Creating the Future of MedTech Through Purpose with James Corbett, transformational MedTech CEO and Board Advisor

[00:00:02] Hello, everyone. Welcome back to the Outcomes Rocket. I'm excited to be here on another episode with you today. I've got a special treat for you. And our guest's name is James Corbett. I don't think Jim needs an introduction. But for those of you that don't know him, he's a serial MedTech entrepreneur. He's been in MedTech as an executive over a lifetime, president or CEO over the last 30 plus years.

[00:00:31] With companies like Boston Scientific, EV3, AlphaTech and others. He's done over a billion in financing. He needs no intro. Jim, welcome to the podcast. So glad to be doing this with you. Thanks, Saul. Look, you've done so many things. And by the way, it was so great to connect with you at LSI this year at Dana Point. That was fun.

[00:00:52] It was. One of the great things about LSI is you're bringing together all people who are trying to do something that's new and different. That is what's happening. There's financing people there, but they are really there to feed off of the ideas.

[00:01:11] And the ideas and what the various entrepreneurs who go to LSI are going there for, they're looking for money. The investors are looking for places to make it. The guys who are looking for money aren't really looking for money because that's what they do. What they're doing is they're looking for money to fuel the imagination of tomorrow. And so it's really been interesting in the last, because I think it's seven years old, maybe eight years old.

[00:01:36] It's kind of amazing to have watched it become essentially the JP Morgan Healthcare Conference of private companies. And that is a quote that Scott Pantel will want to be marketing. I love that. No, it is a really well done meeting. In fact, it was my first year at the meeting. I don't know how I let so many years go by without attending. And yeah, I just had a brilliant time going again next year. Do you do the Europe one too?

[00:02:05] I don't. And I often didn't do this one. It happens to be that I'm personally exploring what I'm going to do next and thought that by going, I would get exposure to some things, which I did. But it happens to be, I live in Orange County. So it's convenient. I'm in San Diego too. So it was easy for me. Yeah, it's kind of like, I was like, I absolutely should go. And I'm glad that it's worthwhile for sure.

[00:02:31] That's great, Jim. So look, let's get into it, man. Like 30 plus years as a leader in medtech. I mean, it takes a specific kind of DNA for that. What inspires your work in medtech and healthcare? You know, at the beginning, I graduated from college at University of Kansas. And my first selling job was skipped office products for six months.

[00:02:56] But I went to work for Warner Lambert. And then I went to work for what is now Edwards as a sales rep in Chicago in the early 80s. And what attracted me to the environment at that time was we were selling heart valves and swine against catheter. So I was in the ICU and I was in cardiac surgery.

[00:03:18] And, you know, you were really part of the care team at that time. And two things really kind of framed what I would later find to be my passion. And that is people and purpose. So the people for me as a salesman were the patients and my customers. And the purpose was to make a difference in their life, right?

[00:03:45] You're having your products work and be used correctly. And you're doing hemodynamic monitoring at that time where you're managing the flow of blood throughout the body while the patient's healing from a major surgery. And they don't always live. And the point being is if their chance to live is better, if they're using your products correctly and appropriately.

[00:04:08] And so that became a real people purpose moment for me really early in my career. As I grew in my career, because along the way I've done basically every job in one way or another. And it really accelerated. Baxter, which owned Edwards at the time, their objective was really kind of interesting. There's a great book called Career Imprints. It's probably a 25 years old book.

[00:04:36] Career Imprints. Career Imprints. And it looks at the development strategy of four companies, the career development. And it looks at Baxter, Abbott, Merck, and J&J. Oh, really? That's pretty cool. And the profile of how those companies develop executives is incredibly consistent and very different from each other. Oh, really?

[00:05:03] Yeah. J&J develops functional experts. So you're going to do marketing or manufacturing in Germany on diapers and in Brazil on coronary steps in your career. But you're going to be in marketing, right? Or you're going to be a manufacturer, you know? Yeah. Functional expertise.

[00:05:21] Merck was a scientific oligarchy. So you need a PhD, you need to invent amazing things, and that's your pathway to career development. Abbott really was a diagnostic company at that time. Love the book. Man could they sell. Strategically, no clue. Commercial execution, they were awesome. Right?

[00:06:13] Mm-hmm. I had flown to a foreign country when I went to work for Edwards in 82. And I was a salesman. It was like a big deal for me to go to a national sales meeting. Mm-hmm.

[00:06:27] And then in the end, I opened up subsidiaries around the world and acquired companies around the world and integrated them and did all sorts of things. But now let's fill out the people and purpose issue. I took a little bit of time to develop the why. Because there is an interaction between it. It's not just the patient. It's not just the customers, which include the doctors and the staff and the people in the hospital.

[00:06:52] It's the employees and the employees and their development. And it's shareholders. So you have this kind of interactive, interdependent ecosystem of employees and shareholders and patients and customers and doctors. They all depend on the excellence of what you do.

[00:07:14] And it's been inspiring because you learn things along the way all the time that really help you in the future. So very often, I recently, and I shared it with you before we started this call, I compiled everything that I have done because I'm really leaning into artificial intelligence. And I've got an AI command center. So JimCorbettAI.com. You can go to it and use it.

[00:07:40] And I compiled it. And I compiled it for the purpose because I've realized in the last 10 years that I use all that stuff. I saved it. I used it. And I use it to communicate. Like there's one that's in the command center called managing up the curve, which is really talking about people, selection of people, development of people, managing and intervening on people when they're not doing as well.

[00:08:04] How to do it. How to do it. How to assess it. I actually developed that when I moved to Tokyo. And I was trying to change the organization. And I had to figure out a way to communicate with Japanese cross-cultural. And so I conceived of the idea of managing up the curve. So you can imagine curve goes up left to right. And when it's in its steep slope is when high change is happening.

[00:08:33] And what you have to imagine is where you're going to be a year, two or three or four years from now and what your employees need to be able to do. So when you select them for the job, you have to select them with the idea in mind to develop them to be able to work their way up the curve. And I developed the model that's in there so I could communicate cross-culturally something the Japanese didn't think about.

[00:08:59] They have a word in their language. I mean, it sounds like two words, but it's one word. Bachi, bachi. Bachi, bachi means step by step. So Japanese get ahead by thinking about the step ahead of them. They don't get ahead by being Sam Altman and doing open AI. That's not how they think. So I used a whiteboard to communicate with the team and had a translator. And that's where I developed it as an example.

[00:09:29] So putting all these into my AI command center allows me to proliferate them, which before required me to be present all the time, which you can't do. Right. So people and purpose, shareholders, customers, customers include patients, doctors, nurses, hospital, and shareholders. That is what makes this business so exciting.

[00:09:55] Look, you definitely are passionate after all these years and still in the game and you keep reinventing yourself. And today it sounds like you're off to the next thing. What are you focused on? And talk to us about what the future looks like. The future really lies in two separate domains in terms of what I may or personally may do or not, but also I think in the macro sense.

[00:10:22] There is going to be new categories created. Okay. And then there's going to be operational improvement. So let's talk about category and creation for the moment. Are you familiar with what a PFO is? PFO is when you have a hole in your heart and blood can go left or right to left. They created a device that would plug the hole. Okay. St. Jude Medical is the biggest franchise in that right now, which means to have it. Yep. But that happened 25 years ago. About.

[00:10:53] That was a new category. Okay. Uh-huh. Shockwave, which is little tripsy in the coronary artery to displace plaque. New category. Okay. Right. Right. The watchman, which in your heart and the left atrium in the upper quadrant, you have a left atrium appendage, which has no practical purpose today. It's a sack.

[00:11:19] And what it was sitting there for, kind of, if you look back from when we were on all fours, it was to give the blood extra pumping capacity of blood at high exercise rate. In the case of a human today, if you have AFib and your heart's quivering, the blood will pool in the left atrial appendage, create clots, which become a stroke. Uh-huh.

[00:11:49] So the watchman, which is a product that Boston Scientific has turned into a big category, fills that need. Uh-huh. And it's become a home run. But it took a long time to happen. But that's a category. You could see the trend here. So there's going to be new categories created. Transcathetic valve was a new category. It looked like it was going to be applicable to old people who couldn't have surgery. And now it turns out to be applicable to everybody, basically. Uh-huh.

[00:12:16] So you're going to have continued creation of new categories. And we're going to figure out how to get them to market sooner. Obstacles, the biggest obstacles to getting them to market sooner is scientific evidence. But then the obstacle is the American Medical Association CPT process and CMS payment process. Those are the enablers.

[00:12:40] So becoming one of the things for us as an industry is to figure out how to cause those to be more effective working together. Because they're very, very poorly managed now. And by the way, by them, American Medical Association, for example, manages the CPT process by having rules that they follow only conveniently. When it's useful for them to follow the rules, they do and assert them. And when they want to break them, they break them.

[00:13:10] Because they have a congressional monopoly on the CPT code. So until there's a reason to do it better, it won't. Right? So categories. And then the second topic is operational excellence. And one of the most common things in today's world is that people do not understand how to run a company operationally efficiently. So let me give you a simple example.

[00:13:40] What should your service level expectation be? Someone calls it in orders. What percentage of time should you be able to ship that today? A hundred percent. Yes. You won't find very many companies that have that as a goal. And by not having it as a goal, they accept things. So when you have it as a goal, what you then have to do is seek perfection. Because you'll have all these stock keeping units that don't have much volume.

[00:14:09] So what's the answer? A ton of inventory? No. The answer is very high quality standard and very short cycle time. So make this week what we sold last week. Replenish it. And it's a working capital issue. Okay? Yeah.

[00:14:27] So by being perfect with lean manufacturing, with total quality and 100% service level, you actually use less money than if you just load up on inventory so that you can serve the customer. Because you tie all your money up. And what you really want to do is optimize the use of your working capital. Serve the customer and have more money available for initiatives.

[00:14:52] Whether it's clinical research or product development or whatever it might be. So those are two things that attract me. If you've got a business that's commercially active, I will tell you all the things that are in my AI command center you would use. If you wanted to learn how to do lean manufacturing, my AI command center will tell you how to do it. It'll tell you how to manage it.

[00:15:21] Not how to account for it. How to manage it. So you have this AI command center. And before we jumped on the podcast, you walked me through it. This is available. It's JimCorbettAI.com. Anybody could come on here and use it. They don't even have to pay for it. That's right. So why are you doing this? Because I want to proliferate it. So when I do it, it is a state of play now.

[00:15:49] Yet, most, I'll say 90% or better, most companies and most executives are using AI to do mundane, easy things easier. They're not using it for transformation. Alternatively, the IT departments of big corporations are trying to stop the proliferation of AI, and they can't. So all they're doing is retarding their company's future. So I'm doing this because I want to accelerate the rate of change.

[00:16:18] And someone who is going to want me to work with them is going to want an executive who is looking out on that managing up the curve idea and is preparing themselves to lead the company through the process. You know, there's a gentleman. His name is Chuck Bolton. And the Bolton Group is the consulting firm. But it's Chuck.

[00:16:44] Chuck worked for me in my boss's scientific years as the head of international HR. And he created a consulting firm on generative AI. And so he worked with me on this and helped me learn all these skills. And all I'm doing is putting the work in an organized manner my life experiences professionally. And so that's, nobody should, for example, say, hey, Jim, I want you to come here and be CEO.

[00:17:12] And I show up and I want to transform the company on day one. I don't want anybody surprised by that. So actually, whenever I send my resume, I send a link to my grant center. Which launched yesterday. Okay. All right. So we're inaugurating here. I've had it. Not yesterday. Day before yesterday. I've had it in a PDF version, but I hadn't fully built it out. You're launching today with us. That's right.

[00:17:41] And you just need to go there with your issues and get some feedback. So I love it, by the way. You got six different agents, the Corbett AI playbook, raising capital architect, the commercial execution engine, managing up the curve, managing all the self-assessment, and then the executive assessment. And then MedTech launch board.

[00:18:08] So is the idea, hey, this is self-serve, power yourself up. You'll get to a certain point on your own. If you're liking what you're getting out of this and you want the human, you give Jim a call. Absolutely. Okay. Absolutely. You know, in the course of my career, I've had very interesting challenges, most of them high growth, one term.

[00:18:32] The high growth, though, if you took the Simon Boston years, that was just short of 32 quarters of 50% or greater consecutive growth rates in a row. And then if you go to DV3, it was also just about 32 quarters of the same. At that rate of growth, you have to kind of kill or be killed.

[00:18:59] You really have to respond to the moment. One of the biggest learnings of my career around the people and purpose element is you're really doing your people a disservice. When you hire them, promote them into a position that you haven't prepared them for and that you don't actively prepare them for the business that will be there one, two, three years from now.

[00:19:27] And so one of the things we learned in the Simon Boston years, because it merged in 95, is that I would put somebody in a job and they could do it in January, but they couldn't do it in December. Because the company would have changed so much, right? The company changed so much. Yeah. With the massive growth you guys were... Those are the demands. I remember I was hiring. This was like, I don't know, if I go on to too many stories, you just ring me in.

[00:19:55] But I'll never forget, I was hiring to go direct in Australia and the economics were pretty clear. It was post-merger. You had to... Australia, to function, had to have revenue of 10 million or more to not use money. You know, so... So fun, yeah. And I was trying to hire somebody and the guys I was trying to hire kept giving me a three-year plan that got us to 7.5 million in three years, which means we're going to lose money for three years.

[00:20:24] No plan to get to 10. And I'm just like, I'm not hiring these guys. This is like how they think. So I'm talking to the guy who was president of the Asia-Pacific area. And I said, who's this guy that's in Melbourne? He goes, oh, that's the expatriate. He manages Asia-Pacific distributors. I said, yeah, but we're firing all of them. He goes, yeah. I said, tell me about that guy. His name was John Chalhorn. Still is John Chalhorn. And John was... I said, well, tell me about it.

[00:20:52] He goes, well, he was a search and rescue Navy helicopter pilot. And I go, really? Yeah. He's the kind of guy I like. So flying to Boston from Melbourne, you know, so he comes for an interview. And I like this guy. He's all business. I said, John, I said, here's the thing. We need 10 million. We need 10 million as fast as you can get it. And you need to make the investments that enable that. And you need to build a team that enable that. And we talked about it in greater detail.

[00:21:22] And I said, if you need something, I don't want you to go through the system to get it. Call me. Direct. And you'll get it in one day. In year one, what do you think happens? 12 million. 12 million? Nice, man. In year one. Great. He did 20 in year two. And it tells you about the right stuff, right? Yeah. He had the right. You got to get the right people. You got to get the right people for these jobs.

[00:21:50] That is so the thing. And he went on to be CEO of a company, one of many in my alumni. And, but it really demonstrated about the importance of the person. And that will not go away with AI. Actually. And definitely won't. Actually. It'll be acceptable. What will happen is you have the, like me, I'm an early adopter of AI relative to my CEO peer group.

[00:22:19] And I will make change faster. I will be so far ahead that it'll be a competitive advantage because of AI combined with my implementation. Yeah. Yeah. Look, Jim, I think this is fascinating. And I think the message for the leaders listening to this is never stop reinventing yourself. You've got to hire the right people. Be clear about what you want and don't settle.

[00:22:48] And as you think about all these things that, you know, you're doing today in this reinvention, what would you say is one of your biggest setbacks and a key learning that you feel was an ultimate game changer, a shaper of who you are today? It's really a great question. I've had actually, although many successes, I've had many setbacks along the way because things don't always go just exactly right.

[00:23:17] You know, some of them are technical, you know, there might be IP related or IP conflict. But those aren't the ones I think that really shape you. What shapes you is having to manage through a particularly difficult situation. And probably one that shaped me in a big way was the building of EV3. Okay. And in the early years of EV3, we went awry.

[00:23:45] And we had to reframe the portfolio and change our ultimate outcome. And that happened in year two or three out of the eight I was there. And I remember we had gotten into a situation where our commitments to the portfolio were in excess of the money we would ever be able to raise. And we were funded primarily by Robert Pinkett's private equity.

[00:24:14] And the math didn't work. And I remember going to a meeting where we laid out the alternative strategy, which we ended up doing. And there were people who were opposed to that. They were the dreamers. The dreamers who came to the company were going to create all these new things. We just can't pay for them. So, yeah. And that happens all the time. That's a tough conversation. Yeah.

[00:24:42] And I was having it when the board went with my strategy. And as I'm implementing it, I mean, I'm having to make changes in 30 days that just want to make you. Like, you knew in advance that you were going to have to do that. You just would find a way to avoid it. My MOLA, my Danimoire, there were two of them. Yeah. It was in January and it was in Minnesota. Okay. This guy from the Minnesota Business Journal called me on the phone and said, I'd like to do an interview.

[00:25:13] I understand you're making a lot of good changes. I said, yeah, yeah. No. We don't need to talk. He goes, well, I'm going to write this. I go, no, no, no, no, no. You can't write that because some people were leaving the company who I cared about. And he was going to write about them specifically. And I said, you can't do that. He goes, okay. Well, you do an interview with me and I'll let you control what I'm writing about those people. I said, okay. So then he comes. So he kind of strong-armed you into that.

[00:25:42] For sure he did. So he comes in and he does his interview. And at the end of the interview, he's taping it. And this is about Juan. Yeah. And he goes, Dan, he says, so what's it like to be around here right now? I go, you know, I was right on strategy, execution, doing our job, right? Kind of real fundamental. And he kept asking me in different ways, three, four, five times. And finally I said, you want to know what it's like? He goes, yeah.

[00:26:13] I said, I show up every day with a sledgehammer and I swing it until things go my way. And it was seven at night. And he hits the button on the recorder. He says, perfect. Thanks. Out the door. So a week goes by and out comes the Minnesota Business Journal. And we are the lead story above the fold. DB3 has made big changes.

[00:26:41] And then there was a highlighted quote in bold attributed to me. I show up every day with a sledgehammer and swing until I get my way. Oh, my God. And I was like, oh, my goodness. So I called up the assistant to my partner at Warburg. And his name was Phil.

[00:27:08] I said, Phil, I need to talk before anybody reads that damn business journal. He goes, oh, I just got off the phone with him. I go, what were you doing? He goes, I was ordering 100 reprints. I go, what are you going to do with them? He says, we're going to send them to every one of our portfolio company CEOs and tell them that this is what we want. I said, oh, not what I expected. But never mind about the meeting. About a year goes by.

[00:27:37] And by this point, a very high up in the partnership member of Warburg was attending because they were worried. And my partner and we were going to dinner after board meeting. So this is the second moment. I had figured it out by this point. And I could tell that we were going to make it. We're going to become profitable. And we're going to become a successful company. But you wouldn't know that if you weren't me, necessarily. Right, right.

[00:28:03] And I had just recruited a head of manufacturing from Baxter and moved him from Arkansas to Minneapolis. And this is like the hard moment. So I have a meeting with my investors right before dinner where they say, we want you to know that we're not going to be able to keep funding this forever. And if you don't get it turned around, we'll have to break it up so long. I said, okay. They said, what do you think? I said, well, you own the company. It's like your company. They said, well, tell me more.

[00:28:33] What do you think? I go, you really want to know what I think? I go, did you see that guy, Mike Cameron, today? He go, yeah. You know, I need that guy. And we're going to be successful. And we're going to be successful because a person like that came to work for us. What you just told me puts me in an awkward spot. I either have to tell them the truth or lie. If I tell them the truth, they won't come. And I won't lie. So my advice to you is keep those ideas to yourself.

[00:29:07] Right? Listen, so it's just like tough conversation after tough conversation. And that's part of leadership, right? Love these stories, Jim. And I feel like we could do more of these in the process of rereading Speed of Trust by Covey. And one of the things that he says is that results are one of the best way to develop trust. And being real with people. With a couple minutes left here. By the way, you're an example of that.

[00:29:35] What closing thought would you leave for our listeners and viewers? And where can they find you? Besides, obviously, we're going to link up JimCorbettAI.com. So if that's where you want everybody to go, that's where they can go. But like, where can they find you? Well, I'm on LinkedIn, of course. And they're welcome to contact me there. In terms of parting thought, one of the things when we were grinding away at EV3, I realized we'd lost touch with our mission.

[00:30:04] The part of the people thing. And I really went out of my way to establish a community or place for us, for us as a company. And that transformed the culture of the company. So when you think about people on purpose, the heart of your people create the heart of the community and create the heart of the people that cause your purpose to occur.

[00:30:31] And so therefore, stay true and always be thinking about the purpose. And the purpose includes the patient, but it includes the community and includes your employees. And you want to really create a culture that's enduring and that cares about people. And that will be my number one thing. I love that, Jim. I mean, what a great way to close here. Just an incredible opportunity to chat with you. I always learn so much when we connect.

[00:30:59] Folks, Jim Corbett, an extraordinary leader in medtech. In the show notes, you'll find a link to his LinkedIn as well as a link to Jim Corbett AI. He's available right there for you. And so make sure you check him out and the work that he's up to. Jim, this has been an incredible opportunity. Really appreciate your time. Thanks, Saul. My pleasure.