Climate
Level of trust
' The level of trust is high (cf 85)
The level of trust at Medtronic is considered to be high although it is unclear as to how much this varies across and within different levels, departments, geographical regions, etc. Speaking to this issue, CEO William George gives an example of how trust operates within Medtronic, its relationship to the company's values, and how violation of trust is handled: "We were tested at Medtronic by a subsidiary we had in Europe. The former president of Medtronic Europe challenged the values statement. He said, 'You don't like these promotional funds we have.' And we said, 'No, we don't.' His response was, 'You're trying to impose U.S. values on Europeans, and they operate differently.' We reminded him, 'No, these are not U.S. values. They are Medtronic values. We know the culture is different in Europe, but you still have to operate from the same values and set of standards. You violated what we consider to be a sacred trust.'
This person had to leave the company because he didn't get it. I know that sounds a little brutal, but you have to be prepared to take that kind of step. If you violate the trust, you can't be part of the organization. You can make mistakes; everyone makes lots of mistakes. But you can't sacrifice the values."
Conflict
' The level of conflict is low (cf 85)
None of the articles reviewed indicated that there was any appreciable degree of conflict - opposition of goals, forces and beliefs - within Medtronic, either between major departments or functions, between management and labor, or between top company officials.
One key distinction is between the negative or "destructive" form of conflict - characterized by competitive, inter-functional or interdepartmental rivalries - and the "constructive" or beneficial variety. Conflict of both varieties seems to be negligible or non-existent at Medtronic. This is consistent with the strong influence of the charismatic founder, Earl Bakken, and the unambiguous value and mission statements referred to previously.
Morale
' The employee morale is high (cf 100)
The morale at Medtronic is very high by all accounts. One way in which this was achieved and maintained to this day is through visits by people who were helped by Medtronic products. An example is the the visit to a Medtronic plant, where its Bio-Pump© heart and lung machine is produced, by a three-year-old hypothermia patient, her parents, older siblings, and the doctor who revived her. The visit is described as "the kind of morale-building visit that the company has scheduled annually since the 1970's letting employees meet the patients whose lives were saved or improved by the medical devices they produced."
Reward equity
' Rewards are given in a moderately equitable fashion (cf 85)
One compensation problem that has plagued Medtronic over the years is that related to its handling of "intrapreneurs". Medtronic's inability to balance its efforts to nurture new ideas and products with the legitimate aspirations and compensation demands of product developers resulted in an exodus of top talent in the 1970's and 80's. CEO William George is quoted as saying: "I don't think we managed the process as well as we could have. During that period Medtronic had problems with sporadic R&D funding, the lack of 'real-world' incentives to keep new ideas in-house, and not enough milestones with which to measure progress of research projects."
Underscoring the importance of this issue to Medtronic's future, George also stated that getting top talent to "stay put" is the only way for the company to "re-invent itself" over the coming decade. The company is, thus, attempting to "create an atmosphere in which would-be entrepreneurs can pursue those projects inside Medtronic."
To tackle this problem, Medtronic has created the "Venture Management Group" under the direction of Vice-Chairman Glen Nelson. Clearer benchmarks of progress, such as the submission of required FDA applications, are being established, as are reward systems that are more similar to what designers would receive in the "real world."
Resistance to change
' The resistance to change is medium (cf 100)
Slow responsiveness is suggestive of high levels of inertia and resistance to change. The prior discussion on rewards might also be taken as evidence that portions of Medtronic are slow or resistant to change. While many factors could have contributed to the "brain drain" that Medtronic experienced, it is unclear as to why it took the company so long to recognize the problem or to formulate an effective response to it.
Leadership credibility
' Leader credibility is high (cf 100)
The leadership credibility, i.e., respect, inspiration, acceptance, etc., is extremely high. There are many reasons for this and the one mentioned most frequently is the influence of Medtronic founder Earl Bakken. Since 1976, Bakken has traveled the world meeting new employees. In that time, he has met almost every new employee in the company. Generally he meets them in small groups in sessions that last about 90 minutes. At the meetings he tells the new employees the history of the company and discusses Medtronic's mission, which is printed in eight languages on the inside of the company's annual report. Afterwards he distributes the mission statement: both a full version on a card and an abbreviated version on a medallion.
Scapegoating
' The level of scapegoating is low (cf 85)
The level of scapegoating, that is shifting of responsibility, at Medtronic is low. This can be seen quite clearly in the remarks made in an address by CEO William George to an audience at the Liberal Arts and the Law conference in 1992. Commenting on the need for companies to take responsibility for their actions and mistakes, such as defective products, he said: "You're always better off going public, telling the truth, taking the hit and getting it behind you," . He continued by saying that, bad products should be taken off the market, fixed and returned to the market. Too much of the top management's time is "often wasted handling problems because a company won't face up to them. Management's time could be better spent fixing the problems".
George's earlier statement to the effect that "everyone makes mistakes" is suggestive of a culture which does not seek to punish or single out employees for failures. He tells in an interview of his personal experience with an organization where employees felt that compliance statements were cynical attempts by upper management to protect themselves from the consequences of their own actions. No one believed the value standards.
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