Saturday, December 31, 2011

Calling BS on the link between tax increases and medical device innovation...

I know I haven't posted here in months. Things have been quite busy and I am unable to write as much as I would like. That said, I wanted to leave 2011 with a "I told you so" post, so that I can come back and harp on this later.

Is money the problem with innovation?

How does more money equate innovation? Is it the same expectation as throwing many monkeys in a room with a bunch of keyboards and expect them to produce great literature? It probably is. Has it ever worked? Maybe you will get a couplet out of it, but can you expect a sonnet?

Is laying people off the most innovative solution to increased taxes?

I am not at all for increasing taxes. However, how else would you expect incomes to come in to pay to allow more Americans to access health. One "large" organization is claiming that it will lay off 1000 employees to pay for the taxes. Now, is this really the way to innovation? They can't cut other costs? 

When costs increase, do you skip meals, or skip the movie outings? Every lay-off is grounds to believe that the CEO and management has probably failed TWICE. Why twice? First, they probably did some very inefficient hiring, and secondly they chafe responsibility. 

Well, you have to ask yourself this. Why did they hire a 1000 employees too many? First of all, it never happens to be that much, and secondly, yes, it happens - employee functions disappear and such, but more or less, this is just because the "management" in most of these organizations is an old boys (and girls) club and they want to get rid of well meaning employees, rather than cut from a management.

Shouldn't a performance failure directly mean management failure?

The Cisco Example

Look at the CEO of Cisco. The company was in dire straits in 2011 directly because of his narrow mindset, heck, his inability to produce results. Why mince words? Yet, he got to lay off thousands of jobs and keep his. Ask yourself...

The HP Example

HP had it going for a while. They bought worthless companies, hired duds and kept sending them off with golden parachutes. When things got hot though, what was their solution? Well, they brought Meg Whitman, of the "I took the eBay stock and rubbed it in kaka" fame, and "I hired an illegal immigrant and decided to run for a Governor on behalf of the people opposed to that" fame as well in as the CEO. Here is the kicker - she was on the board that made all the poor decisions in the first place!!!!

What are the real roadblocks to innovation?

A 2.3% tax increase is not the reason why innovation in medical device design is going to retroactively die, as John Kartch and Stephen MacMillan would like to misinform you. Let us look at some real issues:

1. The mid-life crisis - monkey see, monkey want

There were some innovations in the industry, and then for the most part, they tend to poke out their head out of the vast desert stands of the medical device industry every so often. Why so? 

This was a problem in 2007, it is very much a problem even now. One stent succeeds marginally, of course the success is called phenomenal at first, and everyone wants to build a stent company. A catheter company succeeds and of course everyone wants to build...well, you get the point, monkey see, monkey want, monkey try, body not agree, monkey blames taxes, the FDA, the Mayan calendar, everything except self...

There is no attempt at real innovation here, just a need to create copycats. You can see it in the companies, their names and even their job advertisements - Wanted: Someone who has designed 233 catheters and wishes to design their 234th; slavery a must, peanuts optional...

Innovative, no?

2. Crash and Burn - VC style..

The Venture Capitalists who got there with almost nothing but sheer luck and no nothing about devices have their own plan. Under-fund a company on crappy me-too ideas, going after diseases and devices just before they get to the "also-ran" point, and demand quick results that lead you to King Solomon's mines...

The companies that are lucky enough to get this money go after said diseases and devices in a rushed manner, fail and then give the whole thing a bad name, making it bad for anyone trying to go after this a second time around.

And then of course the VCs bandy together and blame regulations for the failures of their minion companies...

3. Taking the wrong risks and avoiding the right ones

Innovation is risky business. By treading the familiar path, you will never innovate. You have to branch off, go against the flow and all that to actually change the way something happens. You really, really cannot do anything but micro-innovate your way to success.

The easy way out, is to blame Obama, the tax man, the regulations, heck even the Mayans and their calendars...and this, is what I am calling BS on...

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