By Steve Hamm Mayo Clinic's main calling will always be treating patients, but, in surprisingly short order, it has become a player in a brand-new business -- medical devices. In the past, it would simply license the technologies it developed to companies, which turned them into products. Now it's able to develop products for sale to other hospitals, thanks to its ability to outsource some of the design and all of the manufacturing, sales, and marketing functions to other companies.
Think of its as Virtual Mayo. "There are a lot of innovations coming from our physicians. Why pass them off to others when you can do it yourself?" asks Nina Schwenk, who heads the technology committee for the clinic's parent, the Mayo Foundation.
FAST TRACK. This venture was a major departure for Mayo, located in Rochester, Minn. Over the years, more than 1,000 technologies developed in its research labs have been licensed to other companies to bring to market. But in early 2003, their researchers sized up MRI technology for capturing images of the forearm and hand and decided they could produce a better-quality device -- and do it faster -- if they didn't pass the idea off to somebody else. So Mayo hired IBM (IBM) to help design and manufacture the product, and relied on medical equipment giants GE (GE), Siemens (SI), and Philips to market and sell it.
It looks like Mayo made the right decision. Within eight months of its initial conversations with IBM, the tech giant had delivered the new devices, Mayo Clinic MRI coils, for use in Mayo's own medical facilities. A second version, begun in January, 2004, was readied for sale by GE four months later. A more typical time-to-market span in the medical-device field is 16 months to 24 months, according to "How Fast is Fast?" a product-development benchmarking study by IDEO, one of America's leading contract design firms.
So far, Mayo has sold more than 100 of the MRI coils, plowing profits back into medical research. Amazingly, the medical device has exhibited no defects, which is almost unheard of in the industry.
VIRTUAL DESIGN TEAM. What made the process so fast and the quality so high? Primarily, it was IBM's ability to bring together all of the expertise needed for design and manufacturing from the beginning, and to collaborate closely with Mayo's people. "We hired them, but it worked like a partnership. It ended up being a virtual design team," says Steve Van Nurden, director of technology commercialization for Mayo.
Even while IBM's materials experts and industrial designers were working with Mayo researchers to develop the device, special tooling was being created in an IBM factory, and manufacturing operators were being trained in the specialized skills it would require to assemble these complex devices. Nobody was waiting around for somebody else to finish their part.
Now Mayo has more medical products in the works. One due out this year: a device that helps patients hold their breath properly during biopsy procedures. Less pain, and, for Mayo, more gain. Hamm is a senior writer at BusinessWeek