Martha Shadan has done what few other medtech leaders ever dream of doing. After a string of success stories in large medtech companies, she transitioned to the startup world. Most medical device executives who attempt this transition after big medtech careers get overwhelmed by the lack of resources in startups. Not Shadan. She led the development of Rotation Medical and its sale to Smith & Nephew for $210 Million.
Shadan is the fourth subject in a series on women in medtech. Her credentials are impressive. She talks about the challenges and opportunities in her prior roles as a vice president and general manager at Covidien (acquired by Medtronic), division president at Zimmer, and CEO at Rotation Medical, a medtech startup. A new honor is her recent election to the role of chair, Advamed Accel (and the first woman ever in that role), where she will lead her fellow medtech CEOs to further develop the medtech innovation ecosystem.
This series includes articles on Marlou Janssen, president of Biotronik; Maria Sainz, president and CEO of Aegea Medical; and Luann Pendy, senior vice president at Medtronic. Readers tell us that learning about the career paths of these extraordinary women and the successes and obstacles they’ve encountered are very helpful as they think about the way they want to structure their own careers.
Shadan’s career path has been unique. Already extremely successful in multiple large corporate environments, she then started Rotation Medical. Rotation Medical was a U.S.-based startup company launched in 2009, with tissue-regeneration technology to treat rotator-cuff disease. Its purchaser, Smith & Nephew, is a diversified medical technology company that sells in more than 100 countries worldwide. Smith & Nephew is a good investment: they have paid a dividend to shareholders on ordinary shares every year since 1937. They develop and produce pioneering products across three franchises: Advanced Wound Management, Sports Medicine, and Orthopaedic Reconstruction.
In her career, Shadan has achieved executive management roles at six large corporations since 1995. This is remarkable considering that medtech is not an industry boasting gender diversity in its executive management ranks. In a 2018 survey of 61 medtech women executives, respondents reported that as few as 17% of their executive peers are women. Many candid and insightful quotes are in this report and also in the article published by MD+DI: The Clogged Pipeline: Women Executives in the Medical Device Industry such as: “The commitment required for executive-level performance means women MUST have a supportive spouse/partner for family/childcare responsibilities or hire out. Full stop. The company must take priority when operating at the executive level.”
Shadan brings humor, integrity, and an amazing ability to focus on the person she is speaking to. When you talk to Martha, you have her full and undivided attention. On a frosty spring day in May 2018, (it was a tough winter for those of us in New England), Shadan took the time to discuss women in medtech and how to bring more women into executive positions.
Tell us about your career and how is it started.
Shadan: I started at a company called W.R. Grace in the 1980s in their plant science group and was asked to build a research testing lab. When I started, it was four walls and there was nothing there. I was young and just starting my career, but that job made me realize that I love to build things, to take something from nothing. And by the time I moved on to my next job, the lab was doing 20 thousand tests a year, which was a substantial increase from zero over a two-year period. From there I went into sales and then to marketing. I didn’t realize for approximately 10 years that I had an entrepreneurial spirit in me. While I was in sales, I started a baking company with three other women.
We made specialty desserts. The bakery was called Shortcakes Inc. There were three women owners and we were all five feet tall, so we called ourselves Shortcakes. I was doing Shortcakes work on the weekends while holding down a full-time job. I wanted to grab something, make it my own, define it, and build it. There have been multiple occasions during my career when this has happened. That plant science lab built my confidence to start my own baking business. Fast forward several years and I went in to Covidien, which was another opportunity to take something that they had just acquired, the biosurgery business called Confluent, and build it into a very successful growing business.
Then in the midst of that, I started a new granola business with my sister, called True North. That business is still in operation after 10 years. I’m not involved in the business any longer other than to be a consultant to her. I had the business experience, so I consulted on the financial side of the business for her. Since then, she has taken that business and really run with it, so you can see a pattern here.
Tell us about what you accomplished at Covidien.
Shadan: Covidien had just acquired Confluent, a bio surgery business. The product was a hydrogel for surgical sealing in cranial and spinal cord procedures. It had a very small sales organization, and I came in as general manager with all the functions reporting into me. That was the first time I’d had that level of responsibility. I loved it. I felt like I owned the business and that we really could create a culture of winning, excitement, and engagement in the organization. I think it was a great experience, empowering for all of us.
What did you do before Covidien to achieve the Confluent general manager role?
Shadan: I went to Covidien from my role as vice president of marketing at Bristol-Myers Squibb. Prior to that I was vice president of marketing at Millipore (acquired by Merck KGaA in 2010).
I was mostly in the marketing track; prior to that, I was in sales. This is what I tell young women: so many see job postings and think, "I can't do that because I only have 70 or 80% of what they're asking for." We women need to think differently and consider our life skills and not just what is on the resume, but what we believe we can do and position our skill sets. It was a leap going from vice president of marketing into a general manager role, but I felt that I'd had the prerequisite experience, skill sets, the temperament, and the will to do it.
Please speak more about the temperament.
Shadan: I'm very inclusive in my management style. I feel everyone should have a voice at the table. I'm a good listener. When people say things, it’s a discussion. Don't let me mislead you—I'll make the decisions. At the end of the day, I have listened to everyone, but I will make the decision. Sometimes my decisions are popular, sometimes they’re not. But I think people feel that when they work with me, they can be collaborative and inclusive. That's what I mean by having a style that is well suited to bringing people together. I learned very early on [that] I could be the greatest quarterback in the world, but if there's nobody to catch the ball at the other end, then we aren’t going to win the game. I made mistakes thinking I could go in alone and then realized that, as I matured in my role, it’s about me and a group of highly talented people.
So, is it all about the team?
Shadan: One thing that I learned, especially during my tenure at Rotation Medical, was that despite my higher level of experience and sometimes against my better judgment, I have to let the team make decisions that I felt wouldn’t work. Sometimes they feel passionate about something that I don’t agree with, but I will let them move forward, even if I don’t agree, because people must make mistakes to learn. I learn the best when I make mistakes.
Here’s an example. In a prior role, one of my sales vice presidents wanted to hire a person. I didn’t agree that his choice was the right fit. At the end of the day, it was his decision, and I told him, “You go ahead and hire him.” I think that he learned a lot from that; it was his responsibility, he owns it, and he is accountable. You can't teach somebody accountability—they have to feel it, they have to do it. They have to realize what accountability means for them.
So, you are comfortable letting team leaders make decisions?
Shadan: It’s interesting. When a team member and I have disagreements, I was right 50% of the time, and my team member was right 50% of the time. We set a metric: to give this new person enough time to prove himself and then we would make the decisions if he was a good fit in a timely way, so we didn't lose a lot of time, lose sales, etc. We had an agreement: "OK, we'll hire this person, but by X date we will make a decision—does this person work out or not?" It's all about being accountable for what we say we are going to do.
What other insights can you share with us?
Shadan: I am very hands on, more hands on sometimes than people would like me to be, but 99% of the time it’s because I want to learn so that I can be a better leader. I want to understand at the granular level: What’s going on? I did this when I was the president of the Zimmer trauma business, where I would sit with my managers and get to the granular level. I wanted to understand their pain points. I wanted to understand where they were accepting a situation that could be changed for better outcomes for the organization. As a leader, I can come in and look at issues in more in a global way [and] help them understand positive change for an organization. I traveled in the field at Zimmer, Rotation, and now at Smith & Nephew. And the things I learned were outstanding. It made me better helping my organization do what they need to do.
Healthcare and orthopedics are changing so much—what else have you learned?
Shadan: I'm learning that it’s not just about relationships with doctors anymore. It used to be that you could pretty much win based on your relationship with the physician. This has changed because of the increasing pressure on savings at hospitals and ambulatory surgery centers. Pricing and value have become the tipping point. I'm learning that first you must have surgeon champions, surgeons who believe in technology, but that's not enough by itself. You must have a strong value proposition, meaning either save the facility money or give the patients better care and/or speed up surgical procedures or save cost in other ways. You must be cognizant of what issues are before the providers and be able to articulate the value of your device. Having evidence is critically important.
I recently gave a presentation to a group of physicians at a key medical teaching hospital. When I started my presentation, after three slides, they said, "Where is your evidence?” Fortunately, we have invested in studies on our device. Once I presented the data, the demeanor and their receptivity to our product changed dramatically. I’ve been in presentations when the CEO doesn’t have a strong value proposition. Medical devices can no longer gain broad adoption unless the company understands their audience, its needs. It’s not just the providers, it’s the patient and the doctor, hospital administration, and insurers. It’s really looking at all stakeholders.
Are you always pressure testing the Rotation Medical value proposition?
Shadan: Always. We are always learning. I'm speaking as often to hospital administrators now as I am to doctors. And it’s important for us to understand the differences between what is important to the doctor versus the provider versus an insurance company. Our value proposition is adjusted (but still within the strategy) depending who we're speaking to. That’s a very sophisticated sell. Ten years ago, fifteen years ago, we didn’t have to think about that. Now we do.
What conversations do you have with insurers?
Shadan: The average patient is with an insurer for about two and half years. Insurers want the value that we deliver within that 2.5-year period, so if I tell them that we've got five-year data, well that's great. But, it’s more important to them about what happens in the two-and-a-half-year period. And, every insurer is different. When we started selling Rotation Medical products in the United States, we quickly realized that it’s a different path with each insurer. Every U.S. state is different in terms of what the hospitals negotiate with insurers, which could change from hospital to hospital in the same states. There’s Workers’ Compensation plans; there’s CMS Medicare/Medicaid and the private insurers. Within Medicare, there is national decision versus regional decisions. The same goes for private insurers; it is an enormously complicated job to understand all these elements. That's why having good reimbursement people within the company or hiring a good reimbursement consultant is so important for startups. It can become the single most important contributor to your success or your failure. It is critical to the success of the company and is something we had to understand very early on in the development of our product.
If reimbursement is the most critical medtech success factor, what is the second most important?
Shadan: The second most important critical success factor is understanding the real size of the market you're going after and what percentage of that market your technology can truly address. Are there unmet needs, true unmet needs? Do doctors recognize these unmet needs, and does your technology address the need? If you do all of that, then you've got something.
Once you have identified the unmet need, then the third critical success factor is how to create the evidence. What kind of evidence do you need? In some cases, it could be bench data; it depends on the product. I'm advising a small company that wanted to do a clinical study, and I said; "You don't need to do a study. All you need to do is do some bench testing on how the product works.” This product is disposable, and because it’s disposable it eliminates the potential for infection. The product that they are competing against is reusable. I told him: "All you have to do is show how dirty your competitor’s reusable products are. You need to emphasize the fact that your product is sterile. You don't need a level 1 study to do that, but you do need to understand what kind of evidence your decision makers need. Do you need outcomes? Can you get outcomes through a registry? Do you need level 1 studies with a randomized trial, or can you get by with level 4 data from a case series or a case control study? You need to understand your evidence goal very early in the process."
When you're designing your study and designing the product, you need to understand how disruptive the technology is and answer the question: What evidence will I need to prove that this product really is what I say it is? You've got to get a read of the customer very early in the development process. The mistake a lot of medical device executives make is they bring in KOLs and the luminaries in the industry when in fact you need a combination of KOLs and other physicians. You need data to guide your path with the community physicians. Many medtech executives make the mistake of talking to a select few, and they get down the road and realize what they have only works for a small percentage of whom they are targeting.
So, go slow to go fast?
Shadan: What I mean by that is you've got to test what you are learning. You will always learn something when you launch a new product. What you don’t want to do, as a small startup or even a big company, is to burn a lot of money and resources. You don’t want to launch the product too early to a broad, untargeted market and then realize you have a problem, because the damage control will be very big and expensive and will take you a lot of time to fix your reputation. Go slow, hire a minimal number of sales representatives, and be highly selective about the physicians or the clinicians that you target. This is even more important if the technology is disruptive. If it's very disruptive, you want to pick the surgeons who are innovators, who understand that things can go wrong and will be tolerant and work with you to give you a right feedback so that you can get the appropriate fixes in place. At Rotation Medical, we are a disruptive technology, so we must have the innovator physicians, right? With disruptive technologies, you target innovators, because they don't need a lot of evidence; they're innovators, so they see the promise, vision, and the potential.
Do you need to plan for more evidence for the later-stage adopters?
Shadan: As you move through the adoption curve and you get to the later adopters, you will need much more evidence, but the innovators give you a way to learn. We started with 10 physicians, we had two sales representatives, and then we expanded to 50 physicians with 5 sales representatives. We learned so much in the process.
How did your investors respond?
Shadan: So, what your investors want to see is, how are you going to bring your sales to the next level? Where will the sales be a year from now? How long will we have to go slow to go fast? I laid a plan out in a way that set expectations early. I advise a few CEOs in the industry and I hear the same story; there is conflict between them and their board. I think part of the reason is that there is misalignment between management and the board. Setting expectations with a disruptive technology is important—you have to align management and the board on the stage of the business, what kind of product it is, and what it takes to get adopted. I had long conversations with my board, and I laid out for them that it was a product that could change the way rotator cuff disease could be managed. We had to prove some things, and we had some things to learn. So, they trusted me. It is about trust and managing the board. Your board hires you because they trust you to do the right thing.
What were the challenges in being a female vice president at Bristol-Myers Squibb or Covidien?
Shadan: I was in the minority, with a handful of females in senior roles at my level. It was also very challenging because women think differently. I'm an outspoken woman, and I have my own ideas. You can't feel intimidated, let people get in your head, and get a dark feeling, like you shouldn't be there or you don’t deserve the position. We do think differently as women; we come at things from a different angle. You have to be confident in yourself, believe in yourself. You can’t let them bring you down. Otherwise, you can get to the point where you feel marginalized. But, I believed in myself, and I loved what I was doing. That was a good combination for me. It was tough, it was challenging. There were times that I doubted myself, but at the end of the day, I could see progress. My teams and I worked really well together. We appreciated each other. It was important to me that I was making a contribution. I made decisions for myself. Sometimes they were hard, sometimes they were easy.
This is what I tell young women: You can vote with your feet. If you don’t feel you are progressing professionally the way you want, don’t be a victim, vote with your feet. If you feel you've got as far as you can at your current company, and you can't see a path, move on. That's what I did, and it worked for me. Women tend to look at a job posting and feel like they don’t have a 100% of what the job is asking for. They don’t feel they’re worthy, but men will look at it and if they meet 70% of it, they will say “I can do this job.”
The other thing I've learned is that it is okay not to be great at everything. My time at Rotation Medical has been transformative, especially on a personal level. I realized that I could laugh at myself more. I could give myself permission to make mistakes. Coming up in the ranks, you make a mistake, and you feel like it’s the world descending, but it doesn’t have to be that way. Recognize the mistake for what it is and learn from it. I'm getting much more comfortable not having to know everything.
Did you always have confidence?
Shadan: No, I didn't. I learned confidence as I was accomplishing things. I've made tremendous mistakes, but I've learned from them. And as I’ve learned I became more confident. I tell young women to get a mentor. Get somebody with whom you can have an open conversation to discuss the challenges you have. I didn't have anybody like that. I tell my daughter that she needs to get mentors. But no, I didn’t have it in the beginning.
Get involved in women’s professional organizations?
Shadan: It is okay to have challenges. It is not about you; it’s just is the situation. You’re still a good person, you’re still worthy, you can be confident. I'm surprised by millennial women, they're coming out as very strong, directed women. And I’m seeing the same thing happen to them as what happened when I was growing up. After a meeting with other professional women, it is very empowering to go back to your company, especially if you are the only woman with a seat at the table.
Can you tell us a story about obstacles you have overcome?
Shadan: In graduate school I was pioneering a new experiment in a plant science lab. One night, one of my vessels broke, and it flooded my entire lab and the lab below it. It was horrible. I remember saying to my fiancé: I’m not cut out for this, we’ve got to go home, I can’t stay in Michigan. I told him I’m quitting. The next morning, I went to see my adviser and he said to me, “Before you say anything, I know you are probably feeling really bad about this, but I want to tell you that it’s only the people accomplishing things who make mistakes. The alternative is to sit around all day long, and get by, and you probably won’t have any catastrophes. It is the people who are out there, pioneering and experimenting who make mistakes.” And I'll never forget that.
I was the only woman in a department dominated by men, and I'll never forget what [I was] told that has stayed with me for the rest of my life. When I get in to a new environment and I feel intimidated, I step back, and I think about all the things that I’ve accomplished and believe that I can do it.
So, know who you are and believe in yourself and follow your true north. Be authentic! I was on a panel once with a woman, and she was asked her about her management style, and she said she acted like a man. Do not act like a man—act like yourself, be authentic. You won’t regret it.
For more inspiring interviews in this series, please read: