Medical Device Daily Executive Editor
SAN FRANCISCO – Generating and managing ideas – and managing the portfolio of potential products that may come out of those ideas – were in the spotlight as the Frost & Sullivan Medical Devices Executive Summit got under way Monday morning at the Hyatt at Fisherman's Wharf.
Dr. Marcus Schabacker, corporate vice president, R&D, medical and clinical affairs and regulatory affairs at B. Braun Medical (Allentown, Pennsylvania), tackled the "ideas" aspect, while Don DeLauder, director of product innovation and advanced development for Medrad (Indianola, Pennsylvania), shepherded the portfolio management discussion.
Before you can have a portfolio of products to manage, you have to have the ideas from which those products spring, so Schabacker outlined his company's relatively recent formalization of an idea generation and collection program.
Referred to as I3 – for Idea. Innovation. Improvements. – the B. Braun program really boils down to two key points:
1) Good ideas can come from anywhere, so get everyone – all levels of employees as well as those who are tied to the company in other ways – involved in generating them.
2) Organize the process for receiving, cataloging and evaluating them.
Schabacker characterized the rationale behind the I3 program as a key to survival in a crowded marketplace. "You can only stay ahead of your competition if you innovate," he said. And to innovate, "you have to start with a good idea."
To gather such ideas, he said, "tap into the minds of your employees, vendors and customers."
Once companies are seeing ideas generated, he said, they need to follow a definable process to identify them and move them to market.
That process, Schabacker said, will let companies objectively decide what the idea – whether for a product or process improvement – "is going to do for you and then decide how to get there."
He added: "To be effective, you need a system in place to get ideas and then process them."
Having such a system, he said, "helps to involve your work force; it gives them the feeling that they are part of destiny of the company."
Schabacker said that B. Braun Medical, a firm with $750 million in revenues and some 4,500 employees, had a variety of "idea" and resultant employee recognition programs in existence, but that "it was important for us that we combined these into one program."
One key in getting started with such a program, he said, is that company-wide communication is essential. "You need to let everyone know what you're going to do." B. Braun established certain "rules," he said.
First, "it was open to all employees." Second, it required a "well-functioning administrative team."
Ideas are reviewed quickly, from strategic (business fit and legal), functional (process and capability) and implementation perspectives.
Importantly, a centralized information databank was established on the company Intranet, which gives the program a "go-to" point for all employees to access.
"It's important to keep the initial submission form simple," Schabacker said. That form, available online and in paper format for those without ready computer access, asks submitters "to tell us what the new product idea is, tell us the product or process improvement made possible by the idea, and tell us where the idea came from," the latter an obvious nod to addressing possible intellectual property or other legal concerns early on.
Review teams that meet every two weeks look at the resultant RPIs (Request for Project Initiation), doing, in the case of new-product ideas, appropriate market analysis to answer the question, "What's the five-year potential?" of the suggested product.
A "scorecard" addresses such matters as whether the proposed idea is a good company fit, whether it can be leveraged in the marketplace, the possibility of technical success, the potential for commercial success and the return on investment.
Schabacker cited the value of brainstorming, noting that "unique ideas" happen when two or more ideas "are accidentally or deliberately merged."
He also cautioned, however, that brainstorming "needs to have a process around it" and emphasized the need for a strong facilitator to move the process along.
As for "dos" and "don'ts," he said the size of the review team is important, and that in B. Braun's experience, four to six people is the right size, that the database of ideas and their evolution "needs to be ready to go at launch of an idea-generating program," and that a "clear chain of contact" is a necessity.
He said that at his company, every employee receives a brochure about the program at the time of employment.
Schabacker emphasized the importance of follow-up, noting that every idea submitter gets a letter notifying him or her where the review team is in terms of looking at the idea submitted, and why a decision was made if the idea is shelved. And nearly all that are turned down are automatically reviewed within a year.
For his part, DeLauder characterized the portfolio management process as "the journey that never ends." Comparing this process to the effort that the selection committee went through to pick the teams for the NCAA basketball tournaments – whose participants were announced the day before – he said the ultimate goal of Medrad's process "is to put compelling products into the marketplace."
While he described Medrad as "a very process-oriented company" and cited its compelling revenue-growth curve, DeLauder also acknowledged that "most of our [existing and potential product] inventory is in what we do now. It's difficult to break away from what you do well."
He cited different stages of portfolio planning at the company, including the "Dark Ages" prior to about 1993, "when there was no sense of How do I get this done?'"
From 1993 to 1996, he said, "we started to focus on a more clear project management" basis. The company started to add the "program manager" function to its work force, an evolution that today sees it with "13 or 14" such persons, each of whom tends to have just one project to manage at any one time.
After a few more years of what DeLauder characterized as a focus on "growth planning," Medrad turned in 2001 to what he said truly could be termed portfolio management, but "found we had a lot of good ideas but not enough people" to execute them, "so we had to develop resource allocation models."
As of last year, he said the company was in an "integrated planning" mode.
"We're including rigorously developed strategic plans," DeLauder said, "adding that to portfolio planning."
Medrad's planning timeline now includes a "Top 12 Selection" line that involves "those projects that are tied most closely to our corporate strategy." Those are usually split equally between product strategies and process strategies.
Now, he said, "we're looking at what's new vs. what's working" in viewing portfolio product turnover.
Noting that portfolio planning "works for us," DeLauder added: "It creates a lot of dialogue, and that's a good thing."
If one single thing stands out from developing the process over a period of years, he said it is that "you have to be able to tie decisions you make with your portfolio back to your product strategy."
While Medrad uses a five-year portfolio management timeline, DeLauder said a specific timeline is not important, "as long as it's far enough out so that your current products can't get you there."