The client couldn’t understand why sales of its device were shrinking. Hadn’t the company just redesigned the packaging? So the device manufacturer turned to Clinvue, the start-up that Paul Fearis heads, to determine the reason for the dip.
“It transpired that the nurses preferred the packaging of their competitor’s product, because when they reached into a drawer and pulled one out they could open it in fractions of a second, whereas with our client’s new packaging, they had to pick at the corner with their fingernail to open it,” Fearis says. The nurses “went for the easy one every time.”

Fearis says the discovery exemplifies the ability of the Westminster, MD–based company to get to the heart of successful product innovation through a “scrubbed-in” approach that takes the chief executive and his colleagues into a range of healthcare settings around the world. Visits to large medical centers and small, community hospitals enable Clinvue to discern the needs of the stakeholders with the most pressing device requirements and prioritize their needs to come up with the best developmental direction. The most important product stakeholder could be the outpatient nurse, the ER surgeon, the patient, or “the guy who wheels it out onto the loading dock and throws it away at the end of the day,” Fearis says.

Launched on July 4, 2010, Clinvue specializes in a broad range of products, including those used in cardiology, thoracic surgery, drug delivery, and high-volume disposable settings. The British-born Fearis holds master’s degrees in both mechanical engineering and industrial design and was technology director of PDD Ltd., a product and services innovation company based in London. Fearis left PDD for the UK–based product development firm Sagentia in the mid-90s. In 2001 he came to the United States, where he became president of Sagentia and developed its U.S. client base.

Fearis cofounded Clinvue with Jonathan Sackier, a trained surgeon originally from the UK, and Brandon Craft, an industrial designer from the U.S. who also worked at Sagentia. “I’ve been really active in the front end of medical device innovation for easily the last 15 years, and years in product development before that—good old-fashioned handle-turning, you know, Stage-Gate product development stuff since about 1988,” he says.

Although Fearis acknowledges an “a-ha!” moment could strike when a bar of soap falls on your head in the shower, he says product innovation is typically hard work that requires channeled creativity. It’s a theme he emphasizes in numerous company speaking engagements and academic lectures, including those he and Craft have delivered recently at Johns Hopkins University.

In addition to product stakeholders, Fearis talks with MX about the urgent need for cost reduction, how healthcare reform is not stifling innovation, Clinvue’s embedded approach to market research, the role of “sunshine” laws in Clinvue’s debut, and his love of aviation and Lotus race cars.

MX: How often do you have speaking engagements, either on behalf of Clinvue or at industry conferences?

Paul Fearis: It kind of comes in fits and starts. If you’d asked me that question 10 years ago, I’d have said, “I’ve already done six this year.” Probably in the last six months there are two elements to it: There’s speaking at in-company conferences and things like that. I’ve done quite a lot of that, probably three or four of those [but] nothing in the mainstream or big conferences in the last year or so. What I have [also] been doing is lecturing at John Hopkins. That was like 12 intense weeks of a complete, full semester with Johns Hopkins University…teaching the master’s biomedical engineering students there. We’ve got another [meeting] the week after next where we’re the keynote speaker for a company off-site. We’ve been doing these in-house sessions most recently.

MX: How are the lectures working out?

PF: They’re working out remarkably well. I’ve had a kind of casual relationship with Johns Hopkins, just acting as a guest lecturer for about the last three years. They have a great course there; it’s a Master’s BME course that’s part of the Whiting School of Engineering and the Center for Bioengineering Innovation and Design. It was casual lectures turned into a request to run a solid, 12-week credit course as part of the master’s [candidates] last year. We did that basically through the fall semester—myself and one of my partners, Brandon Craft. We did 12 lectures of about 2½ to 3 hours each solidly, every week.

Essentially, we taught our process, and the course is titled “Insights: Informed Innovation.” We taught opportunity discovery, which is how to find opportunities for what people need and how to determine ways that could be achieved and then determine ways that should be achieved—in other words, product embodiment. The course was actually the highest ranked one by the students in the faculty for the year, so I think we did a good job.

MX: Regarding innovation, you’ve referred to it as the lifeblood of the medical products business. How would you describe the state of innovation these days? What factors currently affect device innovation?

PF: I think it’s in a different place to that which it has been. If you read the media and what have you, one of the things that people are making quite a lot of noise about is that healthcare reform, or Obamacare, is stifling innovation et cetera. The truth is that I’m not particularly seeing that. What I am seeing is a redirection of innovation effort toward more meeting the challenges that the economy and the recession and the current healthcare environment create.

This kind of innovation is context-specific. It hasn’t gone away; it’s just sort of shifted sideways and perhaps modulated a bit in amplitude. By that I mean innovation at the moment is less about—and this is a generalization, of course—massive sea-change innovation and more about optimizing products and bringing new features and perhaps reducing cost. I think cost is a big issue that we could talk about in some depth. Innovation doesn’t necessarily mean entirely new and never-seen-before. It’s more about the commercial application of creativity. Innovation at the moment is more about delivering the same or slightly better standard of care, but at significantly less cost. So innovation has just moved its focus slightly. I think the huge fireworks that we were seeing a few years ago have gone away a little, but it’s now much more focused on helping healthcare continue as we know it.

MX: What you’re saying ties into comments I read by some of the jurors for this year’s Medical Design Excellence Awards. They mention that the 2012 finalists feature no completely new technology but are longstanding products with incremental improvements. One possible reason is that it takes three years on average to develop a product, and the development process for this year’s entrants would have coincided with the beginning of the economic downturn. Does that analysis make sense to you, given what you just said?

PF: I think it does. Senior managers in industry are constantly managing risk. They’re managing commercial risk, financial risk, shareholder risk, right down to project risk. I don’t think that it’s surprising when you enter a period of financial uncertainty, which was certainly the case three years ago, that those managers and their companies reduced their innovation risk profile, if you want to call it that.

I think that supports what your jurors say. I still call that innovation. That’s just innovation in this climate. I think the interesting thing and the telling part is if we set our minds back—and I kind of lived through this—to 2001 and the recession around then. Many companies did an emergency stop on innovation and dove into their bunkers and pulled the covers over the top. This time innovation has actually stayed quite strong in industry. It’s actually remained in the front and center of companies, because people realized they caught a cold after the last recession and didn’t have those new products and those new opportunities. So innovation remains pretty strong this time compared with last time. I think it’s there, [but] per my previous comment it’s more about one quantum leap at a time. That’s the way I like to think about it.

MX: This may be reductive and I hope you’ll correct me, but my understanding is that Clinvue favors a structured approach to innovation, as you alluded to, as opposed to a “fuzzy” methodology. Is there a fine line between adhering strictly to a framework and letting creativity sort of wash over you, say, in order to develop new products? Do you have to find a balance between those two approaches?

PF: It’s a good question, and one I run into quite a lot. It’s one of my hot topics, actually, and I take quite a robust stance here. If you define innovation—and this is a fairly well-tried and tested definition—as “the commercial application of creativity,” creativity can exist completely unhindered inside an innovation process. Coming from an art school background, I’m always going to advocate very, very hard for creativity. But in the commercial world creativity has to be pointed in the right direction and guided toward a useful goal, because innovation is about the commercial application of creativity. I don’t think the two are by any means mutually exclusive.

Innovation is a tough ladder to climb, so we have to make sure that the ladder is leaning against the right wall. So our innovation process here is by no means restrictive. It makes sure that we’re leaning the ladder against the right wall. It’s targeted toward what matters to stakeholders, or customers, and we might have that conversation in a while, it’s managed toward achieving that goal, it’s creative, and it’s fun. So I don’t think the two are mutually exclusive, but I think to just be creative without a process isn’t appropriate in a commercial environment. That’s an art school environment.

MX: During your lectures at Johns Hopkins and your other speaking engagements has anything struck you about the types of questions you receive from your audiences over the past few years?

PF: I’m not sure how well this answer will sit with your readers, but I ask [audiences] to just take a quiet moment in a darkened room and be introspective for a minute. If I think about the common thread that runs through questions I get at the end of speaking inside companies and in public, the truth is the questions tend to center on how hard the work of doing customer-centric innovation is. It takes a long time; it costs a quite lot of money. It’s grueling, gut-wrenching hard work.

Some companies tend to communicate that they see that as almost too hard, and they want some kind of magic bullet that lets them short-circuit the whole thing; you know, “please just tell us the answer.” I’m afraid to report that you can’t do that, and it seldom works. Once in a while the soap falls on your head in the shower and you have a blinding flash of inspiration. But if you’ve got to get up at eight o’clock every morning and be innovative till five o’clock every night that takes process and hard work. There’s that famous Thomas Edison quote where he said something along the lines of “opportunity is missed by most people because it’s dressed in overalls and looks like hard work.” That is a common theme running through those kinds of questions: “Is it really this grueling? Is it really this hard?” Yes, it is, and there are still no guarantees.

MX: Clinvue asserts that access to clinicians in their working environments is becoming difficult. Why is that and how has your company been able to overcome that problem?

PF: One of the points that led to the formation of Clinvue was that many states in the U.S. have instituted “sunshine” acts, and sunshine acts are aimed at controlling the financial interaction between medical companies and healthcare workers. It was born of the whole slightly distasteful exchange of money for favors and so on. The sunshine acts aim to control that. Even in places where the laws haven’t been passed, there are very, very strong guidelines laid down to control these issues of conflict of interest between a surgeon or nurse and a company trying to sell something.

It’s sad, but it’s proven necessary to do that. It does create a better space for a commercial environment. Unfortunately, it has the downside of actively discouraging caregivers and particularly doctors from engaging with industry in helpful and innovative ways, in case they fall afoul of these sunshine act laws or conflict of interest. Obviously, it’s easier for them to not engage and to do nothing, because that’s failsafe. One of the points about Clinvue is we don’t buy or sell medical devices. We never have and we never will. We represent a safe interaction that hospitals can have because we don’t represent a conflict of interest. We can’t influence or sell the product, and we don’t buy services from them.

There is no conflict. I think that’s the important point. We can act as something of a firewall, as insulation between our mainstream clients, who could suffer from conflict of interest, and the hospitals and the healthcare workers. And it’s important because we find that the doctors do still want to be innovative and be part of making things better, be that devices or healthcare as a whole. We kind of represent a safe way to do that.

That’s the first point. The second point, which is a bit softer, is that we’ve really gone out of our way to build strong and trusted relationships with a network of hospitals. We’ve proven that we can work alongside surgeons in an OR or nurses in an ED, in the care environment, and not disrupt their daily activity and their workflows. We’ve also proven that we can respect patient confidentiality, HIPA et al, and we’ve built some pretty strong personal relationships. When we’re working on a nursing floor or in an OR we’re often so embedded that other nurses and doctors often ask us for directions to the canteen or what’s good to eat today. We’ve had surgeons have us scrub-in, and they’ve pulled us right onto their elbows so we can almost feel what they’re doing. It’s pretty intense stuff, and of course that’s where the real insight around unmet, unarticulated, underserved needs comes from. So a little bit has been building those relationships and proving that we can go and get that information and not disrupt them.

Anecdotally, the reaction we get is: “We’re really pleased that you guys want to come and listen.”

MX: Clinvue says its network is growing. How big is the network?

PF: A good example would really be if we look at the last three months of January, February, March when we worked in—and I mean not just walked through the lobby but spent days in—24 hospitals across seven countries, of which the U.S. was one. So we’ve been to Japan, Turkey, Italy, the UK, Germany, France, all over. So that kind of gives you a scale. The important point to make is that those [visits] span large, academic teaching hospitals right down to small, community hospitals. There’s an important point there that I would like to make: Companies tend to focus on adding key opinion leaders to their armories, and often those key opinion leaders come from massive academic hospitals. But that guy can take out your gall bladder with a coat hanger. He’s an absolutely brilliant surgeon, for example, but he’s not necessarily representative of the bulk of the market. Everything in life is a bell curve: He’s right over there on the right-hand side. But it’s important to engage with the smaller community hospitals where the guy’s trying to do that emergency gall bladder surgery or whatever it may be at 10 o’clock at night and he’s not done one all week. We try to vary our network and mix our network up to cover the bell curve there.

MX: Right, the devices would have to suit a range of situations and medical environments.

PF: And skill levels.

MX: You work with medtech clients around the world then. What are some of the regional differences and similarities in terms of medical device development?

PF: It’s an interesting question. There’s a pretty important point to make here for the U.S. to listen to. Particularly in the last six months we’ve spent a lot of time working in Europe with European hospitals and European physicians. And interacting with some very high-level people inside the UK’s National Health Service. I think I’ve seen a portent of what is to come as a result of that. If you look at the UK specifically as a bit of a trailblazer here, and some other European countries, there’s a very, very strong sentiment now around medical device innovation, and it was captured by a very senior guy in the NHS as part of a client project a little while ago. The quote pretty much verbatim was: “Without cost impact data—and I don’t care how good the product is—if it doesn’t save us money, it won’t be used in the new NHS.”

The point is that the criteria for successful innovation are changing and becoming much more focused upon reducing the cost and at least maintaining, and ideally improving, the standard of care, but at least maintaining it. That is not to say that innovation can’t be radical or push boundaries, but it has to come with a very robust cost benefit to the healthcare system or it simply won’t fly. Many European countries are now bound by government undertaking to reduce healthcare costs by published large numbers of millions of pounds or dollars or euros or whatever. That’s really the new innovation challenge. It’s less about a better mousetrap; it’s about catching the mouse more efficiently at lower cost.

So I think some of the challenges that Europe is going through really paint a good picture of what innovation needs to deliver in the U.S. It’s very well publicized that healthcare in this country can’t continue the way it’s going. Many companies are picking up on this, and innovation is now about delivering the benefits but at reduced cost or with improved efficiency: How can we get more out of what we’ve got? How can we make peoples’ lives easier so they can do more, do better, spend more time with patients, and reduce the cost of doing that?

MX: Yes, that touches on one of the key elements of the healthcare reform debate—“bending the cost curve.”

PF: It’s a big innovation challenge. An innovation challenge doesn’t have to be putting a man on the moon or whatever, it can be putting that three-cent device in the nurse’s hand for two cents.

MX: As far as products developed—or midwifed, if you will—by Clinvue is there such a thing as an unsuccessful development process? You never get to that point, right? Because of cost concerns you obviously want to find out pretty quickly that the process isn’t working before you spend a lot of money.

PF: Exactly. It comes down to whether you characterize that as a success or a failure. (Laughs.) Certainly, sometimes our work leads to us saying to our client, “Actually, the answer’s ‘no.’ Actually, the answer is people don’t care enough to want to do this, so we suggest that you don’t develop this product.” There’s despondency and people [digging in] their heels, but ultimately the senior management in that company is saying, “Phew, we didn’t invest another million or five million, or worse, in that.” So sometimes our answer is no. More often than not it’s yes, because, of course, what we do is customer-led or customer insight–led, so we’re not inventing something and trying to see whether it’s going to be successful in the market. We’re going to the market and determining what’s going to be successful and then inventing it. That tends to put us on the right side of that curve.

MX: Speaking of clients, what are the most challenging aspects of working with clients today?

PF: The hardest clients to work with are when we run into senior management that is doing innovation because they’ve been told to rather than because they support it or love it. The easiest moments are when a client is aligned all the way to the top, and they understand there’s no magic bullet and they can’t short-circuit the process and they’re willing to roll up their sleeves and dive in with us.

We’ve got a client like that at the moment, and it’s just great. You can’t tell where their company stops and ours starts. It’s really just the way we like it. That’s certainly the easiest, and the hardest is when it’s not like that.

MX: Is there a premium for Clinvue’s services? Do you find companies balking at what you charge for your guidance?

PF: Our cost is for the largest part driven by the time it takes literally going into a sensible number [of hospitals]. I’m not talking about hundreds or even tens; we’re talking about 9 or 12 hospitals and spending a day or two days or whatever it may be, immersed in that environment. That drives a big chunk of cost. Our clients look at our proposals and they say, “That’s expensive,” and then we point out, “Well, yes, but look, there were three weeks spent across five nursing units, doing whole shifts with nurses.” They nod and say, “Actually, we can understand where that cost comes from then.” They’re pretty comfortable with the work before and after. So it’s really a case of how we scope the program and do the research segmentation: What hospitals do we really need to go see and how many? Which countries do we really think we’re going to see differences in that are valid for the research?

Often, our clients begin with massive market segmentation. They want to go six different countries and see three different types of care facilities and three of each, et cetera. And that gets obscenely expensive. But when we start to really challenge them and say, “But where’s the value; where are we going to learn different things?” we can normally pretty quickly come to an agreement.

MX: That leads to a question about the stakeholders that you alluded to earlier as distinct from customers. Can you elaborate on that distinction?

PF: Our clients are our customers. We’re talking about the customers of our clients, the people who end up using or adopting this device or service. The traditional term for that is “VOC,” or “voice of the customer.” If you think about it, in the medical world who on earth is the customer? Is it the patient? It could be the patient, but the patient may well be unconscious. So perhaps it’s not the patient. Is it the doctor? Well, yes, the doctor may be using the device, but he doesn’t write the check. Is it the nurse? A nurse may end up cleaning up after the use of the device or after the procedure, but she doesn’t sign the check either. Is it the purchasing committee? Well, it might be the purchasing committee, but they don’t use the device so they don’t understand what the device requirements are. Is it the salesman who works for our client, the company? If he’s not incentivized to get the product out of his bag, he’s going to show the other product that he’s got in his bag when he’s got 45 seconds in front of a doctor in a meeting room.

The point is that the customer is not immediately obvious. Actually, there are a whole bunch of stakeholders all around who affect the purchase and adoption and use. There are classic cases of products that have been bought by a purchasing committee and aren’t used by nurses because they hate them. So what we do is we recognize who those people are, and we recognize that “good” looks different to each of them. What each one of those people needs out of that product is slightly different, and a successful product needs to meet the needs—to a lesser or greater extent—of each of those stakeholders, and to understand how those stakeholders influence each other. One of the first things I do with our clients is say, “Let’s stop talking about ‘voice of the customer.’ You can’t point to your customer. Let’s talk about voice of the stakeholder.” Normally, everybody’s face lights up and they all start nodding. It’s all those people that we need to understand: right through to the guy who wheels it out onto the loading dock and throws it away at the end of the day.

MX: That almost seems like an impossible task. How can you satisfy that many stakeholders? Wouldn’t you have to lean toward one product value or another?

PF: It’s about understanding what their needs are and going beyond that to prioritize those needs and understand what the key success factors are. The key success factors may not apply to all the stakeholders. An example here is medical packaging. We had a case where a piece of medical packaging had been changed by our client to a new packet for his device. And his device lives in a drawer with its competitors’ devices. And the device does pretty much the same [thing] as everybody else’s. The problem in this case is that a nurse sits in an out-patient clinic with patients and shows new patients how to use this device in their home, and they’re going to use this device for many years to come. The client’s sales were diminishing, and he wanted to understand why. It transpired that the nurses preferred the packaging of their competitor’s product, because when they reached into a drawer and pulled one out they could open it in fractions of a second, whereas with our client’s new packaging, they had to pick at the corner with their fingernail to open it. Human nature [being what it is] they went for the easy one every time. After they’d used 10 of those, they would finally reach in and pull our client’s one out.

It was a case where a packaging change that they thought would make things better for some reason, [and] actually it was a different stakeholder down the line that really affected adoption. It was this nurse sitting with a patient in an outpatient clinic, just showing him how to use a device after the doctor had come and done all his cool stuff that was affecting whether this device got used on a patient. And once this patient has started using one type of device he would rarely ever change to another, so it sets the scene for the treatment of that ailment. That’s an example of how it’s not necessarily the stakeholder you think it is. A part of what we do is understand that world and then prioritize from there.

MX: Speaking of field research, what is your day-to-day role in the company? How often do you travel, lecture, and the like?

The lecturing, we gave up our evenings to do that in the fall semester. We thankfully have been off for the spring semester, and we’ll be starting again in the summer with some boot camps and what-have-you for Hopkins. That’s two or three hours a week of preparation and two or three hours a week of lecturing. That’s that part of the equation.

PF: My role is very hands-on for project work, maybe even too much people might say. I’m currently managing active projects that we have in the company, and I’m a team member on other projects under other managers. We have a pretty flat hierarchy in that way, so I can be “managing” or “managed” in any one day. In between that, I’m kind of the marketing evangelist, so I’m out there in the market being hugely enthusiastic about what we do, which comes easy, as you can probably tell. I’m the bookkeeper and the coffee maker, and last week I vacuumed the office and tidied up the coffee mugs. It’s pretty blood-and-guts stuff really. I’m not sitting in a corner office gazing out the window being particularly strategic; we’re doing the work.

MX: As chief executive don’t you need some downtime? Don’t you need moments when you can…

PF: Eat?

MX: …let your mind wander, if you will, to let your creative juices flow? You can still be working subconsciously when you’re walking to the coffee machine. It’s almost like a computer program running on background.

PF: Absolutely. The answer is “get a dog.” Getting a dog makes me go out and walk, and by far the best time for noodling on all that stuff is when I’m in the middle of a field walking a dog.

MX: I understand you also pilot planes as a hobby. Does aviation play a role in your ability to be creative?

PF: I’d like to say there is some deeper connection between Clinvue and aviation, but actually aviation is just totally absorbing in that you have to concentrate on it 100%. That kind of helps me switch off from work and have some of those maybe more meandering thoughts. I also found that horses help, and maybe there’s a connection between aviation and horses and running Clinvue in that if you take your hands off the controls of either of these things for very long and gaze at the scenery things are going to go bad very quickly.

MX: Does your interest in Lotus cars also tie into that need to focus in the moment as well? Or is the appeal their design and performance?

PF: Hmmm, actually it was primarily a schoolboy fantasy, at age 12 I saw the James Bond movie “The Spy Who Loved Me,” and Bond drove a white Lotus Esprit that drove into the sea and turned into a submarine, won an undersea battle, and then drove up onto a tourist beach. I fell in love with Lotus at age 12.

If I think about it a moment, I think I love Lotus cars because if you ask a kid to draw a sports car in 10 seconds they will basically draw a Lotus Esprit. Also Lotus’s founder Colin Chapman once famously scrawled across a design his engineers presented to him to “simplify and add lightness.” I think that’s a pretty good motto for life.

MX: It is. How did your experience with PDD in London and Sagentia in the U.S. also inform what you do now as CEO of Clinvue?

There are a couple of useful points to make here. Both of those companies taught me different things. Art—and I’m using the word art—and creativity do have real commercial value in industry. Creating art is very hard but it’s also very worth it. Innovation still contains a very good measure of art. I always say to my clients, “Don’t let anyone who’s written a book or who has a piece of software tell you there isn’t art in innovation, because there still is.”

That was one thing I learned there. I also learned that building strong relationships with clients, built upon deep trust over multiple projects, is more important than making enough money to buy a Caribbean island. If you can build mutual trust and respect, every once in a while a project will go south, but the chances are you can sit down, have a sensible conversation about it, and retain your client, rather than end up in a terminal screaming match