Nihon Kohden Innovation Center CEO on the ‘Negative Stage Gate’ Process

By Meghan Hall |  August 21, 2023

Steve Weisner knows that nurses can be protective over their patients — particularly where knowledge of and standard of care are concerned. His team at Nihon Kohden Innovation Center, the innovation arm of medical device company Nihon Kohden, has learned that engaging doctors as stakeholders isn’t enough, since nurses are often the ones administering care and understanding patient needs. That’s why Weisner has a full-time nurse on his innovation team, who helps him understand nurses’ perspectives and needs as providers.

As part of our latest research report, Building a Productive Innovation Portfolio, we spoke with Weisner, NKIC’s President and CEO, to get his advice on engaging the necessary stakeholders for innovation activities, hear about what he calls “the negative stage gate system,” and understand how his team’s governance structure has changed over the past few years.

NKIC is based in Cambridge, Massachusetts, just outside of Boston, and is fully funded by its parent company, which is based in Japan. Read highlights from our interview with Weisner below.

Structuring the innovation center. Nihon Kohden Innovation Center actually started in 2015. It is based in Cambridge, because it’s kind of the geo-center of universities and hospitals and startups. We do early prediction, diagnosis of acute diseases in hospital, and early assessment of worsening chronic diseases at home. That could be hardware, software, AI, mechanical disposables. I’m not bound by what my parent company, Nihon Kohden, currently does — in fact, the opposite, I should be pushing the boundaries. Structurally, [NKIC is] set up as a division, legally, an LLC, but as a separate group. I report up through Nihon Kohden corporate through their R&D organization. It’s like being a startup, but with the backing of a large company behind you.

Steve Weisner, President and CEO, Nihon Kohden Innovation Center

The negative stage gate system. We were given a seed fund at one point, but basically, whatever we spend, we get covered for. … But that means, clearly, we need to be measured in some way other than just cost. We have what’s called research gates. Many R&D companies have gates, and milestones. They traditionally have a gate, zero to kick off and one, two, three, four, to the point where they release whatever they’re doing. 

We have what we call negative research gates. They go from negative four to zero, and we measure our progress towards achieving those gates. The first gate is just a concept. The next gate might be a conceptual idea, on paper. The next gate would be something in some physical software [or] hardware form. The next gate is a clinical trial [where] we’re actually testing a prototype, and then the last gate is the handoff. We hand it off to an R&D team and then they take it through a traditional cycle. … I measure our engineers on how well we are progressing to those gates. The ultimate measure is [that we] have successfully transitioned something to an R&D team. 

The gates were developed by [my experience at] three medical device companies before this company. It is a merger of their approaches. I really took the best of each and tried to generalize it, so that it could apply to a project that may just be totally AI, or maybe it’s a project that’s just a hardware component. 

How governance has changed in the past few years. [Nihon Kohden] was founded in 1951, [and] innovation as a formal process existed before… NKIC was founded in 2015. It was — and still is — governed as a subset of traditional R&D. Especially in medical devices, a lot of traditional R&D is incremental, you sort of make up one box, and really make it a little better, and a little better, a little better, but there was always a group. 

Certainly, back in the 1960s and 70s, and so on, that was pushing the boundary a little bit. But it was governed within the auspices of a traditional R&D group. It was only really in the creation of our group in 2015, that there was a separate entity. That other innovation, by the way, still exists. There are a lot of  great engineers that are working in Japan, and doing a lot of great stuff, and I actually travel to Japan every four times a year, so I try to connect with them.

I think what’s changed is that there are a lot of Nihon Kohden subsidiaries. There are groups that do patient monitoring, resuscitation, neurology, ventilation, digital health — and these are all separate groups… and they have focused very much on their particular product. Ventilation focuses on doing a ventilator, right? 

But in the last… two years, these groups have worked closer together. I have monthly meetings with all those groups and we exchange ideas, we exchange problems. There’s this notion that we can learn from each other. 

Where do we get our ideas to actually develop? Before this, it was largely driven internally by myself, my group… and driven largely by the parent company. Now, my charter has actually changed and so I can be contracted, so to speak, to do a research project for, say, the neurology group, as opposed to what the [parent company] tells me what to do. Neurology can say, “We’d like you to do this research.” Presumably, they’ll pay the bill for that, and that’s relatively recent for the last few years.

I have a full-time nurse working for me. I think one of the challenges with medical devices, not unique to my company, is that [when] we identify KOLs, key opinion leaders, they tend to be MDs. But if you walk into any U.S. hospital today, the medical devices … are used almost exclusively by nurses.

Assessing which ideas to address. There’s 1,000 things you could be working on. How do you make that decision? How do you pick? I have a mechanism where we look at the various components of a potential project. We look at the clinical contribution, and at the market fit. We can look at the technology alignment. Is it using what we’re doing now? Or is it a whole new technology? We look at a multitude of risks — whether it’s a technical risk, whether it’s a marketing risk, whether it’s a quality risk, and so on. We go through an exercise where we identify all that. The one thing we don’t do is come up with a number and add them all together — if your idea’s an 18 and my idea’s a 20, I win. It doesn’t work that way. The whole purpose of the exercise is to go through each of the categories, ask the questions, understand the answers we don’t have, and then make an assessment and compare. 

Engaging the end user as a stakeholder. I have a full-time nurse working for me. I think one of the challenges with medical devices, not unique to my company, is that [when] we identify KOLs, key opinion leaders, they tend to be MDs. But if you walk into any U.S. hospital today, the medical devices … are used almost exclusively by nurses. In fact, the nurse that works for me, told me that when a doctor goes to touch one of the patient monitors, she tells him to stop, ask him what he’s doing, and tell him that she will do it for him. I think we tend to overlook that. One of the ways [to source painpoints] is just getting that nursing feedback. I’m getting it directly with a nurse that works full time for me, but we also connect with other nurses and contacts to do that. From a design point of view, as an engineer, I really need to understand that here’s something used by a person who’s — especially during COVID-19 — incredibly overworked, doesn’t have time to go down five levels of menus and find something. That has to be very clear, very obvious, and it has to be actionable. 

Advice on overcoming challenges. We all know the saying that you learn from your failures and that’s, of course, true. But I think it’s hard for companies to accept failures, and especially for an innovation group, you ought to be failing, and you have to have a mechanism where you get credit for attempts. 

The second problem is handoff. The way most research works — whether it’s officially innovation or not — is a certain amount of work is done, and then it’s handed off to a development team. The same thing actually happens with M&A. For a company acquisition, you acquire and you’re going to hand it to somebody within the company. The challenge is the receiver of the technology. I have personally experienced that if you don’t have a plan in place, and people assigned before the transaction takes place, you’re not going to succeed because there’s nobody there to catch it. It’s true for my projects. It’s true in a larger context with an M&A. I think it’s actually not that complicated to solve — you just simply have to have it as part of your plan. “Okay, this is who’s going to receive it, these are the two engineers who are going to work on it, and this is how it’s going to be managed.” Just have that in place.