Medtronic - History

History

Medtronic was founded in 1949 in a garage in northeast Minneapolis by Earl Bakken and his brother-in-law Palmer Hermundslie as a medical equipment repair shop. They originally wanted to sell basketball pumps due to a shortage in the Midwest in the 20th century. Bakken began as a graduate student in electrical engineering at the University of Minnesota before he gave up his studies to focus on Medtronic.

Through their repair business, Bakken came to know C. Walton Lillehei, a pioneer in the field of heart surgery then at the University of Minnesota Medical School. Lillehei was frustrated with the pacemakers of the day, which were quite large, applied electrical current externally (requiring higher voltages), and had to be plugged in to a wall outlet to operate. The deficiencies of such pacemakers were made painfully obvious following a power outage over Halloween in 1957 which affected large sections of Minnesota and western Wisconsin. As a direct result of this blackout, a pediatric patient of Dr. Lillehei who was pacemaker-dependent died. The next day, Lillehei spoke with Bakken about developing some form of battery-powered pacemaker. Stemming from this need, Bakken modified a design for a transistorized metronome to create the first battery-powered external artificial pacemaker.

The company expanded through the 1950s, mostly selling equipment built by other companies, but also developing some custom devices. Bakken built a small transistorized pacemaker that could be strapped to the body and powered by batteries. Work into this new field continued, producing an implantable pacemaker in 1960. Medtronic's main competitors in the cardiac rhythm field include Stryker Corporation, Boston Scientific and St. Jude Medical.

The company remains focused on the mission originally written by co-founder Earl Bakken in the early-1960s. The first sentence of the six-paragraph mission statement reads:

In most recent times and in concomitance with the economic crisis, Medtronic faced a dramatic drop in its stock value. Despite sales and margin where still well above the average of most industries (steady revenue growth since 2008; gross margin above 60%), Medtronic initiated a series of restructurings (in 2008; 2009; 2010 and 2011). The restructuring where contradictory and mostly inconclusive, focusing mainly in cutting mid and low-level employees, maintaining intact the privileges of senior management.

Part of the Medtronic mission also states:“To recognize the personal worth of employees by providing an employment framework that allows personal satisfaction in work accomplished, security, advancement opportunity, and means to share in the company's success”. Despite this, most of Medtronic policies focus in securing privileges of Senior Management: allowing only senior management to fly business-class on long couriers’ flights, not covering its employees with travel insurance when traveling for business, dramatic salary differences amongst senior and mid-level employees or the fictitious participation to the company profit (2/3% of a Product Specialist Vs. 30% of a Director)