management power point presentation

OPD650 Unit 1 Individual Project INFORMATIONAL DOCUMENT 2

SUMMARY NOTES FROM FIRST MEETING: Ken has not worked with outside consultants in this firm but has worked with internal OD staff at previous companies and at BARTH Inc. He came in as president two years ago. This is his first time as COO and his first experience in growing a relatively new or emerging company. He has run larger units of several multi-nationals. There is no formal CEO. Ken reports to an external board, and the chairman represents the main investors: a group of three venture capital firms—two of which were started by the founders, Babcock and Haworth. The company was taken public five years previously. Ken was hired to replace the founder, who left after his 3-year contract expired. While a major shareholder, the founder declined to be a board member. He was not offered the position of chairman nor would the board give him the title of CEO, as he was spending too much time on other interests and did not want to give them up. Dr. Haworth’s close relationship with many of the executives has caused problems for Ken, especially with the board. Often the board asks questions of an operating nature indicating a problem exists before Ken knows of the situation from his executives. He feels his leadership is being questioned—unjustly. Many of the staff has worked with outside consultants, especially during the creation of the corporate culture initiative (which was linked to the company going public). While that had a positive impact, it was time consuming, and its value was not captured by specific measurable outcomes. The company has grown by an average of 12% a year, and its stock has leveled off. The trading has been between $35 and $40 a share for the last year after hitting $49 a share at its high, approximately nine months after Ken took over, coinciding with their third worldwide product launch, which was their most successful launch to date. Their research pipeline for products is strong (according to industry analysts), but cracks in their operational performance are showing. Their first two worldwide product launches were not profitable in all markets. While they propelled the company to a top three ranking in most markets, this is now slipping. Older products make up a majority of the sales, and the margins on these are not as high as the margins on the new products. The new generation of products offers great promise. They are truly innovative, but country managers are concerned they are too highly priced and will cannibalize their current product sales, forcing customers to use competitor products or opting for the generic versions of their current offerings. When these versions have been launched locally, they gained over 40% of the market share in year one—solely competing on price—and continued to make significant inroads each year thereafter. Within two years, patents for the 15 largest markets that the company has will expire, and it is expected that generics will be introduced at significant price discounts. The internal OD unit is strong and has a good record of improving teams, instituting total quality within manufacturing, and reengineering work processes within major functions. They have just begun working at a country level, and you expect they may have problems being successful with these teams. They have been less effective pulling together the regional business efforts and have failed whenever cross-functional efforts were implemented. (This is Ken’s assessment, not the assessment of the functional heads involved.) It is also clear from Ken’s discussions with his company’s internal OD consultants that they are frustrated by the lack of top down

OPD650 Unit 1 Individual Project INFORMATIONAL DOCUMENT 2

“buy-in” and involvement in change efforts. They also have raised a concern, suggesting the functional heads and country heads are not focused on “what really matters” to the firm as a whole. Ken is also concerned that the HR managers and staff development groups have been alienated by the OD unit. Ken strongly believes he has the support of the board to realign the operations and resolve the conflicts that are inherent in the goals and budgets submitted for approval. They have agreed with Ken’s suggestion to hold an off-site planning meeting. What Ken specifically wants from me is a proposal for that meeting. Some questions Ken raised and wanted addressed were as follows:

• What should the team prepare before coming to the session? • What information should we collect before planning the session? • Who should attend? Only direct reports? The Executive Committee and

their direct reports? • How can improvements to the business planning and goal setting process

be made? (Previously, it took too much time and the quality of the country plans varied from excellent to “horrendous” plus none of the consolidated regional plans met required strategic aims even after two or three revisions.) I can appreciate how frustrated the whole team was. During plan reviews, finance, regional managers, and executive staff repeatedly asked themselves such questions as “Why don’t they give us what we requested?” and “Doesn’t anybody understand our strategy and what we are trying to do?”

• What can be done to upgrade the leadership at the country level? • How should the functions and country operations interface with one

another? Can some guidelines be set so they understand when and how they need to share information as well as when they should work together?

• Finally, how and who should assess potential acquisitions or strategic alliances in terms of cultural fit and synergistic matching of capabilities?

• Can confidentiality be kept by the executive team? Will the board “take over” the process if they find out what is going on?