By Douglas A. Wilson
Will your corporate purpose stand the test of time?
Medtronic is one of the leading medical technology companies in the world. Medtronic’s founders articulated a powerful mission statement way back in 1960. This mission has guided the organization’s actions ever since — 60 years and counting! Their mission defined their corporate purpose and guides their strategy as a company.
I had the good fortune to interact with Executive Chairman and former CEO of Medtronic Omar Ishrak earlier this month. He spoke with more than 100 senior executives we gathered for a virtual event co-presented by the CEO Leadership Alliance Orange County and the Center for Higher Ambition Leadership.
His key point – A strong purpose not only guides an organization’s decisions and actions, but it captures the essence of what your company is all about. According to Ishrak, the Medtronic mission “inspires, defines, and guides our employees’ work around the world.”
“To contribute to human welfare by the application of biomedical engineering in the research, design, manufacture, and sale of instruments or appliances that alleviate pain, restore health, and extend life.”
This is the first of six tenants that make up Medtronic’s mission. These words are so central to the organization’s culture that every employee, anywhere in the world, working in any function, can hopefully state this mission from memory. To reinforce its importance and remind employees of the honor and responsibility of the mission, the company regularly holds ceremonies around the globe where employees are presented with a medallion with the statement inscribed on it.
Medtronic’s Mission in Action
Through our conversation with Ishrak, he described how the mission has influenced decision making and guided how the organization has approached critical milestones for the business.
Mergers and Acquisitions: The first step in the 2014 acquisition of Covidien, a global healthcare technology and medical supplies provider, was determining whether acquiring the company aligned with the mission. Even before Medtronic examined the financials of the opportunity, the team spent hours examining how Covidien would fit with Medtronic’s mission.
Within a few years of the acquisition, Medtronic made the disciplined decision to sell off select brands within the acquired portfolio that were not a clear fit. As Ishrak said at the time of the sale to Cardinal Health, “We are committed to disciplined portfolio management, and we reached the conclusion that these businesses, while truly meaningful to patients in need, are best suited under ownership that can provide the investment and focus that these businesses require.”
CEO Succession: Ishrak’s handoff to the new Medtronic CEO Geoff Martha in April of 2020 was another demonstration of Medtronic’s fundamental values. Ishrak was an unusual outside hire for the organization, and he knew from the start that his successor had to come from inside the company. He maintains that one of the main measures of a CEO’s success will not be seen until long after the CEO leaves. The management team a CEO leaves behind is the CEO’s legacy.
Ishrak recommends investing the time to find the right successor within the organization and then helping that individual prepare. He stresses the need to get members of your Board engaged in this process, as many of these board members will likely stay on after the new CEO steps in. Ishrak takes a holistic view, pointing out that the team around the CEO is equally as important.
The Coronavirus Pandemic: Several executives on the call asked how Medtronic is handling the disruption of COVID-19 and how the company is fostering culture and connection through the pandemic. Ishrak shared that focusing on the health and safety of patients came first for Medtronic, and employees were united in this effort. The company saw tremendous innovation in the service of patients, from shifting to collaborative work in a Zoom environment, to creating test labs in garages at home. “It played out naturally and it all goes back to our values,” he said.
Early Experiences Shape a Leader’s Life Purpose
I asked Ishrak about the moments and people in his lifetime that have shaped his own purpose.
“I’m only here because people placed bets on me,” he explained. He spoke about his childhood in Bangladesh and about the leaders who took a leap of faith to hire him early on — from Jack Welch tapping him to lead a division of GE Healthcare to Medtronic’s decision to hire him from outside as their new CEO, an unprecedented move for the company. Today Ishrak makes sure to place bets on others, creating opportunities to help them advance.
Medtronic also works to make sure employees share in the company’s success. In some cases, this translates directly to financial gains, such as a recent equity payout to employees at all levels when the company achieved a key cash flow metric. No small feat for a company of more than 90,000 people. While some employees received just one or two shares, it was perceived as a significant event company wide. And Ishrak stresses that the benefit of this incentive far outweighed any problems of making it all happen.
Bottom line, throughout the pandemic, Medtronic has seen employee satisfaction rise, primarily driven by their focus on, and commitment to, the mission.
“…alleviate pain, restore health, and extend life.”
The clarity and meaning in these words are powerful. Does your organization have a clear purpose statement? Is it embedded in everything you do as an organization? Do your employees rally around it?
“As I tell our employees, you’ll have good days and you’ll have bad days,” Ishrak said. “On the bad days, look at that medallion and think about those words in our mission. If all you have done is help move the mission forward, you’ve done a lot.”
Looking for guidance on sharpening your organization’s purpose? Download the Path to Purpose White Paper for clear steps you can take.