The act of walking up to a door and pulling it open is something most people do many times every day without even thinking about it. For those in a wheelchair, however, it’s considerably more difficult.
“We make remarkable products that can enable somebody with real high-end needs to do amazingly typical things,” says Matthew E. Monaghan, chairman, president and CEO at Invacare Corp.
“They can go to work, go to school and have a social life. But as a business, we still look for things that aren’t solved. A pull door can be a huge barrier for someone in a wheelchair. Fifty percent of the time, you’re on the pull side. I can get you out of bed. I can help you with hygiene.
“I can get you on the bus or get you to work. But it’s still a challenge if you have a door that needs to be pulled open. These fundamental things that are taken for granted in many parts of our lives become very interesting problems for us to work on.”
When he arrived at the medical equipment manufacturer and distributor in 2015, Monaghan was eager to get to work and begin solving some of these complex challenges. However, he first had to confront two significant obstacles.
The first was the continuing fallout from a 50 percent cut to the federal reimbursement that customers typically receive for many of the products that they buy from Invacare.
“We’re universally regarded as having a durable product,” Monaghan says. “If you wanted to pay for something you could reuse and reuse and reuse, we were what you wanted. When that reimbursement went way down, some customers thought, ‘Maybe I’ll buy a disposable unit.’”
The other problem was the levying of a consent decree by the U.S. Food and Drug Administration. This act essentially halted the design, manufacture and distribution of power wheelchairs and wheelchair components from the $1 billion company’s Taylor Street manufacturing facility.
“It was the culmination of a number of interactions with the FDA over the years where the company had not kept pace with the FDA on expectations over paperwork,” Monaghan says. “The consent decree was a precipitating event for Invacare, and it caused us to evaluate all areas of the business.”
As a result of the consent decree, which was issued in December 2012, and the reimbursement cut, Invacare went from net earnings of $1.8 million in 2012 to a net loss of $56 million in 2014. The board reached out to Monaghan to get things back on track at the 4,200-employee company.
“I was open to new opportunities and Invacare was looking for a new CEO,” Monaghan says. “The timing worked out really well.”
Thinking at the next level
Monaghan embraced the challenges at Invacare. Ever since he was a young boy growing up in western New York, he wanted to be an engineer. He had a family friend who had started a company in his garage and Monaghan watched intently as the friend built the venture into a large aerospace business. He’s never lost that love of fixing things. His passion just evolved a bit as the years went by.
“It’s the new manifestation of my engineering acumen,” he says. “It’s not fixing a mechanical engineering problem. It’s fixing a business problem. When I get to a place like this — harvesting the talent and mixing the ingredients in a different way — I get a lot more satisfaction out of it.”
As he got to know the company, he sensed that others in the organization were expecting a quick turnaround.
“There was a thesis,” Monaghan says. “Get a CEO from the outside, get him to fix the consent decree and it’s back to business the way it used to be. But when I came here, I didn’t start with that thesis. My thesis was what is this company capable of doing? What is the market evolving into? What can we do to create sustainability?”
Monaghan had high praise for the many acquisitions that Invacare founder Mal Mixon had made during his leadership of the company. He felt those companies would play a key role in Invacare’s future.
“Within our portfolio of 50 or 51 companies Mal and his team had acquired over the years, we have some of the best technology available in the markets we serve,” he says.
That technological capability could play a part in helping Invacare develop new offerings that would fuel the company’s effort to recover from its difficulties. As Invacare took steps to assess its processes and satisfy the requirements of the consent decree, Monaghan was building a team that could give a new lease on life to those with physical impairments.
“We are blessed with this mission and theme that is to put a person at the center of our effort who needs care and independence 24 hours a day,” he says. “If they need one of our high-end products, they probably need a lot of our high-end products.”
Addressing those needs takes a nuanced approach, Monaghan says. It’s about more than just creating a wheelchair or a set of crutches. It comes down to thinking about the people who use those products in a very detailed, granular way.
“You don’t need just a wheelchair,” he says. “You need to go to work. What’s involved with going to work? Is it getting on a subway or getting in or out of a car? Does your work involve business meetings and meals? You can’t use both hands to propel yourself if your job entails going out for coffee.
“It’s about knowing the person who most directly benefits from our product, then looking at the non-professional care providers around the family who live with risk, trust and hope and a second career they didn’t know they were going to have as a caretaker.
“If we understand those needs, that’s important. The strategy has been to take our capabilities across this portfolio of subsidiaries and try to amalgamate them into holistic solutions that do a better job of meeting that nuanced need.”
One of the first steps to creating the new Invacare was making all those acquisitions feel more like part of the Invacare team.
“When I got here, most of the subsidiaries were best-in-class in their products,” Monaghan says. “Maybe they would make a seating system, but not the whole wheelchair. And before I got here, they were permitted to sell the seating system to all of our competitors.
“In fact, the first time I went to a trade show, I was kind of expecting the Invacare booth, but they all had their own patch of carpet. When I went to their carpet, they would have all of our competitors’ products interface with their component to show their independence. So in 2015, we said Invacare has to win all ties.”
From that point on, if there are two subsidiaries or more with products that can go together, they have to go to together, he says.
“And when they’re put together, they have to do something special,” he says. “By doing that, instead of saying we sell a lot of things, we could say we aggregate a lot of great solutions. Then we can integrate better solutions. And by the way, if you go to the trade show from that point forward, you will all be on the same patch of carpet.”
It was a move made to focus everyone on the importance of making the Invacare brand the best it could be. To get there, a company needs people who aren’t simply punching a time clock and collecting a paycheck.
“You have to have enough people who have a view of excellence that it’s the ante,” he says. “I’ve never been on a professional sports team or been around them. But I’m assuming when LeBron James or somebody gets his teammates together, they’re not talking about the basic rules of basketball or what the fundamentals are. They’re all about the nuanced play. So all of our calories, time and effort are on the nuance of play and not practicing free throws.”
It’s one thing to talk about innovation and thinking outside the box. In order for it to happen, the leader has to empower people to take the actions that lead to those groundbreaking ideas.
“As smart as any one person can be or as good as their vision of excellence is, you have to have the vast majority of the population oriented to make the right decision every day at their desks, cubicles and work stations,” he says.
“To do that, they have to understand the vision and where you’re going. You have to teach them what the criteria is for decision-making and you have to have leaders who understand they’re not all going to be great. Just because you have less than perfect decision-making doesn’t mean micromanaging is the answer.
“Show them the link between what they do and what the overall company is trying to do. Our company’s mission isn’t to make marketing brochures or financial statements. Our mission is to bring products to the market for people who can use them.”
Amazon is a great example of the power of process, Monaghan says.
“Amazon doesn’t make anything,” he says. “It’s the interaction of all the things that got the transaction to happen in this uniquely great way and you want to do it again. We have to have everybody at Invacare know how they play their part. It’s putting the label on the container. It’s getting the packaging right. It’s getting all the configuration right so when that person who has a grave need turns on the product, it works.”
Listen and learn
One of Invacare’s proudest achievements is the family of wheelchairs that are collectively referred to as the Total Drive eXperience line, or TDX. The current model is the TDX SP Power Wheelchair.
“It’s the first wheelchair that any company has ever made that is wirelessly programmable and wirelessly can transmit data about itself to the user, to the provider who put it in service and services it and to a clinician,” Monaghan says.
“That’s really amazing because with all the modernity that we think of with our smartphone, now all of a sudden, the user can have information about how they are using their wheelchair.”
Invacare now offers wheelchairs that can programmed from a tablet with adjustments made in real time. It gives users a better, more seamless experience with the product and provides numerous other benefits.
“They can gamify their therapy so they can make good progress,” he says. “They can understand why the chair does what it does so they can do more. Are they getting out and about as often as they should? Are they doing things to keep their tissue and other organs healthy?
I can give data to the provider so the provider can have remote diagnostics and preventative maintenance — not everything is an urgent cry for help that costs a lot of money to schedule an urgent pickup. And I can give that data to a clinician so they can compare that person’s progress on therapy to a normative population with the same therapy to see how things are going.”
The ability to come up with innovation that keeps a company ahead of its competition often comes down to a company’s ability to hire people who are both good listeners and good observers.
“If you want to know what the next generation of breakthrough products is, the last thing you’re ever going to do is ask,” Monaghan says. “The iPhone didn’t come from people who use Sony Walkmans. They would have just asked for a longer battery life. Our team has a clinical background and an industrial design background.
“They understand what can be accomplished with electrical and mechanical design. But they are also really good at observing and understanding what challenges need to be overcome. The world has lots of good wheelchairs and we make many of them. But the way to grow share, profit and interest and solve more problems for people is to still figure out what the challenges are they can’t get to.”
The recovery at Invacare is ongoing. In December, the company announced a reduction in force of 110 employees across the company’s North America segments.
“We are realigning our North America infrastructure with our new sales levels and finding more efficient ways to do business,” Monaghan says. “Through this action, we are empowering employees to drive simplification and enhance customer engagement. We expect the result to lead to improved cost-effectiveness as we pursue growth.”
But Monaghan is confident that Invacare is on the right path to a bright future.
“My first year was really about getting investor trust with the vision ahead of results,” he says. “The second year has been demonstrating that results kept up with what we said we were going to do. And now we’re continuing to talk to them about what remains.
“My journey is all about transformation. To be a good leader, you have to be a good simplifier and a good communicator. There’s a whole other generation of Invacare ahead of us. The information age is going to apply to Invacare in a big way.” ●
How to reach: Invacare Corp., (800) 333-6900 or www.invacare.com
- Embrace every challenge you confront.
- Find ways to make your brand stand out.
- Don’t wait for customers to ask for a new product.
The Monaghan File
NAME: Matthew E. Monaghan
TITLE: Chairman, president and CEO
COMPANY: Invacare Corp.
Education: Bachelor’s degree in mechanical engineering, Cornell University; master’s degree in mechanical engineering, Massachusetts Institute of Technology; MBA, INSEAD, Fontainebleau, France.
Monaghan on solving problems: I went to college to be an engineer and I graduated and went to work for General Electric. I got diverted from an engineering job into a general management training program. It was 100 percent travel, most of it outside the U.S. You got four-month assignments.
You were given a problem and they wouldn’t tell you what the source of the problem was. They would just tell you the symptom. You had a couple weeks to get your feet on the ground and understand the industry, three months to get it sorted out and a couple weeks to report to the leader of the business. I learned how to learn, how to do quick assessments and how to focus on things that would really make a difference.
What is your approach to M&A? In the short term, the gap to even greater success isn’t filled by acquisitions. We’ve done some divestitures since I’ve been here and we’ve been de-emphasizing some of the sales that don’t contribute a lot of value or don’t fit this strategy that we have. We have a huge commercial footprint and a lot of infrastructure to get products to market or create products.
So there are opportunities to bring in pieces of technology whether it’s patents or components that can make things work differently. In a way, we’re still learning to harvest the acquisitions that Mal made. We still have a number of founders that work at the acquisitions and their subsidiaries and we’re still integrating them.