While MediSys had grown to become a $400m firm with 1,750 employees, in 2008, it was at a crossroads. The firm’s highly effective entrepreneurial culture had been stymied by size and bureaucracy. At about this time, the firm hired a new President, Art Beaumont, who instituted a change in the New Product Development process. Instead of a traditional linear progression, product development would now be handled by cross functional teams comprised of key representatives from each business silo. The strength of this new approach was believed to be significant:
• All of the firm’s critical functions represented
• Leadership strength with cross-functional expertise
• Reintroduction of an entrepreneurial / team approach • The avoidance of single-minded focus in one’s particular area of expertise
Though it began under the traditional system, IntensCare became one of the first products to shift into the new cross-functional development system. This also represented the firm’s largest and most ambitious single project – with a 10-year time line and $20.5 million in total investment.
Despite the positive changes brought about at MediSys, there are a number of cracks in the veneer that are now playing out as the firm struggles to complete product development and launch IntensCare. On a macro level, these can be broken into several main categories:
• New product development approach does not mesh with the balance of the firm’s operations • Employees and team members that are spread too thin
• Bifurcated culture of long time employees (“friends”) and outsiders/newcomers • Lack of ultimate responsibility and/or responsibility without authority
The idea of modifying the product development process was legitimate, forward thinking, and seemingly well accepted among employees. However, whereas this aspect of the business process was radically changed, the rest of the firm’s operations were not adapted to mesh. Although the cross functional product development teams worked more or less outside the firm’s traditional structure, the team members still reported to management under the traditional system. This removed, or at least greatly reduced, the level of accountability of each team member.
The case study also revealed the recurring theme that employees were spread too thin as a result of economic conditions and requisite cutbacks in staffing. While this may have been unavoidable, it seems to have been overlooked when setting timeline goals for the team’s launch of IntensCare.
A chasm existed between the old guard – those employees who had been there for many years and had developed close “friendships”, and the outsiders – those who were either newly hired (notably Valerie Merz) or those who were seen as obstacles to the process (Karen Baio).
Lastly, but perhaps most importantly, the new structure didn’t clearly define responsibility for the project success. The team leader (Jack Fogel) was notionally in charge of the process yet there seemed to be no direct consequence for failure (long term, perhaps his reputation would be damaged but short term, less so). Conversely, Valerie Merz, who was not the team leader, seems positioned to bear the full brunt of failure yet was given no authority over the process.
In summary, MediSys is a well established firm with a solid track record of success. Having grown dramatically over the past decade, it is faced with challenges to the product design process and, even though the new president reacted to those challenges by modifying structures, they are reeling from an incomplete solution, unintended consequences, and personality conflicts.
Are people doing all they can to work together?
Due to many of the issues discussed previously, the team’s communication has been challenged and the effectiveness of their efforts severely compromised. Although each individual would likely report that...