5. Resuscitating the Artificial Heart

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And as you know, Michael, during all that time, the Total Artificial Heart was made by the talented and small hands of only a few skilled and dedicated technicians. It took a true master technician to build one of our hearts, and we couldn’t find people to do it. When you came to SynCardia and spoke to the entire team in 2006, you were surprised at just how fragile SynCardia was, and admonished me that until we installed reliable, leveraged, and scalable manufacturing systems we couldn’t possibly expect to fill the great need out there for our product. And you were right. Despite all the time and money and work which it took to get SynCardia to the point when you met us, when I joined SynCardia its systems were more antiquated and complex than a start up or even the most difficult turnaround project.

Michael: What was the first step?

Rodger: I concentrated on installing the system. Good systems trap exceptions and help turn chaos into order. Do you understand my point? Without a system foundation all well-meaning people individually do what they feel is right , whether it is or it isn’t, and collectively what they do often magnifies chaos. Systems on the other hand, allow a business and its team members to conduct activities and transactions with the freedom and clarity that detail will be trapped and tracked with the result that customer satisfaction will result. So, to me, great systems were key. But, let’s get back to when I started at SynCardia. I began my role as CEO in May of 2005 and within 5 days the FDA showed up with an unscheduled audit…..a surprise. The audit lasted 10 days. A 30 minute review was conducted by the FDA auditor at 11:30AM and 4:00PM each day. After just a few days a pattern emerged – SynCardia had inadequate systems for document control, inventory management, Corrective And Preventative Action (CAPA), design control and more…………… It maintained its books in Quicken! It became so obvious to me that even before the FDA audit was complete the SynCardia Board of Directors authorized the purchase of a Master Control document management system and the Expandable Accounting modules of General Ledger, Inventory Control and Cost Accounting. The systems were n’t easy to implement. Good Habits are HARD to come by and EASY to live with, and Bad Habits are EASY to come by and HARD to live with. It took us 2 years to “groove” t he new systems into our operations and persuade our people to abandon old habits. And discarding old habits is difficult. I maintain that it takes 20 consecutive repetitions to “groove” a new habit. And if the chain is broken, if the good habit gets lost and the bad habits come back again, then we had to start all over again with one and produce 19 more like the first. It was so difficult during that time that 13 of the original 16 SynCardia people departed and new fresh people joined us to, as we called it, “ride for the brand” .

The principle is to begin any enterprise with a solid system foundation or platform which allows ordinary people to become extraordinarily successful. That is not to say that the best talent is not

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