Just how important this role is became evident during a recent crisis over faulty batteries for the company's pacemakers (or "pacers," as they are called in the trade).
The problem arose, ironically, out of an attempt to innovate. Engineers at Cordis thought they could reduce the size and improve the efficiency of pacers by producing a hermetic, leakproof, lithium battery to be used in the devices. Shortly after introducing the new batteries in 1979, however, the engineers became aware of a potential complication when one of the engineers attended a seminar on lithium batteries. There he learned that the new construction Cordis was using might eventually cause the batteries to corrode. Even though no problems had yet surfaced, Cordis changed the battery specifications, while it set about monitoring and testing the 8,500 sealed-battery pacers that were already in use.
During this process, the engineers came across another potential problem -- a bizarre chemical reaction that was causing a gradual depletion of the batteries. Upon discovering the problem, the company immediately sent an advisory to all physicians who had installed the devices. Although the pacer warranty didn't apply in such circumstances, Cordis nevertheless offered to reimburse all third-party costs resulting from the battery problem and to pay for replacement when necessary. The company also notified the U.S. Food and Drug Administration (which later issued a pro forma recall of the affected pacers).
So, in the end, medical wisdom saved the day. It was medical wisdom, after all, that prompted Cordis to halt production of the sealed batteries at the first hint of trouble. And it was medical wisdom that led the company to monitor the suspect pacers for two years and then to respond quickly and effectively as soon as further trouble was detected.But, most important, it was medical wisdom that lay behind Cordis's education program, designed to keep engineers abreast of the latest developments in the worlds of science and medicine -- a program that resulted in the discovery of the problem at a very early stage. Cordis has made roughly 100,000 pacers since the introduction of the hermetically sealed lithium batteries. If it were faced today with the need to deal with 100,000 potentially faulty pacers -- rather than 7,900 (about 600 have already been replaced) -- the crisis, however resolved, would have killed the company.
The role of "keeper of the corporate flame" is one to which most company founders seem to gravitate over time. "It is as close to the truth of what a founder should ultimately do as you can get," remarks Donald Clifford of McKinsey & Co., a student of the phenomenon. He recalls parenthetically that Marvin Bauer, one of McKinsey's early managing partners, always found a way at any meeting to tell a story that in some way emphasized the importance of commitment to the firm's original ideals.
That is, indeed, how many founders play the role -- telling stories, often hammy ones, that are nevertheless imbued with a patina of authority and through which the founder comes to be seen as the repository of the company's values. At first blush, this may seem like a largely symbolic function, and to some extent it is. Yet it may be the best way -- perhaps the only way -- for a founder to control his company's destiny. In defining the company's values, after all, he is defining the way in which the company is perceived by its own employees, the people charged with carrying out its mission. "For the employees, Dr. Murphy is Cordis," says Gerard Gow, who has been at the company for more than 15 years. "Even if their last conversation with him was five years ago, they will remember that conversation."
This is not to suggest, of course, that it is easy to be a keeper of the corporate flame. Quite the contrary. There is, for one thing, the problem of figuring out what exactly the corporate flame is -- what principles lie at the heart of a company, what ideals should guide it, what mission it has, and what values are essential to its long-term success. Together, these constitute the company's underlying ideology, the system of beliefs on which it is founded. Like the company itself, this ideology is constantly being tested and challenged in the marketplace, and over time it may have to be modified or adapted. The tricky part is to figure out how and when. "The corporate flame may burn too hot or too cold, or it may burn the wrong rear end," observes Professor Renato Tagiuri of Harvard University's Graduate School of Business Administration. "An important thing for a founder to decide is whether the original ideology is still viable."
Murphy, for his part, has never doubted the viability of his company's original ideology, although it has occasionally been questioned by the investment community, and even by his own board of directors. On the whole, Cordis's performance tends to bear him out: The company Murphy founded in a garage in 1957 is expected to gross $207 million during the current fiscal year. Murphy would be the first to admit, however, that his faith has had to survive numerous tests over the years.
William Murphy grew up in Boston, the son of Dr. William Parry Murphy, an eminent physician at Harvard Medical School and Peter Bent Brigham Hospital, and one of the first American Noble laureates in medicine. "I did not quite grow up running barefoot through the halls of Peter Bent Brigham," the son recalls, "but almost." Medicine filled his life. Such people as famed cardiologist Paul Dudley White were regular visitors at his house. So total was the medical environment of his youth, he says, that it never occurred to him not to go into medicine.
On the other hand, Murphy also discovered early on that he had a gift for something besides medicine -- namely, mechanical engineering. He liked to tinker and, as a teenager, got into designing medical tools. In due course, he became aware of the primitive state of medical instrumentation at the time. "It was not in vogue to do unusual things with the medical profession from an engineering point of view," he recalls. For Murphy, this situation posed a challenge and an opportunity, and he soon settled on medical engineering as a career.
