was headed in the long term. This resulted from the inability of Medco's management to communicate its vision for the future to the company's personnel. Employees were aware that changes were being made, but were not always sure how these changes would affect them or their departments. Consequently, employees experienced high levels of anxiety. When this anxiety became too great, many left the firm.
Most People Felt Meetings Were a Waste of Time . Employees complained that too many meetings were held among top managers and not enough among the lower levels of the organization. In addition, those meetings that were held were often inefficient and did not result in resolutions to problems. It was because few meetings had written agendas or minutes – many of those attending described them as “free-for-alls.” They were at best discussions, and at worst fights between departments or individuals. Worst of all, they went on interminably.
Moreover, people complained that most meetings were called on an ad hoc basis. Since these meetings were unscheduled, people typically came to them without any sense of their purpose and certainly with no preparation. Thus, they tended to have the atmosphere of bull sessions in which people shot from the hip. In addition, people felt that they could not plan their work because they were constantly interrupted for “crisis” meetings.
Some People Began to Feel Insecure About Their Places at the Firm . This problem grew out of the many changes taking place and the large number of problems the firm was encountering as it grew. Some original founding members were terminated and replaced. This caused people to wonder who was next. Although many recognized that some employees had not grown as the company grew, they worried about their jobs and their places within the firm. This, in turn, led people to spend an increasing amount of their time covering their vested interests.
The Company Grew in Sales but Not in Profits . Medco, like many entrepreneurial firms, traditionally had been most concerned with increasing sales. It adopted the philosophy of many growing firms: “If we're selling more, we must be making more profits.” Unfortunately, this is not often the case. The other side of the profit equation, costs, often increases along with sales, and if costs are not contained, the firm soon may find itself in a position of losing, rather than making, money. Thus, although Medco sales were increasing at a rapid rate, profits were remaining relatively constant.
Medco's problems certainly are not unique. Indeed, these are the classic symptoms of what we have termed “growing pains,” as will be described in detail in Chapter 5. It should be noted that while these “symptoms” represent problems in and of themselves, they also suggest a deeper, more systemic organizational problem. Specifically, they signal that the organization is coming precariously close to choking on its own growth. This, in turn, indicates that the organization must change its very nature; it must make a transition to a different kind of organization, a more professionally managed firm with processes and systems to facilitate growth.
Bob Mason recognized that his business was experiencing problems. He realized that the organization had outgrown the current way it was being managed, and that both he and the organization needed to make some serious changes in the way things were being done.
His first step was to get deeper insight into the kinds of problems he was facing at Medco. He did a search for books that would help, and obtained a copy of an earlier edition of Growing Pains. After reading the book, he initiated action to help his company overcome the problems associated with growth. Specifically, he began a program of organizational development for Medco. The four specific steps in the program were as follows:
STEP I: Conduct an organizational assessment.
STEP II: Formulate an organizational development plan.
STEP III: Implement the organizational development plan.
STEP IV: Monitor progress.
An organizational assessment was performed to evaluate Medco's current state of development and future needs. The assessment involved collecting information from employees about their perceptions of Medco and its operations. One tool used in this process was the Growing Pains Survey©, which will be presented and described in Chapter 5. This survey measures the extent to which an organization is experiencing the 10 classic symptoms of growing pains.
At Medco, the scores on this survey ranged from 30 to 34, with an average score of 32. As explained further in Chapter 5, this indicated that the company was experiencing some “very significant problems,” which required immediate attention. Specifically, the assessment revealed that the company needed to:
• Better define organizational roles and responsibilities and linkages between roles.
• Help employees plan and budget their time.
• Develop a long-range business plan and a system for monitoring it.
• Increase the number of qualified present and potential managers.
• Identify the direction the company should take in the future.
• Reduce employee and departmental feelings that they always “needed to do it themselves” if a job was to get done correctly.
• Make meetings more efficient by developing written agendas and taking and distributing meeting minutes.
• Become profit oriented rather than strictly sales oriented.
Having identified its organizational problems and developmental needs, Medco proceeded to the next step: designing and implementing a program that would resolve problems and help the company develop the infrastructure necessary to accommodate its rapid growth. Management met at a retreat to design a plan for the firm. The plan included specific action steps to overcome its problems.
Some of these steps were (1) acquisition of human resources and development of operational systems needed to support current operations and continued growth; (2) implementation of a strategic plan that clearly defined where the company was going, and how it was going to get there; (3) implementation of performance management systems to motivate people to achieve the company's goals; (4) design of a management and leadership development program to help people become better managers and overcome the “doer syndrome”; (5) development of a system to explicitly manage the corporate culture. In addition, Bob began to focus on making some important changes in his own role, behavior, and attitudes.
Acquisition of Resources and Development of Operational Systems . As the company grew, so did its need for greater skills and sophistication in certain functional areas. A controller was recruited to replace the firm's bookkeeper. A national sales manager was appointed. Medco also hired a personnel director and a marketing manager. Moreover, Medco engaged a consultant to serve as its adjunct management and organizational development adviser. In brief, the firm made a significant investment in its human resources. These people, in turn, were responsible for developing the day-to-day operational systems required to manage growth in various areas.
Implementing Strategic Planning . One of the first steps Medco took to manage its growth was to develop a strategic plan and begin implementing a formal strategic planning process. The major goal of this process was to motivate the company's managers to begin to take a longer-range view than “what's happening after lunch.” A related goal was to affect the corporate culture at Medco and make planning a way of life.
The
