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| Properly functioning equipment
is critical |
| Courtesy Radiometer |
In the 1930s, Carl Schrader and Barge Aagaard formed
a company that made meters for the Danish radio
industry, and called it Radiometer. They established
a good reputation for measuring, and soon Carlsberg
labs asked them to develop an analytical instrument
to measure the acidity of liquids. They responded
with instruments and electrodes that measured pH.
In 1952, what was then a terrifying disease, polio,
attacked Denmark. Two Danish doctors discovered
that measuring the pH value of blood was the key
to treating the disease, and noted the pH measuring
instrument. This started Radiometer into the field
of in vitro diagnostics. They went further, developing
electrodes to measure the blood’s oxygen and
carbon dioxide. When they combined this with the
pH measuring process, the world’s first fully
automatic blood gas analyzer was created. This led
to blood gas monitoring, and they now have 49% of
the world market share.
Peter Kurstein, president and general manager,
is a youthful, energetic man who once considered
becoming a doctor. Thinking that economics would
give him more scope, he took an MBA at Harvard Business
School. But he kept his interest in medicine, which
has kept him in good stead in his current job. He
has been with Radiometer for 17 years. He wouldn’t
be comfortable at a huge firm; the Danish style
of niche business seems to suit him fine.
“The most successful companies are those that
are niche," Kurstein says. "Why? Because
they focus on the customer. Larger companies may
have politics and issues. When you have research
and development, marketing, sales, there are a lot
of departments to make that orchestra play. One
needs a lot of coordination. That can be very difficult
in a larger organization. Our life depends on being
successful in this business.”
This is not a business for amateurs. Patients live
or die according to the performance of the machinery
that is freeing more and more of the doctor’s
time.
“For instance, patients who are in intensive
care or operating rooms are getting oxygen while
CO2 is being taken out," Kurstein says. "To
be sure they are at the proper level you take a
sample of blood and inject into this instrument,
and you want to get the result very fast. so you
can adjust the ventilator. If you don’t do
that very quickly the patient can die. The buzzword
is called ‘point-of-care test.’
“The way to get the revenue is to place more
instruments. And the way to do that is to have more
little things that increase the value for the customer.
By making them faster, more accurate, easier to
use. When you do that, it saves lives. That’s
one of the ways you have to stay on top of this.”
Kurstein gives a good illustration of how this
works.
“Imagine you are a salesman. You have our
red system. You will go in and find the decision
makers. You ask them if they are happy with their
system, if anything is giving them problems. You
make notes and make a complete picture. Ask them,
how much it costs to make a complete picture? Would
you want me to make an analysis to show what it
really costs?
“So they take out a computer and show him.
You paint a picture. ‘Now I will tailor make
another solution for you. You need this and this.’
And that’s a package we sell.” And they
back it up, with visits and further consultations.
Does this mean you offer a focused strategy, as
opposed to simple machine sales?
“Right. It matters how well the system works,
not individual instruments.”
After years of tight focus, “cutting away
everything which is not relevant,” Radiometer
is now, under Kurstein’s direction, beginning
to mine the almost endless Danish “idea”
landscape. The company found four very promising
ones, all in-house. “We went to a science park,
created four teams with technical and marketing
specialists. They were given three months to write
a complete business plan for this idea.
“After three months we presented these plans
to the board of directors. They said, ‘Yes,
lets move on to the next 3-month phase.' In addition,
the board said, ‘We want this way of working
to become permanent, because just finding four ideas
is not going to make us into a growth company.’
So we have set up a way to create four groups a
year. It’s a almost a methodology or a machine
that constantly processes new ideas.”
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