Workplace Dynamics

A few months ago, I spoke to a client who was let go of her job. She was the CEO of a large product company and had only been in the role for less than two years. Under her watch, the company had lost its market share by about 30 percent to a competitor and also lost a third of its revenue. What happened?

A few months before she had come into office, a vendor had been collaborating with the company to build a technology (a chip) for one of their core products. When the technology was done (late 2007), the CIO and the executive team decided not to pursue it saying “they did not need it.”  After all, they were doing very well, selling products and making money. The frustrated vendor went to the competitor and sold it to them. This happened, incidentally, right after my client—the new CEO—came on board.

A few months ago, after two years of losses, the company decided to purchase its competitor’s product—literally from a public store at the mall—and dissect it, only to learn that the technology they turned down (the chip) was in fact the one the competitor was using. The CEO wanted to hold accountable the people who were responsible for (1) turning away the technology, and (2) for taking so long to figure out the reason behind the losses. This seems like a classic business school case study, only it just happened and it is still unraveling.

Because the CEO was new and the “culprits” were incumbents, the CEO became the convenient scapegoat. The executive who made the decision to turn down the technology was just announced as the new CEO and his first order of business was to put a core team in place to help them get out of the slump. Who was on that core team of executives? All the same incumbents that created the situation.

What is the lesson here?  I’d welcome your thoughts…

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One response to “Workplace Dynamics

  1. Just confirms my own opinion that the vast majority of officers in any company make the overwhelming majority of their decisions based on short term job preservation, quarterly statements and their own perceptions of what others think than taking risks to preserve and grow their companies.
    By and large they ignore any long term visions they may have because they are surrounded by other middle level managers who aren’t encouraged or empowered to execute on any visions they may have.
    Also reinforces the sad state of mediocrity on which we now seem to thrive and reward.

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