Bob Hopkins is Senior Vice President, Head of Global Strategy at Medtronic. In this role, Bob helps set the broad strategic direction of Medtronic, with a specific focus on capital allocation and portfolio management. He joined Medtronic in November 2021 from Bank of America Merrill Lynch where he was Managing Director, covering the medical technology industry, including Medtronic. While at Bank of America Merrill Lynch, and previously in various leadership positions at other organizations, Bob was regularly recognized as a leading analyst in the medical technology industry, and he has over 25 years of experience in the sector. Bob earned a bachelor’s degree in Political Science from Trinity College–Hartford and an MBA from Columbia Business School.

The Pulse: Before we get into Medtronic, I’d love to learn more about your decision to come to Medtronic and what got you excited about the role.

Bob Hopkins: Prior to Medtronic, I had a 25-year career as an equity research analyst at several major investment banks covering the medical device industry. It was a phenomenal seat that I did not give up lightly. The analyst job provided me with a unique perch from which to observe a dynamic, innovation rich industry. Over the course of that 25 years, I witnessed firsthand most of the major strategic failures and successes in the industry from companies large and small. 

The analyst job is an exciting one, but I had always thought that a strategy role would be something that I wanted to do. My thought was that working directly for a company would allow me to put the knowledge I gained as a critic to work helping with decisions that could have a more direct impact on a company. The consequences of the decisions made in a strategy role, especially at a company like Medtronic, are simply on a different scale than the decisions I made in my previous career. When Medtronic called to see if I would be interested in leading strategy, I jumped at the chance. Medtronic employs over 90,000 people, generates over $30billion in revenue annually and has been around for almost 75 years. The opportunity to try and help this important company navigate a complex healthcare landscape and position the company for the next 75 years was one I could not pass up.  

The Pulse: Since starting with Medtronic, what are some things that have surprised you, or have been unexpected? Discuss challenges and opportunities you have had to work through.

BH: To start – I completely underestimated the power of working for an organization that is built around creating technologies that save lives. Having worked at investment banks for my entire career I did not understand how large a motivating factor the healthcare mission can be to attract talent and keep talent. Medtronic’s patient focused mission is the glue that holds the company together and motivates our people. We have to innovate, compete, and earn the right to benefit patients every day, but working for a company with a purpose like Medtronic’s has become a source of great pride for me personally. 

It can be a challenge for large companies to move quickly. That’s not a surprise. What has surprised me though is how hard it is to drive change within a large organization even when there is a strong will and desire to act differently. Medtronic is implementing significant changes across the company and we are making clear and quantifiable progress, but it has taken a significant amount of organization, hard work, time, and in some instances new people.

I would not call this one a surprise as much as a learning. I did not appreciate the importance of the financial planning and analysis group within an organization. That may sound naïve, but what I have learned is that the process they use to model the business and set targets can vary from one company to another. If I were back in my old analyst seat, I would ask a lot more questions around the FP&A process. The importance of strong leadership generally is obvious, but I now see that firsthand. I think investors spend far too little time getting to know the division heads and how they think.    

Lastly, for those of you considering careers in investment banking or consulting it is also worth mentioning that spreadsheet math, while incredibly valuable, does not consider real factors like resource utilization required to successfully execute mergers or divestitures. Understanding how much an organization can take on is a critical consideration. 

The Pulse: Tell me more about how you think about strategy and why it’s so important.

BH: A company needs a vision for how it will create and sustain value. A company also needs tactics to realize that vision, but the vision or strategy must come first. Employees need to know where the company is going and why a well-articulated corporate strategy is the best way to make that clear. 

In my view a corporation’s strategy must check three key boxes. It must be easy to articulate and understand. It must focus on core competitive advantages and a vision for critical industry mega-trends. And it must make economic sense. If I were to add a fourth, I would say a strategy should  be dynamic especially in high velocity change industries. 

There are thousands of great videos and quotes on the importance of strategy. My favorite quote is: “tactics without strategy is the noise before defeat” (Sun Tzu). My favorite video is a 5 minute Steve Jobs interview where he talks about the importance of starting with the customer and working backwards versus starting with a technology.  

At Medtronic our strategy is simple. Our strategy is to lead through innovation driven growth in attractive markets where Medtronic can make a difference for patients and customers. For those not familiar with medtech by “lead” we mean leadership in a category. Underneath that simple statement are critical assumptions about where we think we have competitive advantages; what mega-trends are driving change in our markets and the outlook for our markets broadly. You can’t “peanut butter spread” with capital allocation. You must make tough choices with an overarching strategy in mind. Being resilient with respect to strategy is critical as we have to stay focused on the areas where we are best positioned. In order to maintain that discipline, everyone needs to understand the strategy of the broader organization and the logic behind it. Each business needs to understand their role within the company to deliver the strategy. Defining roles for everybody within the organization and making sure that everyone understands the strategy are two absolutely critical components of being successful. 

The Pulse: How do you effectively define strategy and make sure everyone is rowing in the same direction?

BH: It is all about communication and the simplicity of the message. Clarity focuses managers on what they need to do to meet goals. Defining roles and setting goals that align with is a core part of the strategic planning process inside any company.  Inside a large company it’s the job of leadership to make those determinations and then to communicate those things clearly to employees.

The Pulse: How does a company like Medtronic balance legacy areas, where they were best in class, with new areas, which are emerging and may not be in the Company’s core focus?

BH: Well, our analysis around which markets we want to focus on and which mega trends matter must remain dynamic. And a company needs to be honest about how its competitive advantage changes over time in different markets and what it might take to regain leadership in cases where a company falls behind. 

It’s critical to remain true to your core and not chase markets unless competitive advantages exist, but a strategy can and should adjust as markets change. For example, artificial intelligence and the shifting sites of care are two trends in healthcare that have recently become much more important and must be factored into a long term strategy for medtech companies today. 

Another example: Medtronic lost share in the overactive bladder market over the last five years. But after reassessing our position and the market we believe we have the technology and strategy to return to strong growth and maintain leadership in the market.  

The Pulse: How does an organization of Medtronic’s size maintain sustained success?

BH: For any company in the medical device industry it all starts with a strong core rooted in operational strength and product quality. That’s table stakes. Next, a company must decide where to focus. The constant evaluation of which medtech markets are the most attractive and where a company can lead through the creation of innovation that customers want and patients need is critical.  

The Pulse: Where do you think Medtronic excels? What will be a driver of future success at Medtronic?

BH: In terms of where MDT excels – three areas in particular stand out to me. 

Medtronic is a category leader in its three largest businesses – surgery, cardiac rhythm management and cranial / spine. The expertise that has come from being a leader in these markets has put Medtronic in a position to drive the kind of innovation that expands markets and sustains growth to benefit a greater number of patients around the world.

Medtronic has a clear and differentiated core competency in electronic stimulation, which includes multiple large markets Medtronic participates in today such as pacemakers, ICDs, neuro modulation, and overactive bladder as well as a number of newer markets where Medtronic does not have a presence. 

Medtronic has very strong global distribution with particular strength outside the US. 

For Medtronic, the key to future success will be driving innovation and category leadership in our core must win markets; maintaining the right execution mindset; and making sure that we leverage our scale such that the benefits from that scale far outweigh the challenges of managing a large organization. We must make the tough choices to be able to allocate sufficient capital to our highest return and biggest opportunities where we are well positioned. 

Interviewed by Dan Varrichio, January 2024.

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On Feb 15-16, 2024, Wharton is excited to feature more expert perspectives at our annual Wharton Health Care Business Conference. This year’s conference is themed ‘The Resilience Edge.’ Conference details and tickets are available here.