Pete Nicholas, WG’68 Co-Founder Boston Scientific. Joseph Wharton Lifetime Achievement Award.
15 February, 2020
category: Entrepreneur, Health, Joseph Wharton Dinner
We take a glimpse at Pete Nicholas, WG’68, and focus on his leadership at Boston Scientific, the company’s growth, and his insights on management as well as on successfully merging and acquiring companies.
Conducting this interview is Art Collins, WG’73, the 2018 Joseph Wharton Lifetime Achievement Awardee. Art’s life, as an officer in the Navy, CEO of a major medical device company and Wharton alum, parallels Pete’s life in many ways.
How were you attracted to the world of medicine?
During my two years of graduate school at Wharton, I had planned to enter the consulting industry. However, I had married the great granddaughter of Eli Lilly, who had founded Eli Lilly and Company. Her family had created an incredible world-class healthcare company that had impacted the lives of so many people. The family had hoped I would join. I concluded at the end of a summer at Lilly, that I could do this work and that the company’s pride of work and accomplishments were something that I wanted to be part of.
You met your co-founder, John Abele, at your kids’ soccer game back in the 1970s, and then ultimately, you two got together and started Boston Scientific. What did you and John talk about in those early days?
I had spent 10 years at Lilly, where I had been completely absorbed in the work of the company, had learned so much, and had risen to become a general manager in Europe. The elder Lilly family members had passed away, and so I felt relieved of the pressure to stay with the firm. I began thinking of starting something on my own. Devices had always intrigued me, and after leaving Lilly, I spent months investigating, trying to understand who was in the field and what was going on. It was against that backdrop that, in Concord, Massachusetts, I met John Abele. His early work involved recording, analyzing and measuring standards by which devices’ activity and analytical equipment had been historically assessed. That led to his starting a catheter company named Medi-Tech. He was a tinkerer, and his company had developed novel polymers that enhanced the function and potential use of many different types of catheters. We saw the application of that technology to interventional therapies and catheters, and decided to join forces. We bought his small company, and that, in time, became what Boston Scientific is today.
Often, a founder will form a company and get it up and running. The company outgrows the founder’s ability to manage it. That happened to a great man we both know, Earl Bakken, founder of Medtronic. To Earl’s credit, he knew when it was time to move out of the CEO position. You are somewhat unique in that you led the company for decades. How did you continue to adapt and grow with the company?
When one looks at the background of founders to see who succeeded and who didn’t, one often finds people who start companies with not just an idea in their heads but also a proprietary technology that they themselves have created or control. They were often technologists, not enterprise builders. They might have failed to appreciate that they didn’t possess the business skills required to execute a commercialization strategy, and to build effective teams to grow the company.
My background included a Duke undergraduate education with an economics major, a tour in the military as a naval officer, followed by a Wharton MBA. As I mentioned earlier, I then had a 10-year stint at Eli Lilly and Company, which culminated in a European general managership. That cumulative experience provided me the background and empirical skills that helped me enormously as we started up Boston Scientific Corporation (BSC).
The combination of John’s and my very complementary knowledge, skills and background created a near-perfect recipe for success. We never thought about failure — rather, we thought about how we were going to build our business and, as we came to think of it, become the “biggest, fastest growing and best company” in our device world. So, for us, success was in front of us and ours to lose. The name of the game was execution, and the proof was in the pudding, as they say. We were able to assemble a great team, and the rest is history.
What do you remember from the Navy that potentially helped hone your leadership skills?
On board the ship, I was assigned combat duties. The responsibilities were enormous and in your face 24/7. It was a sink-or-swim time for me. I became aware of, in a very real-time way, the integrity, the trust, the confidence required for successful team playing, and the importance and imperatives of the chain of command. It was humbling, but also hugely empowering for me. It made me very aware of the importance of the individual and the indispensability of the team where your teammates rely on you, trust you and believe in you. They become your family, and you gain experiences at a very young age that many never get in their lives.
I worked with a group of people whose lives were on the line, all the time, in a way that was unsung, unappreciated, unknown, and yet, so critical to what our nation’s mission was about at that time. It was an amazing learning experience that I have always remembered and that I still think about.
You swam well and kept swimming! The growth trajectory of Boston Scientific was amazing. Some of it was organic, and some came by over 15 acquisitions. What advice would you give to leaders who are active in the merger-and-acquisition area?
We were a bit unique, and remember, we are talking about a time over 40 years ago. The industry was much smaller than it is today, and the field of medicine that we helped create did not exist at that time. As a founder, I ran the company in a very non-bureaucratic way. My partner and I were amazingly aligned on the strategic imperatives we saw. We had an agreement that, when we disagreed about things, rather than count the votes, we would weigh them. I liked to joke that I was bigger and heavier, so decision making was not complicated.
And I wasn’t living in a deep freeze. I knew the guts of the business. I would attend all the important worldwide industry meetings and tradeshows. I knew physicians. I knew hospitals. I knew our customers. Because the industry was small, and most of the CEOs were hands-on like I was, we were all very involved and knew each other well. So, I knew our competitors personally.
Since I knew most of the people who were critical players in the companies we competed with, it was easy for me to meet with them to discuss mutual opportunities. I knew their companies and their marketplace. I understood physicians’ perceptions of their people, their technology, their strategies and their operations.
Also, Boston Scientific’s reputation as a fair and honorable acquirer was solid, and our documented growth and market leadership were well understood. All of this, along with the persuasive skills of our team, enabled us often to successfully acquire companies that then became integral to our continuing success. We would never do a deal where the business style and mindset of the target company were not aligned with ours.
As a result, we were able to acquire several terrific companies and bring them into our family quickly. I think I can fairly say that, of the many acquisitions that Boston Scientific made, all were successful.
What would you like to say about leadership for aspiring leaders?
This is such a complicated question. What causes or enables people to become leaders? How does that all happen? Is it something innate that enables people to rise to opportunities for leadership and then become good at it? That’s an imponderable. Corporations are always asking that question so that they can find and develop the future leaders within their own companies. They can invest in them and give them the leadership experiences so they can grow and ultimately become significant contributors.
It’s so individual. Some are quiet leaders; others are public. Some want leadership to be identified with them personally. Other people are more focused on the outcomes, not on self. For the most part, however, I think successful leaders are less comfortable talking about their own accomplishments and more commonly leave it to others to do that. I have always placed more value on the leaders who lead from the front and are the doers, enthralled not by self, but by the outcomes that they and their teams achieve. It’s a deeply personal issue, too. When you move the needle and make a difference that is valued by the corporation, other people may know it or not. To the true leader, it doesn’t really matter. They know it, and it makes them feel good because they have accomplished something valuable to the company that otherwise might not have happened.
Is there anything else you would like to add?
One of the things we take for granted and don’t talk about very much is family. In my case, I have always tried to be sure that family is my highest priority. I am talking about my family, of course, but I am also mindful of all the other families of the people who make up the company. We all try to spend as much time as we can with our families, but we also know the sacrifices they make to support us as individuals so we can do our jobs. We also know that most of us attribute much of our own accomplishments and success to the support we get from our families — those we love the most and who are the most valuable people in our lives. We have all been blessed in so many ways. Those who have been blessed have an obligation to return those blessings not only to those they love but also more broadly in service to the greater public good. If we can all do that, we can all say that we have lived a good life.
Pete Nicholas is Co-founder and Chairman Emeritus of Boston Scientific. He served as Chairman and CEO from the company’s founding in 1979 until 1999, when he turned over CEO responsibilities. He gave up his Chairman role and retired from the BSC board in 2016. Under Nicholas’ vision and leadership, Boston Scientific grew from a startup company to a global corporation with approximately 32,000 employees and revenue of $9 billion in 2018. Today, Boston Scientific is one of the world’s largest medical device companies dedicated to less-invasive therapies.
Before co-founding Boston Scientific, Nicholas served as General Manager of the Medical Products Division of Millipore Corp. From 1968 to 1978, he held positions both domestically and internationally at Eli Lilly in sales, marketing and general management. Since his retirement from BSC, Pete founded a family-owned partnership, Ithaka Partners, with his three children. Ithaka Partners is a venture capital and private equity firm that invests in early-stage and mid-stage companies with innovative breakthrough technologies primarily in the fields of energy, healthcare, environment and opportunistic internet-based technologies.
Nicholas is a Fellow of the American Academy of Arts and Sciences and former Vice Chair of its Academy Trust, and he is a member of the American Academy of Achievement. He is a recipient of the AdvaMed Lifetime Achievement Award, for his role in the development and commercialization of interventional medicine. He is also a recipient of the Ellis Island Medal of Honor. Nicholas was formerly Chairman of the Board of Trustees of Duke University. He is the Founder of the Nicholas School of the Environment and the Nicholas Institute of Environmental Policy and Solutions at Duke University.
Nicholas served as an officer in the U.S. Navy for two years, resigning his commission in 1966. He holds a B.A. from Duke University and an MBA from the Wharton School of Business at the University of Pennsylvania. Pete and his wife Ginny have three children and seven grandchildren, and live in Cape Cod, Massachusetts, and the west coast of Florida.
by Kent Trabing, WG’01