquired by Edwards in 2004?
SR: In the late 90s I met Professor Alain Cribier, MD in Rouen, France and he had the idea to design a catheter based approach for replacing aortic heart valves. This was a significant alternative to open heart surgery. Normally with cardiac surgery, the doctor opens up your heart and stops it for an hour. Cribier proposed that we didn’t need to remove the diseased valve, which eliminated the need for open heart surgery. I worked with him while at Johnson & Johnson and in 2000, we started our venture-backed company, with a close J&J colleague, and another famous cardiologist. PVT was based in New Jersey. What was fairly unique then was that we decided to do our R&D in Israel. Our audacious goal as a company was to develop the first ever percutaneous catheter-delivered heart valve, a valve replacement without open heart surgery, done on a beating heart!
SB: What was the experience of integrating your company with the well-established and larger Edwards? Did this impact company culture?
SR: PVT was a company with twenty-three people. We were small, Edwards was large. We were fast, they were slow. We were the upstarts and they were the leaders in heart valves. When I started going out on the road to fundraise for PVT, I was going to the top venture capitalists. We’d tell our story about the valves and they’d say, “oh, that’s interesting, I haven’t heard of that before.” They’d then call in their experts in heart valve disease, who were surgeons. Well they would say that our idea is preposterous! They would give you all the technical reasons why it would never work. And most of this criticism was coming from their genuine experience as surgeons.
Similarly with Edwards, this was a company that was very close to the surgeon. It’s in fact their huge strength. This means though that there is a division in Edwards that largely did not believe in our PVT technology. So if you put PVT into Edwards, you run the risk of it getting killed or minimized by the “experts.”
It was important to me as someone selling the company that everyone had a job offer. As PVT’sCEO, I made sure everybody had stock options. I had operators who were making the valves that didn’t even know what stock options were. One of my proudest moments was when we were able to explain to them that we sold the company and that their stock options were now worth a year’s salary. It was a huge impact on their lives and that was rewarding to me. When you’re a CEO, these people entrust you with their money and career. I always felt these huge levels of commitment, ownership and responsibility. It’s an enormous responsibility, and my job when selling to Edwards was to keep the doors (in Israel) open because these people deserved the opportunity to prove themselves.
SB: What was done so that Edwards saw the possibilities of not compromising what PVT was originally striving for?
SR: They didn’t think that the valve was going to work until we did our first human studies. We got lots of great PR in the top journals and they were blown away. Edwards had their own program too so it wasn’t “make or break it” for them. It was “we’ll keep playing along with this cause it may be something.” But for us, it was simply “make it work.” We had a huge commitment to it. And we did buy the primary intellectual property which then became very valuable once we showed that it worked.
When we started having serious conversations with Edwards, they were very cognizant that PVT’s technology could get lost very quickly within Edwards. So Edwards set up a separate unit that would isolate us from the rest of the business and I reported directly to Mike Mussallem, our CEO. That had a big impact. And a lot of small things helped too. One that I’ll never forget that had such an impact–and cost nothing!–was a big “Welcome to Edwards!” banner that we had every employee at Edwards sign. It was sent over to Israel and they hung it proudly. It was a cultural bridge that made a great difference. Mike and Rob Reindl, VP of HR came to Israel to meet with the group and let them know how much they were wanted. And everyone did get an offer. Edwards could have been very arrogant: “What do we need from these guys in Israel? Eighteen or twenty of them? Who cares?” It could have easily been shut down, but instead it was warmly embraced and now that sector of the company continues to exist with a workforce three times the size. Israel remains the leading center of percutaneous heart valves in the world.
Creativity and culture of both groups was really important for the success of PVT and it’s new home within Edwards. It continues to be important for the success of Edwards.
SB: With your success in both invention and innovation, can you share what the differences are?
SR: Invention is an individual sport. Innovation is a team sport. Invention comes from people who think differently, but you can’t innovate your invention without a whole bunch of people working with you. What I try to readily practice is that when I see invention walking into my door, I give it away. What a lot of inventors do wrong is that they are so proud and have so much ownership over their idea, they hold it close. If I give an idea to a team it can be innovated. Their paths end up being the dominant ones and that’s not a concern for me because ultimately our goal is to make products that serve patients. My job is maybe to create the seed, but I have to give it to the gardeners to grow it into something beautiful.