Why Doctors Can Be Good at Inventing But Bad for Innovation

Written

Why Doctors Can Be Good at Inventing But Bad for Innovation

A study shows why medical startups need top executives who are skilled at turning ideas into products.
A surgeon at work.
Research shows having only doctors as inventors, or having doctors as CEOs, can actually slow innovation down. | Reuters/Keith Bedford

Technological breakthroughs in surgery don’t always attract as much public excitement as those in smartphones or self-driving cars, but they have in many ways been at least as life-altering.

Thomas Fogarty’s invention of the balloon catheter in 1961, which allowed surgeons to remove blood clots in a one-hour procedure, launched a revolution in “minimally invasive” technologies that radically simplified surgery on everything from knees to heart valves and brain tumors. Robotics, 3D imaging and computer-guided ultrasound are expanding the surgical boundaries even further.

Practicing surgeons like Fogarty have fueled much of this innovation. They understand the medical challenges better than anybody. They are expert users who see opportunities to improve on current technologies, and they constantly exchange ideas when they talk shop. Like Fogarty, many surgeons are tinkerers and entrepreneurs in their own right.

Entrepreneurial startups have been a major source of advances in medical technology, especially in the field of surgery. The San Francisco Bay Area has been home to about 40% of all U.S. medical-device startups in the past 30 years, followed by San Diego and Boston.

But a new study finds that there can be too much of a good thing. Having only doctors as inventors, or having doctors as CEOs, can actually slow innovation down.

To be sure, the study confirms that practicing doctors are essential to inventing new medical technology. But it also shows that doctors don’t necessarily have all the skills to manage the broader process of innovation.

“Diversity of expertise fuels innovation, and doctors are great at bringing that variety to technology-focused startups,” says lead researcher Riitta Katila, a professor of management science and engineering at Stanford University. “But you also need diversity of expertise in selecting which ideas to implement.”

That was what Katila and her colleagues – Stefanos Zenios at Stanford Graduate School of Business; Michael Christensen, a doctoral candidate at Harvard Business School; and Sruthi Thatchenkery, a doctoral candidate at Stanford – found in a study of 231 medical-device startups that received their first round of venture capital funding from 1985 to 2009.

The researchers tracked innovative prowess in part by the rate at which companies won new medical-device approvals from the Food and Drug Administration. In addition, they carried out extensive anonymous interviews with physicians and non-physicians at the companies.

Adding a doctor to the invention team initially boosted the number of new ideas. But when the firms began selecting which ideas to pursue, having people who were all rooted in one camp, such as doctors, led to groupthink.

“When diversity in selection is lost, a decision-maker is likely to go back to old patterns of thinking,” Katila says. “They risk passing over the truly novel, different ideas that would result in radical innovation.

“CEOs in young firms are not supposed fall in love with any one idea,” Katila says. “Their job is to consider many points of view in deciding where to commit precious resources. Professional doctors and surgeons aren’t usually as well suited to that.

“One way to think about it is that a CEO has to say no a lot,” says Katila. “And when they say yes, they need to be sure to have picked the right solution and direction to take the company. You are the ultimate decision-maker, and you are under time pressure. The environment in a startup is hectic, and you have to make difficult choices all day. If you put a doctor-specialist in the role of CEO, he will tend to go back to tried-and-true solutions. That’s good if you’re trying to make something a little bit better, but it can kill more fundamental innovation.”

Practicing doctors are essential to inventing new medical technology. But they don’t necessarily have all the skills to manage the broader process of innovation.

One motivation for the study, says Katila, is that policymakers in Washington are increasingly eager to block potential conflicts of interest between doctors and for-profit companies. A “sunshine” provision of the 2010 Affordable Care Act, for example, requires both pharmaceutical and medical-device companies to disclose payments to a physician totaling more than $100 annually. As an unintended consequence, the measure appears to have discouraged doctors and device manufacturers alike from any kind of collaboration.

One of the study’s clear findings is that innovation at medical-device startups is heavily dependent on doctors.

“The question is which other roles should be staffed with physicians versus which ones could be staffed by others with no harm to innovation,” Katila says.

Perhaps not surprisingly, some 59% of the ventures studied employed at least one surgeon-inventor. Up to a point – but only up to a point – the more surgeons that a company had on its invention team, the better it did at getting regulatory approval for new devices. The sweet spot for ongoing innovative prowess, Katila estimates, was when surgeons made up about 40% of a company’s invention team. If the invention teams became more top-heavy with surgeons, however, the rate of FDA approvals declined rapidly.

Why? One reason seems to be myopia: Unless practicing surgeons were challenged by team members from different backgrounds, they became bogged down in conventional wisdom and incremental improvements.

The opposite problem arose at some companies: “pie-in-the-sky” ideas by doctor-dominated invention teams that lacked people with practical product-development experience. “You need interdisciplinary skills and a diversity of perspectives,” Katila says.

About 25% of the startups had chief executive officers who were practicing surgeons. Those companies had a markedly slower pace of innovation than those with non-physician CEOs. On the other hand, companies did quite well when they had surgeons on their boards of directors. As directors, the surgeons could provide strategic guidance and practical insights without becoming enmeshed in day-to-day decisions.

The reason for this mixed performance, Katila and her colleagues write, stems from particular strengths and weaknesses that practicing doctors bring to business ventures.

The great weakness in relying solely on doctors, or on any group with just one area of expertise, is that the experts reflexively apply past practices when faced with difficult choices. They are poor at judging which ideas to implement for innovation and which to pass over.

The great strength of practicing physicians, in contrast, the study finds, is their deep expertise about both medical needs and existing technology. They instinctively think about how a device could work better, and they sometimes think up entirely novel strategies.

That was the case with Thomas Fogarty, who invented the balloon catheter. Instead of opening up a patient to get at a blood clot, a difficult and risky operation, Fogarty came up with the idea of threading a tiny tube with an inflatable balloon into a person’s blood vessel through a very small incision. The balloon could be inflated to widen the vessel’s passageway and open up the blood flow.

To successfully innovate on a continuous basis, companies need top executives who are skilled in transforming ideas to products. That’s where multidisciplinary teams of engineers and business managers, together with physicians, can make life-changing products come to fruition.

For media inquiries, visit the Newsroom.
Explore More

Insights

A sign marking the premises of the Intellectual Property Office | iStock/whitemay
May 24, 2017
Written

Why Do Some Innovations Stick? Quite Simply, Because They’re Better

Patent gatekeepers require truly original ideas to be stronger, but there’s a downside.

Insights

Baidu's robot Xiaodu | Reuters/Kim Kyung-Hoon
March 11, 2017
Written

Andrew Ng: Why AI Is the New Electricity

A computer scientist discusses artificial intelligence’s promise, hype, and biggest obstacles.

Insights

The Tech Crunch Disrupt conference in San Francisco, California.  | Reuters/Beck Diefenbach
March 7, 2017
Written

Why You Don’t Understand Disruption

It’s not that big companies are bad at inventing; it’s that they’re bad at organizational shifts.