HomeResearch & Knowledgeback to HomeOrganizational Changeback to Research & KnowledgeMedTech Diagnostics’ transformation crossroadsback to Organizational Change

Case Study

MedTech Diagnostics' transformation crossroads

By Michael D. Watkins

10 pages

October 2025

Order this case study

Reference: IMD-2726

The case study examines the organizational transformation challenges faced by MedTech Diagnostics, an $850 million medical diagnostics company attempting to balance innovation speed with regulatory compliance and quality standards. CEO Patricia Chen must navigate the tension between traditional, reliability-focused operations and agile innovation pods, while facing a critical contract renewal worth $187 million that represents 22% of the company’s revenue. The case illustrates the complexities of dual operating models in regulated industries. MedTech’s traditional divisions generate $120M in EBITDA and are FDA-compliant but are declining at 8% annually. Innovation pods achieve 120% growth and high customer satisfaction but face higher post-market issues and lower FDA approval rates. Hybrid teams – intended as a compromise – satisfy neither approach, demonstrating the difficulties of organizational ambidexterity. Chen faces three strategic options: controlled evolution over 24 months, creating a separate subsidiary for innovation, or transforming into a platform company. Each option carries significant costs, risks, and uncertain outcomes. The case explores critical organizational design questions, including culture change, stakeholder management, resource allocation, regulatory navigation, and leadership alignment in transformation contexts. Key themes include managing organizational culture during transformation, balancing innovation with quality in regulated environments, addressing internal resistance and political dynamics, developing effective dual operating systems, and making high-stakes strategic decisions under uncertainty. The case is designed for classroom discussion on organizational change, innovation management, and strategic decision-making in complex operating environments.

Learning Objective

Analyze the challenges of implementing dual operating systems in established organizations.
Evaluate strategic options for organizational transformation under resource and time constraints.
Understand the complexities of balancing innovation speed with regulatory compliance and quality standards.
Assess how organizational culture and political dynamics influence transformation outcomes.
Apply decision-making frameworks to evaluate high-stakes strategic choices in ambiguous situations.

Keywords

Organizational Change, Agility, Business Transformation, Transformation, Innovation

Settings

MedTech Diagnostics (Fictionalized)

Type

Generalized Experience

Available Languages

English

Related material

Teaching note

IMD case studies are distributed through case clearing houses. In order to browse the collection and purchase copies please visit the links below.

The Case Centre

Cranfield University

Wharley End Beds MK43 0JR, UK
Tel +44 (0)1234 750903
Email [email protected]

Harvard Business School Publishing

60 Harvard Way, Boston MA 02163, USA
Tel (800) 545-7685 Tel (617)-783-7600
Fax (617) 783-7666
Email [email protected]

Asia Pacific Case Center

NUCB Business School

1-3-1 Nishiki Naka
Nagoya Aichi, Japan 460-0003
Tel +81 52 20 38 111
Email [email protected]

IMD retains all proprietary interests in its case studies and notes. Without prior written permission, IMD cases and notes may not be reproduced, used, translated, included in books or other publications, distributed in any form or by any means, stored in a database or in other retrieval systems. For additional copyright information related to case studies, please contact Case Services.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Keep reading

Video

The art of thinking in a digital world: Be logical, be creative, be critical

The Art of Thinking in a Digital World – a synthesis of a career spent teaching leaders to think with greater rigor, creativity, and courage - Luc de Brabandere

Leadership

By Knut Haanaes and Luc de Brabandere

in I by IMD

Article

In it for the long run? Here’s what the world of sport can teach executives

Discover how elite sports principles can help leaders achieve longevity in their careers, balancing well-being and high performance for decades.

Leadership Team

By Matthijs Büchli and Susan Goldsworthy

in I by IMD

Case Study

The Qualios transaction: Engineering a partnered buy-in

Entrepreneurship Finance Business Transformation

By Benoit F. Leleux and Konstantin Dreyer

Article

How AI can coach us to improve how we communicate

AI-powered coaching tools can sharpen executive leadership by delivering framework-based feedback, revealing blind spots, and complementing human expertise.

Coaching Leadership

By Katharina Lange and José Parra Moyano

in I by IMD

Article

AI, culture and well-being: New Spotify CHRO unveils her top priorities

Spotify CHRO Anna Lundström focuses on AI readiness, culture, and personalized well-being to empower employees and shape Spotify’s future success.

Corporate Governance Human Resources Leadership

in I by IMD

Podcast

Can NIO reinvent the automotive industry, Mark Zhou?

Discover how NIO, under Mark Zhou's leadership, revolutionizes electric mobility with community-focused innovations and resilient strategies.

Growth Innovation Leadership Strategy Technology Management

By David Bach

in I by IMD

Video

The Confidence Myth: Rethinking Confidence at Work | Ginka Toegel

In The Confidence Myth, IMD Professor Ginka Toegel reveals how confidence is misread at work and how systems shape who is seen as confident.

Growing longevity market needs new types of leaders

The fast-growing longevity sector needs a unique leadership archetype to realize its full potential.

Change Management Leadership Strategy

By Jennifer Borrer, Lisa Casper and Saule Serikova

in I by IMD

Article

Why you need to agree to disagree

Senior bank leader faces a career crossroads and, through coaching, learns to agree to disagree - unlocking bold negotiation and executive promotion.

Navigating uncharted waters: Wärtsilä’s journey to decarbonize global shipping and energy

How Wärtsilä is reimagining how a 190-year-old company can drive change from within two of the world’s hardest-to-abate industries: shipping and energy.

Innovation Leadership Sustainability

By Julia Binder and Esther Salvi

in I by IMD

In it for the long run? Here’s what the world of sport can teach executives

By Matthijs Büchli and Susan Goldsworthy
in I by IMD

Summary

Discover how elite sports principles can help leaders achieve longevity in their careers, balancing well-being and high performance for decades.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Leadership

Team

Browse all topics

The Qualios transaction: Engineering a partnered buy-in

By Benoit F. Leleux and Konstantin Dreyer
Case reference: IMD-2745 ©2026

Summary

The Qualios case tracks the search, negotiations and ultimate acquisition of an industrial, family-owned SME in Southern Germany. Using a variety of materials, including sophisticated composites, the company produces customized, high-quality braided sleeves primarily for technical applications. The fourth-generation owners were led to sell due to a lack of succession and health issues. A reputable niche business serving automotive, packaging, construction and industrial clients across Germany and internationally, Qualios generated €12 million in revenue and healthy EBITDA and employed around 50 staff. The company faced several issues, such as rising raw material and production costs, difficulty attracting skilled workers to the region and growing demands from customers for sustainability certifications. The potential buyer, Konrad, believed he had a joker up his sleeve with Georg, an experienced operating manager, family confidant and potential co-investor. Negotiations proved complex until the duo was able to bypass the broker and establish direct links to the seller. A deal was ultimately closed, involving not only a significant earnout element from the seller but also 90% leverage offered by local banks, with strenuous covenants. Nonetheless, fundamental questions remained after the deal: Had the buyer paid the right price and established the proper structure to ensure long-term success? Closing was only the first battle: Could Qualios grow fast enough to service the debt, repay the vendor loan and justify the price tag – all while honoring the company legacy that mattered so deeply to the seller?

Reference IMD-2745

Organization Qualios (Disguised)

Industry Manufacturing, Textile;Materials, Construction Materials

Available Languages English

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Entrepreneurship

Finance

Business Transformation

Browse all topics

How AI can coach us to improve how we communicate

By Katharina Lange and José Parra Moyano
in I by IMD

Summary

AI-powered coaching tools can sharpen executive leadership by delivering framework-based feedback, revealing blind spots, and complementing human expertise.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Coaching

Leadership

Browse all topics

AI, culture and well-being: New Spotify CHRO unveils her top priorities

in I by IMD

Summary

Spotify CHRO Anna Lundström focuses on AI readiness, culture, and personalized well-being to empower employees and shape Spotify’s future success.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Corporate Governance

Human Resources

Leadership

Browse all topics

Can NIO reinvent the automotive industry, Mark Zhou?

By David Bach
in I by IMD

Summary

Discover how NIO, under Mark Zhou's leadership, revolutionizes electric mobility with community-focused innovations and resilient strategies.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Growth

Innovation

Leadership

Strategy

Technology Management

Browse all topics

Growing longevity market needs new types of leaders

By Jennifer Borrer Lisa Casper and Saule Serikova
in I by IMD

Summary

The fast-growing longevity sector needs a unique leadership archetype to realize its full potential.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Change Management

Leadership

Strategy

Browse all topics

Why you need to agree to disagree

By Nathalie Ducrot
in I by IMD

Summary

Senior bank leader faces a career crossroads and, through coaching, learns to agree to disagree - unlocking bold negotiation and executive promotion.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Coaching

Leadership

Browse all topics

Navigating uncharted waters: Wärtsilä’s journey to decarbonize global shipping and energy

By Julia Binder and Esther Salvi
in I by IMD

Summary

How Wärtsilä is reimagining how a 190-year-old company can drive change from within two of the world’s hardest-to-abate industries: shipping and energy.

Contact

Research Information & Knowledge Hub for additional information on IMD publications

Related topics

Innovation

Leadership

Sustainability

Browse all topics