Who's in charge at Marquette Electronics? (Hint: It only looks like it's the employees.)
Quite frankly, the executives at Marquette Electronics Inc. would be a little uncomfortable with the notion that theirs is one of America's best-managed companies. Here's a manufacturer of sophisticated medical devices used by doctors around the world to make life-and-death decisions. And yet, here's a company organized around the unorthodox belief that there is productive value in fun and creative merit in a bit of disorder. By any standard, it is an odd combination -- as a group of visiting West German businessmen discovered.
As the story goes, the foreigners were taking a midshift tour of Marquette when they happened upon Hawaiian-shirted employees with boom-box hula music playing in the background.Puzzled, the visitors turned to their guide, Michael Cudahy, Marquette's president.
"Coffee break," Cudahy explained.
Passing by Le Bistro Restaurant, Marquette's tony version of a company cafeteria, the West German visitors came upon assemblers quaffing beers from a company-owned spigot and rehearsing for a fashion show in the adjoining theater.
"Coffee break," Cudahy explained.
So it went -- from the day-care center, where sales representatives were taking time off from their jobs to play with their kids, to the exercise room, where a determined bench-presser grunted through his workout. At the end of the tour, the confounded leader of the group sidled up to Cudahy.
"If you let your employees do whatever they want, whenever they want," he asked, shouting to be heard over the hubbub of a busy assembly area, "why are there any people here working?"
Cudahy smiled. "Because our people like their jobs."
The West German nodded and turned to speak to his group in their native language: "Either these guys are very good managers, or they're full of it."
Actually, a company with projected earnings of $7 million on sales of $90 million, with a debt-to-equity ratio of .73 to one, isn't full of anything but justified pride. Surely the company couldn't claim 80% of the market for centralized electrocardiograph management systems, 26% of the stress-testing market, and 20% of the market for patient-monitoring devices if something wasn't being done right. But good management?
"The truth is, we're all quite bad managers," admits engineering vice-president Carlos de la Huerga. He cheerfully acknowledges that at Marquette, job descriptions are vague, reserch and development goals are inconsistent, and interdepartmental coordination is often poor. The result sometimes can be seen in abandoned projects, eleventh-hour design changes, and rush-rush production schedules. Marquette will never be a candidate for "excellence" of the best-seller variety -- unless fun and chaos are added to the criteria.
But Marquette's is an organized sort of chaos that masks a clever sort of control, and an effective sort of leadership. "Maybe we're not managers at all," offers de la Huerga, mulling it over. "Provocateurs -- that may be closer."
Twenty years ago, Marquette Electronics consisted of Mike Cudahy and Warren Cozzens, two ambitious manufacturers' reps in Chicago who had decided that they could build the world's first machine to monitor, analyze, and store information about the heart of a hospital patient. Researchers at Northwestern University Medical School had designed an interesting system to record the electrocardiographic data on microfilm, but the estimate from one manufacturer was that it would cost $250,000 just to get the prototype built and tested. Hewlett-Packard Co. had failed to deliver on its part of the project. So when Cudahy and Cozzens said they could deliver the finished product for $12,000 within six months, the university was happy to award them the contract.
Cudahy and Cozzens installed the system on time -- but only after they had gone to the university for another $12,000. And they still lost $10,000 on the deal.
Their work, however, had won them the respect of medical academia, and soon teaching hospitals across the country were ordering more sophisticated versions off Cudahy and Cozzens's equipment. Before long, the original system's microfilm gave way to magnetic cards, and then to digital disks. Marquette's was the first electrocardiograph system to computerize, the first to employ digital disk storage, and the first to spew forth dot-array readouts instead of the pen-and-ink spikes that had traditionally plotted the human heartbeat.
Marquette began to diversify its line in 1982 as the result of a deal with General Electric's Medical Systems Group. It wasn't exactly the deal GE had had in mind. The electronics giant had approached Marquette with the idea of buying up the smaller company and marrying Marquette's healthy electrocardiograph business with GE's not-so-healthy patient-monitoring division. Cudahy flatly rejected the GE bid, but he made a counteroffer GE chose not to refuse: Marquette would trade convertible stock for GE's inventory, designs, back orders, and the opportunity to hire from among GE's employees. In effect, Cudahy had traded paper for cash and a smooth entry into a new and lucrative market.
Within its industry, Marquette Electronics is now regarded as a sensible innovator -- a company that strives to be first with the best. The company has a knack for translating its ideas into production in a matter of months instead of years. And it manages to keep its products inexpensive enough to meet the efficiency requirements of some of the nation's toughest hospital administrators.
No company accomplishes such a juggling act without maintaining a close and continuing relationship with the medical community. Marquette has been more zealous in that effort than even bigger domestic competitors, such as Hewlett-Packard; or more prestigious foreigners, such as the German behemoth Siemens. Its marketing staff includes nurses, whose experience helps the company decide what to build and how to sell it. Mrquette's success in winning opportunities to participate in major cardiovascular research programs is the envy of the industry. So, too, is its annual retreat, which awttracts about 30 electrocardiographic experts to a weeklong brain-storming session in scenic resorts.
Still, it is Marquette's unique approach to human-resources management that most sets the company apart. Mike Cudahy and Warren Cozzens are hands-on leaders who scorn policies and directives and eschew memos and meetings. Individually, each is possessed of seemingly boundless energy and enviable people skills. Together, theirs has proved to be an extraordinarily harmonious relationship in which each is content to work his own area of responsibility: marketing and sales for Cozzens, product planning and engineering for Cudahy. When disputes arise, Cudahy and Cozzens may haggle them out from the doorways of their adjoining offices, literally shouting over the head of their shared secretary.But, although vicepresident Cozzens wins his share of the skirmishes, he never mistakes his influence for power: it is Cudahy who is by far the largest stockholder (nearly 50%), Cudahy who sets the company's direction, and Cudahy whose personality is most closely reflected in Marquette's corporate personality.
