Transferring Innovation Across National Boundaries

Factor that triggered new product strategy at Minnesota Biolabs

1. What triggered the new product strategy at Minnesota Biolabs (MB)?

2. What prediction would you make for the success of getting the country general managers in Europe and Japan to adopt the new product? Explain your prediction.

3. What changes might MB make in its design in order to better promote the transfer of new products across national borders?

Transferring Innovation across National Boundaries Imagine entering a hospital for treatment of a medical condition only to come down with a far more serious, perhaps even life-threatening disease caused by that very treatment. That, unfortunately, is an increasingly common experience in hospitals located in the United States and elsewhere. The culprit is often an infection transferred to the patient through a tainted “injectable”: that is, a needle, an IV drip, and so forth. This is known as a sepsis infection: an overwhelming infection of the blood stream resulting from toxin-producing bacteria (endotoxins). National health regulatory agencies seek to limit such negative outcomes by requiring that products intended for injection be tested. 30
Minnesota Biolabs Traditionally, tests for sepsis infection were performed on live animals—rabbits, for the most part—lead to the animal’s death.

Minnesota Biolabs (MB) was one of the companies that supplied rabbits to the producers of injectable devices. Headquartered in suburban Minneapolis, MB served customers—mainly pharmaceuticals but also university and private laboratories—in over 20 countries. Europe was divided into three MB national units, MBFrance, MB-Germany, and MB-United Kingdom. A fourth country unit, MB-Japan, served Asian markets. Each of those four units—France, Germany, the United Kingdom, and Japan—was managed by a country general manager. That general manager was typically left alone to operate his or her unit autonomously. Corporate headquarters set annual growth goals for the units and measured their profit and loss. As long as the units performed according to those goals, the managers were paid a bonus and mostly left alone. Strategies, product decisions, and acquisitions were determined by corporate executives in the States and communicated to these country managers.

MB’s CEO frequently said that he liked this approach to management because it delineated clear lines of authority and responsibility. Country managers also preferred this autonomy. They were allowed, they believed, to decide on local strategies that best served their customers while maintaining good relationships with the national regulatory agencies to which they needed to respond. MB’s exceptional history of sustained, profitable growth reinforced the belief of managers that this was a well-designed organization.

Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. The Search for an Alternative Test In the early years of the 21st century, MB began to look for an alternative method of testing for sepsis infection in injectable products. As animal rights became increasingly important,MB sought a methodology that would leave the animals alive. Because most of MB’s growth over its history had come from acquiring other businesses and integrating their products into the company’s offering, that is what MB executives sought to do now. An opportunity arose when a small, Rhode Island-based company received government approval for a test known as Sepsis Detection Test (SDT). Instead of conducting tests in live rabbits, SDT used blood extracted from horseshoe crabs for the tests. After extraction, the crabs were returned to the ocean where they were able to regenerate lost blood. MB purchased the company, and horseshoe crab-based testing quickly became the standard for the United States.

In addition to leaving test animals alive, SDT was both less costly and more profitable for MB than the previous rabbit tests. After several years of rapid growth in its home market, MB executives urged country general managers in Europe and Japan to move from rabbit-based tests to SDT. At the annual strategy meeting in Minneapolis, corporate executives presented the business case for SDT and urged the country general managers of MB-France, MB-German, MB-United Kingdom, and MB-Japan to switch over their product line. The country general managers agreed to move forward as quickly as possible.

For some ailments, tests have to be conducted in the laboratory to know exactly what disease a patient has. This majorly is because some diseases share similar symptom and it’s only through blood analysis can the doctor determine the disease and prescribe the appropriate treatment. However, in the early years, the conduction of successful sample extraction from patients was a problem. This is because some of the needle used for blood extraction was contaminated with a more serious disease. This left most of the patients developing a more serious health condition in the very institution they sat foot to receive treatments and feel better. The culprit came about as the disease-causing, microorganism, be it a bacteria or a virus was passed from one patient to another through the very needle they use for blood sample extraction.

The problem was widespread in American and other regions in the world. This made the national health regulatory agencies to seek alternative methods that would limit patient to patient infection through the use of needles. The answer was found in Minnesota Biolabs. They used to conduct tests for sepsis infections on live animals, mostly on rabbits. However, the situation was not any better as many of the animals would die after the test. A great demand of rabbits from Minnesota Biolabs roles and they used not only to supply rabbits to companies dealing with the production of injectable devices but also pharmaceuticals, universities and private laboratories in over twenty countries (Lane, Spector, Osland, & Taylor, 2014, pp. 229-248).

Since there was a large geographical market in Europe and Asia, Minnesota Biolabs decided to divide them into four national unite, the MB France, MB Germany, MB United Kingdom, and MB Japan to serve the Asian market. These four units were managed by a country general manager. The corporate headquarters did set annual goals and measured the realized profits or losses. However, in the early 21^st century, there was a need to search for alternative testing methods as opposed to the use of live rabbits as animal rights were becoming increasingly important. Minnesota Biolabs realized that the continued use of these live rabbits will kick them out of business as their enterprise could be closed forever and their licenses revoked. They also realized that the four units that they were supplied with the rabbits, Japan, Germany, France, and the United Kingdom would shy away from conducting tests on the live rabbits as would adopt a new method.

This prediction of a future loss made by the country general manager made the company look for alternative testing for sepsis infection in injectable products. Following the reputation of acquiring other businesses and later integrating their products into the company’s offering, Minnesota Biolabs was on the lookout. The company was fortunate to find and purchase a small company based in Rhoda Island that had received government approval for conduction of a test known as Sepsis Detection Test (SDT). The Rhodes island company other than conducting the traditional tests on live rabbits, they used blood extraction from horseshoe crabs. There method was safer as after the blood extraction, the crabs would then be returned to the ocean. These crabs were noted to regenerate the lost blood after a short while thus no major harm done to them.     

Predictions I would make for the success of getting the country general managers in Europe and Japan to adopt the new product

The horseshoe crab testing method was quickly assimilated in the United States and it because of a standard test measure. The procedure was more advantageous than the traditional one. It did not just leave the crabs alive but also the procedure was cheaper and had a huge sales return to the Minnesota Biolab. After perfecting the procedure in their home country, Minnesota Biolabs then started to convince the European and the Asian market to adopt the new SDT method. This was done during the corporate meeting where the company's corporate executives presented their SDT business case to the general managers of MB-Germany, MB-Japan, MB-United Kingdom and MB-France. They explained the benefits of adapting to the new testing method and the risks involved in the old one with animals rights and the risk of the prosecution being among the drawbacks. The country's general managers agreed to adapt to the new style immediately (Goold, & Campbell, 2002, pp. 117-24).

To better promote the transfer of the new SDT testing method across the national border to the European and the Asian market, Minnesota Biolabs should allocate a high level of autonomy to the respective European and Asian markets. This will help the managers in these countries to make immediate decision to achieve market responsiveness (Beer, Eisenstat, & Spector, 1990, pp. 117-24). This is the case where immediate sales are required the management team in the individual countries are flexible enough to make a decision to take advantage of the market gap. These step of autonomy ensures that the corporate enjoys opportunities from the specific countries and then report the situation they were faced with, the choice they made to fill the market gap and the volume of sales and return hey got from the sales (Marchington, Wilkinson, Donnelly, & Kynighou, 2016, pp. 233-241).

The company should also build on employees' commitment where the employees are aligned to adopt the new strategies of SDT testing since there is a shift in reality. Minnesota Biolabs can also improve on their sales in the European and Asian market by creating a perfect collaboration among these companies in that in case a market gap for SDT tests has arisen in the Asian market and they have run short in their supply, the MD-German can opt to supply their stock to fill the market gap as they await the supplies from America. By so doing the slow-moving SDT products in the German possession will be sold in Japan, get the profits and then wait for more supplies to arrive from the United States (Armstrong, and Taylor, 2014, pp. 118-123). The company should also improve on their employee commitment as a strong feeling of individual goal overlapping with the organization’s shared goal will lead to a productive workforce (Mintz, 2018, pp. 56-63).

Highly committed employees are characterized by creativity, productivity and collaborators, attribute that may lead to coming up with better and efficient ways of production the Minnesota labs thus improving overall productivity. To increase the employee’s commitment Minnesota Biolabs needs to clarify their values, goals, and strategies to the employees, allow the Biolabs employees to have access to the managers in case of a concern or innovative idea. It can also do this through the creation of teams, share their performance information widely and rely on modern means of production other than the old traditional ones (Wilton, 2016, pp. 91-96).

Minnesota labs can also improve on their overall transfer to new SDT testing by redefining the job design. This can be achieved through carrying out task identity, task autonomy, task significance, task variety and feedback that is incorporated into the transfer of new SDT business (Jamali, El Dirani, & Harwood, 2015, 125-143). The Biolabs need to offer their human resource with the freedom to design their job descriptions in order to evoke their initiatives and enhance their potentials. Through the enhancement or the working dimension, the job will become more motivational to workers hence increasing productivity. This increased productivity will then ensure that at no time will the company run out of supply (Bamberger, Meshoulam, & Biron, 2014, pp. 382-384).

This will increase the supplies across the market border to the European and the Asian Market. Minnesota Biolabs can also increase their supplies across the border by finding the new market. Through strategies such as expanding the European market, they will be able to sell more (Spector, Lane, & Shaughnessy, 2009, pp. 261-279). Another strategy is to find an entirely new market say in Australia, Ireland or South America. These new market will come with increased demand for the SDT and thus increased supply across the border (Lawrence, & Lorsch, 1967, pp. 1-47).

References:

Armstrong, M. and Taylor, S., (2014). Armstrong's handbook of human resource management practice. London: Kogan Page Publishers, (3^rd ed., Vol 6), pp. 118-123.

Bamberger, P. A., Meshoulam, I., & Biron, M. (2014). Human resource strategy: Formulation, implementation, and impact. Abingdon: Routledge (6^th ed., Vol 23), pp. 382-384.

Beer, M., Eisenstat, R. A., & Spector, R. (1990). The critical path to corporate renewal. London: the business weekly, (4^th ed., Vol 6), pp. 67-72.

Goold, M., & Campbell, A. (2002). Do you have a well-designed organization? London:  Harvard business review, (3^rd ed., Vol 80), pp. 117-24.

Jamali, D. R., El Dirani, A. M., & Harwood, I. A. (2015). Exploring human resource management roles in corporate social responsibility: the CSR?HRM co?creation model. London: A European Review, (2^nd ed., Vol 2), pp. 125-143.

Lane, H. W., Spector, B., Osland, J. S., & Taylor, S. (2014). Global strategic change: A synthesis of approaches. In Advances in global leadership. United Kingdom: Emerald Group Publishing Limited (6^th ed., Vol 5), pp. 229-248).

Lawrence, P. R., & Lorsch, J. W. (1967). Differentiation and integration in complex organizations. Administrative science quarterly. New York: Sage Publications, Inc.  (2^nd ed., Vol 12), pp. 1-47.

Marchington, M., Wilkinson, A., Donnelly, R., & Kynighou, A. (2016). Human resource management at work. London: Kogan Page Publishers, (3^rd ed., Vol 10), pp. 233-241.

Mintz, S. L. (2018). Issue: The Business of Philanthropy. California: SAGE Publishing, Inc., 2nd ed., Vol 13), pp. 56-63.

Spector, B., Lane, H. W., & Shaughnessy, D. (2009). Developing innovation transfer capacity in a cross-national firm. The Journal of Applied Behavioral Science. New York: Sage Publications. (2^nd ed., Vol 45), pp. 261-279.