SIEMENS HEALTHINEERS In Sickness and in Health

The head of Siemens’ health-care division - the newly named Healthineers - admits its rebranding launch last month backfired. But one embarrassing mistake should not detract from ambitious growth plans, he says.
Siemens Healthineers specializes in diagnostic tools such as MRI scanners.

 

Last month, Bernd Montag's company, Siemens Healthineers — the new name for Siemens Healthcare — suffered something of a PR disaster.

At the rebranding launch, attended by hundreds, dancers in blue and orange spandex suits, resembling Teletubbies, gyrated to a pop tune with the refrain “We are, we are, we are Healthineers!”

The number didn’t go down well with staff and was widely scorned online, including comments such as “embarrassing” and “cringeworthy.” One person posted: “This is how you destroy a company.”

Mr. Montag is putting a brave face on the scorn heaped on his company, the health-care division of the engineering giant Siemens. In an interview with Handelsblatt, he admitted that the song backfired. But he said it was “a little tragic” that all the criticism drowned out the venerable company’s vision for the future.

A company has the courage to go forward and rename itself and what moves people most isn’t that but a brief moment that is torn out of context — even though it wasn’t especially good. Bernd Montag, CEO, Siemens Healthineers

Mr. Montag, 47, a physicist by training who started work at Siemens in 1995, said it would be wrong to let the criticism distract from the growth strategy of the business. The unit, which has been carved out into a separate legal entity, generates some €13 billion, or $14.5 billion, in sales and has an operating margin of 16.9 percent.

“There is a positive reaction to the overall story,” he insisted. “The video only shows one rather unfortunate moment in the internal event. At the end there was this one moment where we wanted to celebrate. Maybe it wasn’t to everyone’s taste, and that was definitely a mistake in hindsight.”

Asked if the event was his decision, he said: “I don’t want to go into that now. I fully and wholeheartedly support the name and the overall story. I find some aspects a little tragic: A company has the courage to go forward and rename itself and what moves people most isn’t that but a brief moment that is torn out of context — even though it wasn’t especially good.”

He said he was confident that “the thing the company stands for will prevail — the strategy, our special employees, the history, the way forward and the name that expresses all that.”

The German-based engineering and technology conglomerate announced the rebranding of its health division last month, saying the new name would underline its pioneering spirit. But even the word "healthineers" is controversial, with some people saying it is hard to pronounce.

“We consciously decided against taking an abstract, made-up name as happens so often,” said Mr. Montag. “We wanted a name that expresses where we come from and tells our history that goes back 120 years. But the name also expresses what we want to be going forward: the pioneer and creator of tomorrow’s health care.”

Mr. Montag, who took over the division last year, said he planned to accelerate the company’s growth by providing new services and expanding its medical imaging and laboratory diagnostics business.

 

Quelle: Siemens
Bernd Montag has been working for Siemens since 1995.

 

Asked whether Healthineers would be spun off from Siemens, he said: “I don’t want to speculate about that now. At the moment we’ve got all the scope we need to implement our plans in the current constellation.”

He also declined to say whether Healthineers would be floated on the stock exchange.

Mr. Montag said the health-care sector now was a “race for relevance,” and that Healthineers was well positioned due to its size.

“In this game we’re already the biggest supplier of medical infrastructure for health companies,” he said. “We want to expand this position by choosing selected growth areas and new services.”

Diagnostic imaging, a central part of Healthineers’ business, is growing only moderately. But it can expand through applications in new treatments, he said.

“For example, if you have a new method to operate on the mitral valve in a heart, via a catheter and not with open-heart surgery,” he explained. “Then you need imaging. It plays a central role there. That’s one of our really big areas of growth.”

Another focus is offering services. “The boundaries between what we do and what the customers do are getting blurred,” Mr. Montag said. “In Turkey, for example, we have the first deals where we run a laboratory as a service for a hospital.”

Consultancy services also offer possible growth, as does processing of big data or molecular diagnostics, where the market is seeing the most innovations and strongest growth, he said.

“In our new strategy we have a broader definition of the market,” said Mr. Montag. “The targetable market for health technology and services has reached a volume exceeding €100 billion by now.”

Siemens Healthineers last month bought German cancer diagnostics firm NEO New Oncology to expand its range of molecular testing services.

Asked if it planned further acquisitions in that field, Mr. Montag said: “We are observing what’s going on. But we will only do things if it really fits our strategy. The valuations are high. That means the priority is to make organic progress.”

 

Axel Höpner is the head of Handelsblatt's Munich office, focusing on Allianz and Siemens. To contact the author: [email protected].