DeviceTalks Editorial Director Tom Salemi (left) interviewed Boston Scientific CEO Mike Mahoney (right) in front of a crowd of medtech insiders at our DeviceTalks Boston show in early May. [Photo by Jeff Pinette for DeviceTalks/MDO]
It’s more expensive to run a business, and health provider customers face operational challenges. But while other medtech companies are laying off workers, Boston Scientific is hiring. The interventional medical device giant’s workforce grew 10% over the past year to 45,000 employees.
Boston Scientific sales grew 6.7% to $12.7 billion in 2022, and CEO Mike Mahoney and other top company officials expect it to grow another 8–10% on an organic basis this year.
“Thankfully, we have a very strong innovation cadence right now. In Europe, we grew 20% [operationally] in the first quarter. So why I’m so bullish about the future is many of the products that are driving that growth in Europe are going to be launching in the U.S. from now over the next two years,” Mahoney said during a keynote interview at our annual DeviceTalks Boston show in early May.
Mahoney went on: “It’s always about the innovation that we’ve created that’s driving the growth, and we’ve got an excellent operations/supply chain team with great depth globally that have helped us manage the supply chain issues better than most.”
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BSX shares were selling for under $6 apiece when Mahoney joined the company as CEO in October 2011. They’re trading at more than $51 apiece as of this publication.
So how did Mahoney lead Boston Scientific to this point? Here are five leadership themes that came out of his DeviceTalks Boston talk:
1. Have the courage to take on new challenges.
Back in 2011, Mahoney was running Johnson & Johnson’s medical device business, one of the largest in the world. Meanwhile, Boston Scientific faced slack demand for its ICDs and stents while grappling with debt and legal issues, and CEO Ray Elliott unexpectedly announced he was leaving.
At the time, Mahoney was in his mid-40s, so he thought he had time for the challenge. “I felt like I was ready to take on a company that was in trouble and have a chance to turn it around.”
“I think they ultimately hired me because they couldn’t find an experienced CEO who wanted it,” he joked.
He was motivated but had doubts. He personally recruited a consultant to help him decide. The day before he interviewed with Boston Scientific, the consultant gave him a binder with an analysis that basically told him to stay at J&J.
“I called him on my way home from the interview. He goes, ‘You must be so relieved to not take this job and go to New Jersey on Monday morning.’ I said, ‘I took the job.’ He was like, ‘What the F-bomb,’” Mahoney said.
So what happened?
“I’m at the interview, not sure if I want the job. And they actually said to me, ‘We’re not sure you want the job.’ I’m thinking to myself, ‘How do they know? How do they know that?’” Mahoney recalled to laughs.
He asked to be excused from the interview. He went to the men’s room. “I finally looked at myself in the mirror … and said, ‘Mike, it’s Monday morning. You didn’t take the job. How do you feel?’ And my whole body went, ‘Ugh.’ And I came back, and I said, ‘I want this job.’ And they ended up hiring me.”
Mahoney summed it up: “I did it because it was a massive challenge, and with a little bit of time, we could do it. It’s a special place.”
2. Help your company find its inner startup mentality.
Mahoney honed his leadership style during his stint during the early 2000s as the founding CEO of healthcare supply chain management company GHX. GHX now serves more than 19,000 healthcare facilities.
Of being a startup CEO, Mahoney said, “You’re worried about the balance sheet and cash flow and starting a company and culture literally from the ground up.”
A few months into the Boston Scientific job, he had a business dinner where an executive congratulated him. “He goes, ‘Your company is like an aging elephant.’ I’m like, ‘Holy cow.’”
Mahoney used that moment as a motivator to go into startup mode at Boston Scientific and remove management layers. He wanted less corporate bureaucracy between him and the people leading operations on the front lines.
“We actually thought of it as a startup: ‘Let’s create Boston Scientific,’” Mahoney said. “We created ‘Advancing Science for Life.’ We changed the colors of the company. We created new values as a company. Like, you don’t do that with established companies. We started over: ‘This is the company we want to be 10 years from now.’ We really excited our leaders around that.”
3. Be willing to take risks to innovate and grow.
Mahoney also steered Boston Scientific toward more innovative, fast-growing areas. When he joined, drug-eluting stents and cardiac rhythm management made up more than half of the company’s portfolio mix. Today, it’s 15%.
“We really modified the portfolio quarter after quarter through M&A, through alliances, through organic R&D consistently over 10 years to put ourselves in faster growth markets along the way,” Mahoney said.
The push to innovate means there are going to be failures. Mahoney acknowledged that many companies in Boston Scientific’s venture portfolio haven’t worked out. “You’re better off … taking a swing than constantly waiting.”
“If you’re going to get that large, the size of some of our bigger competitors, you need big things to work, to grow faster. And oftentimes, you can’t play it safe all the time with innovation M&A and win that way.”
Mahoney recalled how Boston Scientific first invested in Farapulse and its pulsed-field ablation technology for treating atrial fibrillation (AFib) nine years ago, eventually acquiring the company for nearly $300 million in 2021. The system is already available in Europe, where demand is strong, and positive data continues to roll in as Boston Scientific seeks FDA approval in 2024.
“That easily could have not worked out, but it worked out fantastic,” Mahoney said of Farapulse. “And so that one deal will make up for four early-stage investments that completely flopped or maybe 10 investments that completely flopped.”
4. But don’t venture too outside your wheelhouse.
One area where Boston Scientific never really considered expanding into was surgical robotics, Mahoney said. These days, the move appears wise considering the challenges large medtech companies such as Medtronic, Johnson & Johnson and Siemens Healthineers have experienced when competing against Intuitive in soft-tissue surgical robotics.
“We’re in interventional medicine — so catheters get stuff anywhere in your body, and hopefully, you’re out in the same day,” Mahoney said.
He sees the company continuing to expand into more interventional procedures where patients receive same-day treatments and go home. “What we try to do is disrupt general surgery.”
Meanwhile, “Intuitive is an amazing company, and what they do is best-in-class.”
“We haven’t had the clinical need to have a robot, nor will we be very good at it. … I don’t think an Intuitive would ever be as good at med devices as we are. And we’ll never be as good at robots as they are.” Mahoney said, later continuing: “I think sometimes you have to know what you’re really good at to avoid wasting a lot of money.”
5. Company culture is key — and it must be local.
“We want leaders to run our companies, not managers,” Mahoney said of Boston Scientific’s culture.
One of the important changes that Mahoney ushered into the company involved completely changing the operating model completely so there were business unit leaders with global responsibility.
As an example, he mentioned Meghan Scanlon, Boston Scientific’s SVP and president of urology, who also spoke at DeviceTalks Boston. “As a leader, she’s able to align resources where she wants around the world. … It gives her the flexibility to do that and to prioritize R&D projects without having to go through me or a bunch of other people to do that, because we empower her as a leader.”
Mahoney doesn’t just want leaders at the top of businesses, either, because a person often defines their employer based their immediate boss. “A culture is local. … It’s often what your supervisor or manager is,” he said.
“We really try to go deeper in the organization with our great HR teams and our leaders to really push that culture.”
Mahoney also said that company culture and the search for innovation is not a box a business leader can check off before moving on.
“As soon as you get settled on people and on innovation, then your growth slows, then you lay off people. So you have to be really restless on making sure you have great talent and culture and innovation.”
