Cool Company - A Site Where Hospitals Can Click to Shop
Today hospitals and suppliers checking into Neoforma.com swap 10,000 to 20,000 emails a month about products . . .
Fortune Magazine, April 12, 1999
E-Commerce Poised to Impact Healthcare Supply Industry Significantly
Several companies are lining up to cash in on what looks like the purest form of healthcare e-business . . . Probably one of the most visionary, and by far the best financed, of the medical product e-commerce companies is Neoforma . . .
IDN Strategies, April 1999
The Trillion-Dollar Opportunity
One of the Internet’s great conceits is that it changes everything. In the Internet Economy, you can buy anything from Furbys to furniture online . . . But swallowing the trillion-dollar dinosaur that is the U.S. healthcare industry could give Net entrepreneurs a serious case of indigestion . . .
The Industry Standard, April 5, 1999
Balance is not always found in the middle.
In moments of stress or confusion, I often catch myself looking back in time to similar situations...
In moments of stress or confusion, I often catch myself looking back in time to similar situations...
One such moment occurred as I was leading a meeting in a crowded conference room in April, 1999. I was thinking about a meeting that happened long ago. The context of that meeting had been quite similar to this one, but had turned out very differently.
About fifteen years earlier I had been working seven days and nights a week helping a friend, Andy, design and build a restaurant that he wanted to open in Southern California. Things were not going well. The contractor had used all of the money we paid him to buy a sporty new car, then he promptly disappeared without paying any of his subcontractors.
I had brought in a few friends from architecture school to help out at almost no cost. They were not getting along with each other nor with Andy. Then a series of unexpected accidents happened.
Foolishly, I took one day off to go water skiing with a friend. I had been so tired that I severely pulled a hamstring, leaving me almost unable to walk. A few days later, I had fallen twenty feet from a ladder that had buckled under me. I landed hard. Nothing was broken, but everything was strained and bruised. I could have used an excuse to take a day or so off, but I was still able to hobble around, so I kept working. I was a mess, but the project was even more of a mess.
On the day of my return, Andy was in a particularly bad mood. He was in the middle of a nightmare project and could see no end to his misery. Andy was standing inside the dark and dusty restaurant, yelling at one of the guys I had brought in. He was pointing out his distaste for the way this guy had constructed one of the walls. Another guy I had hired had stopped working and was listening, disgusted by the incessant arguing. When I stepped in to intervene, both workers told me that they were quitting, right there and then. Andy snapped back that if they quit it just fine with him—maybe he would just quit too.
I don’t know why, but I was so upset at the way he said this that I did something I had never done before and have never done since—I lurched forward, raising my arm to strike him. I caught myself just before completing the act—stopped cold by the startled look on Andy’s face.
I immediately escorted my tense body past the rest of the crew who had witnessed the incident and into the bright sunlight. I staggered like Quasimodo, which was the only way my injuries allowed me to move, aimlessly, around the beachside community for several hours.
I seemed to be the only one left. Everyone wanted to quit—even the owner. What is it to me? I asked myself. I am not even getting paid for this job. I’m working for room, board and experience. I’m doing this for the fun of it. And it’s no fun at all. I should just pack it up and go.
On the other hand, what will I accomplish if I quit? Failure, nothing else. All of the good stuff that we had been working on until now would be gone, obliterated by my moment of weakness.
As my mind cleared in the fresh air, my conviction returned. I would get this project built. It would be up to Andy to run the business after that. I couldn’t quit. I had little to lose and everything to gain.
I assembled Andy and the crew together that afternoon. They were reluctant to sit around the same table, but finally agreed to humor me.
I began speaking to the slouching, frowning, sighing group. In the past, Andy and I had shared duties. This day, I took control of the group. I would get the building built. He would fill it with food, utensils and people. As I spoke, I became aware of the changing attitude of the individuals around the table. They sat up, became attentive, even smiled, as I carefully acknowledged each individual’s feelings, frustrations and infractions. I told it as I saw it. I held nothing back. I was decisive.
Afterward, a woman who was coordinating orders and deliveries came up to me and said, dreamily, “Wow . . . that was amazing. I sure wish I could talk like you do.”
I wasn’t sure what I had said or where the words had come from, but that didn’t matter. I gained the confidence that day that I would
be able to handle similar situations in the future, as long as I presented my beliefs with conviction and compassion. This proved to be true during many leadership challenges I would face in the future.
The restaurant was built. It was opened. The food was very good. It turned out to be a very successful venture.
Now, fifteen years later, I was sitting at the end of a much larger table in front of a much larger group of people. Other than that, the situation was strikingly similar.
For the first time in nearly a year, I was running the company’s weekly staff meeting. The stress and frustration over the previous funding round had left Jeff tired and discouraged. His energy was almost exclusively focused on getting the Board to find a new CEO. Alexander was out of the picture too. He had moved on to a new company.
So without any convincing explanation, I informed this group of about twenty managers that I was going to be in charge of these meetings for awhile. I told them that Jeff was busy with some special projects.
Most of the people in the room had been hired by me, but had become used to taking their direction from Jeff or Alexander. Although I had remained active in many parts of the company, I had been careful to ensure that everyone saw Jeff as the one in control. For now, that had to change.
Each manager gave a brief update on his or her group’s progress and problems over the last week. As they made their presentations, a clear pattern began to emerge.
If the manager had been reporting to Jeff, he or she was focusing on Jeff’s priorities. If the manager had been reporting to Alexander, then Alexander’s priorities were dominant. If he or she had been still working under my influence, my very different priorities had come into play.
There was clearly a crisis of leadership. And for the time being, I was the one who needed to provide focus.
But that was a temporary situation. Neoforma was about to begin a formal, high-profile search for a new CEO. Jeff and I had always known that we weren’t the right guys to run Neoforma in the long run. We preferred to design and build rather than to operate. Neither of us savored power over others.
Once we filled the company’s current job openings Neoforma would have more than a hundred employees. We wanted to hire someone with experience running a larger company. And whoever that was would direct the company’s operations. I would be out of that role.
So after everyone had completed their status report, all eyes were on me. Decisions had to be made. There were too many projects under way. Some had to be postponed. Others had to be cut. Some of the decisions were easy, some were not.
Everyone knew my bias. They knew that I was obsessively focused on the capital equipment solution we were building. This project was code-named Picasso. I knew that many, if not most, of the managers believed that Picasso should be cut. I knew that I was biased.
Working privately in my office, I could indulge my biases. But in the role of the leader, I was uncomfortable with my bias, so I polled various people in the room, seeking some kind of consensus on how we should proceed. But consensus was impossible.
I either had to make the more popular decision to cut Picasso and alienate the people who had remained loyal to my original vision for the company, or I had to make the less popular decision to keep Picasso alive and alienate the others. If I made the former decision, I would reveal my weakness as a leader. If I made the latter decision, I would be showing my disregard for the advice of the majority of the managers I had hired. It was a classic leadership problem.
My concern for doing the right thing clouded my ability to see the real issue. I was going to disappoint people with either decision, but which decision I made was unimportant. What was important was that I make a prompt and clear decision.
This was a group of intelligent, driven people who wanted to do the best they could do. I had hired them for this reason. If I made an unpopular decision, they might grumble, but they would implement it with a passion. If I wavered or made no decision, they would lose their passion.
In my similar crisis of leadership fifteen years earlier, I had nothing to lose. This time I had everything to lose. I was afraid that the wrong decision might lead to failure—not just mine, but that of everybody in the room. I was afraid of losing my house and my family. And I was not used to being afraid. The fear obscured my sense of purpose and, ultimately, my projection of leadership.
I’d like to say that I rose to the occasion this time, as I had when there was nothing on the line. But, in an attempt to be fair to everyone, I came up with a weak compromise that satisfied and inspired no one. We’d keep the Picasso program going, but only allocate it just enough resources to stay alive. Sadly, my half-hearted decision conveyed uncertainty. The effect was immediate and deeply disheartening.
I stayed in the room after everyone had left. As I sat at the end of the now-empty table, I buried my head in my hands and contemplated the dreadful mistake I had just made. Instead of seizing this moment as a great opportunity for rejuvenation, I had turned it into a catalyst for disenchantment.
When I attempted to correct the errors I made that day, I made some progress, but there was no way to undo the damage. I might remain a spiritual leader in the company, but I could never again be its executive leader. My only consolation was that I had certainly set the stage for a new leader to come in and save the day.
About fifteen years earlier I had been working seven days and nights a week helping a friend, Andy, design and build a restaurant that he wanted to open in Southern California. Things were not going well. The contractor had used all of the money we paid him to buy a sporty new car, then he promptly disappeared without paying any of his subcontractors.
I had brought in a few friends from architecture school to help out at almost no cost. They were not getting along with each other nor with Andy. Then a series of unexpected accidents happened.
Foolishly, I took one day off to go water skiing with a friend. I had been so tired that I severely pulled a hamstring, leaving me almost unable to walk. A few days later, I had fallen twenty feet from a ladder that had buckled under me. I landed hard. Nothing was broken, but everything was strained and bruised. I could have used an excuse to take a day or so off, but I was still able to hobble around, so I kept working. I was a mess, but the project was even more of a mess.
On the day of my return, Andy was in a particularly bad mood. He was in the middle of a nightmare project and could see no end to his misery. Andy was standing inside the dark and dusty restaurant, yelling at one of the guys I had brought in. He was pointing out his distaste for the way this guy had constructed one of the walls. Another guy I had hired had stopped working and was listening, disgusted by the incessant arguing. When I stepped in to intervene, both workers told me that they were quitting, right there and then. Andy snapped back that if they quit it just fine with him—maybe he would just quit too.
I don’t know why, but I was so upset at the way he said this that I did something I had never done before and have never done since—I lurched forward, raising my arm to strike him. I caught myself just before completing the act—stopped cold by the startled look on Andy’s face.
I immediately escorted my tense body past the rest of the crew who had witnessed the incident and into the bright sunlight. I staggered like Quasimodo, which was the only way my injuries allowed me to move, aimlessly, around the beachside community for several hours.
I seemed to be the only one left. Everyone wanted to quit—even the owner. What is it to me? I asked myself. I am not even getting paid for this job. I’m working for room, board and experience. I’m doing this for the fun of it. And it’s no fun at all. I should just pack it up and go.
On the other hand, what will I accomplish if I quit? Failure, nothing else. All of the good stuff that we had been working on until now would be gone, obliterated by my moment of weakness.
As my mind cleared in the fresh air, my conviction returned. I would get this project built. It would be up to Andy to run the business after that. I couldn’t quit. I had little to lose and everything to gain.
I assembled Andy and the crew together that afternoon. They were reluctant to sit around the same table, but finally agreed to humor me.
I began speaking to the slouching, frowning, sighing group. In the past, Andy and I had shared duties. This day, I took control of the group. I would get the building built. He would fill it with food, utensils and people. As I spoke, I became aware of the changing attitude of the individuals around the table. They sat up, became attentive, even smiled, as I carefully acknowledged each individual’s feelings, frustrations and infractions. I told it as I saw it. I held nothing back. I was decisive.
Afterward, a woman who was coordinating orders and deliveries came up to me and said, dreamily, “Wow . . . that was amazing. I sure wish I could talk like you do.”
I wasn’t sure what I had said or where the words had come from, but that didn’t matter. I gained the confidence that day that I would
be able to handle similar situations in the future, as long as I presented my beliefs with conviction and compassion. This proved to be true during many leadership challenges I would face in the future.
The restaurant was built. It was opened. The food was very good. It turned out to be a very successful venture.
Now, fifteen years later, I was sitting at the end of a much larger table in front of a much larger group of people. Other than that, the situation was strikingly similar.
For the first time in nearly a year, I was running the company’s weekly staff meeting. The stress and frustration over the previous funding round had left Jeff tired and discouraged. His energy was almost exclusively focused on getting the Board to find a new CEO. Alexander was out of the picture too. He had moved on to a new company.
So without any convincing explanation, I informed this group of about twenty managers that I was going to be in charge of these meetings for awhile. I told them that Jeff was busy with some special projects.
Most of the people in the room had been hired by me, but had become used to taking their direction from Jeff or Alexander. Although I had remained active in many parts of the company, I had been careful to ensure that everyone saw Jeff as the one in control. For now, that had to change.
Each manager gave a brief update on his or her group’s progress and problems over the last week. As they made their presentations, a clear pattern began to emerge.
If the manager had been reporting to Jeff, he or she was focusing on Jeff’s priorities. If the manager had been reporting to Alexander, then Alexander’s priorities were dominant. If he or she had been still working under my influence, my very different priorities had come into play.
There was clearly a crisis of leadership. And for the time being, I was the one who needed to provide focus.
But that was a temporary situation. Neoforma was about to begin a formal, high-profile search for a new CEO. Jeff and I had always known that we weren’t the right guys to run Neoforma in the long run. We preferred to design and build rather than to operate. Neither of us savored power over others.
Once we filled the company’s current job openings Neoforma would have more than a hundred employees. We wanted to hire someone with experience running a larger company. And whoever that was would direct the company’s operations. I would be out of that role.
So after everyone had completed their status report, all eyes were on me. Decisions had to be made. There were too many projects under way. Some had to be postponed. Others had to be cut. Some of the decisions were easy, some were not.
Everyone knew my bias. They knew that I was obsessively focused on the capital equipment solution we were building. This project was code-named Picasso. I knew that many, if not most, of the managers believed that Picasso should be cut. I knew that I was biased.
Working privately in my office, I could indulge my biases. But in the role of the leader, I was uncomfortable with my bias, so I polled various people in the room, seeking some kind of consensus on how we should proceed. But consensus was impossible.
I either had to make the more popular decision to cut Picasso and alienate the people who had remained loyal to my original vision for the company, or I had to make the less popular decision to keep Picasso alive and alienate the others. If I made the former decision, I would reveal my weakness as a leader. If I made the latter decision, I would be showing my disregard for the advice of the majority of the managers I had hired. It was a classic leadership problem.
My concern for doing the right thing clouded my ability to see the real issue. I was going to disappoint people with either decision, but which decision I made was unimportant. What was important was that I make a prompt and clear decision.
This was a group of intelligent, driven people who wanted to do the best they could do. I had hired them for this reason. If I made an unpopular decision, they might grumble, but they would implement it with a passion. If I wavered or made no decision, they would lose their passion.
In my similar crisis of leadership fifteen years earlier, I had nothing to lose. This time I had everything to lose. I was afraid that the wrong decision might lead to failure—not just mine, but that of everybody in the room. I was afraid of losing my house and my family. And I was not used to being afraid. The fear obscured my sense of purpose and, ultimately, my projection of leadership.
I’d like to say that I rose to the occasion this time, as I had when there was nothing on the line. But, in an attempt to be fair to everyone, I came up with a weak compromise that satisfied and inspired no one. We’d keep the Picasso program going, but only allocate it just enough resources to stay alive. Sadly, my half-hearted decision conveyed uncertainty. The effect was immediate and deeply disheartening.
I stayed in the room after everyone had left. As I sat at the end of the now-empty table, I buried my head in my hands and contemplated the dreadful mistake I had just made. Instead of seizing this moment as a great opportunity for rejuvenation, I had turned it into a catalyst for disenchantment.
When I attempted to correct the errors I made that day, I made some progress, but there was no way to undo the damage. I might remain a spiritual leader in the company, but I could never again be its executive leader. My only consolation was that I had certainly set the stage for a new leader to come in and save the day.
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