The Human Touch

Very few topics covered in Medical Product Outsourcing have as much to do with the human factor as research and development. In medical device development, “human factors” refers to the practice of designing products that will interface well with their users, whether they be clinicians or patients. But the human factors behind the research and development of such products and devices are just as important, because machines cannot understand the way in which humans make devices. Imperative in the development of medical devices are the brains that understand why a product will be easy to use, attractive to use, and effective for human use. This is why human resources are the most important assets in every research and development or innovation department in medical device companies.

A 2010 study in the Cornell HR Review examined motivators for individuals working in healthcare R&D.¹ It noted that extrinsic factors of motivation such as salary, promotion, and bonuses were important in motivating good ideas in R&D departments—an idea that might seem at odds with the idealized image invention and innovation-centered work. However, expert sources note that hiring and retaining talent is the key to a vibrant R&D department. And why wouldn’t it be? Medtech companies are competing with technology sectors in the consumer marketplace that are larger, richer, and more profitable. The medical device industry must provide material benefits in order to attract the best talent.

But this junction is where medtech companies also excel—the junction between offering attractive salaries and benefits to top talent, but also providing the sense of satisfaction that comes with working on jobs that affect people’s lives in deep and meaningful ways. The Cornell report found that intrinsic motivators were “at least as beneficial as extrinsic motivators for innovation among scientists and engineers.” According to data collected from more than 11,000 scientists and engineers, employees who were motivated by intellectual challenge spent more hours at work and produced more patent applications than those motivated by job security. In the medical device industry, intellectual challenge is met by a moral return on investment, when devices and technologies actually save lives.

MPO’s expert sources provide insight into what drives innovation at their companies, as well as what drives their talent to excel in R&D.

• Ed Burnard, associate director, innovation R&D at Bethlehem, Pa.-based B. Braun Medical Inc.
• Bob Ferguson, vice president of global research and development for Vernay Laboratories Inc., based in Yellow Springs, Ohio. Vernay provides custom fluid control solutions.
• John Havard, chief technical officer for Stratos Product Development LLC, an engineering design and development services company based in Seattle, Wash.
• Larry Johnson, vice president of business development at Foster Corporation, a Putnam, Conn.-based provider of biomedical polymers and pharmaceutical additive compounds.
• Todd Macy, director of R&D at EG-GILERO, a full-service provider of medical device contract manufacturing headquartered in Durham, N.C. Macy leads R&D operations at the company’s new Columbus, Ohio location.
• Richard Meyst, president and CEO of Escondido, Calif.-based contract product development, management, and engineering services consulting firm Fallbrook Engineering Inc.
• Mark Schaefer, vice president of business development-medical at Alpharetta, Ga.-based Pexco LLC, and Mike Badera, president of Precision Extrusion Inc., a Pexco company. Pexco makes specialty plastic products.

Ranica Arrowsmith: What is the core strategy and mission that drives R&D at your company?
Ed Burnard: What drives our R&D is what really drives the whole organization: our brand, which is “sharing expertise.” It comes across as a noun, but it’s a verb—we are customer focused and customer facing. That understanding of what our customers are doing and what they need to do with the products and services we provide really should work back into my world of R&D, because we need to be satisfying not only their current needs but also anticipating what those future workflows are going to look like; what those future products are going to need to be in order to make our customers as efficient as they can be. And having that open dialogue along the way is also very important to us.

Bob Ferguson: We have a dedicated strategy for what we call technology expansion. It goes with a preface that there are many types of R&D. There are three major classifications: incremental research, radical research, and disruptive research. It’s a premise that states there are different levels of R&D that could impact the products you’re developing.

For instance, you might have an incremental type of R&D project that would only take the research a very short distance away from where it is today. So if I had an MRI machine and did some incremental research on it, I wouldn’t come up with something completely different. It would be very similar and would just be an improvement, so to speak.

The radical type of R&D is a method that would take it further than incremental, and it could change some of the form, fit, and function of the device itself. But it’s definitely not going to be anything completely new to industry or the marketplace.

Disruptive R&D is something that is completely different. For example, the invention of the railroad system and train, or maybe the airplane. Something that completely changes the way the consumer and the industry operates.

At Vernay, we place more of our time on the incremental and radical R&D. Those types of R&D projects are strictly driven by the market requirements and demand. So our core strategy is to follow the market driven demands and requests and expand our technology into the gaps between where we’re at today in the product offering and technology offering and proactively meet those market requirements.

Vernay has a measure that we call the technology expansion index, which is like a return on investment measure for R&D—it’s a measure of all R&D project revenues divided by the cost to implement. In 2015, we expanded our technology index by 26 percent.

Todd Macy: Our core strategy is really to be able to handle the entire soup-to-nuts process. We want to provide a service. We want to be a service provider to our customers—not a just a component provider, not just a design provider. At the end of the day, our clients are coming to us because we know our business and we’re experts; and because we can alleviate them of the burden of needing to worry about regulatory, R&D, as well as manufacturing. So we want to add value, seek out partnerships, and become a preferred partner of our clients.

Richard Meyst: At Fallbrook, a key part of our strategy is to provide a multi-disciplined team of experts not usually available to start-ups and small companies. We design for a world market. We work early and closely with regulatory agencies to ensure all needs are met, emphasizing a rigorous risk management program that makes approvals faster and more likely. The risk management methods ensure a safe and efficacious product. We focus on delivering manufacturable, integrated designs that are robust and easy to use. We achieve our client’s goals beginning with a customized, staged development plan and budget that sets realistic milestones tied to the client’s marketing product release schedule. 

We are a design and development company that uses contract manufacturers when appropriate for our clients. We are set up to deliver exceptional, novel solutions that are efficient, intuitive, reliable, and cost effective. I define engineering as the science of compromise. When you look at a situation, you consider cost, size, aesthetics, and so on. Each area impacts another and we figure out the best option or options. It’s important to maintain a cost-effective approach to achieve excellence.

Mark Schaefer and Mike Badera: Our mission is to be the go-to company for new product development. As a plastic solutions provider, we find ourselves being driven by the unique and demanding challenges our customers come to us for solving. It could be developing novel methods of tool design to accomplish “unmoldable/extrudeable” geometry or tolerances, or a new and unique bonding of dissimilar materials, to pushing the limits on minimum wall thicknesses. We need to be involved with R&D at a very early stage to ensure the new products that the customers are trying out are manufacturable and cost effective in order to save the customer precious time and resources.

Arrowsmith: How do you foster innovation in an ever more fast-paced technology world?
Burnard: Outside of the medical device industry in some other more commodity or service areas, a lot of the discipline is lacking. At the end of our line is a patient, more often than not who doesn’t even have the buying decision for the products that will be physically connected to them and will determine the course of their health and treatment. For us, discipline—and having individuals that understand that discipline, the design controls, and all the requirements and regulations—is a very important quality in an R&D engineer.

There’s no cutting of corners or doing it part way and leaving things unanswered.

On the other hand, you also need to have people who have the ability to work that disciplined approach very quickly and as aggressively as they can. One of the most resounding features of the people that are successful in the business I’m in would be exercising that technical discipline to make sure we’re following our processes and our procedures. 

We’re not making apps for an iPad or something like that where if the game has a glitch—too bad. Our products will not have a glitch when they go out. That disciplined process has us going through those beta stages, but they’re always going through those processes in a construct where if they fail, they fail in a safe way. They fail in a way that informs our process. We make the improvement and then we move on from there.

Part of it is psychology. How does a person know that my job is to invent and to be creative, versus my job is to do something else? So when we created our innovation department, the paradigm that we went for was to literally take people from past experiences and prior assignments and put them into a department where their core mission is to create value. And essentially they are evaluated on that  creation of value.

Our innovation team works up to the point where a concept is accepted as a fully resourced project. Then there are people who are following behind us. That’s our R&D dept, and they’re doing all that tedious i-dotting and t-crossing and things like that. So we’ve tried to foster a small front-end group that’s out there sensing and doing what we need to do to create the best technical cases for these areas where our customers have need. So by creating the right goals and framework around how the people in my innovation group are evaluated, you create the paradigm that for them to invent is the thing that they’re rewarded for.

To provide successful business cases and to be selective on the things they choose to spend their time on, we’re always focused on the ones that have meaning, value, and the better probability of successfully becoming a project, and then succeeding as a project and becoming a viable product. So we’re incentivizing the individuals within the innovation department by rewarding them for the successes that we get. So a lot of our initial work in setting up the innovation team was oriented around the psychology of the workplace.

Ferguson: That’s an interesting question. Does it just happen, or do we concentrate on creating the right ingredients in the culture? We do a little bit of both. We have very creative resources—people. Our primary and most important resource. But you also have to know the requirements and needs of the industry. So innovation is great, but innovation just for its own sake is not going to pay the bills. So we have to make sure the core strategy is me—that we’re looking at market-driven requirements and demands.

But then you also have to know the specific needs within those requirements. Our marketing and sales teams do a really good job of understanding what those specific needs are within the industry.

We’ve been able to retain a culture of curiosity and creativity through scientific investigation. Our founding father Sergius Vernet was an inventor, and invented the wax thermostat element. That was in 1938. We have held over 70 U.S. and international patents since then. Vernay comes from a long lineage of inventors creatively innovating to meet market requirements and demands.

Times have changed and now innovation occurs at an exponentially faster pace. Every time you turn around you see a new innovation with regards to technology. We try and keep in touch with general innovation from a tech standpoint and try to apply that general innovation (those innovations within the public domain) to our specific industry needs.

So we try and innovate but you can’t force innovation. You have to create a culture of creativity and scientific curiosity. How do you accelerate that? You can use different technologies born from other industries to see how they relate to ours, but you can also make sure you have very, very smart people.

John Havard: We bring people with a wide variety of skills together to solve problems. Many of the most interesting challenges are multidisciplinary, and a team that looks at a problem collectively through, say, mechanical, electrical, software, and user interaction eyes, can come up with very novel ideas. It is also incredibly valuable for individuals to have a multidisciplinary outlooks and skills; for example, we have a Ph.D. electrical engineer on our team with a B.S. in physics and an M.S. in material science. People like that can understand complex problems, and they can both envision and design very creative solutions.

Larry Johnson: There’s got to be an innovation of process. One of the things we are doing in 2016 is developing our innovation process so that is more nimble, yet effective. Right now, because of the U.S. Food and Drug Administration’s regulations, it’s tough for customers to get to market as fast as they want. This being the case we want to set up a process that’s going to make it easier to get to market. The innovation process we envision has the number one objective of moving our innovation efforts forward as quickly as possible. This means understanding what we need to do, ask good questions as we go along, and then developing the product that customers need.

We also try to do research to find out about trends that we’re seeing in the marketplace and what’s driving them to make sure we’re on solid ground in terms of the technologies we’re trying to develop and making sure we’re not making something in the market that is not needed. We don’t try to be perfect…but we try to be directionally safe. Part of that research is listening to our customers as well.

Fundamental research for a company our size is difficult to do, so most of what we do is  “D” (development) rather than  “R” (research).² This development is in the form of adding value through functionalization to polymers in a compounding process. Some of this technology is “tweaking,” some of it is substantially more than that. For instance, let’s say there’s a thermoplastic urethane technology out there that a large OEM needs to be antimicrobial—what can we do to develop a functional product in the fastest possible time frame?

Macy: It comes down to hiring talented individuals. In addition to that, our approach to product development is much different than that of large device and pharma companies. Large companies often times require excessive steps that otherwise can inhibit innovation, whereas we’re a very nimble team. We can approach things in a very systematic and appropriate process, allowing us to execute much more quickly. So our innovation is really in our processes, as well as hiring market-leading individuals and empowering them to do what they do.

We’re big enough to handle all aspects of a project from R&D to commercialization within regulatory requirements. We’re also small enough to adapt to our clients and integrate processes to complement theirs. While we’re deeply rooted in our quality management system which governs everything we do, some of our customers want us to look at only a portion of our process and some of them want us to take it all the way through. Our processes allow us the ability to do everything from concept development through to commercialization.

We foster innovation by understanding not only what the end user needs are, but understanding the commercialization needs of our clients and partners. And that innovation can be something as miniscule as how quickly they need to get to market, or financially what they need to accomplish. We understand everything involved in the equation for a device, whether it’s the company for which we’re developing it, the end user, the people servicing it and especially human factors.

Hiring talented people who are creative and innovative in their thinking and are open to new ideas is vital. One of our founding principles is that we are open to new ideas. We have a regimented process for concept development and research and we pride ourselves in researching technologies as well as manufacturing methodologies. We have an endless pursuit of learning new ways to accomplish things. For instance, wearables and sensors are very prominent right now in the medical market. There are a lot of technologies that are in different stages of development and that are ripe for wearable telemetry and implementation.  It is always nice to find new uses for existing technologies and even more exciting to develop new technologies and implement them into products.

Meyst: We use vendors and technology specialists to help select new technology that will stand the test of time, rather than using trendy solutions that are here today and gone tomorrow. We do benchmarking and assessments to carefully pick those design solutions that are based on solid research and will be supported over the product lifecycle. We make sure to work with our clients to discuss “risk management” to arrive at an appropriately configured plan that looks at new innovation advantages versus unknowns. Bigger risk may or may not deliver bigger differentiation over competition. We ask questions and listen carefully, and give our designers the freedom to take risks and think out of the box. It’s important to risk experimentation to uncover new innovative approaches—part of this strategy is to provide up to 15 percent of our time for new, unproven ideas. Also to this end, we use brainstorming sessions with strict rules of no criticism during development of the ideas. We do lots of quick sketches to stimulate ideas and lead to a common direction.

Human resources are our best resource, so we bring together designers that have different backgrounds and perspectives to get a balanced approach. We ask all employees for their ideas, using collaborative thinking to enhance innovative ideas.
Investing time and effort into staying current with transformative technology and advancements in applicable methods and products is also key. We do concurrent development to identify problems early and shorten development timelines, and partner and collaborate with appropriate experts, academic institutions and institutes to bring the latest approaches to the forefront.

Schaefer and Badera: By staying in tune with our customers’ R&D departments, not just their procurement team, while working hard to stay on top of equipment and material developments that will allow us to bring the best technology to our customer’s projects.  We focus on becoming an integral member of our customers’ long-term development efforts so that as new materials or needs are uncovered, we have worked hand-in-hand with them to develop actual manufacturing processes capable of meeting these innovative needs. We work hard to be seen as “partners” with our customers not simply a molder/extruder.

Arrowsmith: What is your impression of the state of R&D in the medical device industry at large? What are the factors affecting it right now?
Johnson: First, FDA regulations are getting a little tougher, which means longer time to market for customers. That’s money. Secondly, a lot of companies for a long time have acquired technology instead of R&D to get the technology they need into the marketplace instead of developing it themselves. So they acquired smaller companies. Smaller companies are where the meaningful R&D is coming from. The larger companies are now just starting to get back into R&D, but I don’t think it has been as big a deal as it has been in the past. I think they’re going to keep acquiring technology as they see it and then adapt it to their needs.

There’s also some R&D that’s going overseas. There are some home-grown technologies growing up in places like China such as minimally invasive and a few other industries. There are some pretty big companies growing up overseas. 
 
References

1. http://www.cornellhrreview.org/motivating-employees-in-rd/
2. See last year’s R&D feature at tinyurl.com/hu3k86y