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(gentle music)
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Welcome everyone,
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and thank you for joining our CEO Fireside Chat
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on leading medtech during COVID and beyond.
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I'm Bob Lavoie, a Senior Partner
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and Managing Director at BCG.
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I'm humbled and privileged to be hosting Geoff Martha,
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the CEO of Medtronic with me today.
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Geoff, welcome.
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It's great to see you again, and thanks for being here
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given everything you've got going on.
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Yeah, thanks Bob, I'm thrilled to be here.
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Very excited to talk the pandemic,
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especially as it has been going on for quite a while.
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We've got lots of good things to share.
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Well, we really appreciate you being here Geoff thank you.
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First, let me start by commending you,
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the Medtronic leadership team, and all the employees
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for the incredible response
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that you guys have all delivered regarding COVID.
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I think ventilator production went up five times or so.
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I think you've had to find some non-traditional partners
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to help make that happen.
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What was all that like in the moment?
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In the moment it was intense.
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I remember it was a Sunday afternoon in March
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and I was trying to get some exercise in
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and I made the mistake of keeping my phone next to me.
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And it kept ringing, matter of fact,
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it was bouncing across the table.
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And getting calls from the White House,
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from different heads of state,
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of countries outside the United States,
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a bunch of different governors.
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Everybody was very concerned about ventilators,
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they wanted to learn more and they want lots more of them.
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And the spike in demand was orders of magnitude
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over anything that the industry had ever provided
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or could even comprehend.
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And so that was a really important moment for the company.
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We really rallied around this crisis,
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and did a lot of things.
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We went up to over 1,000 ventilators per month
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out of our own manufacturing facilities.
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And that took a lot of creativity
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and a lot of, like I said,
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blood, sweat, and tears, and courage.
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Because these are factories
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that when you're working seven days a week, 24/7,
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you do run the risk of some COVID outbreaks.
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And we've had some, and employees really did not
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let those plants shut down for very long.
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It was hours, and they were right back in there
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after cleaning and really putting their own health
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at a bit of risk here.
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And we try to keep it as safe as possible
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but they knew what this meant for the world.
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And I just can't commend them enough,
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I can't say enough great words about them.
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And then our leadership recognizing the seriousness
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of the moment and that it took a different bold action.
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And we put one of our key ventilators online,
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the one that we thought had the most impact,
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potential impact, positive impact for this pandemic.
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And we put those plans online, everything,
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everything about the ventilator on thousands
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and thousands of documents.
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It took us like two, three days just
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to load all the documents online
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and gave out a royalty-free license for anybody
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that wanted to either take this information
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and run with it on your own, or partner with us.
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And we had a couple of companies that did both.
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We had over 250,000 people
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and different entities download the documents.
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And out of this, we had a couple of companies
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that were able to just pick this up
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and manufacture it themselves.
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These are medical device companies.
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We had one called Baylis Medical in Canada
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that was really taking this on for the country of Canada.
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We had other partners that were contract manufacturers
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with very strong supply chain capabilities
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that helped us overcome some of the supply constraints.
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And are making these ventilators
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for other parts of the world, like India and Bangladesh,
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as well as here in the United States,
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and making it for areas like Latin America.
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And then we had another category of partners,
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of more technology partners,
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that helped us overcome technology problems.
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Or in this case, opportunities where physicians reached out
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and said, "We'd really like to have new functionality
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on the ventilator so we can operate them remotely
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and monitor patients remotely."
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And so that entailed some technology changes, improvements,
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and we partnered with companies like Intel and SpaceX.
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And like I said, Elon Musk himself personally got involved
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in these projects.
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And it really was a testament to the human spirit as well.
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These are engineers in these companies
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that once they saw our plans online,
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and on their own time, decided over the weekend
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or at night or whenever to look at these drawings
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and understand the product,
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thought that they had the capabilities
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of their respective companies to help.
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And they reached out to us, both Intel and and SpaceX.
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And here we are, they helped us solve major issues
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or opportunities, and we've got new products
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serving new patients because of it.
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I know we've been speaking about the part
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of the portfolio specific to and critical
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to the COVID medical response, in the heat of the battle.
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Now what about those elective procedures
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that we've seen a shift in dynamics
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between the patient-doctor approaches
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given the nuances of working more remotely.
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What are a few of the most critical lasting changes
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that will have implications for Medtronic
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and the medtech industry more broadly,
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and how do you think global medtech companies need
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to respond and adapt going forward
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in order to be successful?
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Well, I think there are some changes
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that I think are here to stay as a result of COVID.
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Anything that can be done, remote or virtual,
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is effectively... is preferred.
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And I think we're learning that more things,
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more activities than we previously had considered,
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can be not just done remotely or virtually,
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but done effectively.
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And I think that technology provides that solution
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and it's not just connectivity and 5G, and video,
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things like Zoom like we're on today,
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it's also the different product features
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that medtech provides.
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And cardiac rhythm is a good example,
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plantable pacemakers, and defibrillators.
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So that's what I mean, the technology,
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whether it's the digital technologies, things like Zoom
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and 5G, better connectivity,
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but also the medtech products
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are just different.
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So that is one change that I believe is here to stay.
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So in that context, what has this crisis shown you
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about how you might adapt,
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and what some of the big capabilities are
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that you might need to work into the portfolio?
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Well, I think a couple of things.
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I mentioned earlier the ventilator experience,
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it really for us has been profound,
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and in a number of ways.
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Beyond just when you really focus on something
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that's critical, what you can do in a short period of time.
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So there's the whole idea of focus,
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and that's something I want to carry forward
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for Medtronic, is to make sure we don't get caught
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up and try to do everything,
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and just focus on the critical things
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we can really have a meaningful impact on.
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But more specifically, I would say that the partnerships
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that came out of this to innovate,
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I think there's a convergence.
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We're in a time right now where technology
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is moving so quickly.
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And at medtech, we tend to be focused on really
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a stable suite of technologies and the intersection
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of those technologies and the physiology of the human body.
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But now you're seeing the convergence
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of digital technologies and the medtech as well
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to help support the virtual piece of it.
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And so that is something I think that...
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so you hear about data and AI,
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I think that's really going to change medtech,
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we've really got to keep our eye on that.
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In addition to that,
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the computational power that Silicon Valley is putting
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out in their new products.
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We need to think about how that's going to change medtech.
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So, you know, lots of opportunity here.
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And finally, I think the partnerships,
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and partnerships with hospitals,
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and partnerships with other companies
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outside of medtech, outside of our industry.
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So I do think in this new phase,
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hospitals are looking for less vendors and more partners,
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and there is a big difference
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between a vendor and a partner.
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And then the second is, I think medtech
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companies really do need to look outside
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of the medtech industry to learn some things.
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Like I said, some of the digital capabilities
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that are out there as well as some
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of the supply chain capabilities
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that we see in other industries,
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whether it be the automotive industry which
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I've learned a lot about over the last couple of weeks,
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industries like that.
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So lots to learn for us if we,
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in some respects broadened our horizons,
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but in other respects, laser-focus
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on the things that really matter.
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I'm taking away three things: focus,
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supercharging tech in medtech,
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so putting the tech back in medtech,
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and using partnerships to get there.
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How do you think the medtech industry
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is going to have to respond going forward?
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You know, you may not need
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to have a sixty year old mission for this.
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I think companies just need to start playing bigger.
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And look, it's all about attracting and retaining
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and developing the right talent.
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And I think part of a company's value proposition
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for employees does have to extend beyond
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providing them with salary and benefits,
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but also providing them with a place
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that they're proud to work
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and is contributing to society in multiple ways.
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I agree, Geoff, in fact, there's an old saying
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that a company's response to crisis reveals a lot
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about its leadership, its culture, and its people.
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And if you take the current context today,
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the social unrest that people have been dealing with,
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the geopolitical uncertainty in the world,
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the global pandemic, the US presidential elections,
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that's a lot.
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If you think about the increase
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in cognitive load being experienced by everyone,
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Medtronic colleagues included,
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what insights have you been able to gain
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in the last six months regarding corporate culture values
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and specifically leadership, that might've come to light?
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Well, look, you mentioned the mission
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and like I mentioned earlier, it has these six tenants,
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and it really is more than just words.
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And one of the tenants, the sixth one, talks
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about being a good corporate citizen.
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And back in 1960, that wasn't a phrase.
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Today that is a common phrase,
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but back in 1960, this was not a common phrase.
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And it's something that has permeated Medtronic's
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culture all that time.
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And really, in this time of crisis,
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it really paid off where we focused on employees,
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and especially during the social unrest,
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as well as this pandemic, we really took a position.
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A position of ... we were decisive
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on where our priorities were,
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and we took a position on social issues
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and many companies have been hesitant
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to weigh in on social issues.
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And I'm not saying we can weigh in on every social issue,
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but I do think in today's day and age,
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companies need to play bigger than just business.
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And that's what I think good
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corporate citizenship really means.
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Absolutely, we see it ourselves at BCG.
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We work with a lot of companies
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and we see this acknowledgement
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that they just need to play bigger.
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They need to play beyond just commerce,
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to include social responsibility.
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And we really appreciate
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what Medtronic has done on that front.
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You know, Earl's vision way back 60 years ago
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was, I think, critical in setting that tone.
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Back then it was only a glimmer
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in a few folks' eyes,
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and now it's core to how a lot of companies operate.
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Geoff, I want to thank you again for your time today.
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Appreciate your leadership,
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the partnership with BCG over the years,
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and certainly your time today.
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Most welcome.
Thank you.