Medtronic’s CEO says, “We’ve got to be an ‘and’ company”

12/03/2024, 7:25 AM
fastcompany.com

Hello and welcome to Modern CEO! I’m Stephanie Mehta, CEO and chief content officer of Mansueto Ventures. Each week this newsletter explores inclusive approaches to leadership drawn from conversations with executives and entrepreneurs, and from the pages of Inc. and Fast Company. If you received this newsletter from a friend, you can sign up to get it yourself every Monday morning.

When Geoff Martha, chairman and CEO of Medtronic, took over the medical device maker’s Restorative Therapies Group in 2015, the company faced a tough decision. The group at the time was underperforming, and the leadership team had to consider how to prioritize technology investments such as neuromodulation—sending electric signals to the brain to treat disorders—that can take years to develop and bring to market or invest in other opportunities that might produce more immediate wins.

Management decided to keep investing in brain therapies, and the bet appears to be paying off. Earlier this year, Medtronic received approval from European regulators for its adaptive deep brain simulation (aDBS) technology, which includes an implant that can dynamically adjust signals to help personalize therapy for people with Parkinson’s disease. “Our leadership team joined hands,” Martha recalls. “We said, ‘this is what we’re going to do, and it’s going to be a long-term play.’”

Playing the long game

Long-term plays are nothing new for Medtronic, which was founded as a medical device repair business in 1949 by Earl Bakken and Palmer Hermundslie. The company introduced the first battery-operated pacemaker in 1957 and the first implanted pacemaker a year later. Despite its groundbreaking innovations, the company was on the verge of bankruptcy in the 1960s. The scare prompted Bakken to write a mission statement that highlighted the company’s commitment to contributing to human welfare.

At Medtronic, those contributions come to life through direct interaction with patients. Every year the company brings patients from around the world to its operational headquarters in Minnesota to hear about their lives before and after treatments and therapies with Medtronic technologies. “They thank our employees, and there’s not a dry eye in the place, including mine,” Martha says.

In addition to improving the human condition, Martha says Medtronic needs to be performance driven in order to attract new talent, develop best-in-class new products, increase profits, and reward shareholders. Martha’s holistic approach to long-termism brought to mind a 2024 LinkedIn post by leadership expert and Harvard Business School executive fellow Bill George, who also served as Medtronic chair and CEO from 1989 to 2002. In a piece titled, “Choosing long-term leadership in a short-term world,” George urged executives to stay true to their companies’ missions and strengths. “Creating sustainable value must start with the alignment of all stakeholders around a shared mission and values in service to an organization’s customers, employees, shareholders, and all those who have a stake in its success,” he wrote.

Marrying mission and performance

I asked Martha what it was like to sit in a chair once occupied by someone who has literally written the book—make that books—on leadership, and he commended George and Omar Ishrak, his immediate predecessor, for their accessibility to Medtronic’s leadership team. “We keep in touch because they understand the mission,” he says. “But they talk about how much harder it is to be a CEO today. And so, we take the best of what they did and emphasize what we think still works, but then we’ve got to put our own imprint on that.”

And one of Martha’s imprints is the marriage of mission and performance. “My job and our leadership team’s job is to keep reminding our employees that we’ve got to be an ‘and’ company: mission and performance,” he says. “We know we can do both.”

How does your company combine performance and purpose?

Does your company combine mission and performance—and if so, how? Does one take priority over the other? Send your comments to me at [email protected]. I’d like to share some of your insights in a future newsletter.