Indeed, Murphy's personality is one topic on which all his colleagues seem to agree. He has tremendous presence. He is quiet, courtly, and soft-spoken. When he talks, he conveys a sense of great integrity and will. "Such is the force of Bill Murphy's personality," says Norman Weldon, the current president of Cordis, "that those around him adopt whatever coloration is necessary to augment his particular skills. That was true for John Sterner, and it is true for me."
Murphy's personality made a similar impression on General Georges F. Doriot, the Harvard Business School professor and legendary venture capitalist, to whom he was introduced by Sterner in 1960. Doriot's firm, American Research & Development Corp., eventually invested $225,000 in Cordis. More important, Doriot helped Murphy and Sterner to develop a corporate strategy geared toward the long-term growth of the company.
The key to the company's growth was research and development -- something in which Murphy believes passionately and for which he was willing to make substantial sacrifices. He was well aware that Cordis could come up with state-of-the-art health-care products only by spending the money to develop them. The consequence was that, for its first io years, Cordis had a negative net operating cash flow. Rather than reduce R&D and milk existing products, Murphy and Sterner frequently went to the equity markets, diluting their own holdings.Today, they control less than 5% of the company's stock. "We might have held on to more stock," says Sterner, "had we spent less on R&D." Then again, he shares Murphy's view that the health and growth of the company is more important than personal enrichment.
Murphy's influence was felt in other, more subtle ways as well -- in the shaping of Cordis's public image, for example. Early on, he decided to commission Lippincott & Margulies Inc., the eminent corporate image consultants in New York City, to come up with a logo and design specifications befitting a young company with big ambitions. "Dr. Murphy seemed to realize that even though the company was small and new, it would be important to present a face to the world as though Cordis was big and established," says Jack Goldstein, who worked on the project for Lippincott & Margulies, and later left to join Cordis full-time. "A lot of the other companies in the field back then presented no coherent image." Murphy still devotes considerable attention to such matters -- overseeing the way in which Cordis's exhibits are presented at trade shows, for instance.
But it is in the area of design that Murphy has had his greatest impact, for it was there that he discovered and developed his role as "medical conscience" of the company.
"In the early days, I did much of the design myself," he recalls, "but the first engineer we got in naturally wanted to make some design decisions of his own. . . . Every man wants to make his own contributions and will be unhappy if he can't do it -- if the boss tells him, 'No, don't do it that way, do it another way."
For that reason, Murphy found that he had to play an increasingly editorial role as his engineering staff grew. He began acting like a teacher, probing deftly to make sure that new product designs served the needs of patients and physicians, rather than engineers. His style was oblique. If he spotted a problem, he would seldom confront the engineer directly, but rather would ask questions, coaxing the engineer to look at the design from the customer's point of view. It was a long and arduous process, and he didn't always succeed.
The problem was not talent. From the start, Murphy had gone after the most capable engineers he could find, hiring them away from companies like Mead Johnson at a time when Cordis had only 10 employees. But, in Murphy's view, it was not enough to have first-rate engineers.
"Finding people who understand both worlds -- the world of engineering and the world of medicine -- is perhaps the hardest thing to do in a company like ours," he says. "We have a few such people, but it's one of the hardest kinds of training to construct, and it's the most difficult thing to teach. We have engineers here whom I have great regard for, and who do a good job, but who still, after 25 years in the company, don't understand that if it's good for an engineer, it isn't necessarily good for a physician. That's so obvious to me that I find no difficulty in discriminating between the two, but I have yet to teach them the principle. I can teach them the fact in an individual situation, but the principle as something that guides you is very hard to teach."
As difficult as it was, Murphy searched for ways to make employees understand that principle. Early on, he began putting his thoughts on the subject into writing. Later, he found that he was spending more and more time trying to get the message across by telling stories that somehow illustrated or dramatized the values of the company. "What surprised me was that I would have to tell a story more than once," he recalls. "I would have thought people would have got it the first time." Nevertheless, he went on telling the stories. He also made a point of being visible in the company -- and not just to the engineers. "It is equally important for Maizy on the production line to be reminded by the founder that the pacer she is working on is a life-or-death matter for the person wearing it," he says.
Over time, Murphy's efforts did have an important effect on the company. He gave employees a sense of purpose, which carried over into their work. Cordis began to develop a reputation for excellence in its field. But then, in 1975, a crisis arose that threatened the company's existence -- and called into question the viability of Murphy's whole approach to business.
