My MedTech Life: Accu-Tube’s Kevin McGrath

Welcome to our blog series sharing highlights from conversations with Chamfr sellers, the leaders of companies that are helping to shape and drive the medical device industry forward.

This month, we spoke via videoconference with Kevin McGrath, CEO of Accu-Tube. Based in Englewood, Colorado, Accu-Tube fabricates precision stainless steel tubing for the orthopedic, arthroscopic, and minimally invasive surgery (MIS) markets.

A Colorado native and avid skier, Kevin began his medtech career in sales and progressed to national sales management. He then co-founded Mountainside Medical, which was acquired by Tecomet in 2016. After serving as VP of Advanced Surgical for Tecomet, he became CEO of Accu-Tube in 2018. (Read his bio here.)

Learn how a chance meeting on a river rafting trip inspired Kevin’s career path, what advice he’d give his younger self (that’s he’s giving his daughter now), and why the week of MD&M West is one of his favorite of the year.

How did you end up in the medical device industry?

As a kid, I didn’t know what I wanted to do. I didn’t even know if I was going to college! I goofed around after high school then went to business school in Denver. I had a job as a river rafting guide in college and met a professional sales person on a rafting trip who introduced me to a career in sales. We kept in touch and he helped me plan my job search to get into sales. I landed with a small manufacturing company that made stamped metal components, with a third of their business in medical device and electrosurgical instruments. That company just happened to be a block and a half away from Accu-Tube! I kept in touch with that sales guy until he retired.

What led you to become an entrepreneur and found Mountainside Medical?

Pete Neidecker, the guy who hired me into that first sales job, became my mentor and business partner. We knew that Valley Lab (a local medical device company that’s now part of Medtronic) was looking for a machining company near its plant in Boulder. We first looked into buying a company, but that didn’t work out. So in 2006 we ended up greenfielding a machining shop 2 or 3 blocks away from Valley Lab. We bought 5 pieces of equipment, hung out a shingle and started a factory!

We had a lot of experience and knowledge from our MedSource and Accellent days. Our goal was to combine that skill set with a small “mom-and-pop-shop” feel. We started with 5 of us and zero dollars in sales, and when we sold the company 10 years later, we were at 104 employees and $21 million in sales. Looking back, our success was built by hiring very good people, and being able to measure and use data to validate processes. Plus, it never hurts to be right down the street from your biggest customer!

What do you like best about your current role at Accu-Tube?

I like building things. I very much enjoy building a business, like we did at Mountainside Medical. When our team took over Accu-Tube in 2018, we found that they really hadn’t put any investment into their facility for 20+ years. So we got busy and are moving to a new manufacturing facility in Denver. We’re upgrading equipment, and developing technology around the intellectual property (IP) we have in house. We’re building a contract manufacturing organization organically rather than by acquisition. We did do one acquisition last year, but our focus is more on organic growth, and I’ve spent much more of my career on that than on mergers and acquisitions (M&A).

I also like networking with a lot of people. The highlight of my year is going to the trade shows; specifically, Medical Design & Manufacturing (MD&M) West in California, because it’s like an annual reunion for my former colleagues. Everybody meets at the end of the day for happy hour. And every year I go back to the same sushi place I’ve been going to since the early 2000s. I really enjoy that—it’s one of my favorite weeks of the year.

What would you like Accu-Tube to be known for? What would success look like for your company?

I want to build a customer-centric business that employees are proud of. I want to create a company that’s leading in terms of lean manufacturing processes that is well-positioned for future growth. I want to create a business where people want to work, that values and supports employees and their families. We just celebrated one of our employee’s 30^th anniversary. Our VP of engineering has been with us for 29 years—that’s longevity!

If an engineer wasn’t familiar with Accu-Tube, what are the top 3 things you would want them to know about your company or products?

1. We make very tight-tolerance precision tubing—tighter than industry standards

2. We specialize in 17-7 stainless steel tubing which is stronger and easier to machine than 304 SS. About 70% of our 17-7 tubing goes to precision Swiss machining companies for orthopedic, arthroscopic and minimally invasive devices.

3. We are very customer-focused and are continually improving. For example, we’re currently shortening lead times and delivery times.

What is the coolest device your tubing has ever been part of?

One of our long-time sports medicine customers is running multiple Swiss machines unattended, 24/7. They have one of the most advanced Swiss machine shops I’ve ever seen, and they can do it because we have very high-quality tubing.

Back in about 2007 when I was with Mountainside Medical, I worked with local supplier to develop a minimally invasive, navigated brain biopsy needle. Accu-Tube fabricated that tubing, and that program is still running today. I’m pretty proud of that, and it’s one of the reasons I came to Accu-Tube.

What appealed to you about partnering with Chamfr? Why was it a good fit for Accu-Tube?

Chamfr made it really easy to onboard and quickly sell our stainless steel tubing on their platform. I had just started as CEO and Accu-Tube had done no marketing—ever. So we kind of had a blank slate. Chamfr is a great way to engage with R&D engineers, and the Chamfr team brings a lot of industry experience, so we’re all in!

Looking back, what is something that has changed in the medical device industry over the course of your career?

The availability of and reliance on data. There’s just so much more data available now. This industry makes decisions based on data much more than when I first started. And it’s not just for the finance people. Sales, operations, quality, R&D, business development—everyone has to understand the numbers.

What are some of the trends you see looking ahead 3-5 years?

There’s been a lot of consolidation over the past 20 years. As a result, one challenge—especially for larger contract manufacturing organizations (CMOs)—is that a lot of the small CMOs have been bought. There are fewer businesses for sale, so when they do come up for sale, it starts a feeding frenzy and drives prices up. I expect to see the big CMOs getting bigger over the next 3-5 years.

Another thing is that some of the big CMOs are big enough that they’re looking to go public—they aren’t looking to sell to another private equity group. They’re selling to big strategic manufacturing companies. A couple of the big strategic manufacturing companies have gotten into buying some of the private equity groups. So we’ll see how much bigger they’ll get.

What motivates you? What gets you out of bed in the morning?

First of all, I’ve always been a morning person. That drives me to get up early and start working. What drives me now is working with an organization on this organic growth—building a company and a team and a technology at Accu-Tube. Those are the things I really enjoy. It’s very hands-on and it’s very rewarding. Building something.

At Mountainside we built a great organization in 10 years, and we did very well selling it to Tecomet. Now I’m back at a small company doing that same thing again, and I’m definitely enjoying that side of life.

What are your hobbies? Do they provide any lessons for your professional life?

I like to do things outdoors. Skiing is my winter hobby—I’ve been skiing since about the 2^nd grade, and my whole family skis. My summer hobby is wake boarding. What I’ve learned from them is that no matter what skill level you are, you can always improve, at any age.

What is a key lesson you’ve learned during your career?

That leading or enabling a group is much more powerful than trying to do everything on your own. At the beginning of my career, I was…how do you say it nicely?…kind of pushy about getting things done. Mentors like Pete were very influential in developing my collaboration skills. I’ve evolved from a sales person focused on his numbers to a more collaborative leader of an organization.

What advice would you have for your “younger self”?

Take more accounting and finance classes! My skill set is more on the organization/operations/sales side of the business than on the accounting and finance side. I’m doing more of the finance now, and we’re lucky to have really good people that handle accounting.

My daughter is in her first year of business school, studying marketing and data analytics. I’ve told her that she doesn’t need a finance degree, but I’ve advised her to take a bunch of finance classes, so she has agreed to that!

How do you think your colleagues/co-workers would describe you?

Hmmm…Why don’t you ask them?

We asked Todd Oehlerking, VP of Sales at Accu-Tube, what it’s like to work with Kevin. Here’s what Todd told us.

“Kevin is very focused on customer service and creating partnerships with customers where both parties win. For me, it’s a tremendous asset to work with someone who’s so well connected in the industry. He knows everyone: sales people, operational leaders, CEOs, and business owners.

Kevin started out in sales, but his professional growth has come in all the functional areas: operations, finance, quality, and engineering. His 30 years of experience has helped him become a very good leader.”

Well said Todd. We couldn’t agree more!