August 25, 2008

News & Opinion: How the Wise Decide: Bill George, Part II

By: 800-CEO-READ @ 4:30 PM – Filed under: Leadership & Strategy

Part II of the Bill George story, brought to you by the authors of How the Wise Decide.
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Bill George, Part II

After having a faulty Medtronic catheter thrown at him by an angry surgeon, Bill George began investigating why he hadn't known about quality problems plaguing the catheter business. What he found was a tortuous path that routed the sales reps' field reports about failing catheters through seven layers of bureaucracy before they reached the people who designed the products. When George questioned the engineers about the reports they denied any design flaws and blamed the surgeons for misusing the equipment. George quickly reached two conclusions. First, there clearly was a problem with the quality of the catheters. He had seen the problem with his own eyes, had been shocked by the incident and had even brought the ruined device back to headquarters in his baggage.
"It's an overstatement, but field reports are a dime a dozen," George told us. "There's no emotional association with them. But when you're in a medical environment like an operating room all your senses--sight, sound, smell, taste--are working. It's a totally different experience than reading a field report."
Second, and more importantly, there was something dangerously wrong with Medtronic's ability to handle critical information. "It was a systemic problem," he explains. "What was wrong was that the system wasn't getting quality information from the operating room to engineering, quality control and manufacturing, the people who could fix the problems. People don't want to pass on bad news and engineers can be in denial about a problem."
George immediately ordered up a solution. Within a few months the catheter sales force was split off from Medtronic's centralized sales operation and attached to the catheter division where sales people were in much closer contact with engineering, quality control and manufacturing. At the same time George ordered engineers to get out of their offices and spend at least one day a month in operating rooms observing how the equipment they designed was being used. A few engineers complained to him that they were too busy to waste time watching doctors. "I said 'if that's the case, you're working on the wrong things'."
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Stay tuned for today's final blog entry on Bill George.