Turnarounds: The Gift and The Curse
Miles took a huge…and calculated risk.
As he explained to OTW, the three primary attributes possessed by high-performance companies: deep know how, a commitment to innovation, and a unifying, engaging culture, were in short supply at Alphatec when he arrived. Having been part of developing those attributes at NuVasive, Miles understood that he was, in effect, being tasked with a “restart” and wholesale change, top-to-bottom.
On the positive side, Alphatec had good “bones” around which to build a successful company, most notably significant hospital access (a struggle for most companies Alphatec’s size) and an annual revenue run rate of about $100 million (although that number had been declining). To be sure, said Miles, “the company was not doing anything unique that would compel someone to adopt its technology. It was a ‘me-too’ company, that wasn’t doing anything that well.” As a result, the company “was getting killed, losing market share and was bereft of any great prospects.”
The restart began in earnest in late 2016 and early 2017. “Alphatec eradicated many jobs” during that period, said Miles, “because there was so little confidence in the company’s performance and prospects that it couldn’t raise money.” By early 2017, Alphatec had retreated to barely 100 employees; by the end of 2017, the company’s entire executive leadership team had been replaced, as well as 90% of its Board of Directors.
The historical missteps and the resulting existential threat that compelled these wholesale changes had also affected the Alphatec culture, creating serious doubts among the employees (not to mention the customers and marketplace) about leadership’s ability to shepherd the company to success.
“This was a fearful culture,” said Miles. “The employees had lived through a number of leaders who tried their hand at steering the company. When I came in, many expressed skepticism, telling me ‘we’ve seen a lot of you come and go.’ My response? It didn’t bother me. As I told them, ‘realize we are all in this together; if we don’t do well, then I won’t last—likely none of us will.’ Being completely frank with them helped foster a more authentic dynamic than they were used to, which began to form the basis for a highly transparent, unifying culture.”
Find and Fill Product Gaps
Miles, who served in multiple leadership roles during his 17 years with NuVasive, including President and Chief Operating Officer, and Vice Chairman of the Board of Directors, knew what had to be done: find and fill product gaps while ALSO building a team around the primary attributes that drive high performance—know how, innovation and an all-in, engaging culture.
“The first thing I did when I arrived at Alphatec in late-2017, was to get a handle on what the company was trying to accomplish from an innovation perspective, and whether those goals were the right ones,” said Miles. “What became apparent was the need to elevate the standard we were committed to delivering. In order to drive that, we had to ensure that our company possessed unbelievable skills and know-how from an engineering perspective.”
Among the gaps in Alphatec’s offerings in 2017 was neuromonitoring—the company had neither the technology nor the know how to create it. Immediately, Miles went to work addressing that issue. “We studied—then acquired—SafeOp Surgical, a company with an advanced neurophysiology offering that uniquely performs automated Somatosensory Evoked Potential (SSEP) monitoring. Then we assembled a group that was very familiar with the neurophysiology business and understood the intraoperative value that the SafeOp technology provides—specifically, giving surgeons the ability to determine nerve health, real-time during surgery, would ultimately improve the quality of care in the operating room.”
