How Stryker Spine approached the K2M integration and what's in store for 2020: Q&A with Eric Major

Written by Laura Dyrda | October 27, 2019 | Print  |

Stryker has been in the news over the past few years for its continued acquisitions and innovations.

Last year, Stryker announced its $1.4 billion acquisition of K2M, which finalized on Nov. 9, 2018 and K2M CEO Eric Major became president of the Spine division. In September of 2019, Stryker also signed a definitive agreement to acquire Mobius, a point-of-care imaging technology company, for up to $500 million in September. Since the date of this interview, the acquisition has successfully closed.

During the North American Spine Society Annual Meeting in Chicago, Sept. 25-28, Mr. Major sat down with Becker's to discuss the integration between K2M and Stryker, and where spine is headed in the future.

Note: Responses are edited for clarity and length.

Question: It's been just about a year since K2M and Stryker came together. How is the integration going and what do you expect from the spine division going forward?

Eric Major: The integration has been a lot of work for everyone across the entire organization, but it has been a really exciting time. As we walked into this integration, we looked at previous spine integrations, what has gone well and what hasn't gone well, and what can make this a best in class integration so we can focus on running our business. We are about 10 months in — we closed on Nov. 9, 2018 — at NASS. Last year at NASS we announced but hadn't closed the deal yet.

One of the things I'm most proud of was how quickly we moved. It was very hard, but by moving quickly what we learned was it took a lot of the anxiety and ambiguity away. Nobody at any level of an organization functions well amid uncertainty. We made decisions on leadership very quickly; we announced our senior leadership team on the day of the close; we put together six legacy leaders of Stryker and six from K2M, so we had leadership from both organizations. We made decisions about our U.S. field leadership within three days for our area vice presidents, and our regional managers within a few weeks. Then we had every single employee knowing their role on the go-forward team done by Jan. 24, 2019.

It was a lot of work that made for a very difficult three months, but it was so important for each individual, because what it does is provides them with the ability to know where their future is going and allows us to set the foundation for the business.

You are bringing two sales forces together that had been competing, and then overnight they are part of the same team. By July of this year, in the first six months of 2019, we had stabilized nearly the entire U.S. sales field.

Q: Was there anything from your perspective that was really important for all team members to know as they went through the process of becoming one team?

EM: To actually get the team to come together, No. 1 is facetime. You have to be with people. We had our global sales meeting where we brought in everyone from Stryker Spine, and we also had four very large meetings in the U.S. across May and June. Those meetings brought the entire field force together, roughly 200 people putting their hands on both product lines and getting to know each other and learning about legacy Stryker and K2M products.

Lessons learned include: you have to make decisions quickly, understand that you must set your vision as to where the division is going, let people know where they sit within that business and then make decisions around products and get people in the field together to understand the focus of providing best in class service, responsiveness and listening to our customers every day.

Q: There is always more integration with the smaller acquisitions, but what are you excited about for the portfolio today and where it is headed?

EM: The portfolio where it stands right now is very exciting. We have an integrated 3D printed portfolio as it stands now between Tritanium and Cascadia. We have a leading complex spine and deformity portfolio that provides spine surgeons with nearly everything they need to treat their patients. Together with EVEREST and MESA, we have built out our degenerative portfolio with the addition of Serrato.

When you take a step back and look at the platform today, you really are able to sit down with spine surgeons and say we have so many of the core technologies you need to treat your patients. We are always trying to innovate and incrementally enhance those technologies. One of the things that happens with large companies is that innovation can slow down, and it becomes more difficult to roll out new products as often. We are excited that we have not changed our focus. The market should expect our product development engineers to continue launching new products to keep building out the portfolio.

I'm excited about the fact that we have such a broad portfolio today that touches on degenerative, minimally invasive, complex spine, and really allows us to help surgeons treat their patients.

Q: It must have been a big change for you, after starting your own company and building it from the ground up, to join a corporation with a huge infrastructure behind it. Was there anything for you that was surprising coming into that situation? What have you learned?

EM: The big thing is that people have different perspectives of companies and individuals, but until you are inside, you don't know what is really going on. Being now part of the Stryker team, what has been so interesting is how close the cultures really were between the two legacy organizations. Focus on the customer and the patient: what are the needs of the surgeon customers and their patients. The other really interesting thing is how big Stryker is. The cross collaboration between the divisions is impressive from my perspective. One of the most exciting things has been to travel the world, meet with the spine team in France, Switzerland, Asia Pacific or Ireland, to find a way to work together and collaborate and realize that we are one Stryker and under one Stryker, when we work together, we can be an unbelievable resource for a hospital or surgeon.

We have a product called SpineMap Go, which only requires two fluoro shots before you are ready for live navigation: it's pretty exciting. The one thing we didn't have was intraoperative imaging, hence the excitement around the Mobius acquisition. That really lets us offer true intraoperative imaging.

Everyone on the floor is talking about enabling technologies. It's imaging, navigation, robotics, and then virtual, augmented and mixed reality. If you pull all of these technologies together and apply predictive analytics across the continuum of care, that's where I think the future is going. With Mobius, the team really understands imaging and all the needs for the customer in the imaging space.

Q: Surgeons are feeling pressure from all sides to deliver quality and control their costs. They are caring for patients in a value-based environment. How do you keep that front of mind when you are developing technologies or working with your surgeons to make sure they have what they need?

EM: We now can leverage the size of Stryker and the resources of Stryker while bringing the innovation of the legacy K2M machine inside. By doing that, we can continue to innovate like crazy, but we have the scale of the manufacturing facilities that will help us think about cost structure as we are doing that, and the ability to think about the continuum: the preoperative planning, imaging, how implants could potentially work in the robotic space, and postoperative follow-up.

That allows us to collaborate from the cost perspective, because you have more resources to work with. I'm excited to continue to see how we can work with hospital systems.

Q: Are there any headwinds you are preparing for heading into next year?

EM: We are in an exciting place from my perspective. We have built out a ton of these resources, and there is a great tone from the top. Kevin Lobo, our Chairman and Chief Executive Officer, has asked us what we need in order to build a great spine business. We have K2M and Mobius; we are doing the things that need to be done to build out not only the foundation but to expand upon that, so that we have a strong spine business. When Stryker has a strong spine business, that rolls into so many other aspects of the company. The spine sales representatives are in the operating room nearly every day, and they play a large role there by having strong relationships with the HCPs in the room. In addition to spinal implants, there is so much other capital. Whether it's instruments, imaging, endoscopy or lights, the spine rep often helps open the door for our sister divisions to introduce these technologies.

We need to operate in the environment of our business. We can't impact changes in the geopolitical space; we know there is always going to be change. We are always trying to look out ahead and think what will happen there. The larger business of Stryker allows us to pivot if something unexpected happens.

I am feeling huge tailwinds as we finish out 2019, because we have done so much to bring these two great organizations together. We'll be now looking to 2020 to integrate the Mobius technology. That just adds to the excitement to our field force.

Q: When looking at the entire Stryker spine business, where do you see the best place for Stryker to keep growing and developing as a company?

EM: Healthcare continues to change. I think Stryker continues to stay focused on being a leader in medical technology by being a best-in-class collaborator. Together with our customers, we are driven to make healthcare better. I do think we are going to see continued changes in the healthcare environment, but we have the ability and resources to respond to those changes. There is a lot of talk about enabling technologies, and I think processing power is better than in the past. That is starting to accelerate, and as we look to that future, the ability to be a resource for our customers across the entire continuum is exciting. Stryker has the scale and resources to build out an entire solution to care for the patient.

Note: A surgeon must always rely on his or her own professional clinical judgment when deciding whether to use a particular product when treating a particular patient. Stryker does not dispense medical advice and recommends that surgeons be trained in the use of any particular product before using it in surgery.

The information presented is intended to demonstrate the breadth of Stryker product offerings. A surgeon must always refer to the package insert, product label and/or instructions for use before using any Stryker product. Products may not be available in all markets because product availability is subject to the regulatory and/or medical practices in individual markets. Please contact your Stryker representative if you have questions about the availability of Stryker products in your area.

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