(Anne Donnellon Joshuad.Margolis)
It was just six months away from MediSys's planned August 2009 launch of IntensCare, their new remote monitoring system for use in hospitals' intensive care units. The company was investing $20.5 million in the new system, which represented the most ambitious project in the company's 10-year history.
Valerie Merz, marketing manager for IntensCare, was feeling enormous pressure as she reviewed the agenda for the upcoming meeting of the product development team. Once again there was no scheduled time to resolve the debate over the modular design that she knew was critical to successful adoption and long-term success in the market. Without this modularity, she was certain that the system would lose market share to the competition's forthcoming products, both scheduled for release within the year. And it wasn't just her P&L that would take the hit; the team, and the whole company, would look second-rate. "Why isn't Jack stepping up on this issue and getting it resolved?" Merz wondered. Jack Fogel, senior production manager, was the project lead for IntensCare, but in Merz's opinion, he was far too focused on the details of the product side and far too little concerned about the business issues and the impending launch. Perhaps it was time for her to blow the whistle and get the bosses involved. How else could she get her colleagues to do the right thing for the company and not just for their own departments?
MediSys: Background and Organization
MediSys Corp., a privately held U.S.-based medical device manufacturer, was founded in 2002. Its annual revenues in 2008 were $400 million, and the company employed 1,750 people. The company developed, manufactured, and sold medical monitoring systems for the hospital segmen
MediSys's first two products were highly successful specialty pulmonary and renal monitoring systems. Though still relatively small, the company was very profitable. Its entrepreneurial culture had fostered innovative thinking across the company, and as a result, numerous promising initiatives were at various stages of development—from redesign to development of new systems.
However, the board of MediSys saw early signs that growth was slowing. Two wellknown public competitors, with deep pockets and strong reputations in the industry, had announced they were moving into MediSys's key markets with products designed to compete with IntensCare. A similar competitive response seemed likely as MediSys launched future products as well.
Partly to counter this threat, an aggressive new president, Art Beaumont, was hired in January 2008 to sharpen strategic focus while preserving the innovative culture and restimulating rapid growth. Within weeks, Beaumont introduced a series of changes. As shown in the MediSys organization chart (see Exhibit 1), the company continued to be organized functionally; however, Beaumont created an Executive Committee consisting of his five direct reports: the vice presidents of sales and marketing, research & development, design and engineering, production, and administration. His intention was to develop them into an executive team that would jointly create and implement a strategy for growing the business swiftly.
His early months in the job convinced him that, despite the entrepreneurial culture, some of these managers had become entrenched in their functional roles and that progress could take some time. While he worked on shaping his management team, Beaumont also formalized a process for product development. He believed that MediSys could outmaneuver its larger, richer competitors by speeding product development through the use of crossfunctional teams. Speed was the key. New Product Development at MediSys
Historically, MediSys's approach to product development was essentially sequential: 1. Research & Development staff typically started the development sequence by proposing new...