01 September 2013

Leadership Agenda: Stryker Corp.

Growing up in southwestern Michigan in the 1950s and 60s, I remember The Upjohn Co., a pharmaceutical manufacturing business, as the dominant and benevolent corporate presence in Kalamazoo, Michigan. A great company and community citizen.

Others contributed positively including General Motors Corp. (Fisher Body plant), Checker Motors Corporation (taxis), and respected Western Michigan University. Only the university survives with nearly 25,000 students. GM is now a restructured General Motors Co.

The Upjohn Co., founded by University of Michigan graduate, Dr. William E. Upjohn in 1886, was noted for its "friable pills" which were powdered and supposedly easy to digest.

A long run

As with many corporations, The Upjohn Co. came to an end in a 1995 merger with Pharmacia, later called, Pharmacia & Upjohn.  What remained of Upjohn, after a second merger with Monsanto and Searle in 2000, was consolidated by Pfizer Corp. in 2003. 

Pfizer is a major presence with an expansive global manufacturing facility on the former Upjohn site and an animal research center in downtown Kalamazoo.  

In 2007 the Frank Lloyd Wright-inspired Upjohn administrative office, officially known as Building 88, and sometimes referred to as the "Taj Mahal," was demolished.

A transition

Clearing away The Upjohn Co. office made it possible for Stryker Corp., founded in 1941 by Dr. Homer Stryker, also a Michigan graduate, to fulfill a role as Kalamazoo's leading "corporate" citizen with its world headquarters, three major business units, and 2,400 local employees. 

For perspective Stryker is a Fortune Magazine "most admired" company; is currently ranked 305 on the Fortune 500 list; has 33 international facilities; and sells higher-end medical-related products in 100 countries. Its total global employment is 24,000. 

Setting the agenda

In October of last year, Stryker, with sales in 2012 of $8.3 billion, promoted from within and named 47-year-old Kevin A. Lobo to be its president and CEO. The change came after former Chair and CEO, Stephen P. Macmillan, resigned over a personal family matter. 

Approaching the first anniversary as CEO, Mr. Lobo recently gave the Kalamazoo Gazette an extensive interview.  He offered up a leadership agenda (themes) for growth consisting of four areas critical to Stryker's long-term success:
  • Globalization
  • Collaboration
  • Innovation
  • Cost optimization
While most attention in organizational life is given to "strategic planning," Stryker's CEO has cooperatively developed a company-wide agenda that communicates priorities, internally and externally. The goal of this or any other leadership agenda is to give the planning process direction and build on the company's strengths.  

What's important to Mr. Lobo should matter to all Stryker associates, shareholders, current and prospective customers, as well as competitors.  

The agenda was not created in a vacuum as he appears to place a premium on listening. "You listen, learn, engage the teams, be transparent and open, identify areas of opportunity," the CEO offered in that interview. 

A clear No. 1

Having a list does not mean all things get equal attention at the same time.  For example,  globalization, which may be the number one priority, received the greatest attention in 2013 and made the most progress according to the Gazette interview. 

The globalization emphasis indicates an agenda should be treated as something dynamic, not linear, as new opportunities (or problems) emerge that were not thought about or present when the list was created. New leaders at the top soon discover that market forces demand flexibility in managing anything, including a list of priorities.

On the global checklist was the first acquisition in China with the $764 million purchase of Trauson Holdings Co. a lower-end manufacturer of medical equipment and devices. "Long term, emerging markets are very important and the fastest growing," Mr. Lobo said.   

A turnaround was needed in Europe so that's where more of the CEO's time was given to getting the right leadership in place.

Getting things done

No doubt the Chief Executive Officer spends a lot of time communicating his messages inside Stryker. The two Gazette articles are must-reading for employees and investors as the proposed path to the future is clear.   

Although Upjohn, GM, and Checker Motors lasted a combined average of 88 years, the fact they no longer exist is a reminder that corporate life comes without a guarantee.

To illustrate:

-Of the Fortune 500 companies that appeared on the first list, in 1955, only 71 hold a place on the list today. (The 1955 list included industrial companies only, whereas today's list also includes service companies.) 

-Nearly 2,000 companies have appeared on the list since its inception, and most are long gone.

When the CEO has a moment perhaps someone could take him by the former Upjohn administrative office site on Portage Road, not too far from the Stryker headquarters building next to Kalamazoo/Battle Creek International Airport. He would see a grassy knoll, with no sign of the Bruce Graham-designed building completed in 1961.  

The empty lot is a reminder to continually have the correct leadership agenda in place; work through the right people to have it successfully implemented; hold to core values, and adapt to market opportunities and changing customer demands.  

With hard work, and some luck along the way, Stryker Corp., now in its 72nd year, could achieve what The Upjohn Co. did and hit the century mark, even though there are no assurances that will happen. 

Yet for CEO Kevin Lobo, and everyone at Stryker, aging profitably is something a medical devices business, featuring orthopedic products, should know how to do.


(C) Bredholt & Co.