Constructing on Success within the Covid Period – An Interview With Intuitive’s CEO Gary Guthart

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Gary Guthart is Chief Executive Officer (CEO) at Intuitive (formally Intuitive Surgical – NASDAQ: ISRG), and a member of the Board of Directors, roles he has held since 2010. Under Guthart’s leadership, Intuitive, the world’s most successful medical robotics company, has grown to more than 8,000 employees, and sold nearly 6,000 da Vinci Surgical Systems. The company’s stock is up more than 600% during his tenure. Guthart is also on the Board of Directors for Illumina, and a member of the Board of Directors for the Silicon Leadership Group. Guthart received a bachelor’s degree in engineering physics from University of California, Berkeley. He earned an MS and a PhD in engineering from the California Institute of Technology.

Gary Guthart was recently interviewed by Joanne Pransky for Industrial Robot. That interview is reprinted below, with minor modifications. The original interview can be found HERE.

Joanne Pransky – Why did you decide to leave SRI International, one of the world’s best nonprofit research institutes, and go work for this new corporate spin-off called Intuitive Surgical Devices in 1996?

Gary Guthart Side 1Gary Guthart – It was not an obvious decision for me to join Intuitive Surgical when I was offered a position. I am not a roboticist by training; I was formally trained in nonlinear mathematics.

I was introduced to robotics at SRI International when Ajit Shaw, who ran the SRI Medical Robotics Lab, asked me to work with their group. My introduction to that work was suturing a femoral artery of a rat, first by hand, and then using their robotic prototype. I was skilled at assembly from building models and other projects that filled my garage growing up. However, it was the first time I was exposed to anything medical.

I tried suturing by hand, using loops and Castroviejo needle holders, and it was really difficult. I then tried it on their robotic system and immediately fell in love with the technology.

I loved working on the SRI team and initially declined the job offer from one of the three founders of Intuitive. Thankfully, Rob Younge, the founder who was recruiting me said, “Let’s have another conversation. Talk to the other founder, John Freund, a venture capitalist and a brilliant man.”

John came out and we sat down at a local coffee shop. I was about 28 at the time and I knew nothing about the startup world. John on the other hand, was quite experienced. He said the following to me, and it really stuck, “Regardless of whether you want to be a commercial technology person or not,” (I was just quite happy with the view of myself as an applied researcher) “you’ll be a better researcher if you see what it really takes to try to make these prototypes commercial. Succeed or fail, you’ll be better for it and SRI will still be there, but you will be more valuable to them having seen what the process really is.”

I went home and I talked to my wife Dawn about it. Dawn’s an adventurer and she said, “He’s right. Go for it!” So I said yes and thankfully, I listened to them both.

In science-based businesses, I think leaders need to acquire some level of fluency in many domains – strategy, operations, organizational leadership, technology and science and finance.

Joanne Pransky – When you made that transition, was it on your mind to become a CEO?

Gary Guthart – I joined Intuitive in April of 1996 as a controls system analyst and I met the CEO of Intuitive, Lonnie Smith in early 1997. Lonnie is a spectacular human being as well as a fantastic businessperson. Those two attributes are not always found in the same person, and fortunately, he is both.

Lonnie had a lot of diverse experiences. He was an electrical engineer by training (BSEE) and then went to Harvard Business School (MBA), then went to the BCG (Boston Consulting Group)… a classic business leader background.

A couple of years in, Lonnie said to me, “Gary, I think you have skills and attributes beyond what you think you might.” Lonnie planted the seed in me that I might be capable of doing more, even though I hadn’t aspired to at that time. I loved seeing the direction of Intuitive, but I did not feel like I had to be the person leading the company, and I did not have a burning ambition to be the CEO. I still don’t. But Lonnie invested his personal coaching and drive in me.

Intuitive Surgical Set-Up

Figure 1: Intuitive’s da Vinci Surgical System Operating Room Set-Up

Joanne Pransky – A lot of technical entrepreneurs go on to study business management to acquire business skills. How did you acquire yours?

Gary Guthart – I was fortunate to have great mentors. Founder Rob Younge, a brilliant man and a wonderful technology leader, invested, like Lonnie, in teaching and mentoring me on the business side. As an avid reader, I like to learn by reading. Lonnie would frequently drop a book on my desk with a Post-It Note on it that said, “You might find this interesting.” What he meant was, “You’re struggling with something the solution to which is in this book and I’d like you to find it.” It was like a puzzle to me.

It took me about a week to read the book and then Lonnie and I would sit down and we would discuss whatever I was struggling with. He really was more than a boss. He was teaching me in a fantastic way that I understood. A little later, he sent me, and later others, to executive education courses at universities such as Harvard, Caltech and Stanford, so we also obtained some formal training on finance, business and marketing.

Joanne Pransky – Turning this question around, do you think business school graduates should acquire technical skills?

Gary Guthart – In science-based businesses, I think leaders need to acquire some level of fluency in many domains – strategy, operations, organizational leadership, technology and science and finance. The reality is that no formal education gives you all of it, but I think there are a few things that can supplement. One is a genuine curiosity that captures your imagination, and the other is the love of the mission.

I think there are a lot of really smart people who are expert in all these different areas who will mentor you, if you know how to ask. I have great friends and colleagues who started in finance, or in the arts, and ended up in the health-care sector. They are super curious about the technology, and attracted deep people because of the mission.

Gary Guthart Side 2Joanne Pransky – What do you think Masters and PhD engineering students should be doing in school to best prepare themselves for the real world of engineering?

Gary Guthart – I think both the formal and informal worlds of engineering are awesome. I was really fortunate. I grew up in a town, the same town I live in now, where we have a NASA base down the street. I could ride my bike to the NASA Ames Research Center.

In my senior year in high school, I was a shy latchkey kid. Without my knowing, my high school math teacher signed me up for a NASA internship. He told me to ride my bike over there and meet Sandra Hart, who ran the Human Systems Integration Division. As a result, in my early years, I had both real-world experience and great opportunities to learn in formal settings.

In the formal settings, I would advise students to master the formal tools of engineering. You do not have to be at Stanford University or other top university to obtain mastery, and we have seen many fantastic entrepreneurs and technologists master those tools in different settings.

Formal learning is important, but it is not enough. The exciting part about real-time work is that tech customers generally care about solving whatever problem they are struggling with and do not care about the technology per se.

Start with the mastery of tools through schooling, but then really get yourself into the customer’s needs and the problems you as a technologist can solve. Clayton Christensen’s construct is helpful here – that deeply understanding the problem can lead you to an elegant tradeoff as to which solution makes the most sense.

At Intuitive, we have manufacturing and healthcare capabilities. We do not traditionally make personal protective equipment (PPE), but when demand was lacking for our products because of COVID, we converted our factories to create PPE and we donated it.

Joanne Pransky – As CEO of the world’s most successful medical robotics company, what keeps you up at night?

Gary Guthart – Two different things. In a pandemic year, there has been a lot of “up-at” nights. At Intuitive, we have had both a massive challenge and a sacred obligation to being both healthcare experts and technologists. The obligation has been, how do we help our customers? How do we help our staff be safe and productive? How do we help our supply chain stay fresh, whetted and full? How do we help communities?

At Intuitive, we have manufacturing and healthcare capabilities. We do not traditionally make personal protective equipment (PPE), but when demand was lacking for our products because of COVID, we converted our factories to create PPE and we donated it. There is no sense in having medical device factories idle when you can make something that people need. These activities and others kept us busy in 2020 and I think it aligned our company toward our values.

Outside of the pandemic, I think the opportunity for better healthcare is just massive. Our generation and the next generation will continue to work on it. The challenge then for a company like ours, is not a question of where do we find opportunity to work on, but how do we choose a productive pathway? How do we advance as a company and remain as dedicated, passionate and committed as when we were a small company?

Larger companies do not have a problem with hiring intelligent people, or securing financing and resources. But sometimes they forget their mission, and mediocrity creeps in. I worry a great deal about keeping focused, vibrant, and continuing to strive toward excellence.

Intuitive Surgical

Figure 2: Intuitive’s Systems Lineup – Surgeon Console, Vision Cart, da Vinci Xi, da Vinci SP, da Vinci X

Joanne Pransky – For years, Intuitive’s position in the marketplace has been protected by patents that have now come to an end. Do you think that this has encouraged Intuitive to push technical boundaries even more?

Gary Guthart – For one thing, competition is natural. If we were at this for 25 years and did not have competition, you would be worried that we were not doing something of interest or importance.

We have not stopped innovating at Intuitive. While it’s true that our early systems are off-patent, we continue to invent new technologies, along with several thousands of new patents and patent applications.

I do not think [competition is] robot versus robot. I think it’s about ecosystem versus ecosystem. The technologies and services that deliver better outcomes and experiences for the patient, and better experiences for the care teams, with lower total treatment costs.

Joanne Pransky – If you could wave a magic wand to solve one technical problem today, what would it be?

Gary Guthart – I think there are two places that are really interesting. One is that there has been enormous variability between care teams. Surgery has a large standard deviation between its care team of four or five people – surgeon, physician’s assistant, anesthesiologist, circulating nurse – who are orchestrating that procedure.

The variance between the good ones and the less good ones is quite high due to factors such as experience, training and level of competency. I believe imaging, cloud computing, the Internet of Things (IoT), sensing, and machine learning can really start driving closure of those gaps.

If we can help surgeons using physics and some new technologies to illuminate disease, as well as the things that surgeons should not injure during a procedure, such as nerves or deep blood vessels, we can substantially improve safety and surgeons’ guidance.

It’s not that “everybody is the same.” The difference between a lowest quartile care team versus the upper quartile care team in complex procedures can result in about two to three times the likelihood of patient complications or readmissions to the hospital. That’s an enormous opportunity for improvement and I think imaging, machine learning and cloud computing can make a powerful difference.

The second technical needed is a collection of sensors that can construct a view of the world that allows for successful surgical navigation. In most cases, surgeons cannot see a cancer when they’re doing cancer procedures. They have a preoperative image that guides them, but some cancers are totally invisible to the unaided human eye.

If we can help surgeons using physics and some of the new technologies to illuminate disease as well as the things that surgeons should not injure during a procedure, such as nerves or deep blood vessels, we can substantially improve safety and surgeons’ guidance. These are are two massive opportunities, [that if addressed will] change the conversation and outcomes.

Gary Guthart Side 3Joanne Pransky – What is the greatest lesson or largest mistake you have made?

Gary Guthart – There are plenty of lessons and mistakes. My mom was a high school science teacher and my father was an electrical engineer who later in his career became a startup leader for a small defense company. Science is in my blood. Literally. The Physics of Fluids was a magazine on my parents’ coffee table.

When I came out of school, I was really excited about technology first. Then I learned pretty quickly that healthcare is a “human-first” endeavor. If you go ask the surgical experts and do the workflow analysis, it’s about 60 human beings who have to do the right thing the day of surgery for that patient to have an optimal chance of a good outcome.

Approaching medical challenges as human first, and anchoring on patients’ needs with technology as an aide, was really something that was super important. My most challenging lessons were viewing through the eyes of the patient first, then viewing through the eyes of the care team and then viewing through the eyes of the healthcare organization. If we invert that order and fall in love with a particular technology, we find that actually carries us a little bit in the wrong direction.

Joanne Pransky – What is your proudest moment in your career?

Gary Guthart – The things that I am most proud of have to do with people, and not an invention or technology. When I think about being in the operating room, design room or in the manufacturing labs, working with incredibly bright, driven and courageous people to bring cool and important missions to life, are what I find most satisfying.

Sometimes you can get higher performance in something that is used only once, but in general, it is not a great idea. It increases costs, medical waste and transportation costs, and also leaves a carbon footprint.

Joanne Pransky – Hospitals have to look at the overall costs of treatment, reducing length of hospital stays, and reduction in complications as the major selling point for robotic technologies. What can be done to reduce the cost per operation of using robotics like the da Vinci surgical system?

Gary Guthart – I think the core economics that matters most to the healthcare system is the total cost-to-treat per patient episode. In terms of the hierarchy of costs, it turns out that the robot itself is the part that everybody focuses on, but actually is not the costliest item on a per procedure basis.

The cost of the parts, service and capital allocation for the robot are a small fraction, about 10% of the total cost expenses. Furthermore, over time, we have had a chance to refine our design and manufacturing prowess. We have used advanced manufacturing techniques to create lower costs for our instrumentation. We have recently also implemented some scale advantages in terms of our supply chain and our manufacturing capabilities that likewise lower costs.

The highest cost is human staff, the second highest is the time in the OR, and the third is the operating room consumables. Single use sterile instruments, used once and thrown out, are typically more expensive, not less expensive.

Sometimes you can get higher performance in something that is used only once, but in general, it is not a great idea. It increases costs, medical waste and transportation costs, and also leaves a carbon footprint. In general, reuse is a better idea than single use, with the exception of very few things where waste costs can be managed.

Joanne Pransky – Is it is it possible for hospitals to do two operations a day every day of the year? How much downtime should they assume for routine maintenance?

Gary Guthart – What drives utilization has little to do with the robotic system and almost everything to do with the kind of surgery. We have hospital customers who do benign surgeries, such as gallbladder surgery or hernia repair. They can do seven to eight per day, every day. On the other hand, if you are performing a complex colorectal cancer, you may only do two a day because of total surgical time and the uncertainty of the procedure.

In general, the amount of time the system is decommissioned for maintenance is less than 2% of the total operating time available to it in a year. Reliability is quite high. In industrial settings, people talk about mean time before failure, but it is somewhat different in our setting. In our setting, the assistant is right on top of the robot, right there with the patient. It is not automation in that sense. System availability to complete a case is greater than 99.9%.

Joanne Pransky has been an Associate Editor for Industrial Robot Journal since 1995. She was also one of the co- founders and the Director of Marketing of the world’s first medical robotics journal, The International Journal of Medical Robotics and Computer Assisted Surgery. Pransky also served as the Senior Sales and Marketing Executive for Sankyo Robotics, a manufacturer of industrial robot systems. She has consulted for some of the industry’s top robotic and entertainment organizations, including Robotic Industries Association, Motoman, Stäubli, KUKA Robotics, ST Robotics, DreamWorks, Warner Bros., and for Summit Entertainment’s film Ender’s Game, in which she brought never-seen-before medical robots to the big screen. She can be contacted at joannepransky[@]gmail.com.