While tapping the 46-year-old Mahoney, and needling his rival in the process, is sure to delight co-founder and chairman Pete Nicholas, who exactly is the man that will be responsible for leading Boston Scientific into the next generation?
For now we know that he was one of the early front-runners for the job.
“Mike was essentially, from very early in the game, almost a perfect match; and that’s culturally, too,” outgoing CEO Elliot told an investors’ conference today. He added that Mahoney will continue to execute the turnaround plan that is already underway. “The last thing you want is a new CEO coming in who says, ‘I’m the new CEO, I’m going to blow up this plan,'” he said.
In addition, Elliott said the long transition period will allow Mahoney to get up to speed. Hank Kucheman, the company’s CRM group president, will run the show until November 2012.
“Hank’s running two-thirds of the business and it fits in with his plans. There are a number of businesses that Mike has no exposure to,” he said “The timing allows Mike to learn all the things he doesn’t know and to participate in the delivery on POWER, and allows Hank to continue on. … It’s a bonus. It may look a little peculiar, but it’s a bonus for Mike and a real bonus for the company too.”
If his resume is any reflection, Mahoney is no stranger to learning on the fly.
The young executive has spent the bulk of his professional life working in a diverse array of businesses within the medical device field, with experience in the in the diagnostic imaging, cardiology services and health care IT spaces. He started off in a sales role for GE Medical, according to a 2008 interview he gave with Orthopedics This Week.
“I started off in sales and marketing,” he told the publication. “My first job was actually selling nuclear medicine cardiology systems to every little hospital in the Carolinas…I’ve been in a lot of sales roles, marketing roles, sales and service roles on the commercial side. When I became the President of the Healthcare IT division it was a lot of fun. We grew that and did a number of acquisitions. Now it’s a multibillion-dollar company within GE.”
In 2001, when GE and J&J started a joint venture called the Global Healthcare Exchange, Mahoney volunteered to run the company for GE, which acted as a web-based business-to-business service to automate transactions from hospitals to suppliers. The business was eventually spun out with Mahoney at the helm, running as a stand-alone company for the better part of six years before he accepted a position as the top man at DePuy in 2007.
Along with former DePuy Orthopaedics president David Floyd, Mahoney was supposed to turn JNJ’s ortho business into the biggest name in the space.
He told Orthopedics This Week that in order to accomplish his goal, he would need to “create a culture where employees are empowered; they’re customer focused; they’re innovative and they’re competitive. They’re also creative so you can unleash what we call the “winning spirit.” It’s a much more competitive winning culture that’s less risk averse.”
The combination worked for the better part of two years until August of 2010, when the company recalled its ASR XL acetabular hip replacement and resurfacing system off the market due to a high rate of revision surgeries.
Since then, numerous product liability lawsuits have piled up against DePuy, alleging that the company knew of design problems with the implants but failed to adequately warn physicians. DePuy introduced the ASR in the U.S. in 2005 after winning 510(k) clearance from the FDA.
Johnson & Johnson officials said the company paid nearly $1 billion in legal costs and settlements in 2010 related to the hip implant recall. And more than more than 1,700 suits have been filed since the direct filing option was opened in January of this year.
While the controversy eventually ended up costing Floyd his job , Mahoney was promoted to lead J&J’s diagnostics and device business, replacing Alex Gorsky who was named vice chairman of the New Brunswick, N.J.-based medical products conglomerate. It is widely believed that Gorsky will eventually replace William Wheldon when he finally retires as CEO.
With his ascension to the top job at JNJ seemingly out of the question, Mahoney now will lead his former company’s biggest rival and undertake his biggest career challenge to date in turning around the fortunes of Boston Scientific.
It’s a job his soon-to-be predecessor says won’t be nearly as difficult this time around.
“The fact that we were able to [deliver on the turnaround] quicker is an enhancement to the company and that’s what motivated me to leave sooner,” Elliott said. “I wasn’t really looking to be a CEO after Zimmer. I had my own plans. The message you ought to take from this is that it’s going better, not that there’s another shoe to drop.”