This really shouldn’t come as a surprise to anyone as another Diabetic Investor call has come true as Medtronic made it official this morning as Hooman Hakami is out and Sean Salmon is in as the new leader of the struggling diabetes unit. While this move took longer than we had anticipated we knew it was a done deal and are not surprised one bit.
Here is the official notice from the evil empire;
“Medtronic plc (NYSE:MDT) today announced that Sean Salmon, previously Senior Vice President (SVP) and President, Coronary and Structural Heart (CSH) within the Cardiac and Vascular Group of Medtronic, has been named Executive Vice President (EVP) and Group President of Medtronic Diabetes, effective today. Salmon will serve on the company’s Executive Committee and succeeds Hooman Hakami, who is leaving Medtronic.”
The real question is what can Mr. Salmon do differently to turn things around. If he’s smart, he could follow the playbook used by Pat Sullivan when he took over at Insulet. Pat in a stroke of brilliance threw the old management team under the bus blaming them for everything he could think of. Additionally knowing the old team would be blamed Pat got as much of the bad news out of the way when he first took over. This bought him the time he needed to figure out what was wrong and how then to fix it.
We doubt that Mr. Salmon will follow this path for two reasons, this isn’t the Medtronic way plus Hooman was handpicked by Omar Ishrak the CEO. However we would be remiss in our responsibilities if we did not first welcome Mr. Salmon to the wacky world and second offer some free advice. Not like he’ll follow it but hey you never know.
Job one is to meet with the folks in Northridge and tell them exactly what’s expected of them and what direction he intends to take the unit. If there are more cuts coming, more layoffs come clean now and don’t make these people suffer further. Frankly these people have suffered enough and it’s not their fault the previous management team was incompetent and arrogant. Moral is as low as ever and these people need a pat on the back not a knife put in their back.
Next at all cost protect that golden goose this is job one. There isn’t much that can done in the short term to fix the pipeline or prevent the coming Control IQ from Tandem. Acknowledge that when it comes to new pump placements, that is patients new to pump therapy, are pretty much a lost cause. Tandem and Insulet are getting these patients and it’s foolish with the current set of product offerings to try and reverse this trend. Simply put fight the fight you can win and that’s keeping existing users in the fold.
Third and this will truly show if you are serious or not but acknowledge the obvious that the stand alone CGM unit needs to start over. No more public statements about this crappy sensor becoming a billion-dollar product. Either scrap this foolish quest entirely or completely revamp this effort even if that means going out and buying one of the many Dexcom wannabees.
Fourth take a serious look at the pipeline. The reality here is too many of these projects are too far along and cannot be killed. Unfortunately it is also true too many of these projects will be already outdated when they are launched. Lower expectations and either become serious about being innovative or understand that Insulet and Tandem have taken over the innovation lead.
Fifth and this will be a tough one to swallow but be bold and DO A DEAL WITH DEXCOM SO THEIR SESNOR TALKS WITH YOUR EXISTING PUMPS. Yes this would be admission that your existing sensor sucks but it’s only an admission internally as everyone else already knows the existing sensor sucks. The 670G may not be the best hybrid closed loop system, but it would be a hell of a lot better with the Dexcom sensor attached to it.
Finally and this will also be a tough one spend some money on customer service, get these people some help and get it now. While you’re at it no more BS either when it comes to patient programs keeps things simple, easy to understand and most importantly keep your word.
Mr. Salmon is taking over as the insulin pump and insulin delivery systems landscape is undergoing dramatic change. Soon Tandem will have the best toy in the toy chest with the Control IQ. It won’t be long before Insulet joins Tandem when the Horizon gets here. Tyler is coming as well, and his arrival will have a dramatic and negative impact on insulin pump growth. Doing the same old same old will NOT work, now is the time to be bold and overhaul the entire unit before it’s too late.
Medtronic still owns the most valuable piece of real estate, formulary position and still has the largest installed user base. The Death Star can be rebuilt but time is running out and the rebels are winning the war. Act quickly, act decisively and act with a clarity of purpose. The Golden Goose is still laying the eggs, but the oven is on and failure to act will just turn the heat up even further transforming the goose into a dead duck.
Sorry you inherited such a mess, but you have everything to gain by being bold and frankly not much to lose, so don’t become another Medtronic storm trooper turn from the dark side.