Since the start of the COVID-19 pandemic in the U.S., companies across the country have stepped up to help support affected individuals, from frontline workers to patients. One such company is ZOLL Medical, a Massachusetts-based medical device manufacturer. While ZOLL’s core business centers around defibrillators, the company shifted its focus to a smaller segment once the crisis hit – its ventilator division, through which it has drastically scaled up production. We recently spoke with Jon Rennert, the company’s CEO.
1. How has your business responded to the current health crisis?
Our company’s roots are in this narrow category of sudden cardiac death. As we’ve grown and invested in adjacent technologies over the years, we’ve broadened our focus to other acute critical diseases – those that are time-sensitive, meaning minutes or hours may matter, and critical, meaning they are life-threatening. Beyond sudden cardiac arrest, we’re now focused on other conditions such as acute heart attacks, heart failure, stroke and sepsis. That’s where COVID-19 comes in. It’s a life-threatening, rapid-onset disease that has huge numbers of affected patients, so some of the same technologies that are useful in cardiac arrest or heart attack – such as mechanical ventilation – are appropriate here as well. As a result, our technologies have received a lot of interest from hospitals seeking more equipment to treat large numbers of patients. It’s great for us to be able to help. Our people want to make a difference.
We’re primarily thought of as a defibrillator company, but we also make products for induced hypothermia, which is used for fever control. We also acquired a small ventilator company a few years ago. That had been a relatively small part of our business, but when we read the media reports in mid-March about this looming ventilator shortage crisis, we leapt into action and started exploring how to dramatically increase our production of these devices. We’re now focused on trying to scale up our ventilator output by a factor of 25 within a few months.
2. What prepared or enabled the company to be able to scale up successfully under such short notice?
Our employees are our biggest asset. They are passionate and wanted to help make a difference, so it was easy to motivate them to focus on the swell of demand in ventilators. We’re fortunate that it had been a small piece of our business, because that meant we had a lot of other resources in manufacturing, supply chain and engineering that we could divert onto this effort.
You need to have all the elements in place, and the most difficult one is the parts. There are over 1,000 individual component parts that go into a ventilator, and we have had to ask every supplier to provide 25 times their normal output as quickly as they can. We’ve had a lot of help. I’ve been impressed with the outpouring of support from other industries – people in aerospace and IT have reached out to see how they can help by making parts or connecting us with other sources. In just a few weeks, we were able to scale up our ventilator production by a factor of five, and we’re aiming for another factor of five over the coming weeks and months. I think we will be able to get there.
It has been rewarding to be able to help some of our customers in a real time of need. Our ability to ramp up production quickly in those first few weeks – even to get just a couple dozen devices to New York and Massachusetts hospitals – really made a difference. I believe that so far, no patient in the U.S. who has needed a ventilator hasn’t had one available to them, which I don’t think has been the experience everywhere in the world. We take some comfort in that.
3. What has the ramp-up been like for your employees?
Everyone at ZOLL is working, either from home or in our factories, so everybody is able to contribute as we try and make a difference. Everyone who can work from home right now is doing so, and that’s really to protect the people who have to be in the factories. Obviously, a lot of these manufacturing and service activities need to be done on-site, and the experience there has changed dramatically. In our facility in Massachusetts where we make ventilators, we have 500 people coming in daily, and they’re going through strict single point of entry screening, completing health questionnaires, undergoing temperature scanning, wearing masks and adhering to strict social distancing protocols. People appreciate the safe environment we have created, and morale is good.
4. Have there been any unexpected positive developments or stories you have heard during these difficult times?
The most inspiring thing for us is that we haven’t yet seen this ventilator crisis develop in the U.S. I know some of the early reports out of Italy were very concerning, and that is what got us motivated to ramp up production. We weren’t alone in acting obviously – a lot of people and companies have risen to this challenge. But the fact that only a few weeks later it doesn’t seem to be a big problem is a pleasant surprise.
One internal story that comes to mind will give you a sense of the way ZOLL employees work. As I mentioned, we have employees coming in every day to put together ventilators. My assistant worked with human resources to have people who were working at home make signs and banners thanking all of their peers in the factory. They came in one night and decorated the whole campus with these signs saying things like “Thank you” and “Heroes work here.” Nobody told them to organize this; it was something that they wanted to do to support their co-workers who were taking a risk. That people are willing to come in and do that speaks to the spirit of ZOLL.
5. You mentioned how you have workers coming to the office and touched on some of the safety protocols you have put in place. What have you learned from that? What is going to transpire as some of these businesses begin to open?
I think there is going to be a lot of soul-searching across industries about why for centuries we have brought people to a common place to do work. I do think that humans are fundamentally social creatures, though, and working remotely is just not the same. Our fiscal year-end was in March, and normally about now we would be gathering 1,500 people from all over the world to celebrate and kick off the new year. We’re doing that virtually instead, and it’s not as good as face-to-face interaction. Overall, having people working from home hasn’t been as disruptive as we may have expected, so I think people are adapting. At the same time, there is a craving for people to get back to that live interaction.
Right now, we are focused purely on safety, so we want the bare minimum number of people in our facilities. If there are reasons someone needs to come in to get work done, we want them to do that, and we make sure to catch them up on the safety protocols we have implemented. The biggest challenge for us is in our sales organization, they’re normally on the road at customer locations, which now may be closed to visitors, or working from home themselves. That’s going to be the most difficult problem for most companies to solve – how to develop new business in this virtual world.
Brown Brothers Harriman & Co. (“BBH”) may be used as a generic term to reference the company as a whole and/or its various subsidiaries generally. This material and any products or services may be issued or provided in multiple jurisdictions by duly authorized and regulated subsidiaries. This material is for general information and reference purposes only and does not constitute legal, tax or investment advice and is not intended as an offer to sell, or a solicitation to buy securities, services or investment products. Any reference to tax matters is not intended to be used, and may not be used, for purposes of avoiding penalties under the U.S. Internal Revenue Code, or other applicable tax regimes, or for promotion, marketing or recommendation to third parties. All information has been obtained from sources believed to be reliable, but accuracy is not guaranteed, and reliance should not be placed on the information presented. This material may not be reproduced, copied or transmitted, or any of the content disclosed to third parties, without the permission of BBH. All trademarks and service marks included are the property of BBH or their respective owners. © Brown Brothers Harriman & Co. 2020. All rights reserved. PB-03704-2020-05-22