The AO Foundation: Transformational Entrepreneurship to Globally Revolutionalize a Healthcare Sector

his case describes the AO Foundation’s transformational entrepreneurship, undertaken at a time before this concept was widely known. It provides an opportunity to analyze how employing and leveraging entrepreneurial and business principles can fund a large NGO for the long haul. The AO (Association for Osteosynthesis) is a Swiss-based non-profit organization, founded in 1958 to improve the treatment of bone trauma. The AO revolutionized bone trauma treatment by developing implants, resulting in enormous health-economic benefits over standard methods of immobilization by plaster casts. The AO founders, a small group of Swiss surgeons, accomplished a global rollout of their method against strong peer resistance and without government, corporate, or investor support employing entrepreneurial practices. Through an ingenious business model enlisting industrial partners to produce and distribute implants to hospitals worldwide, the AO secured licensing fees to develop implants and surgical tools, run a massive educational program, and support continued research and a full range of publications. The founding members of the AO donated their intellectual property (IP) and adopted a self-funding model that was able to sustain itself for more than 60 years. As the AO grew, it expanded its implants and surgical tools to include an ever-larger array of trauma, from adult long bones to smaller bones, the spine, to facial trauma, the move from adult to children, and even implants for veterinary applications. Today, the AO operates globally and trains about 100,000 surgeons annually. With an annual budget of about $125 million, the AO continuously improves surgeon support without government funds or donations. Its approach to bone trauma has become the gold standard across the world.