© Dr. Curtis Odom. All Rights Reserved. [.docx

©
Dr.
Curtis
Odom.
All
Rights
Reserved.
[email protected]
ORGB3201
Final
Exam
Cast
Study
Questions
–
MediSys
Corporation
I. Your
Role:
You

are
a
new
Organizational
Behavior
Consultant
who
has
been
hired
by
this
client
to
improve
in
house
relationships
and
productivity.
II. In
answering
the
questions
below,
you
will
show
how
skilled
you

are
in
observing,
analyzing
and
suggesting
workplace
improvements.
Focus
not
only
on
the
what
for
each
question,
but
also
on
the
why
for
each
aspect
of
your
diagnosis,
and
on
the
how

for
each
step
of
your
action
plan.
Good
Luck!
III. Diagnosis:
1. How
well
is
the
IntensCare
team
performing?
2. How
much
teamwork
do
you
think
there
was
prior
to
the

formal
introduction
of
teams?
3. What
forces
are
affecting
the
IntensCare
team's
behavior,
culture,
and
outcome?
4. What
is
at
stake
here
for
the
company?
5. How
would
you
assess
the
situation

at
MediSys
in
terms
of
meeting
its
initial
goals
for
teams?
6. How
would
you
assess
the
situation
at
MediSys
in
terms
of
achieving
its
competitive
goals?
7. Are
people
doing
all
they
can

to
work
together?
Why
or
why
not?
8. How
do
team
members
from
different
functions
coordinate
their
efforts?
IV. Action
Planning:
9. If
you
were
Merz,
how
would

you
feel
about
the
team
and
the
IntensCare
project?
a. What
things
would
you
consider
in
acting
within
and
managing
the
team?
b. How
would
you
take
action?
10. If
you
were
OBrien,
how

would
you
feel
about
the
team
and
the
IntensCare
project?
a. What
things
would
you
consider
in
acting
within
and
managing
the
team?
b. How
would
you
take
action?
11. If
you
were
Fogel,

how
would
you
feel
about
the
team
and
the
IntensCare
project?
a. What
things
would
you
consider
in
acting
within
and
managing
the
team?
b. How
would
you
take
action?
12. If
you
were

Mukerjee,
how
would
you
feel
about
the
team
and
the
IntensCare
project?
a. What
things
would
you
consider
in
acting
within
and
managing
the
team?
b. How
would
you
take
action?

_____________________________________________________
_____________________________________________________
______
Babson College Professor Anne Donnellon and HBS Professor
Joshua Margolis prepared this case solely as a basis for class
discussion and not as
an endorsement, a source of primary data, or an illustration of
effective or ineffective management. This case, though based
on real events, is
fictionalized, and any resemblance to actual persons or entities
is coincidental. There are occasional references to actual
companies in the
narration.
Copyright © 2009 President and Fellows of Harvard College.
To order copies or request permission to reproduce materials,
call 1-800-545-7685,
write Harvard Business Publishing, Boston, MA 02163, or go to
http://www.hbsp.harvard.edu. This publication may not be
digitized,
photocopied, or otherwise reproduced, posted, or transmitted,
without the permission of Harvard Business School.
A N N E D O N N E L L O N
J O S H U A D . M A R G O L I S
MediSys Corp.:
The IntensCare Product Development Team

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.1 The
company developed, manufactured, and sold medical monitoring
systems for the hospital segment.
MediSys’s first two products were highly successful specialty
pulmonary and renal monitoring
1 In 2008, the average value of annual shipments per paid
employee in the medical equipment industry was approximately
$190,000.
4059
O C T O B E R 3 0 , 2 0 0 9
For the exclusive use of C. Odom, 2016.
This document is authorized for use only by Curtis Odom in
2016.
4059 | MediSys Corp.: The IntensCare Product Development
Team
2 BRIEFCASES | HARVARD BUSINESS SCHOOL
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 well-known
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 cross-functional teams. Speed was the key. 2
New Product Development at MediSys
Historically, MediSys’s approach to product development was
essentially sequential:
1. Research & Development (R&D) staff typically started the
development sequence by
proposing new technologies or new systems that could yield
significant new business
opportunities.
2. Once the leadership agreed on a new idea, Marketing
developed product descriptions from
customer needs and responses to new MediSys concepts, and
then passed these on to Product
Engineering and Software Design.
3. Engineering and Software Design developed them into
product specifications, and passed
those on to the Regulatory group who researched and, where
necessary, conducted clinical
trials to test prototypes of the systems.
4. Once these specifications were finalized, they were passed on
to the production group, which
arranged for the fabrication and assembly of the products.
In August 2008, Beaumont introduced a new parallel system for
product development in which a
”core team” of people assembled from all the critical
functions—R&D, Marketing & Sales, Product
Engineering, Software Design, Regulatory, and Production—
worked together continuously to move
a product from conceptual stage to final production. For every

core team, a project leader was
designated to orchestrate its work, keep an eye on the complete
project, secure resources for the team,
and serve as a liaison to senior management. Beaumont
believed that the project leader needed to
2 A widely cited economic model developed by McKinsey &
Co. calculates that going 50% over budget during development
to
get a product out on time reduces profits by only 4%, but
staying on budget and getting to market six months late reduces
profits by a third.
2016.
MediSys Corp.: The IntensCare Product Development Team |
4059
HARVARD BUSINESS SCHOOL | BRIEFCASES 3
have cross-functional expertise, a track record of high
performance, and the respect of his or her
colleagues.
Most of MediSys’s professional employees embraced the cross-
functional team design and parallel
development process. Conceptually, it fit their entrepreneurial
and team-like approach, though it
was more disciplined and formal than they were used to. They
understood that parallel

development required new ways of thinking and behaving,
particularly in relationship to the
functional areas that had grown up with the company. "Parallel
development doesn't allow people to
single-mindedly defend the position of their functional area,"
one employee noted, "or what's easiest
or best or cheapest for their own functional area. It forces
people to look at the bigger picture."
While requiring that functions look at the "bigger picture,"
parallel development did not alter the
way reporting and evaluation occurred. All employees,
including core team members, continued
reporting to their functional managers who continued to
supervise and evaluate them.
Art Beaumont recognized that the management style of all the
MediSys executives would also
have to change in a parallel development environment:
I know I am asking these folks to give up control, which will be
hard for them in the context of
this major investment. But as the company has grown, a
management style has evolved here
that doesn’t reflect the entrepreneurial spirit that everyone loves
to brag about. It has become
much more of a command-and-control culture with an emphasis
on technical excellence. Not
that we don’t need that, but the competition has become intense
and our reputation is on the
line, so we need all the brain power and discretionary effort we
can get. I think that cross-
functional teams are the only way to get that. But it will be
challenging for my direct reports
and me to change our styles to be more patient, open, and
trusting, and not to intervene.

History of the IntensCare Project
IntensCare had developed in typical MediSys fashion (see
Exhibit 2 for a time line of this product
development effort). In September 2006, Aaron Gerson from
the R&D group had the idea for a
patient monitoring system that would collect data on patients in
intensive care units and post it to an
electronic database that could provide an integrated profile of
an individual patient’s health and
would also send email messages to various physicians and
nurses involved in the patient’s care. He
pitched this concept to Peter Fisher, a friend in Sales, who
tested it with clients and found great
interest. The two invited a third friend from Software Design
(who later left the company) to chat
with them about how this might work, and before long an ad hoc
product development group had
organized itself informally to develop this opportunity.
Over the next year, this ad hoc group developed preliminary
market research and product
designs, which they took to the senior leaders of MediSys to
request funding for further product
development. In July 2007, the group was given $500,000 to
be used for software development and
ongoing product engineering work. Progress was slow, as the
team members were often pulled
away to work on other priorities in their functional areas.
Fisher had been promoted to vice-
president of Sales and Marketing, but started working
immediately to identify an external hire to
replace himself in this effort.
In August 2008, Beaumont formalized a core team and chartered

it to accelerate the new
monitoring system. (See Exhibit 3 for his notes on a list of
team members and their backgrounds that
Beaumont had obtained from Human Resources as he was
planning the changes in the IntensCare
project.) The team members included two people from the
original ad hoc group: Aaron Gerson, the
R&D researcher who formulated the idea, and Bret O’Brien, a
manager in product engineering. Jack
2016.
Team
Fogel, senior production manager, was named project leader
based on his extensive production
experience at MediSys and his track record for successfully
managing the interface between
engineering and production. Dipesh Mukerjee was assigned to
oversee the software design and
development (and had made it known immediately that he
intended to outsource both functions to a
firm in India). Karen Baio was asked to represent Regulatory
Affairs, and a new external hire in
Marketing—Valerie Merz—was assigned to oversee the product
launch and manage the P&L for the
new product. Managing this as a business was Merz’s sole
assignment for the next three years.

Beaumont approached the IntensCare project with a sense of
urgency: "Two competitors have
announced that they will launch similar monitoring systems
within the year. We have to get this
product out the door on time and we cannot make a mistake."
Beaumont committed an additional
$20 million to the rapid development of IntensCare and
communicated the new IntensCare goal:
“Launch an innovative, world-class MediSys product by August
2009.”
The IntensCare Team
Before the IntensCare team was formally chartered by
Beaumont, the group was convened by
Aaron Gerson and typically met every other Friday afternoon
for an hour or so. When Jack Fogel
was appointed project leader, he continued this practice but he
also met frequently with Bret O’Brien,
Gerson, and Mukerjee individually or together to brainstorm
solutions to problems that had arisen.
In addition to Fogel’s various departmental responsibilities
within production, he was responsible
for the final assembly of the IntensCare product. Fogel
characterized his role on the team as follows:
I try to keep all ends tied together for the net result. Where are
we on software development
and testing, engineering design, order and delivery of the
component parts, and fabrication
planning? I tie all the pieces together to make sure they hit the
floor at the same time. I make
sure communication is happening so that all things are getting
done.

While the team had made significant progress in the six months
since it had been reconfigured,
Fogel knew there were still difficulties to overcome if they were
to meet Beaumont’s very aggressive
release date.
On February 2, 2009, Mukerjee sent everyone a terse text
message that suggested even bigger
problems to come, as O’Brien’s critical path depended on
getting the software in final form by May 1:
“Problems again with delivery dates from India. Need to talk to
you asap.”
On February 12, O’Brien e-mailed Fogel:
Jack,
We are running into some serious engineering problems trying
to fit the data displays and
battery units into the customer size specs Marketing provided.
Can you spare some time
tomorrow to meet alone with me and Aaron to brainstorm
solutions to this? I know we have a
meeting tomorrow afternoon with the whole team, but we need
to do some serious thinking
together before we put this in front of the rest of the team. I
can’t afford the time to deal with
Valerie’s predictable drama over this.
Bret
P.S. Have you talked to Dipesh recently about the delays with
the software? Any updates?

2016.
4059
“Bret’s right,” Fogel muttered to himself; “Valerie is going to
go through the roof if she hears
about these two major problems. We’d better get these issues
and the specifics all nailed down before
we bring these up in the team meetings.”
Merz had her own critical path to product launch, and any major
problems in product design
would create a cascade of delays in the marketing of the product
that the IntensCare business plan
could not accommodate, from the production of marketing copy
to the development and publication
of technical installation guides to the final development of the
webpages devoted to the system. In
fact, she was hoping that an accelerated time line might leave
room for at the least the initial planning
of how the monitoring system could be modularized for the
variety of clinical situations where the
system might be used, from military surgery units to neonatal
intensive care. While she was not
counting on this, she felt she had to demand it now if she had
any hope of getting it in the next
version.
Merz’s experience to this point with her colleagues on the

IntensCare team had not given her
much confidence in their competence in general or, more
particularly, in their ability to deliver the
product that Beaumont and the market were expecting. She
was very frustrated with Fogel as the
team leader. Having led two other major product development
teams for her former employer, Merz
knew what was possible “when the team leader was really in the
driver’s seat.” Yet, here she was
responsible for the IntensCare’s P&L, but not in a formal
position to get the other team members to
deliver. She described her relationship with the product and the
team this way:
I feel my position is mini-general manager. I have ultimate
responsibility for profit and loss on
IntensCare. The engineers and production staff don't report to
me, but I’m responsible for
refining the product road-map. If I don’t keep on them, they’ll
stray to other projects. I
provide the technical support to customers: the training, the
hotline, the technical support for
field reps. I’m in charge of pricing, advertising, and sales
promotion activities. I have all the
responsibility but no authority to get others to live up to their
commitments. I have no idea
what Jack is doing, but it looks like he is just another “good
guy” who doesn’t want to ruffle
any feathers. Bret and Aaron always seem to have each other’s
back. And who knows what
Dipesh is doing; I worry that this offshore development is going
way off track and no one even
knows.
Bret O’Brien was the lead engineer on the IntensCare project;
he also managed several other

engineers working on redesigns for the two existing MediSys
systems and on one new system in the
early stages of development. At the formal start of the project
six months earlier, O’Brien had two
other engineers reporting to him who worked full time on the
IntensCare. However, due to recent
recession-driven companywide cutbacks, those engineers now
split their time between IntensCare
and other projects. O’Brien knew from the beginning that his
staff would be deeply challenged to
meet the aggressive deadlines: “It was already almost mission
impossible; this product is as complex
an integration of software and hardware as any NASA project,
not to mention all the other pressures
to accelerate the time line.” And that was before the staff
reductions. Now his solitary focus was on
designing a high-quality product as quickly as he could. He had
resigned himself to accepting the
constant berating from Merz about the time line, coping with it
by avoiding her as much as possible.
“Let Jack give her the bad news,” he told himself. “After all,
they are the two that will get all the
glory for this product.”
O’Brien described his view of the roles of the various functions
within the team:
We all have very different drivers, which really complicates our
ability to make good decisions
together. Marketing is revenue-driven, and this product should
be a big revenue generator.
Production likes the product because it shows off their ability to
manage a complex supply

2016.
Team
chain of software and hardware components. Of course, we in
Design and Engineering are
also integrating the software and hardware elements into the
design, but Dipesh and I are too
busy with our own parts of this complex project, and he spends
so much time in India with our
software contractor that we never get to talk about integration
in any big-picture way. I
operate pretty much on my own. My objectives in engineering
are to deliver at cost, on time,
and with specified features. Dates are my driver, and quality
too. And Regulatory—well, their
role is to throw roadblocks in front of everyone.
Karen Baio, the lawyer who represented Regulatory Affairs on
the team, knew that she was seen
as an obstructionist by most of her teammates. “Sometimes
their childishness really bugs me,” she
reported. ”They act like this whole effort is some kind of game
we are trying to win, instead of an
important healthcare initiative that will save many lives and
therefore must function perfectly and
operate within the law.” Baio’s patience and persistence were
well-known throughout the company,
as she had been with MediSys for many years. She found
Mukerjee and Merz increasingly difficult to

tolerate. Software developed overseas was notoriously
problematic in the medical diagnostics field,
yet Mukerjee acted like this was a non-issue. A hotshot
newcomer to MediSys (like Merz), he
regularly asserted his expertise and substantial experience with
developing and testing medical
diagnostic software and dismissed Baio’s concerns about the
time required for adequate testing of
externally produced software before integration into the
IntensCare system.
But it was Merz who really got under Baio’s skin. “Valerie sees
herself as MediSys’s savior,” Baio
commented. “She is self-centered, myopically focused on
marketing, and very aggressive in our
meetings.” Like others on the team and even in Marketing,
Baio wondered what signal Beaumont
was sending to the company by personally hiring someone like
Merz. Baio described several
instances in which Merz downplayed the risks of failing to test
the product thoroughly, insisting that
“lead users will help us test” the system once it was installed.
Baio was almost looking forward to
the upcoming meeting where she suspected Merz would turn red
with anger when she heard there
were expected delays in the product design—a rumor Baio had
heard from Gerson.
For his part, Aaron Gerson was fairly confident that IntensCare
would be a big hit in the
marketplace. He wasn’t as worried as his teammates about the
time line and aggressive goals; he had
seen many an executive try to push product development faster
and fail. He also knew the
competition well and didn’t believe they were capable of getting
a better product to the market faster

than MediSys could. His only concern was the new offshore
software development, an unknown
they had not dealt with in previous products. While Mukerjee
seemed competent and confident,
Gerson was withholding judgment on whether this outsourcing
approach could be both successful
and cost-effective.
A Sticking Point: Modular Design
One of the most hotly debated topics among the IntensCare team
members regarded modules. By
creating a modular design within the system, the customer
would be able to tailor the system to a
variety of clinical situations, (e.g., neonatal intensive care, day
surgery, or field hospitals), and thus
have greater flexibility.
Merz firmly believed that customers demanded a modular
design:
The hospital equipment distributors we have interviewed are
insistent that a modular design
will allow them to sell our system into a much wider set of
segments from hospitals to military
organizations to a variety of clinical arrangements.
Furthermore, the two competitors who
have announced their plans to enter the field have described
what is essentially a modular
design.
2016.

4059
While Merz believed that IntensCare had to be modular, she
thought modularity might be
introduced in the second version, after the initial product
introduction. She had not expressed that
view to her teammates because she feared that such a
compromise suggestion would be used by
engineering as an excuse to continue ignoring the demand for
modularizing anything.
O’Brien acknowledged that engineering had no intention of
developing these modules – at least
for this version of the system. He and his staff were at capacity
just trying to solve the internal space
problem, which was critical to meeting the launch deadline;
they couldn’t waste time with
redesigning for modules. “Besides,” noted O’Brien, “modules
were addressed only in the most
general terms in the original 2007 IntensCare business plan, so
we never designed for them, nor did
we specify such requirements for the software people.” It
seemed that the team was at loggerheads
over how to proceed on this issue.
February 13, 2009
IntensCare was behind on design, clinical testing, and
production schedule. Still, the team was
fighting to meet the August deadline for introducing the
monitoring system to the marketplace. The

marketers were busy preparing a training video for technical
installation and another for medical
users; software designers in the United States and developers in
India were in constant
communication about the programs; the engineers had their
hands full with the space problem; and
the production engineers were ordering components and
arranging the assembly lines. Regulatory
was revising clinical test protocols and schedules. The team as a
whole still had to decide about
modules.
Art Beaumont was aware of the difficulties confronting the
team:
We have several problems going on right now. But I know all
these people are really working
hard to resolve them. Now, if I jump in there and shout or
accuse them, what I'd basically be
saying is that I don't have faith in the people I've assembled to
get the job done, and I don't
think they're giving it their best effort. And that's not what I
should be doing. My job is to
support them, not to shout at them.
Still, pressure was intense. Production would have to start soon
to assure projected market
introduction. Any additions or changes to the design would
threaten a delay in production. At the
same time, IntensCare had to meet strict quality and regulatory
standards as the company adjusted
the product to satisfy market needs.
As Valerie Merz was headed to lunch just before the Friday
meeting, she walked past a conference
room near Bret O’Brien’s office. She couldn’t help hearing him

complaining loudly to Fogel:
Look, Jack, if you don’t get that woman off my back about this
modular issue, I am going to
demand to be let off this team. As it is, there is no way I can
even come close to meeting our
scheduled milestone of handing the design off to your people!
And you know there are even
worse delays coming from the Indian software team. Why don’t
you call off today’s meeting
and we’ll get your boss and mine in here and give them the
straight story?
Merz stopped in her tracks, tightened her fists, and took three
deep breaths. If she walked into
that conference room, there was no telling what she might do or
say. Maybe she should turn around
and walk right into Beaumont’s office and hand in her
resignation.
2016.
40
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2016.
4059
Exhibit 2 Time line of IntensCare Product Evolution
September 2006 R&D person gets inspiration for the product
October 2006 Sales person vets the concept in the market
December 2006 Conversations include software designer
June 2007 Ad hoc team presents product concept to senior
leaders
July 2007 Senior leadership of MediSys allocate $500,000 to
development of IntensCare
January 2008 Beaumont hired as president
August 2008 Beaumont formalizes NPD and charters a core

team to develop IntensCare
August 2009 Projected IntensCare launch date
2016.
Team
Exhibit 3 Beaumont’s Annotations on HR’s List of Prospective
Team Members for IntensCare
Karen Baio, Regulatory Affairs
Employed in 2002. J.D. 1989 from University of Illinois.
Previously employed by
Pfizer. Zoe Thompson rates her as high performer. Sharp
woman. Watch for general
counsel potential.
Jack Fogel, Senior Production Manager
Employed in 2002. B.Eng. 1971 from Tufts University. Led
the renal monitoring
system launch. High performer, well-respected by colleagues in
production and

engineering. Seems a bit laidback for this job, and not as
business-focused as I’d like but no one else has
the experience of launching such a product
Aaron Gerson, R&D
Employed in 2002. PhD 1972 from M.I.T. Lead scientist on
both monitoring
products. Has four patents. High performer. Created the
IntensCare product
concept and was ad hoc leader of the group that did early
development of the
project. Brilliant, need to keep this gug involved in company
long-term. Could replace Arnie if he wanted to
Valerie Merz, Marketing Manager
Employed in 2008. MBA 1997 from Stanford University. Came
with very high
recommendations from competition. Peter Fisher rates her as
his top performer.
I like her. A real go-getter, could be GM material when we
grow up.
Dipesh Mukerjee, Software Design
Employed in 2004. 2002 M.I.T. graduate, previously employed
by General
Electric Healthcare. Ambitious guy, very intelligent. This may

be too much for him at this stage, but I
think he is determined to prove himself.
Bret O’Brien, Product Engineering
Employed in 2002. M.S. 1991 from Georgia Tech. Previously
worked for Philips.
High performer. Led the engineering effort on the pulmonary
systems. Len
Broman rates him highest performer in the group and has
personally groomed
him as a manager. Part of ad hoc team for early development of
IntensCare. This
guy seems very expert but narrow. Can he be developed into a
project leader? Does he get the business issues?
Fisher says he’s passive aggressive.
2016.
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>>
>> setdistillerparams
<<
/HWResolution [600 600]
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>> setpagedevice

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