Here is How Big Companies Innovate
[creativ_pullleft colour=”light-gray” colour_custom=”” text=”Episode 044″]
Leaders of Alcon, AMO, Valeant and Zeiss Discuss the Role of Innovation in their Success.
Tom Salemi: Hi, welcome back to the OIS Podcast. This is Tom Salemi, your host. Thank you so much for joining us today. If you tuned in last week, you heard from J. Michael Pearson, the CEO of Valeant. He gave the keynote address at OIS in San Diego, and he focused the talk on innovation. He, in his message, suggested that the better source of innovation are the small companies, the researchers, the entrepreneurs, the KOLs that are leading the ophthalmology sector. And he pledged that Valeant would continue to spend time and capital to help those new technologies grow. But we continue the innovation talk today. At the end of that very same conference, we had our Masters of the Universe Panel, in which the CEOs of AMO and Alcon and Zeiss joined Mr. Pearson to talk about many issues, innovation being one of them. Today we’re going to poll the other leaders in ophthalmology and hear how they view innovation for their own leading companies.
TS: Jeff George assumed the role of President of Alcon just over a year ago. And in the panel discussion, he said ultimately it is all about innovation. And he acknowledged that the innovative pipeline at Alcon may have lagged the past five to ten years, but it’s really ramping up. It’s focusing on mid to long-term areas, including retina, dry eye, and the premium IOL space. It’s gone from 9 projects that it has last June up to 25. So Mr. George suggested that big companies can indeed innovate.
Jeff George: Actually if it’s done in the right way, you can do early stage innovation well in big companies. I look at Novartis on the pharmaceutical side. The majority of our revenues today were developed in-house, early stage. Products like Diovan, with 6 billion in peak sales, or Glivec at 4 and a half billion in peak sales, or Tasigna and Afinitor in cancer, or even new products like LCZed, or LCZ, which is going to be a multi-billion-dollar chronic heart failure product, or Cosentix in autoimmune, which was just approved. So I come at it from a philosophy of saying looking at the room here, and what you do is absolutely critical. I’m agnostic as to whether we’re developing it within Alcon or with you, and as I think Laurent talked a little bit on the panel earlier, there’s a tremendous amount of collaboration that we do with scientists and engineers in startup companies in the room.
TS: Ludwin Monz, the President and CEO of Zeiss, said that the key to innovating or innovation for his company is networking. It’s networking within the company, making sure all departments are moving in the same direction. And of course, it’s networking at events like OIS, where companies like Zeiss can meet and connect with leading KOLs and investors and entrepreneurs to ensure, again, that the new ideas and the freshest ideas are being identified and supported when necessary. But Ludwin Monz opened up his discussion pointing out that Zeiss is no stranger to innovation.
Ludwin Monz: It’s actually true that innovation is key to Zeiss. And let me explain why. Zeiss is a very old company. Actually, it’s 170 years old. And we’ve been in medical technology for more than 100 years. And what our customers know us for is actually innovation. And there’s a long series of firsts of things that Zeiss brought to ophthalmology. And let me just mention some. The slit lamp was introduced to the market by Zeiss. Surgical microscope was invented by Zeiss. OCT was brought to the market first by Zeiss. Optical biometry was invented by Zeiss, and even we talked about that earlier today, the trifocal IOL was brought to the market first by Zeiss. And there are actually many more. So that’s what our customers know us for, and this is why innovation is so important to our company. What we focus on is patient outcome. We focus on efficacy, on safety for a very simple reason: our marketing is about facts.
TS: Murthy Simhambahatla, Senior Vice President of Abbott Medical Optics, also cited IOLs as an area of interest for his company. They’re also looking at improving efficiencies in operations in the operating room. But he identified one particular area that’s just dying for innovation, and it’s an area that AMO is focusing on.
Murthy Simhambahatla: The one big unmet need where I think industry has stagnated quite a bit is in Lasik technology. There just hasn’t been a lot of new innovation, particularly in the United States in Lasik. So we made a conscious decision to invest the most we have in almost a decade in re-energizing Lasik.
TS: Jim Mazzo, the Chairman and CEO of AccuFocus, was moderating the panel and he directed a question, an interesting question toward Bill Link, OIS co-chair, and of course partner at Versant Ventures. Why, Jim asked, can’t large companies learn to fail fast as smaller companies are forced to do? Why can’t they pull the plug on a project early on, when they see that things aren’t going their way?
Bill Link: I think they can on a project level. And there’s an honest difference if you have a portfolio of projects in a single entity, and then you’re measuring the progress and performance of all those projects. And one of my biggest setbacks as a decision maker at Chiron Vision is I killed a project because it was in trouble at budget time. And we re-deployed capital, and later I regretted it because it was a worthy project that later re-emerged in a private company and did beautifully well. And so one of my learnings as maybe a business leader in that setting is you have to be really thoughtful when you’re dealing across a portfolio because every project, every project will have its ups and downs. And it’s awful if the down is at budget time.
TS: And in this last comment, we’ll turn back to Mr. Pearson, who of course spoke extensively about innovation in our last OIS Podcast. This time, Mr. Pearson was asked about integration. What does Valeant do when it identifies a companies and acquires a company and makes it part of Valeant? The company’s approach to incorporating new personnel and new technology is definitely worth listening to.
J. Michael Pearson: In terms of the actual integration, we continue to learn. Not all integrations go smoothly. We were lucky in the B&L integration. I think it went pretty well. Some of the things we’ve learned is we tend not to touch anything that touches the customer. So when we bought B&L we made a commitment internally and externally that we were not going to change our sales forces. So we have not changed – there’s been no sales representative or anyone facing the customer that has left our organization unless they were either not performing or they choose to leave. So that’s very important. We get things with the back office we take care of very quickly. We try to make decisions very quickly. A lot of companies integrate things over years, and we try to integrate them over months or days and get our focus back on the customer, and not have our people worrying about will I have a job in three months. I’m sure we make some decisions that are wrong by moving so quickly, but I’d rather make a wrong decision and fix it later than make no decision at all.
TS: I hope you enjoyed this conversation between the leaders in ophthalmology. It’s a regular feature at our OIS conferences. We’ll have another Masters of the Universe panel, hosted by Jim Mazzo, at our OIS@AAO coming up in November. So if you’d like to see this in person, go to OIS.net to register. If you have a company that you feels should be presenting in front of these folks, go to OIS.net and fill out an application for presenting companies. And we’ll see you in Las Vegas.