Stryker CEO Kevin Lobo talked about the company's robotics strategy and the decision to acquire Mako Surgical early, which propelled the company to become a market leader in orthopedic robotics, in a Chief Executive report.
Mr. Lobo said the $1.65 billion deal for Mako Surgical was among the most controversial deals Stryker has ever done; it was also his first big deal leading the company. "Even my customers were upset, it was a disruptive idea," Mr. Lobo said in the report. "Most of the deals we do are simple tuck-in products, they're obvious. It's a need that we have, we fill the gap. This was disruptive."
At the time, Mr. Lobo said customers and consultants told him when the deal was made in 2013 that robotics wasn't needed in orthopedic surgery, and they didn't want the technology. However, Mr. Lobo made the purchase with a keen eye for the future. He saw that the future of knee surgery would depend on how well the knee is balanced and minimal disruption to the soft tissue, not the implant; robotics could provide the next level of care with 3D planning technology and the ability to create a more personalized procedure.
When Stryker revealed the deal, its stock price dropped 5 percent and the company faced stark criticism. However, the market and tolerance for robotics in orthopedics has changed, and Mr. Lobo said there are now around 800 Mako robots being used, with about one of three knee surgeries being done with the robot.
Now, Stryker sees its robotics offering as integral to its strategy to maintain market share.
"Two of our competitors launched new knees three or four years ago, and we're taking market share from them with an older knee. Why? Because instead of investing in a new knee, we chose to invest in robotics to help put the knee in perfect balance, and we chose to invest in one component of the knee that's 3D printed so that you don't need to use bone cement when you do the procedure."