MEDTRONIC CORPORATE CULTURE

Group I
Agus Wiyono Dian Dandalina Teguh Subarkah M. Nur Hadi

What is Medtronic ?
Medtronic is best known as a

producer of implantable medical devices, designed

primarily to support the human cardiovascular system

History and Background

Medtronic was founded in 1949 as a medical equipment repair shop by Earl Bakken and his brother-in-law, Palmer Hermundslie First Product is life-changing therapy a wearable, battery-powered cardiac pacemaker

History and Background

The first Product is External Pacemaker In 1962 Medtronic nearly bankrupt when the first year's production costs outstripped the company's cashflow By 1969, Medtronic had grown from 50 to 500 employees and up to $15 million in net sales In 1970, expanded manifacturing facilities, increased operating capital, and added several staff departements, direct domestic and international distribution

History and Background

The management changing beginning 1970 until 1985, these changes marked the decreasing role of the founder, Earl Bakken. These major changes interfere

the

Corporate Culture

Medtronic Culture
Medtronic Culture is made from : A unique set of Behavioral Norms Approaches to Management Corporate Objective Rich collection of stories

Who is behind Medtronic Culture ?

The Owner :Earl

Bakken

He is believed strongly :

If you spend your time out in the field, your customer will (make) the strategic plan for you.

What Values did he Implemented?

Innovative : Technology driven pacemaker Care and Trust : Bakken heard what
costumer needs, Bakken also building a bond by approach to stay extremely close to customers and to find a way to accomodate their needs

We are Family : Bakked did personal

approach : He made a practice of having lunch with all new employes and talked with them about the company and its mission

And The Culture Changes...

The Company continued to grow,
Nearing two thousand people and $100 million in sales in the mid 1970s The culture began to CHANGE

Why Changes??
Because Old Culture was increasingly perceived to be a barrier of insularity and entitlement that prevented adaptation and change. Competitive Environtment

Earl Bakken's Culture

Symbolic Leaders Benevolent Tolerant Patient Tremendous Expectation with self critism Accountability was Low Penalties were seldom imposed Emphasizing on non economic objective

Dale Olseth's Culture

Higher Accountability Tougher Approach Emphasizing on economic objective Unfortunately Medtronics Marketshare dropped steadily to 40% from 60% of bakkens period

Win Wallins Culture

Worthy goal and a historic strength of the company reaffirmed the importance of Medtronics core value. Conflict between Bakkens old cultures with Olseths new culture arise. Reconcile the two cultures (humanistic culture and management culture) as valuable sources of competency to bear objective. Successfully the conflict was less important than the mission itself. Regained marketshare up to 55%

The Culture and Effectiveness Model

Involvement
during the old periode, involvement is held as the very pabric of the organization's tremendous success. During the reconciliation period, involvement again became focused on the mission and external business environment

Consistency
Under the old culture, consistency was based on share perception of the needs of patients and surgeons, which was forged through direct, frequent, and continual contact. Consistency was high during the first stage, lower during the second stage and high again during the third stage

Adaptability
Medtronic failed to adapt it culture from a leading edge product to an ordinary product. The internal overemphasized on the internal bureaucracy rather than on the increasingly important needs of the company.

Mission
Old culture objective was non economic while the new one was economic.

Lesson Learned
Culture and Causality
Culture vs performance: great culture delivers efective performance

Cultural Inertia
The consistency of a culture and the ability of a culture to change and adapt both contribute to organizations effectiveness

Technology
The development of the culture can only be understood as a complex set of interactions among the life cycle of the technology and the products, the succession of leaders and the changes within the business environment.