Earl Bakken and the story of Medtronic
Co-founder of Medtronic, Earl Bakken, passed away at the end of 2018. Over the 40 years that Bakken was at the helm, Medtronic developed from a medical equipment repair service based in a garage to a multimillion dollar company, which was to become the world’s largest medical device company in 2017. Allie Nawrat explores Bakken’s role in Medtronic’s achievement.
Image courtesy of Medtronic
n October 2018, renowned innovator in the medical technology world Earl Bakken passed away at the age of 94. He leaves behind an impressive legacy of technical innovation at Medtronic, the company he co-founded in the late 1940s, which ranked as the world’s largest medical device company in 2017 based on revenue - its annual turnover last year was $29.7bn, according to Igea Hub, for its portfolio covering 40 medical conditions. Medtronic claims to improve the lives of two people per second globally.
Bakken’s interest in technology started at a young age; he became obsessed with electricity after watching the film Frankenstein at the age of eight. The inventor reflected on this later in life, saying: “What intrigued me the most, as I sat through the movie again and again, was the creative spark of Dr Frankenstein’s electricity. Through the power of his wildly flashing laboratory apparatus, the doctor restored life to the un-living.”
He enlisted in the US Army during World War II as a radio instructor, before enrolling at the University of Minnesota to study electrical engineering. While at graduate school, he worked part-time repairing lab equipment, leading him to create a company called Medtronic.
Ba kken co-founds Medtronic
As his repair services became more and in more in dem and, Bakken founded Medtronic, alongside his brother-in-law Palmer J Hermundslie, in 1949.
Initially the pair worked from a garage, servicing and repairing open-heart surgery equipment, while developing relationships with doctors in local university hospitals. Medtronic struggled for the first few years; in fact the company’s revenue for the first month was a mere $8.
Invention of first wearable, battery-operated pacemaker
Following a black out on Halloween in Twin Cities, Minnesota, that caused the death of an infant reliant upon an alternating current-powered pacemaker, a young surgeon called Clarence Walton Lillehei, who would become a pioneer of open-heart surgery, asked Bakken to find a solution.
Bakken adapted a circuit diagram from Popular Electronics magazine to create the first external, wearable, battery-operated pacemaker.
Although Bakken wanted to hone some elements of his first prototype, which had been successfully used on dogs, when he returned to the University of Minnesota hospital his device had already been employed efficaciously on a patient.
Exclusive agreement for implantable pacemaker
In 1960, US scientists Wilson Greatbatch and William Chardack’s implantable pacemaker, the first in the world, was implanted into a 77-year-old man. As a result of the device, the patient survived for 18 months.
Medtronic signed a licensing agreement with Greatbatch and Chardack, in which it gained exclusive rights to manufacture and market the implantable pacemaker. This deal is seen as a turning point for Medtronic; afterwards the company began to move beyond repairing heart devices to focus on developing its own devices.
Writing the Medtronic mission statement
Motivated by Medtronic’s near bankruptcy, in 1960 Bakken wrote a mission statement for the company to ensure it remained primarily focused on contributing to human welfare.
The Medtronic mission states that the company must create and sell devices that ‘alleviate pain, restore health and extend life’, as well as being as reliable and high-quality as possible. The mission also stipulates that Medtronic must focus on therapeutic areas and recruit people that show the most promise, make a fair profit to meet its obligations and sustain growth, recognise the worth of its employees, and, finally, be corporately and socially responsible.
Bakken once said: “We didn’t set out to be the world’s largest medical device company. We just wanted to make a lasting positive change in patients’ lives.”
The Medtronic Mission is perceived by the company as Bakken’s main legacy; current chairman and CEO Omar Ishrak said: “We are privileged to continue the work that he started over 60 years ago and we remain fully committed to all six tenets of the mission that he crafted so many years ago.”
Former Medtronic CEO Bill George said: “Earl always had a vision of healthcare of not being about devices, about drugs, but about restoring people to full health.
“From the very start he was focused on not implanting a device, but enabling people to live a full active life and he delivered that point of view to all Medtronic employees through the [Medtronic] Mission.”
impressive growth as portfolio expands
The company experienced impressive growth in the 1970s; its portfolio commanded a 35% share of the pacemaker market, sales surpassed $100m in 1975, then exceeded $200m by the end of the decade, and it was listed on the New York Stock Exchange for the first time in 1977.
Due to its success, Medtronic began to expand its portfolio beyond the cardiovascular space to include diabetes, brain surgery and spine therapy towards the end of the 1970s and in the 1980s. Its breakthrough products include CapSure steroid leads and dual chamber Synergyst pacemakers.
The company also moved to establish itself even more internationally by setting up regional headquarters in Latin America and Europe, as well as acquiring key companies in the technology space, for example Medical Data Systems, Energy Technology and Vitatron.
Bakken served as Medtronic CEO and chairman of the board from 1957 to 1976, and then as senior chairman of the board to 1989.
Bakken retires as Medtronic chairman
Forty years after he co-founded the company, Bakken stepped down as the chairman of Medtronic; however, he remained on the board until 1994. In his retirement, he remained committed to the principles he had laid out in the Medtronic Mission.
He founded the Earl and Doris Bakken Heart-Brain Institute at the Cleveland Clinic and sponsored the development of the North Hawaii Community Hospital. In addition to providing holistic care to patients through these institutions, as well as the Bakken Museum, which houses his collection of historical medical devices, and community centres, Bakken worked to promote STEM education.
Bakken Museum executive director Michael Sanders said: “He proudly described himself as a nerd and wanted to inspire people and especially children to become interested in science and technology.”
In 2001, Bakken himself benefitted from the device he had been so instrumental in developing and manufacturing, the pacemaker.
Medtronic becomes the largest medical technology company in the world
Medtronic was ranked the largest medical technology company by revenue in 2017, with an annual revenue of $29.7bn. According to MarketWatch, the company’s current stock price is $91.50, at the time of writing.
It currently operates in more than 370 locations in 160 countries globally, with its headquarters in Minneapolis, US, and its executive office in Ireland.
Product development remains at the core of Medtronic’s work. For example, the company is currently testing a device for patients with complex aortic abdominal aneurysm anatomy called the Heli-FX Endoanchor system.
It unveiled three-year data for the device at a vascular conference in New York, which showed, in the words of vice-president and general manager of Medtronic’s Aortic business John Farquah, the Endoanchor was “a long-term solution that enhances outcomes and durability in patients with complex aortic anatomies."
Another central part of the company’s growth strategy involves mergers and acquisitions; most notably pacemaker manufacturer Vitatron, which it purchased in 1986. In the final months of last year, Medtronic added to its subsidiaries with two new acquisitions of Mazor Robotics and Nutrino Health.
Mazor Robotics is an Israeli robotic-assisted surgery company, as is part of Medtronic’s so-called surgical synergy strategy, which aims to transform spinal care through innovative solutions. Nutrino Health is a nutritional data and analytics, which Medtronic hopes will help it to improve clinical outcomes for diabetes patients.
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