You had a chance to think about, read, and answer some questions about the Johnson & Johnson case study. Here's our chance to debrief a little bit and let me share with you some of the lessons and insights that I got from it. Some of it, of course, will dovetail with things you've thought about already, but maybe take it in a couple of other directions as well. I mean, it's really quite a case when you read it because J&J is one of the greatest companies, innovative, successful, huge, but this is not their finest hour in the interventional cardiology business. There are a lot of lessons. Lesson Number 1. Here's an example of a big company that acquires a small company for all the good creative stuff that that small company was doing, and then goes about destroying that small company because of all that good creative stuff that they do. Johnson & Johnson bought Cordis. Cordis is a younger, very nimble company, very entrepreneurial, creative, and that's what they wanted. That's what they said exactly what they wanted. They went ahead and they bought them. Then all of a sudden, it turns out that this little company, Cordis, could not adapt to the Johnson & Johnson culture, the Johnson & Johnson style, J&J, this enormous company. J&J goes about imposing their will and posing their culture on this little company, and that's exactly the opposite of what they should have done. It's exactly the opposite of what they said that they would do. But I want to highlight that this is not an unusual problem. This happens a lot. Many big companies buy startups, entrepreneurial companies, tech companies. Sometimes they work well, sometimes they don't. But the biggest reason they don't work well is when you try to impose big company mindset logic, reporting bureaucracy onto this small nimble company. I remember years ago, Levi Strauss, so the giant jeans company. They bought this small startup. This was the early days of e-commerce, where this company had developed a blue jeans company that would be made to measure using the Internet, like Warby Parker does with their glasses as well. I can't remember all the details how it worked, but you'd do various measurements. They take a picture of you and you'd send it in and they'd make jeans that would fit you perfectly and they would do it in an e-commerce approach. Levi Strauss loved that idea and said, "This could be great, this could be the future." Then they bought them and then they destroyed them. The top people left because they couldn't stand the bureaucracy. They stopped getting the resources that they need and they weren't able to grow and go to the next stage. That's number Lesson 1. A really big lesson, a common lesson, but it definitely happened here. Lesson Number 2 is something I touched on earlier in one of the videos, is this is not an example of ''good'' and example of arrogance, complacency, and action. J&J and the fact that they were called arrogant by some of the leading doctors, and complacency because they were so far ahead of everyone else, 90 percent market share. In some ways, how do you blame them? They have 90 percent market share and you want them to keep changing and adapting and adjusting. Well, I'm going to say yes, I do want them to do that, but it's hard. It's really hard. That's why extreme success, 90 percent market share, is one of the early warning signs for failure because of arrogance and complacency. Let's even add Warren Buffett's B in there. Remember the bureaucracy part, all of which played a role. Lesson Number 3. Sometimes what seems obvious is not so easy. A question I have about Johnson & Johnson is, why didn't they listen to their customers? The customers, meaning doctors and hospitals, leading interventional cardiologists. They wanted the next-generation stent. They wanted a stent that was a bit more adaptable, a bit more adjustable. They had a bunch of ideas. Johnson & Johnson said indirectly, they never said no, we're not going to do it, but they never did it. This is the mystery. Why didn't they listen to customers? Do you think it's actually possible that anyone in Johnson & Johnson doesn't understand that concept? The concept that says we should listen to our customers. This is not exactly cutting-edge business thinking. Of course, you listen to your customers. Everyone knows everyone understands that, but J&J didn't do it. The deeper question then becomes, why didn't they do it? Why didn't they do something that is obvious and they know to do it and they even do it in many of their other businesses? J&J has many other businesses and they do it in those other businesses. They didn't do it here. It's something to think about. I interviewed some of the key people at Johnson & Johnson. I remember this really distinctly, where I talked to several different managers, one-on-one interviews, and I asked her, why didn't you come up with the next-generation stint everybody wanted? Why didn't you do it? The answer I got, and I'll paraphrase, but it was pretty close to the same answer from each person separately telling me this, they said, "Well, we were so busy making so much money, we didn't have any time." Think about that. Again, great success could lead to your failure. In fact, by not adapting, by not coming out with a next-generation stent, Johnson & Johnson ended up dropping their market share, as you know from the case study, from over 90 percent to single digits. That's quite a price to pay for not listening to customers and for saying let's make as much money as we can and not worry at all about customers, which brings me to lesson Number 4. This has also wide applicability. In this story, eventually, Johnson & Johnson did introduce a new stent that had some different technology around it. It took them a long time, and it also did really well. When they did that, I called up a bunch of the leading doctors from top hospitals that I had interviewed earlier. I called them up and I said, how does it look? Looks like J&J's finally listening. They took some time and they're finally listening. These leading doctors, you know they told me? They said this J&J, they said, ''They're still the same SOBs that they've always been.'' I think, what are you talking about? There's a new stent here, there are new stents. They said, "This is too little and too late." We had patients that we were not able to serve in the way that we needed to because J&J, who again dominated the market, didn't want to adapt, didn't want to do what we wanted them to do, what we needed to do. We had doctors coming in at global conferences from other countries that were ahead of us because we were relying on J&J. In other words, the memory that these key stakeholders had of how J&J really screw them, in their minds, really treated them badly, they wouldn't forgive them. They would not forget, and that is really some lesson. Because when you treat business partners, in this case, it's doctors. Other cases could be any other constituents. When you treat them badly, people remember. People have a long memory, and they're looking for that opportunity to return the favor. I sometimes think about Walmart that has been just so dominant for so many years and pushing so many suppliers to lower their price and whether they're looking for an opportunity to return the favor. Maybe we can say the same thing about Amazon, and Google, and some of these giants. People remember, people have long, long memories. It's very important to remember that how we treat people, how we treat business partners, is critical. It's not like you treat them, you work with them once, and they disappear. Because even if you never worked with them again, they can talk. In the modern era, they could talk on Twitter, they could talk on LinkedIn, they could share all kinds of stuff. Is that something that you really want? The Johnson & Johnson case study is really, really interesting because there's a strategy side, there's certainly a leadership and a people side, and there's a very big culture side as well. I thought it would be a great exercise for you in this module to bring home some of the lessons that we had, and I hope you enjoyed it.
