In our previous columns, we described seven concepts for the successful development of complex medical devices. In this column, as well as the next one, we will discuss specific methods to accompany those seven general concepts. These methods are proven techniques for improving development projects, but their effectiveness depends on companies first embracing the seven concepts.

METHOD: Outsourced Development

Leveraging outsourcing can be a strategic accelerator for the development of complex medical devices. In today’s competitive world, it does not make financial sense to redevelop technologies or subsystems that are readily available. Time and expense of doing such development internally can be costly by using precious development personnel that could be deployed elsewhere. It could take much more time to develop something in-house versus purchasing it or getting it slightly modified to shorten the time of development. It is likely there is a competitor somewhere working on the same problem, especially if the product is addressing a key market need. Time to market is often critical for the project to be successful.

Following are some key questions that need to be addressed before engaging a development partner.

1. What parts of your development project can be outsourced?

• A. Are there companies that already know how to do what your company does not?
• B. Are there companies selling something close to what you need that can be modified?

2. What are your organization’s core competencies and IP? Leverage that and do not try to dive into new technologies as part of development (that should be advanced research work pre-development).

3. What are you looking to gain by outsourcing?

• A. Decreasing time to market?
• B. Compensating for missing internal expertise and experience?
• C. Lowering project risks by avoiding increases in permanent headcount?

Importantly, do not try to save money by outsourcing; it is primarily to save time, lower risk, and compensate for missing internal expertise. 

The technology area should be investigated during Phase Zero when that technology is not well understood. Commercially available products or vendors with proven expertise should be considered versus performing the development in-house, which should only focus on the company’s core competencies. Sometimes, the Phase Zero effort will be the creation of a new core competency for the company.

When there are not enough personnel available internally or the required skill does not exist within your internal team, consider outsourcing a subproject or subsystem instead of bringing in contractors or consultants to augment your internal team. If the subsystem is outsourced completely, the project will still need an internal sub-project lead or manager to oversee it and interface with the outsourced contractor. This project lead should understand how this subsystem fits into the overall architecture/system of the product.

Consider choosing a development partner like a critical hire—evaluate them carefully based on their experience, expertise, and ability to deliver before signing a contract. Use references and your network to ensure the partner has a history of success. Construct your required outcome to get a subsystem or feature that is measurable against some success standard. Do not outsource to drive down the cost of development, since it is unlikely to cost less than developing with skilled internal resources. The priority should be managing your time to market budget versus saving development costs. Make sure the contractor has sufficient information about the product development overall and the project’s customer requirements. Be sure to create interim milestones and an integration plan on the fit of the subsystem to the overall product.

In one author’s experience in an ongoing business where time to market was essential for a follow-on medical-imaging product, the author’s internal team identified several subsystems that could be outsourced. After identifying all the key outsource contractors to accomplish the development, the team convened a several days-long meeting to kick off the outsource projects. In this meeting, the team took time to outline the architecture of the product, the time criticality, the market segment, and the fit of the subsystems into the whole. Under NDA, of course, the contractor teams were treated as part of the internal organization. The outcome resulted in the product being developed much faster, and the outsourced subsystems were linked in ways described in a previous column on “Micro Projects.” 

At another company, a key visualization technology was needed for a surgical robot development project. There were outside companies that claimed to have the capability. When an internal team visited them, however, they discovered the claimed capability did not apply to the needs of the project or the potential customer. The project leader put a team into Phase Zero with a budget and timeline to learn this new capability and demonstrate it on a working breadboard. Eventually, when the capability was developed into the robot as a project, the technology was praised by customers as best in class. It became a major selling point for the company.

METHOD: Aligned Incentives

Companies have many ways to incentivize employees, both directly and indirectly. These include bonuses paid after achievement of defined objectives, promotions and layoffs, and cultural norms in the organization (i.e., what is valued in the organization). Some well-meaning incentives can actively undermine new product development by exacerbating the inherent conflicts between departments and product development projects. 

In organizations with multiple product development projects, it can be difficult to keep the focus of team members when there are competing priorities. Employees will naturally optimize their work to maximize their rewards. Likewise, departments will prioritize resources to maximize their departmental rewards. This is sometimes at the expense of product development projects. Companies, therefore, should ensure incentives support cross-functional cooperation and do not undermine it by reinforcing organizational silos. Each department needs some objectives or bonus targets that are shared with other departments on the project. The purpose here is to get the whole organization on the same page regarding key development priorities and outcomes.

Companies need to consider the full product lifecycle when designing incentives. If the product team’s bonus is based on simply completing the product design (not including regulatory approval nor product launch), then team members may hesitate to fully support all the other crucial activities for commercializing a new medical device. For example, they may feel they are “doing favors” when helping the manufacturing team with troubleshooting problems on the new production line or when helping with technical input for a regulatory submission. For medical capital equipment with a lifetime of eight to 10 years or more, sustaining engineering plays a crucial role in the business success of the product and the company needs to ensure everyone who is needed to support the product is incentivized to do so (product maintenance and upgrades are as important as new product design).

In one author’s experience, the general manager of an organization worked with human resources to ensure the objectives of all the departments that had some “skin in the game” of key projects had those project contributions named explicitly in department objectives. Especially in larger organizations with multiple product lines, we found this approach to help enable teams to contribute to the success of projects that were not their key focus. Before the objectives were changed, some departments had to choose between meeting some (non-aligned) objective versus supporting a key cross-department project initiative (that was not explicit in their objectives). People would choose to get their objectives met. Alignment reduced these conflicts.

Ensure your company’s incentives do not inadvertently reinforce silo behavior or stifle innovation and risk-taking in new product development.

MORE FROM THESE AUTHORS: Managing Compliance for Complex Medical Devices

Russ Singleton, principal consultant with Russ Singleton Consulting LLC, is based in California. He has extensive experience in VP R&D, general management, and C-suite roles in the semiconductor equipment and medtech sectors. He holds a Ph.D. and M.S. in electrical engineering from the University of Illinois and a bachelor of engineering from the Pratt Institute.

Aaron Joseph, principal consultant with Sunstone Pilot, is a biomedical engineer based in Waltham, Mass. With over 20 years of experience across a broad range of medical devices, from surgical robotics to medical imaging to IOT and SaMD products, he helps clients efficiently tackle risk management and design controls for new product development.