Healthcare Informatics and Technology Investors
Healthcare Informatics and Technology Investors


About Team Role Theory

History & Research

Reliability & Validity

Dr. Meredith Belbin

Behavior vs. Personality



Revolution and Evolution As Organizations Grow

Leo J. Borrell, M.D.
President, Equity Investor & Consultant:
Healthcare Equity Investors
Cosmetic Surgery & Health Service of America
Positive Changes for Health & Beauty
Board of Directors,
Interactive Health Systems

Essentials for Success in Rapid Growth:

1. Vision - Action - Goals

Sir Claude: "If you haven't the strength to impose your own terms upon life, you must accept the terms it offers you."

---- T. S. Eliot, The Confidential Clerk

A Long-Range View With Suppression, Anticipation, Altruism, and Humor

"Maturity is the ability to postpone gratification" - Attributed to Sigmund Freud

2.Ability to Tolerate Stress (Anxiety) & Losses (Depression)

Successful Adjustment

3. Emotional Stability

"Occasionally I would start thinking how such dull people could make money. I should have known that money-making has more to do with emotional stability than with intellect."

---J. P. Marquand, Women and Thomas Harrow

E-Commerce Growth

Pro E-Commerce

The case for jumping on the E-Commerce bandwagon continues to build, according to International Data Corp. (IDC) of Framingham, Mass. The information technology market-research company anticipates that commerce conducted over the World Wide Web will reach more than $400 billion by 2002.

People accessing the Web will grow from 100 million at the end of this month to 320 million by 2002. The number of users purchasing goods & services via the Web will grow to 128 million by 2002.

Selecting a Staff for a Rapid Growth Company

When a company is growing rapidly, sometimes not everyone grows along with it. A company that expects to increase sales dramatically needs employees who have the flexibility to fit into bigger roles. Lay out the new responsibilities and what skills are required. Talk about the mismatch and ask the employee what is needed to get him up to speed. Specify a deadline. Hire for what you envision the job to be a year or two down the road. Look for employees who have a lot of potential. Initially they could be paralyzed, but if the new environment encourages risk-taking, the employees could become entrepreneurially driven. Look for employees who are flexible. Look for employees who show signs of being learners. Ask job applicants how they have improved their skills during the last year, or how they solved a problem they encountered at work, and what they learned from these experiences.

Policies for an Entreprenurial Company

Recognizing & Avoiding Organizational Decline After Rapid Growth


  • Observations of Organizational Decline
  • Reasons for Organizational Decline
  • Early Warning Signals
  • Intervention Alternatives
  • Underlying Beliefs that Safeguard Against Decline

Observations of Organizational Decline

Conventional measures such as total sales, profitability, market share, and loss of technological leadership all indicate this deterioration. Leaders blame these setbacks on largely uncontrollable elements in the external environment such as currency fluctuations, interest rates, and low-cost foreign competition. Often the change in climate may have prevented management from acting when the necessity for doing so should have been obvious.

Causes of Organizational Decline

Paradoxically, competitive success itself may trigger organizational decline by encouraging complacency. 5 specific factors play a role in organizational decline:

1. Decline, Entrapment, Self-Deception: Indications of decline, often obvious to the objective observer, are discounted by responsible top managers, usually because of some commitment to an outdated view of the business's basic nature.

2. Hierarchy Orientation: By this, we mean the use of decision criteria based primarily on the perceived desires and politics of the organization hierarchy, rather than on basic business demands. New employees may no longer absorb the sense of urgency that gripped the founders.

3. Cultural Rigidity: With economic success, a change in emphasis from innovation to tightened administration tends to create an increasingly rigid culture. The new culture inhibits the rapid changes often necessary to respond to a rapidly changing business environment.

4. Desire for Acceptance: Conformity: If top management is perceived to be averse to change or criticism, then potentially independent voices within the organization will not be heard.

5. Too Much Consensus and Compromise: The result of this can be a gradual increase in the amount of time key managers spend on planning meetings. The need to achieve consensus causes bickering and waters down managerial responsibility.

Taken together, these 5 factors gradually separate managerial employees from basic, immediate business goals. Also, the momentum generated by success may mean that individual employees feel no sense of urgency. However, sustaining dynamism often requires high levels of energy and effort, and the difficulty of sustaining such a high energy level may ultimately lead to decline in effective performance.

Early Warning Signals


A considerable time lag may occur between the first "weak signals" and the ultimate decline in measurable business performance. Usually, the negative characteristics become more deeply entrenched as time passes; the correction of deeply entrenched problems is often painful and disruptive.


Organizations should systematically monitor weak signal factors, then "amplify" them through institutionalized analysis so as to be prepared to launch appropriate, timely responses. Nine characteristics in particular can give useful early warnings:

1. Excess Personnel: A swollen staff and an excess of managerial levels can magnify the problems described above. Effective communication is virtually impossible when information flows through too many levels. Compensation systems and title structures may further encourage expanding the hierarchy. Small "kingdoms" develop; each has its own agenda, and the stage is set for turf battles.

2. Tolerance of Incompetence: Many large corporations have difficulty coping with managerial incompetence. The uncoupling of managerial personnel from immediate, basic business goals can create an environment where the inability to perform is masked. Leaders of the organization typically find it unrewarding to address competence problems as they pass through various corporate assignments.

3. Cumbersome Administrative Procedures

4. Disproportionate Staff Power: As a hierarchical orientation develops various staff groups (legal, finance, public affairs) increase their influence to the point where the operating groups lose their client status.

5. Replacement of Substance With Form: Many strategic planning processes produce, for example, thick binders full of numbers that do not improve management's understanding of environmental trends.

6. Scarcity of Clear Goals and Decision Benchmarks: When the business moves into success and maturity phases, large segments lose their day-to-day focus on the basic business. Managers often spend more time sorting out the criteria for the decision than making the decision itself.

7. Fear of Embarrassment and Conflict: One of the most interesting outcomes we have noted is that when a company goes through its success phase it becomes increasingly concerned with avoiding public embarrassment and with side-stepping conflict. When one company's losses became staggering, no one identified any problems. While the managers involved were not untruthful, they failed to report their concerns about the timing of a new product that was the cause of the loss.

8. Loss of Effective Communication: Business success requires that accurate information flow vertically and horizontally throughout an organization.

9. Outdated Organizational Structure: An organizational structure often reflects a corporation's past rather than its present or future. To overcome difficulties imposed by rigid structures, many companies have created task forces, planning teams, and so on. The organizational climate must encourage a manager to develop a more broad sense of responsibility than his or her formal job entails. This broad vision often seems unworkable. Managers prefer to be cubby-holed, not to consider the broader issues.

Clearly, it will be difficult to measure many of these danger signals. Where number measurements are not possible, an anonymous organizational survey can produce valuable insights.

Intervention Alternatives

The following 4-step thinking model can help:

1. Unfreezing: Establishing the Likelihood of Decline
Senior management must recognize the high probability of decline. The members of the organization should be challenged to identify indications of performance decline as they arise. Different businesses within an enterprise may develop unique problems, so area leaders must be attuned to specific relevant signals.

2. Reconcile Degeneration Signals with Strategy
Examine the extent to which organizational danger signals might affect the implementation of strategic business plans. Doing this will clarify the consequences of taking no ameliorative action. Each strategic implementation program should be reviewed regularly, with the goal of identifying potential "derailing" factors that could threaten programs within the firm.

3. Top-Down Bottom-Up Dialogue
A two-way conversation at this stage might realistically help - Unilateral top-down dictates will not work, Bottom-up demands are similarly ineffective. Often more effective communication, including descriptions of problems and recommendations for improvements, can threaten an individual's power base. If particular managers are impediments to change, they should be removed. The dilemma, however, is that top management itself can be the problem. In these extremely difficult circumstances, we still emphasize the point that bottom-up pressure is the only way to effect change. For an established business, discussion typically shifts toward improving competitive performance based on cost containment, delivery promptness, securing quality levels, and so forth. Line management thus gets access to the top to discuss these issues. A more issue-oriented, competence-driven interaction seems to result.

4. Follow-Up Monitoring
The early warning indicators should be continually reviewed, and the effort to shelter strategy implementation from degenerative forces must continue. Otherwise, the process becomes a one-shot attempt to attract attention from key management levels. Ideally, if the early indicators are monitored closely and the organization is operating well overall, the changes resulting from intervention will be gradual - the organization should be capable of revolutionary changes, however, should the conditions warrant.

Safeguarding Against Decline
If management merely settles for a "mechanical" interpretation of these steps, not much progress will be made. It is not enough merely to be aware of - and address - the symptoms of organizational decline. It is also necessary to introduce and reinforce institutional beliefs about how to counteract organizational decline.

  • Organize the company into definable ventures that have explicit goals
  • For each business, single out and concentrate on the toughest competitors and the most difficult customers
  • Define each job so that it is closely tied to a venture and has a "daily effect" on the success or failure of the venture
  • Promote individual diversity in order to challenge the hardening of outdated organizational concepts. Make room for experimentation
  • Strengthen the participative, interactive, and iterative sides of strategic management processes.


Organizational performance almost always slacks off following a period of economic success. Organizational complacency sets in if it is not zealously avoided. While it is difficult for the top management team to recognize gradual performance decline, several steps can be taken to increase the capability of coping with degeneration. These include instituting a set of measures to assess common early warning signals. They also include building into the strategic planning a set of formal considerations regarding potential problems. Finally, appropriate managerial benefits can provide a context for fighting organizational degeneration. Maintaining a desirable management climate requires a high and continuous energy input.