Let 'Em Walk

This week in Pedersen's POV, our senior editor explains why the Great CEO Resignation of 2022 is the best thing to ever happen in medtech.

Amanda Pedersen

October 3, 2022

3 Min Read
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If 2021 gave rise to the movement known as the Great Resignation, 2022 has given rise to the Great CEO Resignation, and medtech is no exception.

What's interesting is that the turnover in the medtech C-suite appears to be split between successful CEOs voluntarily stepping down, and underperforming CEOs being forced out.

Globus Medical investors were thrown a major curveball in April, for example, when Dave Demski resigned abruptly from his post as CEO and president. Demski had been with the company for nearly 20 years and had spent the last four and a half years as its CEO. From the moment the news of Demski's resignation broke, the question that seemed to be on everyone's mind was: Why now? What was the catalyst that made Demski decide now is the time to step down as CEO of Globus Medical?

"I would probably answer you with, why not now? You know, I've been looking for a new challenge for a while, and I think we're out of COVID, our technology is great, we have some great stuff coming, the team is strong, we're financially strong, so I think there's really no better time for me to step out and try something new with my life," Demski said. "...There's really nothing wrong with the company or with me that’s driving it, it’s just this is the time.”

On a broader scale, business analysts have cited delayed retirements during the pandemic as a key driver for so many CEOs joining the Great Resignation this year. In medtech, however, most of the CEOs who have left their posts voluntarily this year seem to be driven by either personal reasons, (Insulet's Shacey Petrovic, for example) or bigger opportunities that have opened up (Peter Arduini's transition from Integra Lifesciences to GE Healthcare, for example).

While turnover at the top inevitably leads to disruption, this movement could end up being the best thing to ever happen to the industry. After all, a CEO who is, for whatever reason, no longer 100% committed to the company, is clearly no longer the best fit for that organization. And after all the uncertainty medtech companies faced during the height of the COVID-19 pandemic, now seems the perfect time for boards to clean house and get rid of CEOs who are just not cutting it.

One of the best medtech turnaround stories in recent history is that of Zimmer Biomet. Just five short years ago, the orthopedic device maker had been struggling with quality control and supply chain problems, which created investor frustration and ultimately led to former CEO David Dvorak's resignation in July 2017. The board ended up bringing CEO Bryan Hanson in to right the ship.

In April 2018, after gaining better clarity on where Zimmer Biomet needed to improve, Hanson said it would take two years to turn the company around and return to positive market share growth. Under his leadership the company kept those turnaround efforts on track and, in some respects, ahead of schedule. By the end of 2019, the company had moved from a defensive position to an offensive position and had not only earned back trust from its customer base but also began to win new business. For those reasons and more, MD+DI editors named Zimmer Biomet the 2019 Medtech Company of the Year.

When I think about this CEO turnover trend we're seeing in the industry now, I can't help but be reminded of one of my father-in-law's favorite expressions: Eff 'em, feed 'em peanut butter, and let 'em walk.

For the life of me, I have yet to understand exactly where the expression came from. Perhaps it's something he picked up as a Marine, or perhaps it was born from his days growing up on a farm or competing in track and field in high school. Regardless of the origin, the peanut butter expression seems to "stick" with anyone who hears the old man use it.

So, if your CEO already has one foot out the door, or they just aren't getting the job done, I say feed 'em peanut butter (er, a severance package?) and let 'em walk.

Pedersen's POV publishes every Monday. If there’s a topic you would like her to consider, email [email protected] (please put “POV” in the subject line).

About the Author(s)

Amanda Pedersen

Amanda Pedersen is a veteran journalist and award-winning columnist with a passion for helping medical device professionals connect the dots between the medtech news of the day and the bigger picture. She has been covering the medtech industry since 2006.

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