Cook Group still a trailblazer, years after founder's death
BLOOMINGTON, Ind. (AP) - For decades, Bloomington-based medical-device maker Cook Group kept a somewhat low profile. The company employed thousands of locals and was deeply involved in downtown revitalization programs, yet was seen by the populace as sort of a mom-and-pop operation.
Perhaps because, for most of its history, that's exactly what it was.
Cook Group, which remains family-owned to this day, was founded in 1963 by Bill and Gayle Cook. Bill, born in Mattoon, Illinois, tried several jobs (including selling shot glasses with pictures of nude women on the bottom) before finding his calling making medical devices. In 1958, a year after marrying his wife, he started a Chicago company that manufactured a then-new innovation - disposable hypodermic needles.
The operation thrived and, in 1963, the couple moved to Bloomington (they'd visited it recently and liked it) and started a company that would morph into Cook Group. They invested $1,500 in plastic tubing, a blowtorch and a soldering iron and started making medical catheters in their apartment.
From those modest beginnings, the company grew relentlessly. Not that you'd have known it by looking at Bill, who wore a cardigan instead of a suit and never used a chauffeur or owned a fancy car. In fact, he and Gayle lived most of their adult lives in a smallish, three-bedroom house they purchased in 1967.
Their company cut a similarly unassuming profile. But in the early 2000s, Indianapolis-based Guidant Corp. launched a long, dragged-out (and ultimately unsuccessful) attempt to acquire Cook. Suddenly, the outfit was all over the papers. Including the fact that it was valued at something like $3 billion.
'œIn Bloomington, everybody knew Bill and Gayle,'ť said Christa Curtis, global director for corporate marketing and communications for Cook Medical. 'œThey were such humble people, I don't know if everyone understood the scope of their work.'ť
Though the company still isn't exactly a household name (and Bill passed away in 2011 at age 80), it has continued to swell in size. It generated $2.4 billion in revenue last year and employs 13,531 people worldwide, including 7,699 in Indiana, doing everything from building medical products to staffing the sprawling, historic French Lick Resort, which the company owns.
Cook has had a huge effect on its hometown of Bloomington, where it's the second-largest employer, after Indiana University. Bill and Gayle were also deeply interested in historic preservation and, during the 1980s, played a key role in revitalizing many of Bloomington's downtown buildings.
'œThere are only a handful of institutions that have affected Bloomington in a fundamental way like Cook Group has,'ť said Bloomington Mayor John Hamilton. 'œIt's hard to imagine what the infrastructure of the community would look like without it.'ť
The company is divided into five business lines - resorts, property management, services, life sciences and medical devices. Some of the activities Cook engages in stray quite far afield from its core medical manufacturing competency. Chalk that up to its idiosyncratic owners - and the fact that there weren't any outside stockholders to question them.
'œIt's one of the benefits of being privately held,'ť Curtis said. 'œWe don't have stakeholders saying, '~We're not going to do that. Tell us how that's going to drive profit?''ť
Listing all the things that interested Bill is beyond the scope of this article. Suffice it to say that he was something of a Midwestern Elon Musk, always being swept away by novel ideas. For instance, the company has its own airline services division, Cook Aviation, because Bill was fascinated by flying. And it owns the sprawling French Lick Resort (the crown jewel of the company's resort line) because the Cooks wanted to see the storied complex put back on its feet.
Its property management line oversees two residential and 16 commercial properties in Bloomington, including Showers Plaza, Fountain Square Mall and Graham Plaza. Many of them are historic structures the Cooks payed to rehab.
Bill's interests easily could have taken the company even further from its medical-device roots. His laurels include producing the Tony- and Emmy-winning Broadway show 'œBlast'ť in 2001 (it grew out of his sponsorship of a local drum and bugle corps), driving John Mellencamp's tour bus and even making a serious attempt to start his own railroad.
'œYears ago, there was a lot of discussion about high-speed rail in Indianapolis and elsewhere,'ť said Pete Yonkman, president of Cook Medical and Cook Group. 'œBill came into my office and said, '~I'm just sick and tired of people talking about trains, but nobody does anything. Let's go buy two of them and put them on a track and see if people ride them.''ť
Yonkman duly located a builder of commuter trains and ordered two. But the seller went bankrupt the day it was supposed to sign the contract. If it hadn't, Bloomington might well have a light rail system today - and Cook might have six business lines instead of five.
Though the company has lots of irons in the fire, the biggest always has been medical devices. In 2019, it generated $2.2 billion of the company's $2.4 billion in revenue.
Cook manufactures about 10,000 products and sells them around the world. They include lots of devices that can be used for minimally invasive medical procedures, such as drainage catheters, balloon catheters, procedural sets (containing everything a physician needs to perform particular procedures) and, of course, needles.
'œIt's the largest part of our business,'ť Curtis said of medical devices. 'œIt's where Bill and Gayle Cook began, and it's the bread and butter of what we do. The four other lines happened because they built this successful medical-device business and then followed their passions into other areas.'ť
Today, the business is still 100% family owned. Gayle remains a Bloomington fixture, and the couple's only child, Carl, is president of Cook MyoSite, a Pittsburgh-based maker of cell therapy products.
The disadvantages of a privately owned company are lack of shareholder liquidity, often-complex succession planning, and the ever-present need to keep personal and business interests separate.
But if you can manage to do these things properly (and so far Cook has), the advantages of running your own show can be substantial.
'œA privately held company can respond more nimbly to opportunities, focus on long-term performance instead of worrying about quarterly earnings, and doesn't have to deal with public disclosure regulations,'ť said Mark McFatridge, executive director of the Old National Bank Center for Business Excellence at Butler University, which specializes in family-owned and closely held businesses.
Though Cook is nowhere near the size of the largest privately held U.S. company (Minnesota-based Cargill, with revenue of $113.5 billion), it's one of only 228 private U.S. entities with revenue exceeding $2 billion.
'œWhile that seems like a large number, remember that there are almost 25 million privately held firms in the country,'ť McFatridge said.
Cook Group has indeed taken advantage of, even reveled in, the fact that it can do what it wants without having to placate stockholders.
'œPublic companies have to report quarterly earnings, and they often make decisions based on that,'ť said Mark Breedlove, vice president of Cook Medical's vascular division. 'œIn the years I've been at Cook, I've never had anybody ask me, '~What are you going to do next quarter?''ť
It also means Cook can pursue technologies that don't seem immediately useful, and it can create the nich-iest of niche products. For instance, the company recently rolled out the Flourish Pediatric Esophageal Atresia device. Kids with esophageal atresia are born with an esophagus that doesn't connect to the stomach, making normal eating impossible. Typically, the condition is corrected with surgery. But Cook's new device inserts rare earth magnets that gradually open both ends of the esophagus and form a serviceable connection.
The ailment is extremely rare, with perhaps 100 cases seen in the United States per year. Not exactly a gold mine.
'œIt didn't matter if there was a lot of profit to be made,'ť said DJ Sirota, vice president of Cook Medical's MedSurg division. 'œIt was about the opportunity to treat a patient population that was in need.'ť
Of course, the company is working on other devices that could enjoy a much wider user base. Cook's vascular division has gone all-in on its 'œaortic intervention portfolio'ť - non-surgical solutions for problems such as aortic aneurisms.
'œWe actually custom-make devices for patients' individual anatomy,'ť Breedlove said. 'œThat's just one area that's growing pretty rapidly for us right now.'ť
Though the company is working in the nascent field of regenerative medicine (using the body's own systems to cure diseases and heal wounds), it does so with a distinctively Cook slant. For instance, Cook MyoSite has begun clinical trials for a therapy that uses a patient's own cells to regenerate the bladder's sphincter, effectively curing urinary incontinence. In addition to developing the cell therapy, the company is also designing the custom tools needed to deliver them.
'œWhen you look at regenerative medicine biologics, all of them have to be delivered into the body somehow,'ť Yonkman said. 'œSo, another area of focus for us is making sure that we build the tools for physicians to enable these regenerative medicine therapies.'ť
Of course, things don't move as quickly as they did back when Bill Cook made catheters in his apartment. Back then, when a doctor called him for a bit of specialized kit, Bill could have it in his hands within days. Now, U.S. regulations mean approval can take years. And that regulatory process has to be repeated in pretty much every country where Cook does business.
'œIt's a multiyear program and a very large investment,'ť Yonkman said. 'œThe shortest time period could be a year. Two or three to go global.'ť
It doesn't hurt that Cook, which has production facilities all over the world, keeps much of its manufacturing in the Bloomington area. Indeed, the company's relatively tiny global headquarters sits inside its 1-million-square-foot Park 48 building, which is the company's largest manufacturing center and, in non-pandemic times, houses about 2,700 workers.
Having the actual nuts and bolts of the business right outside his door helps keep everybody focused, Yonkman said.
'œIf your manufacturing is located in China, it's very hard to be connected to your people and understand their needs,'ť he said. 'œWe feel like it's our responsibility because we're eating lunch with everybody in the cafeteria.'ť
If you'd asked Yonkman a year ago where he wanted the company to be in a decade, he'd have reeled off many confident plans. Not so much just now. Thanks to the COVID-19 pandemic, the company's hotels were closed for months, and hospitals deferred or canceled orders for equipment not directly related to the outbreak.
'œThe difference with the pandemic is that it's impacted every one of our businesses,'ť Yonkman said. 'œIn the past, diversity has been a real strength. Something might happen in health care, but the resorts might help out. This has affected everything across the board.'ť
In March, Cook saw incoming orders drop 40% in just 10 days. The company quickly paused all nonessential activities and building projects, and asked its salaried staff to take a 20% pay decrease - while at the same time increasing pay to workers who still had to come in every day to manufacture essential hospital supplies.
To no surprise, the company's 'œairway management'ť products have seen a surge in demand.
'œOur teams have been working overtime to get those products into the hands of physicians to help COVID-19 patients in ICU situations right now,'ť Curtis said.
Cook is beginning to recover from the initial shock of the pandemic and the downturn.
'œBecause we're stabilized, we're now starting to see orders increase,'ť Yonkman said. 'œWe expect, hopefully, to be back to a more normal state of affairs by the end of the year.'ť
He said prospering longer term will require staying true to the values that got the company this far.
'œWe have been innovative for 57 years, which is a remarkable run,'ť Yonkman said. 'œI hope we're in new areas of medicine, new areas of the body, technologies that we can't even think of right now. Keeping that ability to innovate new tools for physicians, I hope that's still there 10 years from now.'ť
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Source: Indianapolis Business Journal