Yesterday I had the pleasure of meeting up with Dr Peter C Farrell AM at the Australian German Association luncheon.
Many of you will be familiar with Peter as the founder and executive chairman of Resmed, a business Peter has grown from 1.25 million investment with less than 1 million in sales in 1990 - whilst losing $250,000/year to revenues now over $1billion per year, over 3,500 employees in 70 countries and listed value of around $5.5 billion making $190million a year after tax.
In 2001 Peter received the award as Australian entrepreneur of the year and is highly regarded as a visiting professor at the University of NSW and a motivational speaker.
There definitely has been a lot of growth since Peter commercialised the technology created by Professor Colin Sullivan in 1986.
Resmed is the worlds largest manufacturer of respiratory disorder solution equipment and from what Peter says - the growth in this area is only just starting as explained further into this article. A big cause of this has been the rising influence of obesity - particularly throughout the western cultures.
Peter's discussion focussed on 3 key areas he has a personal interest in:
Leadership - which can only ever be earnt
Innovation and Entrepreneurship - critical to success in business.
I found it very interesting that Peter then started with the importance of honesty and trust as key elements of a leader - something that is naturally expected of every responsible leader as covered regularly in this portal.
An officer who is not trustworthy cannot be tolerated...
Peter went on to explain some of the key features of leaders as explained by Paul Johnson from the Thatcher Leadership period:
- Leaders have moral courage
- Leaders have judgement - different to IQ - this reflects capabilities for common sense
- Leaders have a sense of priority - such as the Pareto 80/20 rule (or in Resmed's case the 90/10 rule)
- Leaders have a disposal of concentration and effort
- Leaders have a sense of humour - vital in reflecting intelligence, security and confidence.
Additionally - learning from Warren Bennis, Peter believes leaders also require:
- Passion - with a desire to make things work
- Purpose - with a meaning to make things work
- Optimism - with the ability to look on the bright side
- Results to be driven by results that measure your success.
Peter additionally explains:
Entrepreneurs create value - they are not risk takers - but opportunity seekers.
Innovation is not creativity - but it requires creativity. Innovation only occurs when it is anointed in the marketplace.
Technology is also seen by Peter as the Turbocharger of growth. So with Innovation as the key to wealth - technology is the enabler.
When technology is applied to what we do - it enables productivity, and
When technology is applied to something new - it leads to innovation.
So as an entrepreneur considering and seeking opportunity the process follows these steps...
- Market Assessment - is the market sufficiently big and accessible?
- People - do we have access to world class people?
- Finance - Can we really see a path to the financial resources needed for project completion?
San Diego, where Peter spends a lot of his time now has for example about 500 life sciences companies of which only 7 or 8 are making money - most will never see the light of day. They may be suitable for a trade sale to Pfizer or similar - though Peter is not into the business of Trade Sales.
So where do we put scarce resources? Consider these points:
- Will it happen in our lifetime - The 4x2 rule - expect it to take 4 times as long and cost twice as much as anticipated
- Tech Assessment - what does the competition know now - how can competitive terrain change?
- Alpha Factor - Do we love it - as we will be living this business every day
- Do the financial analysis - ROI, Breakeven, Net NPV, Economic Value Added, etc - remembering models are not data - they are opinions
- Innovation - the business must be exciting and through commercialisation pay the rent.
So the feedback taken from this discussion was that any leader who is entrepreneurial and wanting to maintain a successful, innovative and profitable business - must be responsible at the core - living and leading a business they personally care about and are engaged in.
As with any business - a core responsibility is ensuring the business remains profitable and successful using techniques like those explained by Peter above.
The remainder of Peter's talk went into the discussion more relevant to Resmed, their industry and the state of peoples health.
Dr William C. Dement came up with a philosophy about health that just - makes sense. A person's health is dependent on 3 areas of equal importance:
- Good Nutrition - everyone understands that
- Physical Fitness - again - understood by all
- Healthy Sleep - it makes sense the body needs to re-calibrate and energise for the next day ahead
In 1993 Peter explains, sleep apnea was expected to have the same impact on health as does smoking.
So, working on the comments above - the 'Market Assessment' showed a lot of potential.
A major problem is the medical profession work in silo's. For example where doctors learn in Harvard as an example - the sleep experts don't regularly communicate with the heart experts - though these two sectors of the bodies health are so tightly aligned.
Thereby, educating health practitioners and the public will be a big part of consideration in the 'Market Assessment'
Some health knowledge...
It is thought that the biggest cause of hypertension is untreated sleep apnea
What is more - sleep apnea and other causes of poor sleep are directly aligned with other problems - including:
- Heart arrhythmias
- Morning headaches
- Depression
- Nocturia - getting up to pee
- Reflux (GERD)
- Impotence
- Accelerated Ageing / Growth depresion in children
- Exacerbated Type II Diabetes
- Cognitive Dysfunction
- Excessive Daytime Sleepiness
If you Treat the Sleep - You often Treat all of the above...
There is a quote of many...
I want to die peacefully in my sleep like my Grandfather did
Not screaming like the other passengers in his car!!!
The consequences of untreated Sleep Disorder Breathing (SDB) and Obstructive Sleep Apnea (OSA) is extensive.
It has been published that 20% of adults suffer from SDB or OSA. Resmed studies place it's prevalence more at likely 30%.
7% have SDB.
If you look at those people that have hypertesion - 40-50% have SDB
Diabetes II - 80% have SDB
Congestive Heart Failure - about 70%
And when anyone is anaethetised - if they have SDB - they are much more likely to not come out of the operation.
Peter believes that everyone over 40 should be tested for their sleep disorders. You don't need to go to a 'sleep room' - diagnostics are free and easy to use from Resmed. You can have an answer within a couple nights of sleep.
You will be surprised how many leaders are being treated for SDB and OSA.
The biggest competition to improving health problems caused by Sleep disorders is ignorance.
Every Truck driver should be tested. With them figures show prevalence of sleep disorders is more like 50% - which doesn't tie in well with the grandfather quote above.
Most truckies are self insured - though some companies are now requesting that everyone who drives for them must be tested.
Peter also believes anyone going in for an operation should be tested - a sleep test in their home prior to going to hospital.
Our brains, hearts and lungs/breath are all connected - Roman and Greek Literature as well as eastern methodologies have spoken of this for centuries.
Humans are the only mammals with our tongues poking back towards our larynx in sleep aside from some dogs like Shih Tzu's. This tongue positioning is thought to enable us to speak.
For some the solution could be to have a Temporary Mandibular joint adjustment.
For others, treatment using technology like that available from the world leader Resmed - is the solution.
If you like this article you are also likely to enjoy:
A Luncheon with Dr Bob Every - Chairman of Wesfarmers and Boral
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