Business Communication Discussion Question

C A S E S T U D Y

With a group of talented, hard- working people, why isn't this team working^

The Team That Wasn't

by Suzy Wetlaufer

The last thing Eric Holt had ex- pected to miss about New York City was its sunrises. Seeing one usu- ally meant he had pulled another all nighter at the consulting firm where, as a vice president, he had managed three teams of manufactur- ing specialists. But as he stood on the balcony of his new apartment in the small Indiana city that was now his home, Eric suddenly felt a pang of nostalgia for the way the dawn plays off the skyscrapers of Manhat- tan. In the next moment, though, he let out a sardonic laugh. The dawn light was not what he missed about New York, he realized. What he missed was the feeling of accom- plishment that usually accompanied those sunrises.

An all-nighter in New York had meant hours of intense work with a cadre of committed, enthusiastic colleagues. Give and take. Humor. Progress. Here, so far anyway, that was unthinkable. As the director of strategy at FireArt, Inc., a regional glass manufacturer, Eric spent all his time trying to get his new team to make it through a meeting without

the tension level becoming unbear- able. Six of the top-level managers involved seemed determined to turn the company around, but the sev- enth seemed equally determined to sabotage the process. Forget cama- raderie. There had been three meet- ings so far, and Eric hadn't even been able to get everyone on the same side of an issue.

Eric stepped inside his apartment and checked the clock: (inly three more hours before he had to watch as Randy Louderbaek, FireArt's charismatic director of sales and marketing, either dominated the group's diseussion or withdrew en- tirely, tapping his pen on the table to indicate his boredom. Sometimes he withheld information vital to the group's debate; other times he coolly denigrated people's comments. Still, Eric realized. Randy held the group in such thrall because of his dynam- ic personality, his almost legendary past, and his close relationship with FireArt's CEO that he could not be ignored. And at least once during each meeting, he offered an insight about the industry or the company

22 DRAWINGS BY DAVID CROLAND

C A S E S T U D Y

that was so perceptive that Erie knew he shouldn't he ignored.

As be prepared to leave for the of- fice, Eric felt the familiar frustration that had started building during the team's first meeting a month earlier. It was then that Randy had first in- sinuated, with what sounded like a joke, tbat he wasn't cut out to be a team player. "Leaders lead, follow- ers...please pipe down!" had heen his exact words, although he had smiled winningly as he spoke, and the rest of the group had laughed heartily in response. No one in the group was laughing now, though, least of all Eric.

FireArt, Inc., was in trouble-not deep trouble, but enough for its CEO, Jack Derry, to make strategic repositioning Eric's top and only task. Tbe company, a family-owned maker of wine goblets, beer steins, asbtrays, and other glass novelties had succeeded for nearly 80 years as a high-quality, high-price producer, catering to hundreds of Midwestern clients. It traditionally did big busi- ness every foothall season, selling commemorative knickknacks to the fans of teams such as the Fighting Irish, the Wolverines, and the Gold- en Gophers. In the spring, tbere was always a rush of demand for senior prom items-champagne gohlets em- blazoned with a school's name or beer mugs witb a school's crest, for example. Fraternities and sororities were steady customers. Year after year, FireArt showed respectahle in- creases at the top and bottom lines, posting $86 million in revenues and $3 million in earnings three years before Eric arrived.

In tbe last 18 months, tbough, sales and earnings had flattened. Jack, a grandnephew of tbe compa- ny's founder, tbought be knew wbat was happening. Until recently, large national glass companies had heen able to make money only through mass production. Now, however, thanks to new technologies in tbe glassmaking industry, tbose compa- nies could execute short runs prof- itably. They had hegun to enter FireArt's niche. Jack had told Eric, and, witb their superior resources, it was just a matter of time before they would own it.

"You bave (me responsibility as FireArt's new director of strategy," Jack had said to Eric on his first day. "That's to put together a team of our top people, one person from each di- vision, and bave a comprehensive plan for the company's strategic re- alignment up, running, and winning witbin six months."

Eric had immediately compiled a list of the senior managers from bu- man resources, manufacturing, fi- nance, distribution, design, and mar- keting, and had set a date for the first meeting. Then, drawing on his years as a consultant who bad worked al- most solely in team environments, Eric had carefully prepared a struc- ture and guidelines for the group's discussions, disagreements, and de- cisions, which he planned to propose to tbe members for their input he- fore tbey began working together.

Successful groups are part art, part science, Eric knew, but be also be- lieved that witb every memher's full c o m m i t m e n t , a team proved tbe adage that the whole is greater tban tbe sum of its parts. Knowing tbat managers at FireArt were unaccus- tomed to tbe team process, however, Eric imagined he might get some re- sistance from one or two members.

For one, he had heen worried ahout Ray LaPierre of manufactur- ing. Ray was a giant of a man who bad run tbe furnaces for some 35 years, following in his father's foot- steps. Altbough he was a former high school foothall star who was known among workers in the facto- ry for his hearty laugh and his love of practical jokes, Ray usually didn't say much around FireArt's execu- tives, citing his lack of higher educa- tion as the reason. Eric bad thought the team atmosphere might intimi- date him.

Eric had also anticipated a bit of a fight from Maureen Turner of the de- sign division, who was known to complain that FireArt didn't appre- ciate its six artists. Eric had expected that Maureen migbt have a chip on

Suzy Wetlaufer is a Boston-based writer. Formerly, she was with Bain &) Company, where she worked with manufacturing clients on strategy formulation.

HARVARD BUSINESS REVIEW Novt-mbtT-December 1994 23

E 5 T U D Y

her shoulder about eollaborating with people who didn't understand the design process.

Ironically, both those fears had proved groundless, but another, more difficult problem had arisen. The wild card had turned out to be Randy. Eric had met Randy once be- fore the team started its work and had found him to be enormously in- telligent, energetic, and good-hu- mored. What's more. Jack Derry had confirmed his impressions, telling him that Randy "had the best mind" at FireArt. It was also from Jack that Eric had first learned of Randy's hardscrabble yet inspirational per- sonal history.

Poor as a child, he had worked as a security guard and short-order cook to put himself through the state col- lege, from whieh he graduated with top honors. Soon after, he started his own advertising and market re- search firm in Indianapolis, and within the decade, he had built it into a company employing 50 people to service some of the region's most prestigious accounts. His success brought with it a measure of fame: articles in the local media, invita- tions to the statehouse, even an hon- orary degree from an Indiana busi- ness college. But in the late 1980s, Randy's firm suffered the same fate as many other advertising shops, and

If Randy can't help you, no one can," CEO Jack

Derry had told Eric.

he was forced to declare bankruptcy. FireArt considered it a coup when it landed him as director of marketing, since he had let it be known that he was offered at least two dozen other jobs. "Randy is the future of this company," Jack Derry had told Eric. "If he can't help you, no one can. I look forward to hearing what a team with his kind of horsepower can come up with to steer us away from the mess we're in."

Those words eehoed in Erie's mind as he sat, with increasing anxi- ety, through the team's first and sec- ond m e e t i n g s . Though Eric had

planned an agenda for each meeting and tried to keep the discussions on track, Randy always seemed to find a way to disrupt the process. Time and time again, he shot down other people's ideas, or he simply didn't pay a t t e n t i o n . He also answered most questions put to him with maddening vagueness. "I'll have my assistant look into it when he gets a moment," he replied when one team member asked him to list FireArt's five largest customers. "Some days you eat the bear, and other days the bear eats you," he joked another time, when asked why sales to fraternities had re- cently nose-dived.

Randy's negativism, however, was coun- tered by occasional comments so insightful that they stopped the conversation eold or turned it around entirely - com- ments that demonstrated extraordi- nary knowledge about competitors or glass technology or customers' buying patterns. The help wouldn't last, though; Randy would quickly revert to his role as team renegade.

The third meeting, last week, had ended in chaos. Ray LaPicrre, Mau- reen Turner, and the distribution director, Carl Simmons, had each

planned to present cost- cutting proposals, and at first it looked as though the group were making good progress.

Ray opened the meet- ing, proposing a plan for FireArt to cut through-

put time by 3% and raw-materials costs by 2%, thereby positioning the company to compete better on price. It was obvious from his detailed presentation that he had put a lot of thoLigbt into his comments, and it was evident that he was fighting a certain amount of nervousness as he made them.

"I know I don't have the book smarts of most of you in this room," he had begun, "but here goes any- way." During his presentation, Ray stopped several times to answer questions from the team, and as he went on, his nervousness trans-

formed into his usual ebullience. "That wasn't so bad!" he laughed to himself as he sat down at the end, flashing a grin at Eric. "Maybe we can turn this old ship around."

Maureen Turner had followed Ray. While not disagreeing with him - she praised his comments, in fact - she argued that FireArt also needed to invest in new a r t i s t s , pitching its competitive advantage in better design and wider variety. Unlike Ray, Maureen had made this

Ironically, the people Eric thought would be problems v^eren't. Randy vŝ as the problem.

case to FireArt's top executives many times, only to be rebuffed, and some of her frustration seeped through as she explained her reason- ing yet again. At one point, her voice almost broke as she described how hard she had worked in her first ten years at FireArt, hoping that some- one in management would recognize the creativity of her designs. "But no one did," she recalled with a sad shake of her head. "That's why when I was made director of the depart- ment, I made sure all the artists were respected for what they are - artists, not worker ants. There's a differ- ence, you know." However, just as with Ray LaPierre, Maureen's com- ments lost their defensiveness as the group members, with the exception of Randy, wbo remained impassive, greeted her words with nods of en- couragement.

By the time Carl Simmons of dis- tribution started to speak, the mood in the room was approaching buoy- ant. Carl, a quiet and meticulous man, jumped from his seat and prac- tically paced the room as he de- scribed his ideas. FireArt, he said, should play to its strength as a ser- vice-oriented company and restruc- ture its trucking system to increase the speed of delivery. He described how a similar strategy had been adopted with excellent results at his last job at a ceramics plant. Carl had

24 HARVARD BUSINESS REVIEW NovcmbcT December 1994

joined FireArt just six months earli- er. It was when Carl hegan to de- scribe those results in detail that Randy brought the meeting to an un- pleasant halt hy letting out a loud groan. "Let's just do everything, why don't we, including redesign the kitchen sink!" be cried with mock enthusiasm. That remark sent Carl back quickly to his seat, where be halfheartedly summed up his com- ments. A few minutes later, he ex- cused himself, saying he had another meeting. Soon the others made ex- cuses to leave, too, and the room be- came empty.

No wonder Eric was apprehensive about the fourtb meeting. He was therefore surprised wben he entered tbe room and found tbe whole group, save Randy, already assemhled.

Ten minutes passed in awkward small talk, and, looking from face to face, Eric could see bis own frustra- tion reflected. He also detected an edge of panic - just what he had hoped to avoid. He decided he had to raise tbe topic of Randy's attitude openly, but just as he started. Randy ambled into the room, smiling. "Sor- ry, folks," he said lightly, holding up a cup of coffee as if it were explana- tion enough for his tardiness.

"Randy, I'm glad you're here," Er- ic hegan, "hecause I think today we should hegin hy talking ahout the group itself-"

Randy cut Eric off with a small, sarcastic laugh. "Uh-oh, I knew this was going to happen," he said.

Before Eric could answer, Ray LaPierre stood up and walked over to Randy, bending over to look him in the eye.

"You just don't care, do you:" he began, his voice so angry it startled everyone in the room.

Everyone except Randy. "Quite the contrary-I care very much," he answered hreezily. "I just don't he- lieve this is how change should he made. A hrilliant idea never came out of a team. Brilliant ideas come from brilliant individuals, wbo then inspire others in the organization to implement them."

"That's a lot of hull," Kay shot back. "You just want all the credit for the success, and you don't want to share it with anyone."

Fortune Magazine September 20. 1993

"EVA is today's hottest financial idea and getting hotter." The EVA Management Guide! The Quest for Value is the originiil source iind definitive guide to

Stem Stewart's EVA™ framework for financial management and

incentive compensation. Adopted by such leading companies as

Coca-Cola and AT&T, EVA™ {or '̂ Economic

Value Added") focuses an entire

organization on increasing shareholder

v;due. As an indispensable guide for

senior managers, The Quest for Value

shows how to re-engineer a

company's financial niiuiagemenl

system to introduce more account-

ability and incentive for creating

shareholder value. By addressing

such issues as capital allocation,

corporate governance, executive compensation,

(|Uidit)' and re-engineering. The Quest for Value presents a

comprehensive new paradigm for niiuiagement.

Ib order The Quest for Value. plfUNC st-nd tliivk or money order to Stern Stewart M a n a g e m e n t .Services. Ann.:V Butler:

Please send copies at S4'S.(K) each

— Total for Books

Shipping & ilandling ($S per book)

Sales Tax iH.2=i% only liir NY- residents)

Total

Name

Title _

(Company

Address _

Plume

crftlil ciird orders a

• • • ' ' « ' . . •

Stern Stewart & Co. 40 West 57th Street

New York, NY 10019 Tel:212-261-0b00 Fax:212-581-6420

L'V.V" SfiTiccs: Valtie-Added Financial Manajjement

Incenlive Compensation Corporate Financial Advison

C A S E S T U D Y

"That's absurd," Randy laughed again. "I'm not trying to impress anyone here at FircArt. I don't need to. I want this company to succeed as much as you do, but I believe, and I believe passionately, that groups are useless. Consensus means medi- ocrity. I'm sorry, but it docs."

"But you haven't even tried to reach consensus with us," Maureen interjected. 'Tt's as if you don't care what we all have to say. We can't work alone for a solution - we need to understand each other. Don't you see that?"

The room was silent as Randy shrugged his shoulders noncommit- tally. He stared at the tahle, a blank expression on his face.

It was Eric who broke the silence. "Randy, t b i s is a team. You are part of it," he said, trying to catch Randy's eye without success. "Per- haps we should start again-"

Randy stopped him hy holding up his cup, as if making a toast. "Okay, look, I'll behave from now on," he said. The words held promise, but he was smirking as he spoke t h e m - s o m c t b i n g no one at t h e table missed. Eric took a deep breath be- fore he answered; as much as he wanted and needed Randy Louder- back's help, be was suddenly struck by the thought that perhaps Randy's personality and his past experiences simply made it impossible for him to participate in the delicate process of

ego surrender that any kind of team- work requires.

"Listen, everyone, I know this is a challenge," Eric began, but he was cut short by Randy's peneil-tapping cm the table. A moment later, Ray LaPierre was standing again.

"Forget it. This is never going to work. It's just a waste of time for all of us," he said, more resigned than gruff. "We're all in this together, or there's no point." He headed for the door, and before Eric eould stop him, two others were at bis heels.

HBR's cases are derived from the experiences of real companies and real people. As written, they are hypothetical, and the names used are fictitious.

Why Doesn't This Team Work?

Seven experts discuss what teamwork takes.

ION R. KATZENBACH is a director of McKinsey &) Company and co- author, with Doughi.s K. Smith, of The Wisdom of Teams: Creating the High-Performanee Organization (Harvard Business School Press, 1993. HarperCollins, 1994). Their video. The Discipline of Teams, was published by Harvard Business School Management Productions.

Eric has his hands full with this team, particularly with Randy. In fact, a skeptic might well advise Eric to throw in the towel now hecause it

Real teams do not have to get along. They have to get things accomplished.

is elear that Randy can-and might- destroy the team for good. But there are other factors hindering this team besides Randy, and unless Eric rec- ognizes and addresses them, the team will not make progress, what- ever its makeup. n\There is no evidence of a common commitment to a team purpose or a working approach. Eric is trying valiantly to hold the members to an agenda based on the CEO's charge: "to have a comprehensive plan for strategic realignment." At best, that's a vague directive. Consequent- ly, the members do not understand

the implications of tbose words, draw any meaningful focus from them, or recognize any need to work together to make "strategic realign- ment" a performance reality. \I\The "rules of the road" are ex- tremely unclear. While the team has a good mix of skills and experience, tbe members do nut know how each is expected to eontribute, how they will work together, what they will work on together, how the meetings will be conducted, or how each per- son's " n o n t e a m " responsibilities will be handled.

riEric's consultant "team" experi- ence is misleading. In the past, Erie was really a part of a consultant "workinggroup," which is complete- ly different from a team. For one thing, consultants generally have prior experience dealing with the client assignments they obtain. For another, consultant working groups expect to have leaders,- they're usu- ally formed with the understanding that one person knows best how to accomplish the task at hand effi- ciently with minimal risk. Finally, most of the real work in such a

26 PORTRAITS BY CHUCK MORRIS

Copyright 1994 Harvard Business Publishing. All Rights Reserved. Additional restrictions may apply including the use of this content as assigned course material. Please consult your institution's librarian about any restrictions that might apply under the license with your institution. For more information and teaching resources from Harvard Business Publishing including Harvard Business School Cases, eLearning products, and business simulations please visit hbsp.harvard.edu.