Medisys is an example of many innovation companies in today’s business environments that have progressed from a start-up to a med-size company. Medisys established in 2002 is a medical device company that developed, manufactured and sold medical monitoring devices and in a six years span generated annual revenues of 400 million in 2008. The organization now consists of 1,750 employees and maintains it original functional organizational structure and a sequential new product development approach. The company’s entrepreneurial culture fostered employees with two objectives to run their current jobs, as well as create new innovative products and ideas. Medisys enjoyed the success of innovation and adaptation through its initial product offerings, but is now faced with impeding speed to market constraints, mounting aggressive competitive pressure and slowing sales. The company is now belligerently moving to bring one of its most ambitious projects to date in the history of the company to market IntensCare. IntensCares is a new remote monitoring system for intensive care patients in hospitals and its make anticipated introduction awaits an eager market. Current organizational and product development problems were threatening the products on time delivery to market and the overall success of the product release. To make matters worse, they received news of new competitors with deep pockets that have plans to release a similar product that would directly compete with IntensCare and possibly other future products Medisys would release. Medisys Board recognized the urgency and gravity of the situation and sought out someone that could bring strategic focus and solutions to these challenges and hired Art Beaumont in January of 2008 as the new President of Medisys.
Art was hired in an effort to improve organizational performance and charged with the tasks to counter the competitive threat, bring IntensCare to market and restore rapid company growth. Art went to work in an authorative style of leadership to first establish an Executive Committee with the vice presidents of sales, marketing research, R&D, design, and engineering to rapidly execute sales growth strategies and to speed up the decision making process. With Medisys entrepreneurial culture often decision making was prolonged. Art felt that the more focus control strategies would speed business growth but found the Committee members slow to implement these strategies. They were content with their current functional roles and Art realized that implementation would take time. The Executive Committee was more comfortable operating in their established functional roles.
Realizing this Art felt the need to increase decision making and product speed to market by formalizing the product development process. The process was currently sequentially organized. Art changed the organizational structure of the product development process to cross-functional teams but left the departments themselves in a functional structure. I suspect that Art recognize from his previous restructure with the Executive team that leaving the base structure functional while creating cross functional product teams with leads that report to senior management would be easier for employees to adopt and execute. He understood that “going 50% over budget during development to get a product out on time reduces profit by only 4%, but staying on budget and getting to market six months late reduces profits by a third” (McKinsey & Co). Art’s plan was to alleviate the bottle neck in decision making and move new products through the development channel out to market more expediently but did not take into consideration the decrease in resources and personal. In theory the goal may have been the right decision but he also forgot to take in consideration individual behavioral profiles and group dynamics when creating the teams.
Art’s when designing the Executive team did not