SURGICAL SPARK

Hidden Champion in the Operating Room

christian erbe Sebastian Berger für Handelsblatt
Christian Erbe wants his company to have a greater public presence.
  • Why it matters

    Why it matters

    To survive in a highly competitive medical technology sector, Erbe has to “work continuously on new technologies,” its leader says.

  • Facts

    Facts

    • The idea for using electricity in surgery occurred to company founder Christian Heinrich Erbe back in 1851.
    • An electric scalpel cuts more precisely than any mechanical counterpart, by separating skin and underlying tissue without contact.
    • More than 80 percent of Erbe’s products are sold abroad.
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    Audio

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A dummy patient awaits surgery under a green sheet in an operating room just steps away from Christian Erbe’s office. Next to the gurney is an anatomical model a torso, nicknamed “Bronco.”

Mr. Erbe opens the model’s chest to show its insides. “Here you see the bronchial tubes, to which we can add tumors when needed,” he explained.

Doctors from all over the world visit this instructional operating room at Erbe medical technologies, headquartered in Tübingen in southwestern Germany. They come to learn new surgical techniques with the company’s state-of-the-art devices, practicing on life-sized dummy patients and artificial body parts like Bronco’s.

“We used to be proud of being a ‘hidden champion.’ But ‘hidden’ isn’t always sexy.”

Christian Erbe, head of Erbe medical technologies

Mr. Erbe is the fifth generation to head the family business, which develops medical electronics and produces equipment that works on high-frequency electricity to facilitate tissue-protecting operations with minimum loss of blood.

One of the company’s most important revenue sources is the Vio line of electrosurgical products, which earns around €200 million annually. The most recent version, Vio 3, will be marketed later this month. The preceding model sold more than 50,000 times in the last seven years – a target Erbe also holds for its newest version. The company’s most recent innovation is a technical improvement to water-jet surgery, which is often used in liver operations because it reduces blood loss.

The idea for using electricity in surgery occurred to company founder Christian Heinrich Erbe back in 1851. Today the family firm is among the 100 oldest in Germany and the global leader in electrosurgical technology. It has subsidiaries in about a dozen countries, including Erbe USA, headquartered near Atlanta.

Erbe’s biggest competitor is Covidien, a subsidiary of medical technology giant Medtronic in the United States, with about $20 billion in annual revenues. Then there are companies such as Johnson & Johnson, Olympus and many local rivals on the world’s markets.

To survive in this highly competitive environment, the current chief, who took over the firm from his father 13 years ago, said Erbe has to “work continuously on new technologies.”

The success of his predecessors also creates pressure to succeed. For example, the first mobile X-ray device was introduced some 90 years ago at the Erbe factory in Tübingen. Sampling cabinets for determining the proper lenses for eyeglasses were developed at the end of the 19th century, together with a professor at the Tübingen University Hospital and manufactured at Erbe.

Under Christian’s father, Helmut Erbe, electro-medicine made a great leap forward with the first automatically controlled, high-frequency surgical devices. Today the company’s market share for this type of surgery in Germany is 80 percent.

As the founder’s great-great-grandson, Christian Erbe is steeped in family tradition. “It has always been our goal to achieve technological breakthroughs,” he said, adding that to fulfill this ambition, he employs the tried-and-true method of his predecessors — a ceaseless exchange of ideas with scientists worldwide.

“We depend on our medical collaborators here within the company too,” he said.

Some 15 doctors work for the firm to develop new ideas and procedures and instruct surgeons in new technologies.

Mr. Erbe recently spent €30 million to build a modern administrative wing with a training center. In this way – contrary to family tradition – he wants to gain attention.

“We used to be proud of being a ‘hidden champion,’” he said, referring to the fact that many German small and mid-sized companies are global leaders in their sector, yet barely known to the wider public. “But ‘hidden’ isn’t always sexy.”

The new building is also a signal for Tübingen business community, where the company benefits from being embedded in the most dense cluster of medical technology in Germany. About 70 high-tech firms in the sector can be found within just few kilometers. All are small and mid-sized companies, of which Erbe is one of the largest.

“If we weren’t already here, this is where we would have to move,” said Mr. Erbe.

Another one of Mr. Erbe’s strategies is to seek out unusual partners, including auto parts companies that specialize in composite materials, high-tech textiles or 3D printing.

“Many auto suppliers are developing a second source of income with medical technology,” said Mr. Erbe, who is also the president of the Reutlingen Chamber of Industry and Commerce. “We get our Teflon tubes from Elringklinger, which helps us in building surgical instruments.”

Mr. Erbe has a wide range of duties at the firm, where he shares operational responsibilities with his brother-in-law Reiner Thede. He’s also knowledgeable in material science, medical science and licensing criteria in the many countries where Erbe exports – more than 80 percent of its products are sold abroad. Then there is marketing, distribution, service and basic research.

It all stimulates his curiosity. “I’m interested in everything I’m doing today,” he said.

But even though he studied industrial engineering instead of medicine, he was always fascinated by a wide range of topics, from human biology to theology. And he pursues a passion for craftsmanship in his own woodworking studio.

“When something needs to be done at home, I can do it myself 80 percent of the time,” he said.

People who work for Mr. Erbe say he is down-to-earth. But the family name carries responsibilities: The company always comes first.

Looking back, Mr. Erbe said “it was always the unexpressed wish of my parents” that he would take over the firm.

Will his 16-year-old son someday follow in his footsteps and head the firm in the sixth generation?

“What applies to many family firms is true for us as well,” said Erbe’s fifth-generation leader. “You have to be able to do it, want to do it and be allowed to do it.”

Luckily, the family is large enough that his nieces and nephews might also be chosen for succession.

 

Martin Wocher is an editor with Handelsblatt, focusing on the mechanical engineering and steel industries. To contact the author: wocher@handelsblatt.com

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