The 2009 Frost & Sullivan CEO of the Year Award in the North American Patient Monitoring market is presented to Mr. Joe E. Kiani (Mr. Kiani), the founder, Chairman of the Board of Directors, and CEO of Masimo, a global medical technology company. The Award is presented in recognition of Mr. Kiani’s laudable accomplishments in launching Masimo as a platform to conceptualize and develop novel noninvasive patient monitoring technologies. As the CEO of Masimo, Mr. Kiani has demonstrated unprecedented ability in understanding customer requirements, developing new technologies, delivering relevant products, and thereby exploiting new market opportunities. In leading Masimo, he has not only made technology innovation the core of the company's philosophy but also equally emphasized protection of that innovation through patent licensing and OEM contracts with established patient monitoring manufacturing companies such as GE Medical, Philips, Zoll, Atom, Draeger, and Medtronic. While accomplishing all of these things, Masimo and Mr. Kiani have also been recognized for their integrity in conducting business and truthfulness in advertising.
An Industry Icon
Mr. Kiani enjoys an iconic status in the industry by virtue of his pioneering contributions and proven capabilities in transforming a humble start-up venture into a leading publicly-traded company. After earning his B.S.E.E. and M.S.E.E. degrees from San Diego State University, Mr. Kiani served as Regional Technical Manager for Anthem Electronics, Inc, and as Field Applications Engineer for Bell industries, Inc. Moreover, he had also served Unisys Corporation as a Product Engineer. Finally, in 1989 Mr. Kiani laid the foundation of Masimo with the explicit goal to improve the precision of pulse oximetry monitoring equipment. Mr. Kiani also carries other responsibilities as a Board member of Saba Software, Inc; a software company specialized in human capital development and management solutions and as chairman of the Medical Device Manufacturers Association.
A True Innovation Leader
As a technology innovator, Mr. Kiani has always been intrigued by complex technical challenges. In his early career, he identified the inadequacies of conventional pulse oximetry monitoring equipment. Simultaneously, he also recognized the opportunity to apply adaptive filters and innovative signal processing technologies, named Signal Extraction Technology® in measuring physiological parameters. This technology application could potentially address the issue of motion artifact and low signal to noise problem that afflicted pulse oximetry. With the assistance of his friend, Mohamed Diab, an engineer, Mr. Kiani embarked on achieving the impossible goal of developing a pulse oximetry technology that provides precise, reliable measurements during low peripheral profusion and patient motion. The outcome of this endeavor was the invention of a breakthrough technology in pulse oximetry, Masimo SET, which considerably reduced false alarms and increased the instrument’s capability of detecting critical conditions.
This revolutionary discovery marked the beginning of Masimo’s legacy as pulse oximetry technology innovator developing and manufacturing advanced, unique equipment each year. Under Mr. Kiani’s leadership, in 2005 Masimo unveiled its second ground-breaking innovation, Masimo Rainbow SET Pulse CO-Oximetry with the advanced ability to measure several blood constituents that traditionally necessitated invasive methods. Considerable enhancements were made in this product line with the capacity to measure carboxyhemoglobin (SpCO®) in 2005, methemoglobin (SpMet®) in 2006, and pleth variability index (PVi®)in 2007. The latest Rainbow innovation from Masimo launched in 2008 is the noninvasive total hemoglobin (SpHb™). Additionally, this novel equipment also measures pulse rate, perfusion index, and oxyhemoglobin and plays a critical role in early detection and treatment of life-threatening conditions.
Unequaled Entrepreneurial Capabilities
The key to Mr. Kiani’s success as the CEO of Masimo lies in directing his technological inventions to strategically address the unmet needs of the market. With adequate customer insights, identification of the shortcomings to the available pulse oximetry monitoring equipment, ideation and subsequent development of an exclusive class of medical instrumentation procedures, Mr. Kiani has redefined patient monitoring systems. Under Mr. Kiani’s leadership, Masimo has successfully penetrated a market that poses significant entrance barriers. Masimo as a leading market participant not only innovates but also manufactures, licenses, and markets sophisticated medical signal processing technologies to gain maximum profits from a billion-dollar market growing at 8 percent annually.
As a dynamic entrepreneur, he has accepted technological and business challenges successfully, resolved them, and created new industry benchmarks during this process. In this context, it is relevant to mention that in 2006, Mr. Kiani’s relentless efforts enabled Masimo to attain a historic victory against Nellcor division of Tyco Healthcare in one of the biggest patent infringement violation lawsuits. Despite Tyco Healthcare’s stature and market dominance, Mr. Kiani won his company more than $300 million in damages setting a dramatic precedent that has changed the very face of the healthcare industry. In addition, his testimony before the U.S. Senate in 2002 led to Group Purchasing Organization (GPO) reforms that help ensure clinicians have access to the best technology and that every company making effective products, competitively priced, is given a chance to compete and sell to hospitals through a GPO, not just the dominant suppliers.
Persistently Driving Company Growth
Guided by Mr. Kiani, Masimo has consistently delivered phenomenal financial results. At the end of the 2007 Masimo’s product revenue stood at a record $199.7 million. Masimo’s financial results at the end of third quarter of 2008 were equally impressive, depicting 21st consecutive quarter of revenue growth. Some of the noteworthy achievements are: record $66 million revenues, increase by 48 percent in direct business revenues, and a staggering number of 30,700 new pulse oximeters and Pulse CO-Oximeter shipments. It is also pertinent to mention in this context that in 2006, Masimo was one of the two leading participants in the market with 40 percent of the market share. Furthermore, the market for all its products together is estimated as $2 to $3 billion.
Setting Industry Trends
The strategies adopted by Mr. Kiani as the CEO of Masimo have persistently created new industry standards. The novel product portfolio of Masimo has added a new dimension to noninvasive patient monitoring equipment that has considerably facilitated early detection of challenging patient conditions. As a technology innovator, Mr. Kiani has more than 50 patents to his credit in sensors, signal processing, and patient monitoring that include patents for the innovation of read-through motion and low-perfusion pulse oximetry.
His technology licensing strategy has successfully demonstrated the infallibility of patenting as a critical growth propeller for emerging medical device companies. Masimo’s victory against Tyco Healthcare buttresses the importance of patenting in guarding the innovations of the emerging companies against established market participants. Furthermore, this victory also indicates the capability of emerging companies to compete with the market leaders that control the market.
Committed to Customer Value Enhancement
Under Mr. Kiani’s able leadership, Masimo products have proved their value to their customers. More than 100 clinical studies have corroborated the fact that Masimo SET is the world’s most effective pulse oximeter. Measuring hemoglobin, oxygenation status, and pulse rate simultaneously, Masimo Rainbow SET is noninvasive, continuous, and immediate unlike conventional laboratory measurements that are invasive, intermittent, and produce delayed results. It is worth mentioning that in a recent study, Masimo SET pulse oximetry technology has been acknowledged as most valuable in neonatal care. To quote Mr. Kiani, "We are very happy to see that researchers around the world continue to use our technology to improve process of care, positively impacting the lives of the most vulnerable patients in the most difficult clinical conditions."
Integrity and Truthfulness
While leading innovation and industry change, Masimo and Mr. Kiani have also been guided by the highest principles and ethics, resulting in recognition by customers and partners alike for their integrity in conducting business. Masimo has also received high rankings by industry publications and professional societies for truthfulness in advertising.
Significant Accolades
Mr. Kiani in 2005 was honored with the prestigious Monty Award from San Diego State University for his ingenious efforts in addressing the pressing need of pulse oximetry market by applying his scientific knowledge and inventing novel pulse oximeters that leverage on signal extraction technology. His impeccable leadership has earned Masimo a host of industry accolades. Some of the recent awards include AARC Zenith Award (2009, 2008), ACG Outstanding Growth Award (2008), AeA Outstanding Medical Device Company Award (2008), GHX Best-in-Class Award (2008), and FDNY Flag of Heroes (2008).
Conclusion
In successfully augmenting his scientific acumen, his formal university training, his business foresight, and the highest integrity, Mr. Kiani has demonstrated the characteristic virtues of a true entrepreneur. As the CEO, he has constantly assisted Masimo in taking confident, progressive strides in the highly monopolized patient monitoring equipment market. In strategically balancing product innovation, manufacturing, licensing, and marketing, Mr. Kiani has carefully delineated the cardinal elements of an effective business model. Fostering healthy competition and transforming challenges to drivers, Mr. Kiani has emerged as the ideal choice for the 2009 Frost & Sullivan CEO of the Year Award in the North American Patient Monitoring market.
Award Description
The Frost & Sullivan CEO of the Year Award is bestowed each year upon the CEO or executive who has demonstrated leadership excellence within his or her industry. Gains in market share and decisions that improve earnings and grow the company, as well as leadership that affects observable changes in the industry, are common CEO performance measurement criteria and are important metrics Frost & Sullivan utilizes in its CEO of the Year Award selection process. A CEO’s vision, risk-taking, and leadership also can have a profound effect on performance. Frost & Sullivan seeks to identify a highly successful CEO whose leadership, vision, and successful risk-taking stand out among his or her peers. The Award recipient also has distinguished himself or herself from competitors by pursuing a unique restructuring, organizational management reengineering, or competitive roadmap that has resulted in propelling or sustaining the company's market position.
Research Methodology
To choose the Award recipient, the Frost & Sullivan tracks market developments and measurements in the industry. The selection process utilizes market participant interviews and extensive primary and extensive secondary research. After evaluating the research, the analyst team considers market share, market growth, market penetration, profit margins, stock price, and overall industry impact in relation to CEO corporate organizational and strategic business actions.
Measurement Criteria
In addition to the methodology described above, there are specific criteria used in determining the final ranking and Award recipient. The recipient of this Award has excelled based on several of the following criteria:
- History of serving the industry
- Impact on organization and contribution to company financial results, restructuring, or business strategy to grow market share (e.g. effective development and implementation of a new business model)
- Leadership, risk-taking, vision, or decision that has served as the catalyst for market growth, sustaining market share, and/or company image
- Leadership that created industry standards in operations, product quality, processes, or other notable benchmarks
- Leadership that increased value as perceived by the stakeholders (e.g. consumers, suppliers, shareholders, etc.)
- Degree of industry participation and influence on the market as a result of CEO actions
- Degree of CEO leadership and employee participation in community service programs
- Operational excellence
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