When César García came to IRIS International 10 years ago, the company was on the ropes. The manufacturer of medical diagnostic products had a stale product line, flat revenues, and mounting debt.
García welcomed the challenge of a turnaround and in 2003, he became president and CEO of IRIS (International Remote Imaging Systems). He brought in a new management team. Secured debt refinancing. Pushed hard for new product development.
But García quickly concluded that the real problem was IRIS’s toxic company culture. It was a culture that kept its employees locked in silos and prevented the organization from seizing external opportunities.
The transformation at IRIS under García’s leadership has been extraordinary. The company has launched 15 new products in the last 10 years. Annual revenue has leaped from $28 million in 2002 to $118 million last year, with $129 million projected for 2012.
How did IRIS International become a company that is setting the bar in innovation, collaboration, and growth?
1. Eliminate Silos
When García arrived, collaboration among management was nonexistent. For example, R&D was developing products without soliciting any input from marketing, operations, sales, or service. The result: quality was so poor, many of the new products never made it to the trial phase.
Of course, business leaders have been talking about eliminating silos for years. But García did more than talk. He forcefully thrust his company into a new era of meet, greet, and collaborate. “Bagel meetings” were staged in the company cafeteria for the entire workforce. Managers were sent to off-campus lunches to share intentional “informal time.” García occasionally hosted cappuccino klatches in his office. It was all about creating spaces for creative conversations.
García was everywhere. One day production workers complained to García that the engineers were giving them designs that couldn’t be manufactured. García responded by throwing on a lab coat, summoning the engineers, and camping out with the production crew for two days to actually assemble the module. During the process the impromptu group identified 20 problems with the design–and 20 solutions. Today that module is a key component in one of IRIS’s most important products.
2. Be Boundaryless
While breaking down internal barriers, García also sought to reach across external boundaries. He believed IRIS’s short track to a turnaround was strategic partnerships, even with companies that might typically be considered competitors.
“Competition does not exist,” García says. “Just opportunities.”
García set his sights on Arkray, Inc., a Japanese producer of diagnostic products. Arkray manufactures a urine chemistry analyzer, while IRIS manufacturers a urine microscopy instrument. IRIS developed a way to integrate the two devices.
IRIS became the first company to offer a machine to the U.S. market that provides integrated urine analysis. Arkray sells the product in Europe, but of course, IRIS benefits from Arkray’s sales, since each product contains an IRIS component.
By reaching out to competitors and seeking boundaryless collaborations, IRIS’s international sales have grown from 3% to 35% of the company’s revenue. As IRIS enters 2012, it enjoys five lucrative collaborations with companies in France, Japan, and India.
3. Be Nimble
“You can’t enter into a high-volume partnership like that unless you have an organization that is ready to deliver,” García says. “That means being able to move quickly, to work better and faster than the competition.”
Rick O’Leary is the company’s vice president of HR and administration. “The goal is to be nimble, learn more quickly, adjust faster, and still do it with great simplicity,” says O’Leary. “When the CEO throws on a lab coat, pulls engineers out of their silos and down to the production line and immediately starts drilling down to find a solution–that’s being nimble. That’s responding now to what’s happening now.”
Being a smaller company has its advantages, García says. He spent the first 20 years of his career at the much larger Bayer Diagnostics. The bigger the organization, the harder it becomes to stay agile. García tells his people, “Think big, act small. Act like a small company, but have big dreams.”
4. Develop the Right Systems
As free-wheeling collaboration and innovation occur and rapid growth results, it is essential to have good systems to hold things together and make it all work. That’s why García recruited O’Leary in 2011. The two had worked together once before at Cytometrics.
“With César, HR has a very strong seat at the table,” O’Leary says. “He believes that the people, systems, and processes are critical. We can’t achieve such ambitious goals if we don’t have the right people doing the right things with the right information throughout the organization.”
O’Leary uses many tools to help leaders lead, including coaching, 360-degree feedback, and group process consultation. In the latter, a consultant observes team members as they interact during the normal flow of business and then provides feedback about how their attitudes and behaviors are helping or hindering.
“Every leader gets good, candid feedback,” says O’Leary.
One crucial goal of OD systems is to increase the speed of learning. Feedback is great, but only if it is quickly looped back into the process and results in improvement. “Learning faster than everyone else. That’s how you outcompete,” O’Leary says.
5. Be the Best
Quality is García’s mantra. Nothing else matters unless there is quality, he says.
The strategic partnerships with foreign countries which have been vital to IRIS’s second chapter would not be possible if IRIS’s products were second rate or its delivery unreliable.
When the IRIS transformation began and double-digit growth became the norm, the company grew so quickly that customer support couldn’t keep up. IRIS experienced what García calls a “service meltdown.” In response, IRIS introduced its iCare program (IRIS’ Customer Appreciation and Relationship Experience).
iCare is more than a slogan. The program revolves around a far-reaching set of customer feedback metrics. Among those who receive the analytics is R&D, whose product development is driven by customer market research.
“Everything you do you have to do with high quality,” Garcia says.