Case question
An ICU Medical, teams haven't always been the answer. A maker of medical devices, the San Clemente, California, company was founded in 1984 by current chief executive officer Dr. Lopez. At first most of the major decisions were made by Lopez. Business was good-so good, in fact-that the company was ready for public offering by the early 1990s. The company products were in high demand, but dealing with that demand "was an overwhelming task for one entrepreneur CEO," states Lopez.
A solution to dealing with the increasing growth came to Lopez whiling watching his son play hocky. During a game, the opposing team has a star player who dominated his teammates and tried to make most of the play himself. His son's team, however, worked together as a group and overwhelmed the star player. Lopez clearly saw that "the team was better than one player." He decided to reorganize his company to rely on teams that would not merely share in the decision-making process, but instead would have full autonomy their own decision-setting their own meeting times, assigning their own tasks, and creating their own deadlines, and even deciding whether to form a team in the first place.
At that time, his company employed around 100 employees, but they weren't used to making decisions for themselves. Lopez put his new plan in place, telling his employees to form teams to come up with ideas to handle the increasing demand. At first, it didn't work as expected. Angered by the new team-based approach, the chief financial officer of the company quit. The new team weren't faring well either. According to Lopez, "nothing was getting done, except people were spending a lot of time talking." Confidently that team was the answer. Lopez persisted and instructed teams to elect leaders. Team guideline was put in place (e.g., "challenge the issue not the person"), and the company began using group rewards to motivate teamwork.
The new strategies paid off, employees began to enjoy working together and making decisions for themselves, and ICU was able to easily handle the increasing demand. Since then, ICU has continued to prosper. Currently the company employees close to 1500. The company stock price is six times higher than it was when the company first went public, and in 2006, revenue increased 28% to over $ 200million. Each year nearly 60 different teams, usually composed of five to seven members, finish projects. Those teams that are successful share in the $ 300 000 in team bonuses that the company allots annually.
Although teams at ICU have largely been beneficial, they are not without their problems. In particular the team based reward structure has sometimes created competitiveness and tension among employees. Colleen, who has worked on many teams at ICU over the years, recounts an incident where she refused to share a reward with coworkers who were not pulling their share. "you did nothing, I propose you get nothing." She informed them. The team members evaluated what each person had contributed to the project and agreed that those who did not contribute should not receive a bonus. In addition, although Dr. Lopez original vision was of teams that are completely autonomous, over the years the company has instituted more rules and policies, such as a 25 page hand book that tells teams how to operate. Although the goals of these rules is to help teams work together more smoothly, they take away some of the ability of teams to completely make their decisions.
Despite these potential downsides, Dr. Lopez isn't about to change his reliance on teams. His reason is simple: "Top-down decisions are frequently wrong."
Questions
1. What title do you suggest for this case?
2. How would you characterize the teams at ICU Medical Inc.?
3. Dr. Lopaz has instructed the teams to elect their leader. What is the possible stage of this level in group formation?
4. What are pros and cons of giving teams a lot of autonomy to make decisions?
5. Four contextual factors (adequate resources, leadership and structure, climate of trust and performance evaluation and reward systems) influence team performance. Which of these appear to be present in the above case? If present, are they supportive or unsupportive? How?
6. If you were to compose a team that will be given decision-making responsibility to solve complex problems, what types of members would you select in terms of abilities and personalities?
Hint: Refer your note and use electronic medias.