MediSys Case Report

FOURSQUARED CONSULTING GROUP 111 University Ave, Acton, ACT, 2601 Tel +61 2 6254 8555 Fax +61 2 6254 3232

MEDISYS REVIEW 12 MAY 2015

TABLE OF CONTENTS Contents Executive Summary_____________________________________________________________________________________- 1 Introduction _____________________________________________________________________________________________- 2 -

Case Analysis of MediSys Corp. _______________________________________________________________________- 3 -

Cross-Functional Teams ________________________________________________________________________________- 6 Recommendations ____________________________________________________________________________________ - 11 -

References ____________________________________________________________________________________________ - 13 -

Appendix 1 ____________________________________________________________________________________________ - 14 -

FOURSQUARED CONSULTING Executive Summary This report provides an analysis and evaluation of the current business environment of MediSys Corp., and some of the issues the company is currently facing with respect to the impending launch of IntensCare. The major issues facing the company are the lack of clearly defined goals, lack of trust within the team, and weak leadership. The issues are then discussed in the context of cross-functional teams using the relevant literature to provide some recommendations to the president that will hopefully assist to turn the prospects of the company around. Recommendations discussed include: • •

• •

Appoint Valerie Merz as the co-leader of the project. Immediate senior management intervention, reaffirming project goals and milestones. Improve the lines of communication and implement an open door policy As the president, you should constantly monitor the progress of the project.

The report finds the prospects of the company in its current position are not positive and it is unlikely the launch date for IntensCare will be met. The mentioned areas of weakness require remedial action by the staff and management.

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FOURSQUARED CONSULTING Introduction MediSys Corp. is a global company with an annual revenue of $400 million. The company is currently developing a new product, IntensCare, a remote monitoring system for use in hospital’s intensive care units, due for launch to market in less than 6 months.

The company has invested heavily in the IntensCare project and have been experiencing a

number of issues associated with its development, including design and software

development, manufacturing and regulatory requirements. There is concern about the impending launch date and delivering a product that the customers will expect and

respond to. The issues have recently escalated to the point where relationships have broken down, and people are threatening to walk off the project.

FourSquared Consulting Group, as a specialist in cross-functional team behaviours, was

engaged by the President of MediSys, Art Beaumont, to help get the project back on track

and release a successful product to market by the launch date.

This report contains an overview of the issues and problems being faced by the MediSys Corp., a review of the contemporary research on cross-functional teams, followed by a

number of recommendations that will help MediSys in moving forward.

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FOURSQUARED CONSULTING Case Analysis of MediSys Corp. INDUSTRY/COMPETITIVE ENVIRONMENT Two well-known public competitors have announced they are developing products which

compete directly with IntensCare and MediSys’s future products. A huge investment ($20.5 million) in IntensCare has meant that MediSys is exposed to large financial risk. If the new

system fails, the corporation will face severe operating deficit. In addition, the reputation of MediSys in the industry will likely be undermined, and clients might lose their

confidence about the corporation and its future products.

These conditions are putting significant pressure on MediSys to get IntensCare to market by the launch date.

ORGANISATIONAL ENVIRONMENT MediSys has a reputation for an entrepreneurial culture and innovative thinking. A new president, Art Beaumont, was hired by the board after signs had shown growth to be slowing. Beaumont introduced a series of structural changes at MediSys which included a

new Executive Committee, the use of cross-functional teams for product development and

a parallel development environment. The cross-functional team for IntensCare (or core

team) included people from all critical departments of the company with a project leader designated to monitor the overall project. However, the new structure has led to some

communication issues between the upper management and employees, as well as within the development team itself.

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FOURSQUARED CONSULTING As a result of companywide cutbacks, the IntensCare project team was overworked and

understaffed, which led the project to be more complex and difficult than before. Because

of the layoffs within the company, engineers had to work on other projects too, thereby causing delays in hardware engineering.

PROJECT/TEAM ENVIRONMENT Some major conflicts had been developing within the IntensCare project team that

stemmed from team members being too focused on their own area of expertise. Valerie Merz believed that instead of working towards a single goal, it seemed that all team

members were only concentrating on their own areas and roles. This was supported from

information gathered from other members of the team. This may have been due to the introduction of core teams without changing the previous reporting and evaluating procedures within MediSys. That was, all employees in the team continued to report to their functional managers who supervised and evaluated them.

There was a lack of a strong team leader for the project and some confusion over roles. Fogel, the project leader, appeared too focused on the details of the product side and less concerned with the broader business issues and approaching launch date. Additionally,

Merz felt she was acting as “mini-general manager” and had taken responsibility for the launch of IntensCare, but she did not have any formal or informal authority to lead the team.

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FOURSQUARED CONSULTING There was an absence of trust within the team, with many members expressing negative feelings toward each other. This was beginning to affect the team as they had no confidence

in each other’s ability to work. On the engineering side, Fogel, Aaron Gerson, Dipesh Mukerjee and Bret O’Brien had formed a sub-group and held regular meetings without briefing the broader team. The engineering sub-group did not trust Merz and disagreed

with her over the development of modular design. In addition, Karen Baio, who represented Regulatory Affairs, had not gained the trust and confidence from the other team members and was not seen as a critical member of the team. There was severe mutual distrust between all team members.

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FOURSQUARED CONSULTING Cross-Functional Teams Cross-functional teams are those comprised of members with different functional

expertise working towards a common goal. They have been shown to be particularly

effective in companies with fast changing market environments and a focus on responding to customer needs (Parker, 2003). They are increasingly being used in organisations to

increase creativity and foster innovation (Parcon, 2006). There are a number of important

factors that have been shown have a strong impact on the success or failure of a crossfunctional team. Three of the main factors that can exert a negative influence on the success of cross-functional teams were identified within MediSys Corp. and are discussed below in more detail.

SETTING PROJECT GOALS The research shows that setting clear goals that everyone on the team supports is critical to the success of a cross-functional team (Parker G. M., 2003; McDonough, 2000). A clear

goal setting process resulting in key objectives, superordinate and subordinate goals can

reduce conflict, build trust and cooperation and create a sense of ownership within the team. These goals can also help to focus the team and create a framework in which the

team will operate (Bowen, 1991). While it is important for any high-performing team to set clear goals, they are critically important in cross-functional team as each area will have their own agendas and goals.

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FOURSQUARED CONSULTING The IntensCare team has demonstrated the lack of clearly defined goals through the

difference of opinion on modularity, members of the development team paying little

attention to the launch date, and neither development, production or marketing working the regulatory area.

TRUST AND COOPERATION One of the significant issues affecting team effectiveness and performance of the

IntensCare cross-functional team is the lack of trust among team members. According to

Lencioni (2002), the absence of trust is the most important dysfunction of a team (Figure

1) because it is the origin of many negative consequences. For the IntensCare case, Merz is

displaying the result of lack of trust as she does not has confidence in her team members and also questions their abilities, particularly the engineering and production staff. Also,

other team members, such as Baio, have begun to question why the president would personally hire someone like Merz and what message he is trying to send the team. Many

team members are also showing a lack of trust in Merz believing her to be the one who is making the situation untenable. Low trust within a team has been shown to be an obstacle for team performance as it increases the monitoring effort and can stimulate relationship conflict which can lead to defensive behaviors (Liu, Magjuka & Lee, 2008; Kiffin-Petersen,

2004). Moreover, low trust team members tend to believe that other members are unreliable, which, in turn, creates a negative environment in the team, lowering trust further (Kiffin-Petersen, 2004).

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FOURSQUARED CONSULTING Figure 1: Sources of team dysfunction

Source: Lencioni, 2002

One of the main focuses for IntensCare team is to increase the team climate of trust. By

having a high level of trust, it will enhance the communication within the team and lead to an increase in collaboration and more effective team performance (Sheila, 2002). In addition, trust can also reduce relationship conflict which may lead to the better flow of information across the team and more effective problem solving.

The process of trust building is the responsibility of the team leader, who is a crucial part of the team, to manage and bring back the climate of trust for the success of the team.

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FOURSQUARED CONSULTING LEADERSHIP Team leaders have been shown to have a significant impact on the success or failure of

cross-functional teams (Parker, 2003). Leaders enable cross-functional teams by performing a variety of roles, including keeping team members challenged, instilling a positive attitude towards the project, and being a communicator (refer to Appendix 1 for

dimensions of a good team leader). The leader communicates with the team members about the focus of the project, project changes and developments, and individual member responsibilities (McDonough, 2000; Sarin & O'Connor, 2009).

Team leaders should employ a participatory style of leadership, where team members are given the freedom to explore, discuss, and challenge ideas and make their own decisions.

This increases the relevance and reliability of the information exchanged, increasing the communication and cooperation within the team members to interact with each.

The IntensCare project leader is not currently exhibiting many of those skills the research

associates with effective team leadership. His major concentration appears to be on the production side, overlooking the broader business objectives and goals. Fogel is well liked in the organisation, but generally appears to be a poor communicator who avoids conflicts.

Senior management support of a cross-functional project team can have a direct effect on performance; just as senior management commitment can increase the likelihood of project success, a lack of support can increase the chances of failure (McDonough, 2000).

Their support can take a variety of forms, including demonstrating commitment, helping -9-

FOURSQUARED CONSULTING the team to surmount obstacles, making things happen, and providing encouragement to

the team. Up to this point, senior management at MediSys has had very little oversight or involvement in the IntensCare project, but has taken a positive step by engaging FourSquared Consulting Group.

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FOURSQUARED CONSULTING Recommendations These recommendations are based on the contemporary research and FourSquared

Consulting’s evaluation of the current situation at MediSys Corp. The recommendations broadly involve improvements in communication, goal setting, strong leadership and

rebuilding trust between members of the cross-functional team. Potential costs of these actions may be a delayed launch date but we believe the potential benefit of a more

effective and efficient team will offset this cost. More resources, such as ensuring that the

relevant engineering and production staff are focused on IntensCare, may also make the launch date a more realistic target. •

We recommend MediSys appoint Valerie Merz co-leader who can lead and monitor

the business aspect of the project. The two team leaders must keep a track of all

aspects of the project and communicate regularly and efficiently with the team and the Executive Committee. Where conflicts arise these must be discussed in front of the whole team and avoid side meetings, in order to maintain trust and resolve the •

issues them effectively.

The IntensCare project team needs to immediately work with senior management to reaffirm company expectations and goals of the team. Milestones and regular

update meetings to make sure the team remains goal oriented will be beneficial going forward.

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FOURSQUARED CONSULTING •

In order to regain trust within the team, open communication through face-to-face contact is essential, because “trust supports communication and vice versa”

(Hakanen & Soudunsaari, 2012, p.39). The team leaders, Fogel and Merz, need to organise an immediate meeting and communicate in an open and responsive atmosphere to clarify the difficulties the team is facing. Everyone should have a

chance to share their problems and confront them together honestly and •

meaningfully.

Listening and questioning techniques should be adopted by all team members particularly the team leaders. Everyone in the team should listen to others with the

intention of understanding their points. This will help reduce the bias in their minds

and may make them understand each other more clearly and reestablish trust and •

cooperation.

As the president, you must constantly monitor and provide support to the team.

This can be achieved through regular progress meetings and assisting the team leaders when they are experiencing difficulties.

If MediSys Corp do not accept our proposed recommendations or still have difficulty in

taking actions recommended by us, we are willing to have face-to-face communications

with every member in this team on a regular basis and provide courses regarding team trust, leadership and goal setting for the team.

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FOURSQUARED CONSULTING References

Bowen, H.C (1991). The Perpetual Enterprise Machine, New York, Oxford University Press Hakanen, M. & Soudunsaari, A. (2012). Building Trust in High-Performing Teams. Technology Innovation Management Review, June 2012, 38-41.

Kiffin-Petersen, S. (2004). Trust: A Neglected Variable in Team Effectiveness Research.

Journal of the Australian and New Zealand Academy of Management, 10(1), 38-53.

Lencioni, P. (2002). The five dysfunctions of a team. San Francisco, CA: Jossey-Bass. Liu, X., Magjuka, R. J. & Lee, S. (2008). An examination of the relationship among

structure, trust, and conflict management styles in virtual teams. Performance Improvement Quarterly, 21(1), 77-93.

McDonough, E. F. (2000). Investigation of factors contributing to the success of crossfunctional teams. Journal of Product Innovation Management, 221-235.

Parcon, P. (2006). Develop Your Team Building Skills. Lotus Press.

Parker, G. M. (2003). Cross-Functional Team Working with Allies, Enemies, and Other Strangers. San Francisco, John Wiley & Sons, Inc.

Sarin, S., & O'Connor, G. C. (2009). First among Equals: The Effect of Team Leader Characteristics on the Internal Dynamics of Cross-Functional Product

Development Teams. Journal of Product Innovation Management, 188-205.

Sheila, S. W. (2002). Leadership and trust facilitating cross-functional team success. The Journal of Management Development, 21(3), 201-214. - 13 -

FOURSQUARED CONSULTING Appendix 1 Leading Cross-functional teams, Parker, 2003

DIMENSIONS OF SUCCESSFUL CROSS-FUNCTIONAL TEAM LEADERSHIP SKILL

DESCRIPTION

Know your cookies

Demonstrate a working knowledge of the technical, scientific, and business issues.

Work and play well with others Initiate, Interact, Influence Stoke (and stroke) the stakeholders

Set and Stay the course Get the goods Bar the door Show Persistence, Perseverance, and Passion Bend Without Breaking

Be comfortable with Lack of Clarity Keep it real

Have the skills or the potential to develop the skills to facilitate the group process issues of a diverse team of people and make it fun.

Be able to work with little, no, or at best unclear authority. Practice effective relationship management up, down, and across the organization. Facilitate the establishment of team goals and an implementation plan and then keep focused on their targets.

Be assertive about obtaining the resources necessary for the team to be successful. Protect the team from undue and unproductive outside interference.

Demonstrate a commitment to and belief in the value of the work and a willingness to work through obstacles. Be open to change and help the team adjust to changing conditions and priorities.

Be able to deal with ambiguity and act without complete information.

Be authentic; make honest commitments, tell the truth, and act with integrity.

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FOURSQUARED CONSULTING

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