Innostate Case Study

Topics: Harvard Business School, New product development Pages: 13 (3183 words) Published: January 10, 2013


What should
Stephanie do:
institute a basic
reorganization, or
re-create the Jack
Donally model of
strong leadership?

Big Shoes to Fill
by Michael Beer

Reprint R0605X

A larger-than-life CEO left Innostat with larger-than-life problems. The new boss knows the company needs fundamental change, but the image of her predecessor hovers.


Big Shoes to Fill


by Michael Beer

The memorial service was a sellout. Jack
Donally had been a colossal figure who commanded a lot of respect, if not affection. He’ll be a hard act to follow, Stephanie Fortas
thought as she strained to make sense of the
eulogy, delivered in a thick Irish accent by the
same priest who had married Jack and Moira
Donally 40 years ago. Moira must be feeling especially lost, Stephanie thought. A deferring, uncomplaining woman, Moira had apparently
taken second place to Innostat all her married
life, and just when it seemed that she would
soon have Jack all to herself, he up and died.
But it wasn’t just Moira and her five children
who looked lost, Stephanie thought. Everyone
seemed bewildered. As the CEO appointed by
the board to succeed Jack just before his untimely death, Stephanie knew that a lot of people would be looking to her for answers. She edged
forward to pay her respects to Moira, aware that
a lot of curious eyes were fixed on her.

“I’ve heard so much about Jack,” Stephanie
said, offering her condolences to Moira. “I’m
going to do my best to protect his legacy.”

A One-Man Show
That legacy was formidable. Boston-based Innostat was very much Jack Donally’s creation. He had transformed the company from a small
local manufacturer of scalpels and other surgical equipment into the world’s best-known maker of prosthetic limbs and surgical implants. Sales had reached more than $2 billion, with the company employing more than 5,000

people at locations in Boston, Los Angeles, and
Dublin, Ireland. Innostat also had sales and
marketing country organizations around the
world. A pharmacist’s son from the rough-andtumble Irish American stronghold of South Boston—Southie to the locals—Jack had
joined Innostat as a salesman right after completing a tour of duty in Vietnam as a medical

HBR’s cases, which are fictional, present common managerial dilemmas.

harvard business review • may 2006

page 1

B ig Shoes to Fill •• •H BR C A SE S T UDY

Michael Beer ( is the
Cahners-Rabb Professor of Business Administration Emeritus at Harvard Business School in Boston.

harvard business review • may 2006

orderly. His unit had been in the thick of some
of the worst action, and he always said afterward that his passion for the company and its products came from that experience.
Under Jack’s leadership, Innostat built a reputation for technological innovation and manufacturing quality. That was, on the face of it, surprising, since Jack had majored in history at
the University of Massachusetts and liked to
say that he had no head for “science talk.” But
the truth was, he loved to spend time talking
to surgeons and researchers. He had that special skill that merged an interest in technology with an understanding of what customers
needed and wanted. He typically came back
from his travels full of ideas for new products.
He would go straight to the head of R&D and
get him started on a project, rarely engaging
Innostat’s senior team in discussions of these
ideas and how they fit in to the company’s
broader strategy. Consequently, marketing
never developed as a strong function, and
R&D, though technologically sophisticated,
never developed marketing savvy.
Despite his primary focus on new product
ideas, Jack was also acutely conscious that
health care products had to be error free, and
he had always kept a close eye on manufacturing. Frank...
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