Through collaboration, Welch Allyn sees Oregon bioscience community evolving
by Kate McPherron

When Welch Allyn acquired Beaverton-based Protocol Systems ten years ago, it found a perfect fit for the privately held, family-owned manufacturer of medical devices based in Central New York. Welch Allyn has a worldwide market serving frontline healthcare providers – those in doctors’ offices, hospitals and emergency response settings – with innovative breakthrough technologies and cutting-edge solutions. Protocol’s innovative patient monitoring, multi-parameter electronic vital signs and networked clinical data communications allowed Welch Allyn to expand its presence in some very important markets.

Equally exciting for the New York-based company was establishing the business as a wholly owned subsidiary, and leaving it in Oregon. Integrating a knowledge-based company was new to Welch Allyn. Most of its acquisitions before Protocol were manufacturing facilities. So they not only had the geographic challenge of managing remote engineering, service and quality teams, but also the merging of cultures.

Luckily, both companies had highly compatible cultures, sharing complementary products and markets, a reputation for high quality and a history of successful collaboration.

“Protocol’s engineering expertise was a very strong attraction to Welch Allyn, and the importance of preserving human capital was the key driver for keeping the business in Oregon,” says Peter Murray, VP Operations West at Welch Allyn who formerly held the same role at Protocol Systems. “Lots of folks, myself included, did not want to relocate to New York, so it made sense to maintain the company as a stand-alone division, leave the intellectual property in place and grow the competency that was resident here.”

The decision was made simpler because there were no other factors favoring either location. “Oregon offers stronger R&D tax credits than NY, and has lower corporate tax rates, but New York lavishes favorable incentives on the company. In terms of financials, it’s a wash.”

Still, the company has found benefits to operating in Oregon. “Dealing with the state government or economic development groups in Oregon is far and away easier than in Central New York. Oregon should be applauded for making it very easy to get permits, file disability claims and the like.”

The challenge: bring critical mass to Oregon

Neither Oregon nor New York have a bioscience “critical mass” as do the Chicago, Austin or San Francisco areas, where there are very large concentrations of advanced medical companies. But that’s exactly what Welch Allyn would like to see evolve here.

“We struggle to bring in talent in the higher level roles and in some functions. That’s a theme you’ll hear from every company in Oregon. However we are able to hire fairly easily in the technician, manufacturing and engineering functions due to the local talent trained in the high tech industries.”

“The only way we’re going to get this critical mass is by growing the bioscience industry as a community, provide that bioscience value proposition in the state. That’s what makes the Oregon Bioscience Association (OBA) so important. We’ll only get where we need to collectively together we’re a lot stronger than alone.”

Workforce development efforts with OBA and others pay off

“We do not have the strong Bio industry associations in New York that we have with OBA. We benefit a lot from our active participation with OBA, particularly the workforce group, and with a lean consortium of companies in the northwest, Northwest High Performance Enterprise Consortium (NWHPEC). OBA is very industry-specific while HPEC is a broader group, but both have been very successful for us.”

In addition, Welch Allyn has collaborated with state agencies, and both parties gained insight on the bioscience market. “Back in 2005, the Oregon Economic Development Council (OEDC) gave us incentive grants for workforce development because we were expanding and needed to build up our training. In the process of getting those grants from the state, we did a lot of benchmarking. When they looked at our pay packages, including benefits like employer training, we were way above averages for the state. So it was easy for them to justify giving us the money when they saw the value of an individual hire to the state.”

That focus on retention and training comes as no surprise for a company that established one of the first employee pension programs in New York State.

Collaboration with the academic world still in early stages

Top on Welch Allyn’s want list is a better relationship with Oregon universities. “It would be great to have partners in the universities, but we haven't connected yet, so as of today we don’t share or hire grads, but that’s an area we’re actively trying to develop.”

Murray knows what that interaction should look like. “We have a relationship with Syracuse University that led us to build an innovation center next to our headquarters where we can do early-stage work. At Blue Highway, we co-fund a large number of research projects, trying to find the most promising areas. We have nothing like that out here yet. That’s the level we’re striving to reach: to add another innovation pipeline here like we have at our headquarters.”

Enhancing these relationships and building bridges is also a concern to OBA, which invited Welch Allyn President & CEO, Julie A. Shimer, to deliver the keynote address at OBA’s Annual Conference in June.

Collaboration with other local institutions and businesses would also be fruitful, and another area that OBA is helping with. “I’ll give you an example of what we’d like to see here,” says Murray. “A hospital from California came to us with an idea for our product that could help better meet regulations – they had new compliance issues pressing them. These senior researchers brought in some really innovative work. There’s no reason that couldn’t have come from a local source. Our feeling is, the more collaboration, the better.”

Growing, even hiring, in the down economy

Welch Allyn is committed to being very involved in the local community. Here in Oregon, the company has earned several United Way awards for employee contributions and company campaign efforts.

“We continued to hire at a pretty good clip through 2009, filling 15-20 positions locally in the last 18 months despite the slow economy,” says Lena Ulvi, Welch Allyn’s local HR leader. “The positions cross all functional areas and we’re continuing to fill the gaps, and even add head count. We have around 300 employees locally and expect to continue to grow.”

In addition, the company expects to expand on its general internship and co-op program, which covers many of its functional areas, with collaborative programs like MECOP. “We believe that we are an employer of choice in Oregon,” says Ulvi.

“We’ve proven that we’re contributing to the state, that we can even weather the bad economy better than most companies, so I hope we start to see businesses, hospitals, but most of all, the academic world start getting on the bioscience bandwagon,” says Murray. “It would be really great if bioscience industry comes to equal Oregon’s Silicon Forest.”

Kate McPherron provides strategic communications consulting to organizations in bioscience, energy efficiency, engineering and high tech. Kate’s history includes running successful low-budget, tight-deadline product launches and company introductions; ongoing product/PR management; as well as writing and coordinating documentation projects for large, regulated companies. Key to Kate’s work is unearthing, defending and persuading a viewpoint, often communicating technical information to a less-savvy audience. Contact Kate at kmcpherron@gmail.com