Embracing A Schism to Clarify Our Mission
In my first reflection on our 25 years in business, I recalled our first “near death” experience. I outlined how this crisis led us to differentiate ourselves from our primary customers by becoming HIPAA experts and developing a software development team. At the time, these adaptations enabled us to avoid the potential end of our business, but we didn’t see how these decisions set the stage for internal divisions.
As Net Friends approached its 10th year in business, the company had become alarmingly fractious. There were over 30 employees towards the end of 2008, but we were not working together. About half of us provided onsite IT support (primarily at Duke), and the other half developed applications and databases. Normally support folks and developer folks can peacefully coexist and cooperate, but Net Friends still didn’t have a defined company vision or mission, much less one that either of these two groups could champion. Adrift and increasingly at odds with one another, the company culture became increasingly toxic.
Between the years 2007 and 2008, there were unpleasant occasions when a developer and a support technician would shout at each other, and several people in the company openly disliked each other. What kept us going was a true sense of purpose that our customers gave us. Unfortunately, Net Friends was at a low point in giving its employees a reason to work as a team towards a greater goal. Deprived of a vision, we were lost.
The situation was so bad that the only viable solution was to split the company in two.
The decision was made in December 2008 and went into effect on January 1, 2009. The developers transitioned to the company SciMed Solutions, Inc., and all the IT support team and administrative staff remained at Net Friends. It took several months into 2009 before all the details were worked out, since there just wasn’t enough time in the few weeks remaining at the end of the prior year to transition everyone over. I remember having to issue two W-2s at the end of 2009, because there was an interim company established that we were all under for the first 3 months before we “resumed” being part of the new Net Friends from April 2009 onward.
Another strange element of this schism was that SciMed Solutions did not have any official administrative services, and relied on Net Friends to manage all payroll, billing, benefits, and payables for the next several years. The breakup was largely a structural split at the organization level more than anything else, as we continued to work in the same building in downtown Durham and with the same back-office environment for the next decade. This really addressed the major points of contention that led to the company split, and it allowed both companies to refocus on what they did best.
If I could go back to 2003, or 2004, or even as late as 2005 or 2006, different decisions could have been made that wouldn’t have necessitated a company split.
It would have required some intentional organizational changes, forming a coherent company vision earlier, and making some strategic investments that now seem obvious but at the time likely would have been too risky to make. I don’t have any regrets though about how things turned out, since the focus that Net Friends has gained since 2009 has been so crucial to our growth.
Go to Part 3 and read about the "Dark Side of High Growth"
Overview of "Reflections on 25 Hard Won Years" Series
Part 1: Our First Near Death Experience
Part 2: Embracing A Schism to Clarify Our Mission (You Are Here)
Part 3: The Dark Side of High Growth