BookshelfCASE STUDY 10Exploring Innovation in Action â?? Evolving Knowledge Needsof a New VentureHel

BookshelfCASE STUDY 10Exploring Innovation in Action – Evolving Knowledge Needsof a New VentureHelax AB was founded in 1986 by three staff of UppsalaUniversity in Sweden. The three founders had degrees in physics,mathematics and computer science, and had experience of using ITin medical applications, in particular radiotherapy. The founderssuccessfully raised US$3 million of venture capital from privateand government sources, enough for three years of working capitalwithout any additional revenues.The idea for the business originated in a public-funded researchproject called CART (Computer Aided Radio Therapy), whichaimed to create an integrated information management system forthe records of cancer patients. This was believed to be desirablebecause such patients usually undertook a wide range of differentexaminations, scans, diagnosis and treatments over an extendedperiod. By combining and tracking these data, it was hoped that theoverall effectiveness of the therapy would be improved. The CARTproject successfully demonstrated that the success of therapy couldbe improved through better management of the patient data,identified user requirements for such a system, and had developeda number of the software subsystems and components necessary tobegin building a more integrated information management system.However, CART did not go as far as hoped, and never developed afunctioning integrated system. Helax AB was created to take thework further, and to develop commercial applications.So at start-up the three founders of the company inheritedknowledge of the problem area, user requirements, and mostimportantly had formal knowledge relevant to potential solutionswithin the combined fields of computer science, mathematics andphysics. Based on the results of the CART project, a process mapof the clinical process was developed, independent of any systemsdesign. This was circulated to 30 international cancer centres forfeedback, and this quasi-Delphi survey also helped to createpotential customer awareness and buy-in for the future. Thefeedback was positive, and provided the basis for furtherdevelopment of the system. In 1988 the technology was installed intwo hospitals for clinical trials and evaluation. At the core of thisdesign was the dose planning system, later to be renamed the TMS(Treatment Management System). This architecture allowed HelaxAB to act as a systems integrator by adding further componentsfrom other providers and partners.The potential solution had two very different components. The firstwas specific to radiotherapy and concerned the planning of dosagelevels. Dose planning requires knowledge of the relationshipbetween radiation levels and patterns and their effects onbiological tissues and cells. This subject had been explored in aPhD project jointly455456funded by Helax AB and Uppsala University. The second area ofknowledge was more generic, and concerned with informationmanagement. These two fields of knowledge evolved in differentways as the new venture developed. The first was based on theknowledge generated and accumulated from the CART research,plus access to an extended external network of scientific researchand clinical expertise. The second was more internal, but requiredextension by further recruitment.Development was grouped into three different areas: hardware andoperating systems architecture; software for the user interfaces;and quite separately, the development of the algorithms forcalculating the doses, which required access to more basic science.Within a year the whole CART project group of 13 from UppsalaUniversity had joined Helax AB, and in addition engineers withproduct development and commercial experience were recruited tohelp in design and development, bringing the total number ofemployees to 20 by 1990. Almost all employees had degrees,mainly in the physical sciences or engineering, but the companydecided not to recruit medical expertise. Instead, it relied on anetwork of contacts in the medical community. By this time theoriginal venture capital funding had been exhausted, andarguments between the founders and venture capital owners overthe future direction of the firm resulted in the founders buying outthe venture capitalists interest in the firm.By 1994 the company had installed its system in 11 of the 15radiotherapy centres in Sweden, and had also achieved some salesin Germany and the UK. During this period the companydeveloped some new knowledge and capabilities in production,and had an annual capacity to build 12 systems. However, inproduct development most of the knowledge-seeking effort waswithin the existing system design, and was aimed at fixing bugsand improving performance of the existing system by refining thedose algorithms. To extend its sales and international reach further,it established partnerships with Siemens, Philips and GeneralElectric. This was rather too successful, and in the first six monthsof the Siemens partnership 60 new systems were ordered,equivalent to five years of production. Therefore Helax had tofundamentally change how it produced and installed the systems,and the increasing customer base demand created a need formaintenance, service and support for the installed systems. Initiallythe system developers had undertaken the new service and supportfunction, but this placed strains on product development, and sothe firm had to create a new service division and recruit newpersonnel with the relevant skills and experience.The additional revenues from these sales allowed Helax to investin research and development, and two product extensions weresuccessfully launched between 1994 and 1998. Customers weredemanding more standard interfaces compatible with WindowsPCs, rather than the purpose-built and non-standard interfaceoffered. These more fundamental attempts to upgrade and changethe software failed, and Helax experienced significant problemsrecruiting and retaining the necessary staff experienced in morestructured software development. The legacy of the456457unstructured development approach of the original founders andCART team resulted in under-investment in formal softwareengineering, and attempts to out-source this development had alsofailed.The company continued to develop sales subsidiaries in NorthernEurope, and extended its product market into other fields such asoncology with the development of the HOME (Helax OncologyManagement Environment) system. However, efforts to enter thecritical US market were not successful, and in return for access toNorth America Helax sold out to the Canadian firm MDS Nordion.Helax in Uppsala is now a division of MDS Nordion, and a centreof excellence for the development of the HOME concept. Theidentity and knowledge of the founding group remains, butautonomy and control do not: ‘the 20 first employees havebecome, and still are, the core of the company. [But they have not]broadened their core function since they started, but have becomementors in the company’s main process, i.e. the development of asystem of radiography … but I don’t think it is possible to break upand get the individuals to work together in a different perspective.(p. 422)Therefore over its 15-year life as an independent new venture, theknowledge needs of Helax have changed significantly. The newventure was founded based on the formal knowledge outputs of theCART research project, and the explicit knowledge of the threefounders in the fields of physics, computer science andmathematics, plus their experience in the domains of informaticsand radiography. The core knowledge base of the new venture was,and largely remained, a detailed knowledge of the wholeradiography process, combined with the specific knowledge ofdose planning. Over time, the need for new internal knowledge ofproduction systems and formal software development andengineering grew, and to a great extent these had to be satisfied bythe recruitment of new staff with knowledge and experience ofthese fields. In addition, a wide range of external sources ofknowledge had to be utilised to help translate the technology into asuccessful commercial venture. These included the local networkswithin medical research and clinical practice, and internationalnetworks for cancer treatment. The need for specialist national andproduct market knowledge and access demanded partnerships withlarge multinationals, and culminated in the sale of the companyand loss of control.

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