Through a focused business media relations campaign, Medtronic and Weber Shandwick transformed the perception of Medtronic. Known historically as a “pacemaker” company, Medtronic is today recognized as the undisputed leader in medical devices and one of the best-performing and most well run Fortune 500 companies. This transformation played out against investment community concern about Medtronic’s ability to successfully integrate several major acquisitions. In 2000, the communications team was able to extinguish doubt by demonstrating Medtronic’s financial strength, leadership and management vision. As a result, Medtronic’s stock soared 77 percent in 2000 and the company was recognized as one of Fortune’s “Most Admired” corporations, “Best Companies to Work For” and on Forbes’ “Platinum List.”
In the last quarter of 1999, Medtronic was finishing an aggressive period of growth through acquisition. These acquisitions doubled its revenue base and significantly broadened its product line in just 18 months. Wall Street applauded the acquisition efforts but as the pace slowed, began to doubt Medtronic’s ability to integrate them.
The doubt was captured in a Barron’s article questioning Medtronic’s prospects as perceived by institutional investors who had sold their positions in the company. Following publication of this article, Medtronic’s stock plunged and was downgraded by some financial analysts. Around the same time, Fortune published a feature article that, although generally favorable, echoed concerns about the company’s ability to continue growing and commanding a high price/earnings multiple for its shares.
Overcoming these doubts was the challenge for Medtronic and its communication team. The communications opportunity was to build on the rapid expansion and to position Medtronic as not only the category-defining company in the medical device industry, but also a truly world-class company and a model of business excellence.
Research: Research in support of the program required identifying the key concerns and doubts about the company’s future as expressed by investors and the business media. These were easily identifiable as evidenced by the Barron’s “Acquisition Indigestion Could Cause Pacemaker King Medtronic to Skip a Beat” and Fortune’s “How Smart is Medtronic Really?” articles.
Planning: The communications team met with management and created a communications roadmap for the company. Milestones on this roadmap included company events such as earnings announcements and corporate anniversaries but also included two critical communications elements:
- Launch of Medtronic’s new strategy, “Vision 2010”; and
- Announcement of a successor to CEO Bill George.
Objectives: The team agreed on the following communications objectives:
- Continue to build confidence in the Medtronic story.
- Reposition Medtronic as the world leader in medical devices and a leading Fortune 500 company.
- Create acceptance of Vision 2010, the company’s long-term strategic plan.
- Position Medtronic management as both architects of the future of medical technology and thought leaders in the business world at large.
- Manage the CEO transition.
- Support Medtronic’s business units and products in the business media.
STRATEGIC APPROACH AND EXECUTION:
The communications team took a holistic approach to media relations and communications. This meant ensuring that every opportunity to communicate helped reinforce key messages about the company’s strategy and performance while also ensuring that all communications were amplified broadly to echo those messages. For example:
- Every major news release and communications effort included links to the overall strategic direction of the company.
- Whenever appropriate, communications in settings that were not primarily for the news media were nevertheless used to reach the media. In one case, a speech delivered by the CEO became the basis for a feature in USA Today.
- Cultivating productive working relationships with the media remained a priority:
- The CEO was made available to the media for comment after nearly every significant announcement, even in difficult times.
- Top management met one-on-one with key reporters regularly.
The company took some calculated risks in its media relations posture when the potential returns merited it. For example, it allowed a Fortune reporter extraordinary access to its people, enabling the reporter to accompany a different employee home each night for a week to meet the employee’s family and discuss life at Medtronic to demonstrate why the company belongs on Fortune’s “Best Companies to Work For” list. This effort resulted in an eight-page feature on Medtronic and the company’s inclusion on this high-profile list.
The launch of the company’s long-term strategic vision was staged so that the aspirations expressed were manifest in substantive action.
Launch of Vision 2010 was timed to coincide with Medtronic’s announcements of alliances with Microsoft, IBM and WebMD, all tangible examples the strategic intent outlined in Vision 2010 – and all category-leading companies in their own right.
The CEO succession announcement was orchestrated for maximum impact and effectiveness.
The announcement was formally made at the company’s annual meeting of shareholders. This provided an appropriate venue to replay for shareholders the transformation wrought by the acquisition strategy and the plans for sustaining the company’s growth under new leadership.
Key reporters were given the succession announcement under embargo. This allowed them time to put together feature-length pieces incorporating third-party endorsement of the accomplishments of the retiring CEO and the qualifications of the incoming successor.
SUMMARY OF RESULTS
The business media relations campaign conducted throughout 2000 has helped successfully position Medtronic not only as the category-defining medical devices company, but as a truly world class firm among all companies.
Influential business media acknowledge Medtronic as the leader in its industry and an outstanding performer by almost all measures, regardless of industry.
Communication surrounding the launch of Vision 2010 helped win confidence and support among investors, as reflected in the upward trend in the company’s share price immediately following the unveiling of the strategy and the related partnership announcements. Similarly, the investment community received the news of CEO Bill George’s retirement with total calm, reflecting confidence in the qualifications of successor Art Collins, faith in the broader management team and comfort with the company’s strategy.
Evidence for the success of the communications program abounds in the media coverage generated in 2000, the investor commentary on the company’s performance and prospects and, ultimately, in the price of the company’s shares. Examples include:
- The Economist’s face value column: Devices and Desire: “Bill George revolutionised Medtronic, one of the world’s leading medical-device companies. Now he wants Medtronic to revolutionise health care.”
- Fortune’s Best Companies to Work for cover story: “A Human Place to Work, a Company can’t be Everything to all People, but It can try. Here’s the tale of Medtronic’s Efforts”
- Forbes Platinum List: “Medtronic: Pacing the Field”
- WSJ’s Corporate Focus: “MDT to Name Collins to Succeed George as CEO, Former Abbott Labs Exec has Reputation for Making Acquisitions Work”
- USA Today’s Advice from the Top: “Product Development can fill prescription for success. Today’s Topic How to Handle the demands of a company that’s growing quickly”