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MassDevice: Is Intuitive a health care company or a robotics company?
Gary Guthart: I think we’re a high-tech, minimally invasive surgery company. We live at the intersection of high-tech and surgery. We’re not a diversified health care conglomerate – we don’t see ourselves getting into vaccines. I think where we can bring value is how we look at where surgery wants to go.
Minimally invasive surgery is really a simple thought. Surgery is a distinct treatment methodology, relative to radiation and relative to pharma, and it has advantages for particular patients relative to those other modalities. That’s the market we serve. So the question is, how do we do the things we’re good at to take surgery to a better place, through the hands of surgeons?
I think surgeons will really want to get to a place where they can address and fix diseased tissue easily and do as little damage to healthy tissue and recover patients as soon as possible. That’s where we come in. How can we provide them sophisticated tools to allow a highly effective treatment of a disease with as little damage to the surrounding healthy tissue as possible? In that sense, we’ve taken some nice steps from where we started and I think there’s a long way to go.
MassDevice: In terms of future applications of the da Vinci robot, will we ever see anything like unmanned military drones in medicine, with surgeries performed remotely across the world?
GG: There’s a group of people who are interested in that and some of the early funding at DARPA had to do with being able to do remote surgery from a long distance. The technology exists to do such a thing. It’s possible, but that isn’t the focus of the business.
When you think about distance, the way to think about it, from my point of view, is distance mentoring. We have technologies that allows surgeons, at a distance, to mentor another surgeon who’s in the operating room on another system with someone else. Think of it as medical Skype. That technology is interesting, where you can project knowledge at a long distance, and you can imagine that evolving more over time to do some different things. I view it as outreach, rather than something like, "I’m going to do surgery on the space station with the surgeon down on Earth," which has a high-tech appeal but isn’t a very common clinical case.
MassDevice: Where are we in the robotic revolution in surgery?
GG: In a certain sense, the health care system should be agnostic about whether or not outcomes are coming from robots, or not robots. You see both sides of that, you see some people who, seeing the word "robot," have a visceral negative reaction. And you have promoters who see the word "robot" and get a visceral positive reaction. The reality is that health care should not care. They should look at it and ask if you’re delivering a better outcome. And that has to be measured procedure-type by procedure-type.
We started in urology and we’re seeing studies showing better outcomes. It’s also being used in kidney cancer, we’re seeing strong outcomes there.
It’s not that robots take over all of surgery, because it’s a robot, but you have to look at it procedure by procedure. In any given quarter, a da Vinci robot is used in over 100 different kinds of procedures. Does it offer value in every one of the categories? No. But in a lot of them, surgeons are finding a lot of value and that’s where adoption occurs, procedure by procedure.
MassDevice: ISRG shares trade around the levels of Apple and Google. Do you use this as a measure of success? If not, how do you define success for the company?
GG: Never by the stock price. I never get up in the morning and look at stock price and say that it’s a measure of success. There was a long time when the stock was at $3 and that was never a measure of failure, either.
When I get up in the morning, the number 1 thing I care about is whether we are creating products that, in the hands of surgeons, are creating better value for patients. At Intuitive, we try to look at that with cold, hard facts.
The 2nd thought is, "Are we providing value for surgeons?" We’re not an automation company and, in a sense, the systems are computer-aided surgery systems and not robots. We measure success on this question by asking if they get great outcomes and are our systems easy to use and exceed surgeons’ expectations in terms of quality of our products. Does the product work? Does it work as intended? And, can he or she walk up and use it without a problem?
The 3rd element is, are the economics right for the hospital and the company? As I said earlier, the patient economics are clear, the payer economics are clear, the society economics are clear. But the hospital economics have to work, otherwise they can never purchase the 2nd system and the company cannot re-invest and keep moving.
The 4th thing I care about is have we created a vibrant, learning and progressive company? A company that is going to attract outstanding people into the future and retain the culture of innovation that we’ve built?
Fifth, are we making an attractive return on investment for people who have invested in us? Investors are on the list. It turns out, though, that they’re last on the list. The reason they’re last on the list is that it’s a consequence of doing the prior 4 right. If you do the prior 4 right, then the 5th happens. If you invert your priorities, you’ll destroy the company and destroy value.
MassDevice: Sometimes, in companies working on disruptive technologies, corporate culture plays a huge role in building and maintaining an edge. What’s the culture of Intuitive and how do you go about fostering it?
GG: I think company culture makes a huge difference, but the culture doesn’t do anything unless you have outstanding people. We have truly amazing people. The first thing with culture and creating it is who you hire. We look for people who have character first: both integrity and the courage of their convictions. The first rule of being disruptive is having people who believe they can change the world. Then we look for capacity. People who are smart, effective and who can learn – capacity doesn’t mean they have all the right degrees form all the right colleges. It means having the capacity to figure out an intricate playbook. We also look for people who have high energy and then good experience. That’s who we hire.
Our next rule of culture is we put people in small teams of outstanding people. If you looked at our product teams, or our sales teams, we would be much smaller than other companies in our space or our size. The reason we do that is we think small teams move faster. We think they understand problems more deeply and they’re more creative. I also think small teams adjust to problems faster and don’t tolerate lack of performance. There’s nowhere to hide in a small team. If someone isn’t performing, the team knows it and they either get better or get out.
MassDevice: Has that culture helped Intuitive perform even through the recession?
GG: It starts with value. I think what happened is that at the end of ’08 capital spending got tight everywhere. But patients were still using our products and utilization was growing all throughout the year. As utilization grew, demand grew for robotic surgery. We have a great sales team. They’re disciplined, professional, very smart. So when that demand grew on the procedure side, ultimately it flowed back into demand for systems and sales executed well.
Likewise, we have a strong culture of innovation on our product side. These teams are clear-eyed and passionate. They keep making products that help surgeons. So far, that’s been a really virtuous circle.
MassDevice: What are some companies you admire?
GG: I wouldn’t say we’re trying to emulate a certain company, but there are elements of companies that I really admire. I admire Apple’s focus on the customer experience and on executing outstanding products. I also admire that they do it with a relatively small team. Compare them to some of the companies in the tech space, like Google or Microsoft, HP or IBM, the size of the team required to create the kind of value they create. It’s a very focused team and they’re obsessive about creating a quality product and a quality experience and I admire that. We’re not a consumer company, so how that expresses is really different. We’re a medical space in a regulated industry, so you can’t just copy them.
I’ve admired how much value for the customer Facebook is creating. Another company with a relatively small team. Those are two Silicon Valley companies that are highly focused on creating great product and I think that’s important.
MassDevice: Where are you most comfortable – in your office or on the floor working to help solve technical problems?
GG: I hate being in the office. Sitting in my office is not my favorite thing.
There are 2 parts of the job that I derive great joy and personal satisfaction from. I love being with customers and talking to customers, because I believe our job is to create great products that they care about, whether that’s in the operating room – I’ve been in a lot procedures – talking to surgeons or reading the studies they produce about outcomes. I think that’s of high value.
And I love being near the technology. It could be sitting in with the design teams in the lab, it could be on the manufacturing floor. We manufacture our systems here in Sunnyvale. I’m on the manufacturing floor on a daily basis and seeing how these products come together, I think that’s a great joy.
MassDevice: Looking back, did you ever imagine yourself as the CEO of a big, publicly traded company?
GG: I didn’t. There was no point in my career where that was an aspiration. I always wanted to be in a creative place, working with people who are deeply creative and making things that mattered. I love working. I always have. The satisfaction for me comes from being with a group of people that I truly admire and respect and the 2nd thing is a passion for what we do. I have a passion for the products we make. My analogy here is: I’m sure Coca-Cola is a fantastic company but it’s not something that drives a passion in me. You have to find something that you really want to work on.
The 3rd part is you want to have a virtuous cycle, where you can create something that people find value in and that allows you to fund the next set of things so you can keep going.
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