Balancing Innovation and Budget Constraints

Duke Rohlen built and sold 5 companies for $1.7B.  Here's how he's disrupting medical industry with his new model👇 Rohlen started a restaurant business at 22, scaling it to $20M+ in revenue. Post that, he went on an entrepreneurial journey in building medical devices. He built and sold 5 companies in the role of either Co-founder, CEO, MD, or Director. Today, he runs Ajax Health—a private equity platform backed by KKR. His playbook? To turn large, slow companies into lean, fast-moving venture portfolios. Take Cordis, for example → It was once stuck at $700M with slow growth and thin profit, but is now doing over $1B in annual sales after the acquisition of Ajax. Here’s how he is doing it👇 1./ Learnings from different industries Rohlen started in the restaurant industry, scaling and selling a successful chain before ever touching healthcare. But that outsider experience became his edge. He brought with him: • Operational rigor • Relentless efficiency • Customer-first thinking At Lumen, Fox Hollow, and CV Ingenuity (his earlier companies): he applied these same principles. As per him: “We needed a better way to balance capital efficiency and technological ambition.” 2./ New Venture and R&D Models After the acquisition of Cordis, he created “Cordis-X,” a venture arm under Ajax. Since most medtech innovation is either too risky or too slow, he fixes that by restructuring the innovation pipeline. He breaks development into three categories: • Transformative → Bold, high-risk tech • Synergistic → Enhancements to existing products • Incremental → Small but essential updates So, instead of betting everything on a moonshot, he blends all three. This approach blends bold bets with steady improvements, driving faster, lower-risk innovation without wasting capital. 3./ Focus on Capital Efficiency Rohlen’s model redesigns medtech innovation around two principles: • Strategic Budgeting • Hiring independent talent As per him: spending $100M on the wrong bet is career-ending. He focuses budgets on key inflection points, Ajax compresses timelines from 8 years to just 3.5, without cutting quality. There's also a smart talent trick in play. Instead of a traditional org chart, Rohlen uses a model where: - Cordis-X runs like an App Store.  - Engineers and entrepreneurs get scoped projects. - They have fixed budgets and upside in the outcome. This model removes the biggest blockers of capital inefficiency and bureaucracy. Ajax’s model didn’t stop at Cordis. They’ve partnered with multiple multibillion-dollar corporations, building custom growth engines inside each one. Why this works: ↳ Faster, de-risked innovation ↳ Legacy firms avoid disruption ↳ Entrepreneurial talent gets autonomy + support A story with tons of insights for both acquirers and founders.

When uncertainty looms, innovation teams are at risk of being on CFO’s chopping block. Most recently, I joined a half-day roundtable with an outstanding group of corporate innovators, convened by Peter Temes at the ILO Institute during which we tackled this pressing reality and paradox: Companies invest in innovation during good times... but they NEED it most during uncertain ones. This plays out in two ways: 🚫 The First Camp: Slashes innovation budgets at the first sign of trouble. "We’ll restart when things stabilize," they promise. By the time stability returns, competitors have already leapt ahead. 🤦♂️ The Second Camp: Keeps innovation teams intact—but strangles their impact. ROI on experiments must be immediate. Quarterly returns on long-term bets. Zero tolerance for the failures that actually drive learning. I’ve seen both—sometimes inside the same company. The result? Innovation teams lose morale. The best talent disengages—or walks. Stakeholders pull support. A "one-and-done" mindset kills promising ideas before they can grow. 💡 Look at financial services. They came late to the internet, mobility, and social media. Now they’re risking the same mistake with AI, ceding direct customer relationships to fintechs and risking relegation to utility status. Why does this cycle persist? Because the short-term savings of cutting innovation are immediately visible. The long-term catastrophe is invisible... until it's too late. 🔥 Here’s how to keep innovation alive when budgets tighten: 1️⃣ Dramatically lower the cost of individual experiments 2️⃣ Prioritize customer-backed innovation for real-time feedback 3️⃣ Create distributed innovation networks across the org 4️⃣ Speed up cycles by challenging slow status quo processes 5️⃣ Position innovation as risk management, NOT risk-taking ⏳ Don’t let uncertainty kill your company’s future. The best organizations don’t innovate despite uncertainty. They innovate because of it. 🚀 Innovation isn’t a luxury—it’s a lifeline. Julie Fishman, Alex Trotta, Miles Garrett, Andy Grove, Anthony Di Bitonto, Kate Pomeroy (née Stubbs) #innovation #leadership #learning

**Can You Innovate When You’re Living Paycheck to Paycheck?** 1️⃣ Lets consider this from a Macro-Economic Standpoint: - Households living paycheck to paycheck can’t invest in long-term growth.  - They can’t save for education, retirement, or emergencies.  - Every dollar is spent “surviving today” and not necessarily building for tomorrow. - Healthcare systems are increasingly operating in the same way. Yet just like in the broader economy, I still think that resilience is still possible with a focus on strategic investments 2️⃣ Example: Auto Industry during Recession During the 2008 recession, automakers faced major financial strain. They could have frozen all innovation.Instead, they doubled down on developing safety tech (lane assist, sensors, automation) and electric vehicle platforms. Those investments didn’t pay off right away. Today, those very investments are the core of how automakers market differentiation, customer loyalty, and regulatory alignment. 3️⃣ Example: Amazon Amazon spent nearly two decades operating on razor-thin margins, reinvesting every dollar into infrastructure, cloud computing (AWS), and fulfillment systems (most critics questioned its lack of profitability). Despite appearing to live "paycheck to paycheck," it was quietly building the backbone. That long-term investment strategy turned Amazon into one of the most valuable and influential companies in the world. 4️⃣ How about in our Spine World? Take enabling technologies in spine surgery. These tools often get dismissed as “too expensive” during tight budget seasons. But used appropriately, they: - Lower complications and improve our ability to perform minimally invasive techniques - Reduce surgeon cognitive and physical load - Improve peri/intraoperative accuracy and reproducibility; thus improving safety ✅ Yet these returns don’t show up next quarter. And in constrained environments, that’s a tough sell. But the cost of not investing (revision surgeries, lost productivity, burnout); is far greater (as is improving the care that we provide) ⭐ 5️⃣ So, what do we do? We don’t need to go all-in on every shiny object. But we do need to invest wisely! - Bootstrap smartly: Start with scalable, high-leverage tools, like peri/intraoperative analytics, visualization tools that span multiple purposes, build an ecosystem of tools that complement each other and perhaps can be utilized by other specialties, & workflow efficiencies - Measure ROI holistically: A combination of clinical outcomes, surgical team physical/cognitive load, educational/training impact, and operational/economic value. - Empower clinician leadership: Create innovation roadmaps that include: clinical co-leads, feedback loops for regular review, shared governance models, and incentive engagement tied to these outcomes of the enabling tech. - Align cross-stakeholder incentives: Surgeons, hospitals, industry, and payers need to agree on value priorities (back to our work on an Enabling Tech Value Index)