We’ve Got Rhythm! Medtronic Corporation’s
Cardiac Pacemaker Business

Situational Analysis
Cardiac Pacemaker, considered to be one of the greatest engineering feats of the 20th century, was invented by Medtronic Corporation, an US based organization. Medtronic dominated the early pacemaker market of the 1950-60’s being the first-mover into the domain. However, the scenario transformed promptly in the following decade, with the cropping up of steep competition, accompanied by accelerated technological changes etc. and the organization’s market share got squeezed down to close to half of the previous figure as a result of their futility in creating new & advanced products right on time, severely harming their brand reputation. However, Medtronic regained their market & product leadership from the late 1980’s through the timely invention of a path-breaking, rate responsive pacemaker named Activitrax, followed by a thorough revamp of their incorporated processes and systems. The gross lack of coordination plaguing the company’s new product development process, resulting directly into the failure to respond fittingly to the market demands or changes, was gradually got rid-off via inculcating the management philosophies (like, assigning highest priorities to the commitments made, creation of a sense of urgency, fetching greater employee productivity, unifying the management and employees etc.). New performance milestones (cycle time, unit product costs, innovative products and product quality) were also set in place with an aim to alleviate the new product development process. A whole new set of processes pertaining to speed of product development cutting through the ‘new idea’ clutter was developed. The new processes were also related to the creation of product platforms, in which a single product can be altered into creating multiple derivatives, thus fulfilling multiple patient requirements. Also, the platform development was based upon developing new technologies, instead of just the architecture of the pacemaker. The company already had an experienced division for designing hybrid circuits and alterations in the new products under development were made easier through close coordination of the respective teams. Existing incongruities between the engineering and marketing team were dodged astutely via the introduction of the mandatory regulation of affirming each other’s specifications, on paper. The whole process of new product development was segregated into various phases, like, business analysis phase, demonstration phase and development phase, with these being dotted with regular inspections. The cycle of new product development was shaped into being a uniform one (1.5 yrs. - 2yrs), thus shunning the existing uncertainties in the personnel. A solid system of listening closely to the market requirements was created, with reinforcing & empowering of the already existing surgeon review boards, with further determination & promise of streamlining them to enable greater potency. The revamp was headed by Mike Stevens, the VP and General Manager of the PGPS division at Medtronic. The paradigm shifts brought about in the company’s systems curtailed product development time, manufacturing cost, manufacturing flaws and thus, reinstated Medtronic as not only the market leader but also helped to spread its dominion over more than half of the market. The tables were turned and the competitors were now looking down the barrel. However, in order to hold back onto their market and product leadership in the future, Medtronic needed to adopt steps which would be instrumental in upholding their stature in the years to come.

The Key Problems To Be Solved
The future prosperity of Medtronic is dependent on the satisfactory fulfillment of multiple factors and a failure to serve these might result in uncertainties creeping in, as far as business success is concerned. The organization needed a sound & fail-proof process through which the knowledge gathered from the external environment could be translated directly into the formation of renewed company cultures and practices, which would have continuous learning and training as their integral parts. This would automatically result into the creation of new, better products. The process of learning and training would have to be extended to the physicians and insurers too, in order to ensure that the patients receive proper & fitting devices (quality & attributes need to be chosen over the quoted price) and their reimbursements. Even the patients would have to be fed with correct knowledge regarding their pacemakers. The marketing & sales team of Medtronic needs to be bestowed with the responsibility of preaching these vital facts to all the concerned parties. After the process revamp, followed by the creation of better & enhanced products, the company’s arsenal was equipped with cutting edge products. The challenge was the creation of products which would have augmented values incorporated into them and this, resultantly, would aid Medtronic to easily stay up ahead by a generation (Kitchin, 2012). Ageing of the prosperous generation in the US and the rapidly developing economies of the growing nations would also have to be taken advantages of. The growing entry barriers to the pacemaker business, cutting down the numbers of operating organizations have created greater chances of increasing the business and this scope needs to be utilized. The demand for pacemakers has been increasing in the less prosperous nations of the globe. Keeping this in mind, technology would have to be developed at a relatively faster pace along with maintaining a strict check on the concerned costs. The company, on principle, is strictly against making any kind of compromises on the quality of its products and so the matter needs to be dealt with a very high priority. In the developed nations, the organization needs to see that every ailment requiring the aid of a pacemaker is provided with optimum therapy (Locke, 2009). (Ref. no.: 2 and 3) (Numbered references on the “References” page)

Analysis
Medtronic requires regular market information in order to understand the requirements of the customers and the current trends. For this information, the company is dependent on the marketing and sales team. It also has in place a couple of teams comprising of physicians, which aid the company in gaining a proper perspective on the requirements of the patients and throw light at the possible requirements of the future. It has been noticed that the news generated by the sales and marketing team is sometimes not correct at assessing the true existing picture. This often happens because the team members are not always properly trained at collecting, documenting and analyzing information. At other times, a tendency has been noticed towards providing information which would be instrumental at developing new products which would fetch them better sales commission. Thus, creating and ‘pushing’ relatively ineffective products might result in harming company reputation (Locke, 2009). The physicians, on the other hand, spend relatively lesser time behind pacemakers during their practice. So, chances of pacemakers being the matter their concern and interest are low. Also, the information furnished by them reflects the ‘physician’ perspective of pacemakers. No successful system has been built up so far which would incorporate the ‘patient’ perspective of the picture. Information is also not gathered from the numerous health workers working in various clinics. Information from the other members of the distribution chain is also not taken into consideration. So, the market information reaching Medtronic is partial. This also affects the teaching and training process in the organization directly. The training methods adopted by the organization are framed by the management with help from the concerned department heads, functional managers and project managers, while the personnel working at the grass-root level of a project or the marketing/sales department is not listened to closely. Also, business partners, customers or patients are given lesser priority during the process, often making the trainings partial, on a larger perspective. The organizational structure at Medtronic is matrix (considered very effective in this kind of a robust yet ‘need to respond quickly’ organization). Sometimes however, the long cross-functional team faces trouble communicating messages quickly across its length. The organizational culture followed at the company is a merge of Adhocracy and Market culture, with transformational leadership (but task oriented and charismatic while taking decisions) at the top. However, there have been grievances noticed in the various departments regarding the decisions related to the organizational changes that have often been brought in too often. Despite its humongous resources, financial or otherwise, Medtronic has very limited presence around the globe (Medtronic, 2013). One major behind this is the fact that it has not been comprehensively successful at creating economic pacemaker technology which can be served successfully in the countries with relatively lesser economic capabilities*. It has also not been fully successful in providing optimum therapy to patients in the developed nations (Walker, 2011). (Ref. no: 3, 4 and 5)
Recommendations
Medtronic should pay utmost importance to the process of learning and training in the organization and make it a more comprehensive one. In order to do so, the organizational culture needs to be transformed into one with a greater learning capability. The existing adhocracy & market cultures would have to be meshed with Clan culture, allowing greater participation of the employees in general. The leadership style would have to usher in more democracy in its decision making process. This would not only make space for greater learning but would be instrumental in ushering in innovations, greater coordination between the various departments and managers of various stature (e.g. functional and project). The resulting ‘innovative’ environment would help in creating technologies of greater caliber and lesser cost, making the aim of being present at the less prosperous markets to be a reality (Kitchin, 2012). The organization philosophy should be embedded into the hearts of every organizational employee and business partner, with the warning that any disruption would face severe penalties (curbing down the tendencies of ‘pushing products). These learning processes would also make the process of organizational change much easier (lesser grievances) than it is now. The organization structure should be optimized into a shorter matrix, making communication and change easier. The preparation and preaching of the various training modules would need to be more open, with participations from physicians, business partners, health workers, patients and organizational employees working at the grass-root levels. There should be thorough training designed for each of these parties, ensuring the every patient receives proper care (thus, realizing the dream of “optimum care”). For market information, the business partners, health workers, patients should also be interviewed and surveyed. Third party researchers (industry experts, academicians etc.) should be hired for getting correct information (Callingham, 2004). This would help the company in creating better and more market-suitable products, resulting in greater financial prosperity. (Ref. no.: 1 and 2)

References 1. Callingham, M. 2004. Market Intelligence: How and why organizations use market research. New York: Kogan Page Publishers. 2. Kitchin, D. 2012. Introduction to Organizational Behavior for Managers and Engineers. Philadelphia: Routledge. 3. Locke, E. 2009. Handbook of Principles of Organizational Behavior: Indispensable knowledge for Evidence based management. New York: John Wiley and Sons. 4. Medtronic. 2013. about Us. Retrieved from http://www.medtronic.com/ on 13th February, 2013 5. Walker, A. 2011. Organizational Behavior in Construction. New York: John Wiley & Sons.