Newbie at MDT. What caused the company to get to where it is? Bad leaders, bad products, bets that didn’t work out, too much fat in the org..???? Did we get here overnight or a gradual decline?
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I'll be a contrarian. Covidien was a very lean company company as a result of its 2007 spinoff and creation. It made money hand over fist. Medtronic probably paid too much but was out of sync with Covidien. From my viewpoint, MDT did not see a single beneficial idea or system from COV. When I joined MDT my immediate assessment was MDT is fat d-mb and happy. Minneapolis is the center of the universe. The universal impulse was to centralize control and functions. As to GE, I had a great career at the real GE under Jack Welch. Omar was much too weak and treated MDT with kid gloves. Geoff is a muddled, ineffective leader. Stock from 131 to 80. Just reset the exec bonuses and sc--w the stockholders and the employees holding stock options. Geoff is only starting to do too little too late in an attempt to save his job after five years of floundering.
Leadership level ( and wow, so many VP’s SVP’s), in a very low level, not connected and unable to lead
The company actually exists thanks to the senior managers level and below…
Look at a guy like Milo matcalf what the heck is he doing? Already started looking for a new position around boulder…
Medtronic used to have a corporate policy against owning aircraft. When they bought a company with a plane, they sold it.
Then they bought COV and Omar really liked the easy of getitng around to the much bigger footprint of the company. It also was a great help during the Hurricanes in PR, literally ferring product out every day.
Then Geoff decided he deserved $200,000+ perk every year of taking the corporate jet to his vacation home in Florida whenever he wants to get away and the board said "fine".
That right there puts the decline of this company on display.
The downward spiral started with the Covidien acquisition. Omar and his golden boy, Geoff along with Karen and the rest of ExCom and BOD are laughing all the way to the bank. The decline of the culture of morality really accelerated once Earl died.
In a nutshell, everything here, when put together as a puzzle, tells the story. Medtronic had its Tenents, put in place by the founder Earl Bakken. I believe that is at the core of what made Medtronic special. The further Earl got out of the picture, replaced by GE leaders bringing their proven failed GE philosophies, the further we slowly lost track of who Medtronic was. Our leaders now only care about their bonuses, luxury cars and Rolex watches, while they lay off the guy just trying to support their family. Four years of letting the older population go who knew the culture, because they were older and more expensive, but yet made significantly less than the executive bonuses alone. The acquisition of Covidien was the first big greed move. Done so that our HQ, on paper anyway, could be listed as Ireland in order to save taxes. The company really got knocked off its foundation then. The arrival of Covid just added to the company woes. The answer to the “why” is all here in the responses. Sad to see this once proud company flounder.
IMO there is a tendency for companies that stop finding organic ways to grow to use mergers and acquisitions to drive "growth". Inevitably they outgrow themselves and their capacity to manage. This is especially true in companies that acquire something they believe to be in their wheelhouse, but may not be.
Enter the Covidien acquisition and others of recent times. They are not within the expertise of the current design, quality, regulatory, manufacturing nor sales team. They distract and are never actually integrated (>10 quality systems in RTG alone) to sow the efficiencies of scale that justified the purchase.
That and GE. GE su-ks!
Geoff happened. He reorganized the company, purged qualified leaders he replaced with lackeys, and he drove fianancial performance measures that left us understocked and exposed to supply chain disruption. He also engineered some terrible acquisitons that have cost billions with little to show for it. Never underestimate the power of what one man can do....
In a nutshell, leadership moved away from patients first to shareholders first mindset while filling up our emails with MBA language to try to confuse us.
When I started, MDT was happy with 2-4% growth, being patient focused, delivering a consistent modest dividend to shareholders, valuing its employees and making strategic acquisitions. The Covidien merger jump started the decline, after a few years of stagnancy. Doubling the size of the company almost instantly led to too many units being too heavy while still trying to support two different business styles and systems. And the inversion sc--wed over thousands of individual MDT shareholders who had held the stock for decades by forcing capital gains taxes on them (they had to sell the old company, buy the new one, thus cap gains on the sale) while the C-Suite all got to pocket bonuses. After that came a drastic change in message internally to provide shareholder value. Then came the directive to increase cash flow and we in IT had to deliver 10% savings for 2 consecutive years which eventually led to outsourcing much of IT as COVID forced bigger cuts. The GE playbook is a large part of the story, sure, but there was also a conscious decision by the board and leadership to ignore all of the tenets of the mission in exchange for a larger profit margin and market growth.
Yup, GE was the downfall of MDT. The new CEO appointed in 2020 threw away the mission of putting patients first. The goal became to increase shareholder dividends above all other priorities AKA "Creating value for shareholders" and a bunch of other corporate jargon used to justify the poor decision of profits over patients, employees, and innovation.
Top reason is poor management.
Google Neutron Jack, and then realize that the previous CEO (Omar, former GE employee) handpicked his successor (Geoff, former GE employee) to extract value from the brand to return to Wall Street. Capitalism always wins, and paying out shareholders trumps all other objectives.