Steve Jobs, a driven young college dropout, co-founded Apple in 1976 at the age of 21.
He was part of the company’s remarkable road to success for seven years until his famous exit due to power and control clashes with John Sculley. Two years earlier Sculley, a successful CEO at Pepsi Cola Co., was brought in by Jobs as CEO at Apple for his marketing skills to make the consumer products more profitable and manage Jobs. However, it became difficult to keep Jobs under control. He was a perfectionist that would drive others to work in unethical circumstances and no mercy on work that was under par for him. Not some one you might readily want to work for.
The board had to decide to sideline him. After a dramatic confrontation between Jobs and Sculley, Jobs left for a couple days of and said he’d be back. Only to find that the Apple board had changed the organization chart with no space for Jobs left in it.
When Sculley came in, he brought in the motto of competing with IBM and reaching to customers at home and schools apart from professionals. He reorganized the company that was divided based on products. He made the division based on functional units. Having product-based units had caused competition among these teams and their market audience turned out to be same due to lack of communication among the divisions. By having functional based divisions, Sculley brought in stability and harmony among teams. In his tenure, he was able to increase Apple’s revenue from $800 million to $8 billion. He had an analytical and traditional approach to being a CEO.
However, projects started failing. There were too many projects running simultaneously and a lot of capital went in them even if they did not give in good returns. That’s when Apple’s downfall started. In 1993, Sculley resigned. Shortly after the company had another two CEOs and after Gil Amelio, the 3rd CEO of Apple, the company had the lowest stock price in 12 years. Maybe they should not have fired jobs after all?
This is where Jobs stepped in as interim CEO and changed the company around. It is said that had Steve Jobs not taken the reigns in his hand in 1997, Apple would have vanished. He came in and first halted the failing projects and those which had no market value. Jobs was a minimalist in his approach and gave a lot of importance to aesthetics. He wanted everything perfect. He came with a vision to “change the world” with Apple. This time he was more experienced than what he was a decade ago, but no less focused and intolerant of anything that came in the way of that focus.
After leaving Apple, Jobs went traveling, searched his options and ultimately started NeXT. They produced personal computer with high-end industrial design. Only the software was successful though.
Sculley took over Apple and led the company to newer heights. Jobs took over when other CEOs before him had failed to get the company back on its feet. Sculley came in at the right time and later when Jobs came back he had gotten more management and executive experience. He stayed true to his own style and original vision that resulted in the products we see today. What is required of a CEO is the vision of change. Jobs breathed the motto to “change the world” into Apple from the start and made that part of it’s DNA. He is a co-founder of Apple, but the company might have just remained “Camp Runamok” (as it was called) had Sculley not come along. It is all about the right style of management at the right time. We believe they both served well and played an important part in taking the company to where it is today.
By: Gauravee Gandhi, Surry J. Mowery & Jeroen van den Eijkhof
In most of the cases, public sector organizations have had a tendency to adopt management-inspired top-down changes due to larger diversity of influential decision-makers at the top with system-wide perspective and power to bring change. Organizations have made recognizable progress in their process of transformation while they had planned a phased, sequence of activities. The emergent change approach however, was encouraged when companies were not reliant on defined goals, but to increase their organizational capability.
With this comparative analysis of two case studies, we offer some clarification on Barnes (2004b) thoughts where organizations in public sectors under different contexts have successfully managed and implemented change using both planned and emergent approaches. The organizations in focus are the UWV organization in the Netherlands and MagoTaplan – a manufacturing firm in Cuba.
Case 1: The UWV is an administrative for the Dutch collective employee benefit regulations. UWV initiated a VizIer project in March, 2002 (VizIeR stands for Voorzieningen Inkoop Reïntegratie, or provisions purchasing reintegration). The project intended to start a new organizational group within UWV that will improve the purchase process of provisions and essential services from external suppliers. These services will support disabled workers, employers and others that need them. The success metrics defined for this project was that this organization has to be up and running by September 2003, and all the UWV offices should be able to deal with at least 90 per cent of applications within six weeks. At UWV, managers effectively directed the planned changes while also encouraging collaboration and feedback into their planned process. The collapses in the emergent change process was resolved by top management intervention.
Case 2: MagoTaplan is a medium-sized, Cuban rubber goods manufacturing firm, near Havana. The entire Cuban political and economic system had suffered due to fall of USSR. The introduction of new government reforms, profound modifications in foreign investment policies, escalating tensions between Cuban and US government had highly de-stabilized the operations in institutional environment. MagoTaplan had to compete in an open world market with the foreign firms and meet the international expectations for quality and price. Locally, it had to follow government regulations in expenditure and selling, use national currency for transactions and adopt different evaluation criteria which would be controlled under fluctuating administration. Managers at MagoTaplan now had to find a new way to bring the changes within the organization to sustain in challenging economic and political condition in a socialist country of Cuba. This provided impetus to the managers at MagoTaplan to leverage radical changes along with attracting, motivating and retaining talent for improving the organization’s capability.
Based upon our analysis, our recommendations for change management processes for public organizations are as follows:
1) Quickly identify the situation and the requirements for change
2) Commitment of leadership to equally blend elements of planned and emergent change
3) Understand the needs of organizational restructuring and how the change will develop new roles, positions, and departments.
– Nishant Satanekar, Ajay Pillay, Paul Simons
By Che-Wei Hu, Meng-Chi Lee and Zhenhua Wang
A winner-take-all market is a market in which the leading player captures the most profits. Most businesses are seeking a position in that market. There are three characteristics that businesses can use to find trace of the emergence of such market. However even within the winner-take-all market, business should apply different strategy while in the different phases of the market.
The Three Characteristics of a Winner-take-all Market
• A Change in the Basis of Competition
• Customer Lock-in
• Competitor Lock-out
Entry Strategy for a Winner-take-all Market
• Phase I: Changed basis for competition
In this phase, a new category of offering which meets a new type of demand or which reframes competitive criteria is provided by the entering player. To survive in this phase of the winner-take-all market, the new player should maintain its ownership of the standard and keep it proprietary. (McGrath, 2008)
• Phase II: Horizontalization
In phase II, Leading providers overshoot or a public standard is established. Customers defect to solutions that are cheaper, simpler or more flexible. Meanwhile, interfaces and platforms are increasingly standardized and new services are built on top of these standards. To survive in this phase, the business has to dominate a platform or component standard necessary to other players. (McGrath, 2008)
• Phase III: Bullets to the combatants
In the last phase, most solutions have been commoditized and only advantages lie in areas where solutions are not good enough. To survive in this phase, the business needs to help customers compete or conserve more effectively than they could if they didn’t buy from you. (McGrath, 2008)
Case 1: Dropbox – the Rising Star in the Online File Hosting Service Market
Being a late starter to enter the competing and nearly saturated web-based file hosting service market, Dropbox is a rising star in this field. What make Dropbox different from other competitors is its conveniences and rapid development on new features. Dropbox adopts lean startup development process which combines agile software development and customer development. Instead of going through the whole waterfall model to launch a fully featured new product, Dropbox incrementally deploys new features right after they are ready. Dropbox successfully changed basis of the online file hosting competition, the milestone it set up was solving the problem that users don’t have to keep track of which files were stored where especially nowadays everyone has more than one device that can store files.This is also a customer lock-in for Dropbox per se. Since it is really convenient to use, it’s likely that “just throw in Dropbox” becomes an everyday habit of its user. Once files in the dropbox accumulate, users might just stick to its service, seeing that folder a part of routine life.
Case 2: Tencent’s Operation Model in China
Another example is in the Chinese Internet industry. Tencent, today’s one of the largest and most used Internet service portals in China.The biggest change Tencent has made is it changed the way Internet businesses compete in China. Today, it takes advantage of its ample capital with the huge user base. Today Tencent provides its users with almost all kinds of Internet services from IM, email, blogging, microbrogging, social networking to B2C , C2C shopping, online auction, online payment, even online games, music download, online stream video, etc. and etc. By providing such a wide range of products, Tencent could make sure the cost for a user to move to another service provider is too high to be acceptable even in the case when its services are just as good as or even a little bit worse than its competitors’.Due to Tencent’s huge capital, it can develop almost all kinds of tools, games and services it intends to. It actually doesn’t have to do much R&D itself since whenever there is a new relevant service on the market.Tencent takes advantage of its ample capital and huge user base to quickly and cheaply launch new products. These products, in return, help Tencent to weave a net to capture end users, making them stick to those products since those products are not only closely related to each other, but also connect to the friends and families of the user.
Case Comparison
If we do a careful exam on both cases, we can find that although both companies are of different sizes, in different region and different phrases of development, they share a lot of in common to take advantage of a winner-take-all market. We can also tell that both companies are under different phases of the winner-take-all market.
For Dropbox, it apparently is in the first phase of the winner-take-all market – it created a new category of offering for the customer that create real values for them and it is definitely using its proprietary approach as its main strategy.
For Tencent, it is in the second phase of the winner-take-all market – it is using its existing resources (i.e. ample capital and large user base) to secure existing and new users by providing them with integrated Internet services and make them stick to those services. Meanwhile, other competitors cannot easily enter the realm because Tencent’s capital and user base cannot be easily duplicated.
Both companies have pursued a customer value center approach while providing their users with service that are flexible and useful, which is the most critical factor for any business in the service industry.
So what are your thoughts? Do you agree A Change in the Basis of Competition, Customer Lock-in and Competitor Lock-out are the three basic characteristics of a winner-take-all market? Can you provide more examples on businesses in a winner-take-all market and compare their characteristics? Thanks.
How psychology helps your managerial decisions in M&A?
The change of the organizational culture of a company after the merger is as hard as changing a well-established brand image. Our paper looks into the cultural differences that pose serious business risks for any company engaged in mergers and acquisitions, and we give our recommendations on how to deal with organizational culture issues during different phases of the merger based on the cross-analysis of two cases.
The two cases are the merger of Daimler-Benz and Chrysler and the acquisition of Lehman Brothers by Nomura Holdings, a Japan-based major financial holding corporation.
Daimler proposed the merger for winning new market segments, without diversifying the Mercedes brand. On the other hand, Chrysler needed huge investment to stay competitive so that it could best Ford and GM. The merger was announced as “the merger of equals” and preceded in a timely fashion.
As we know, Germans are famous for rigid planning and “play-by-the-book” working style. On the contrary, Americans are known for their entrepreneur spirit and innovation-promoting work environment. A major obstacle for the management after the merger was how to help people from hugely different culture work together.
For various reasons, Daimler, who became the dominator of the merger, decided to impose its culture on the partner. Chrysler people had to change their way of working and communicating, feeling that they were marrying up to Daimler.
The merger ended up with the break up into Daimler and Chrysler, leaving both parts in deep trouble. And the failure in handling the cultural issues was considered one of the main reasons of the failure of the merger.
In the Lehman Brothers-Nomura case, Nomura Holdings acquired bankrupted Lehman Brothers to achieve its long-standing ambition to play as a strong player in the investment banking business. Its intention was to implant Lehman Brothers’ “testosterone-fueled bankers” culture to Nomura. [1]
To make bankers from Lehman Brothers stay, Nomura announced to create a bonus pool of more than $1 billion, and offered to pay Lehman investment bankers the equivalent of bonus in 2007, in cash. [2] As a part of payment system reform, Nomura offered the performance-based pay system to Japanese investment banking staff as well. However, complaints were raised from domestic retail department, saying that new payment system was offered only to the investment bankers. [3]
As a result of the merger, in 2009, 19 out of 23 senior managing directors of Nomura are non-Japanese, and in May 2010, it nominated former London Stock Exchange (LSE) chief executive Dame Clara Furse and ex-British Airways chairman Lord Colin Marshall to join its board of directors, as the first non-Japanese board members.[4]
If you are in Daimler or Nomura’s shoes, what would you chose to do to deal with the culture issues?
Following are some questions that may help you to analysis the issue:
Is a clash of interests and depression of morale inevitable when a new culture is introduced after merger?
How to align your long-term interest with the merger of the culture?
How is the merger of culture in merger cases different from that of in acquisition cases?
Is the merger of the equals more helpful in culture change than acquisition?
What are the consequences if the change of culture is forced within an organization in a timely fashion?
Can experience in the change of culture from one industry be borrowed and used by another?
Fast or slow, which is better in term of the culture transition?
How to communicate the culture change with employees, upfront or on-the-go?
We try to answer these questions when we look into the cases, and here is our Conclusion.
Merger and acquisition is a very difficult process with a low success rate. As far as cultural issues are considered, it is hard to provide a silver-bullet that could be. However, there are some key indicators throughout the change process that can prove to be valuable. Such as, in any merger one of them will be a dominant participant based on their market standing. If the more powerful organization in the merger has dominance, then at the same time the onus of their mergers success also lies on its shoulders. It is upon the organization, to carefully utilize the potential strengths and leave aside the weaknesses. In addition, People factor is always meant to deal with utmost care; they determine the fate of the merger. Nomura realized this and succeeded whereas Daimler failed at the very same point. Business goals always come first. But business is driven by people. One used to power to merge the other used to people to merge.
Reference:
[1] Unknown. (2007, January 10). CEO Richard Fuld on Lehman Brothers’ Evolution from Internal Turmoil to Teamwork. Knowledge@Wharton. Retrieved November 10, 2010 from http://knowledge.wharton.upenn.edu/article.cfm?articleid=1631
[2] Saigol, L. (2008, September 23). Nomura rescues Lehman’s European unit. Financial Times. Retrieved from http://www.ft.com/cms/s/0/795de6ba-8974-11dd-8371-0000779fd18c.html#ixzz15Hpm42Gu
[3] Tudor, A. (2009, July 29). Nomura Stumbles in New Global Push. The Wall Street Journal. Retrieved from http://compliancex.typepad.com/thewallstreetjobreport/2009/07/nomura-stumbles-in-new-global-push.html
[4] Nakamoto, M., & Tucker, S. (2010, May 17). Nomura looks beyond Japan for new board. Financial Times. Retrieved from http://www.ft.com/cms/s/0/221a3420-618c-11df-aa80-00144feab49a.html
[5] Frank Gibney Jr,. Joseph R. Szczesny., . (1999, May 24). Daimler-Benz-Chrysler: Worldwide Fender Blender. Times.com. Retrieved from http://www.time.com/time/magazine/article/0,9171,991030-5,00.html
By Swarnika L Mehta, Jitsuko Hasegawa, and Xiaopu Yu
In the global dynamic economy, consulting services sometimes are extremely necessary due to the skills and knowledge they offer. Consultants have in-depth knowledge of certain areas, yet they also have broad knowledge as their consulting experience is accumulated. Therefore, for any organization, to hire consultants is to empower with additional skills, intelligent advice, and even outsider perspective. Nevertheless, there are disadvantages associated with hiring consultants. The top disadvantage is consultant service fee. This paper focuses on analyzing different cases, in which consultants led organizations into disasters, and cases in which consultants have helped organizations achieve huge benefits. We compare and contrast these cases and evaluate the strengths and weaknesses of consultants that led a case to failure or success. To overcome these challenges, we present some evaluating factors for the clients to consider the type and the benefits of hiring consultants.
We have discussed four important case studies highlighting two different roles of consultants – consultants as doctors and consultants as Engineers. The first case study is about the famous PricewaterhouseCoopers and Satyam Corporations scandal, where in PwC was involved in some fraudulent activities. PWC either could not identify the mismatched number on Satyam’s balance sheets or purposely ignored it. The second case is similar to first one where KPMG conducted an auditing fraud for its client Countrywide by getting involved in changing the companies’ accounts and tax sheets. These consultant roles are doctors which assist a company on regular basis with some domain knowledge expertise. The third and fourth case study talks about technology consulting. Deloitte and Los Angeles Unified School District had a big legal battle over a big settlement which Deloitte had to pay LAUSD for failing in their technical project. Deloitte miserably failed to implement a SAP system for an academic pay roll system, a classic example of failed collaboration efforts. The last case is Accenture feud with Centrica, where Accenture failed in their effort to create a billing system for Centrica. Due to Accenture’s lack of responsibility when the defect showed up, it ended up in a nasty legal feud. Eventually, Accenture ended up paying a huge settlement. From all these cases, we talk about some insights that we learnt from each case study.
Furthermore, we also have also discussed some case studies which show the role of consultants in implementing solutions which benefited the companies in some way or the other. The cases that we have discussed are Google and Conyer Dill & Perman case which shows how Conyer Dill & Pearman, a legal advising firm, helped Google cut its tax-rate from 35% to 2.4% using the ‘Double Irish’ and ‘Dutch Sandwich’ strategy. Second case study is Helsana Versicherungen AG and Accenture Consulting that shows how Accenture helped Helsana, a health care industry, implemented a data warehouse that was compliant with other existing technologies used in the company. Also, this system improved the company’s overall productivity as the executives and sales staff used this system to predict certain factors affecting the business. Finally we discuss Booze Allen Hamilton and Defense Information System Agency (DISA) case which shows how Booze Allen Hamilton has worked through the implementing solutions for DISA in developing Digital Video Broadcast satellite which helps war fighters to send video and data transmissions using satellite resources.
Based on the seven case studies discussed above, in the next section we form a discussion that suggests the factors that client must keep in mind before hiring a consultant. The factors discussed are:
1. Subject matter expertise
2. Portfolio
3. Trust
4. Detail oriented
5. Leadership and collaboration
6. Client relations
7. Think ahead
We conclude by saying that consultants play vital roles in the growth of companies. As demonstrated above, companies have gained huge profits and benefits from hiring consultants, since they provide specialized knowledge and expertise. Consultants also bring innovative ways to look at the problems, for example: the Google Double Sandwich. Yet, it is not always the promise that consultants bring good things for any organizations. We suggest that any organization evaluate the seven proposed factors before hiring consultants. The seven proposed factors serve to reduce risks that an organization faces when hiring the consultants.
The case is written by Ruchi Junnarkar, Tien Nguyen, and Mansi Sharma
By Norah Abokhodair, Colin Anderson, and Emily Oxenford
In software industry, the proper methodologies such as plan-driven, iterative model, and agile development promise the high quality software, increased customer satisfaction, and stability. However, to adapt the development methodology, the software company needs to carefully evaluate the internal and external conditions. In this paper, we provide two case studies- IBM and Jharna Software. These two companies respectively use agile development and waterfall development to successfully satisfy their customers. We analyze the important factors for them to employ the development methodologies. To extend these factors further, we apply the development methodology into different types of project beyond software project. We also provide our ideas about transmission between plan-driven and agile development during developing the project.
It’s always a controversial topic of determining whether one software development methodology is better than another in terms of its feasibility, efficiency and quality of outcome. The reason being that software development process is an extremely complex work that requires strong technical talent and effective communication to succeed. Along the way, there are two famous models, which are used in most of software projects: Waterfall and Agile.
The waterfall model is a traditional development method used in almost all projects at the early stage of software industry. It defines a set of standard work procedures for the purpose of managing software development projects effectively. It was prevalent and favored since it had been brought up, as it’s both understandable for practitioners at all levels and easy to implement. In 2001, a new concept came out – the agile model for software development. The proponents of the agile module believe that they found a better ways of developing software by using the lightweight methods.
It’s safe to say both methods have their advantages and drawbacks since we’ve seen companies tapping into both of them now and then. And there were failures and glories with both of them too. So what should be a manager’s decision if he was faced a choice between the waterfall method and the agile one? What would be the essential factors determining the choice? How would a leader manage an internal change from one method to the other successfully? To make the decision even more complicated, changes around the industry have already exerted significant impact on software development. Externally, the globalization trend brought in software companies in countries like Indian and China who are willing to provide quality software development with competitive price; internally, the software world is demanding more efficient and scalable services than ever before. By taking those factors into consideration, our paper discusses two cases in which companies choose to user different software development methods, and then propose our analysis and reflections based on the cases.
By Po-Chun Liao, Shawn Liang and Tony Jiandong Hu
When it comes to change management, effective communication is one of the most significant factors which determines the success of the change being originated .This gains even more significance if the change under consideration is change due to acquisition of a culturally different company where there is considerable scope for miscommunication and misinterpretation due to the differences in the work cultures and the verbal identity adopted by each organization.
The case study analysis examines two extreme cases which deal with acquisitions of companies which are culturally different from the acquiring company .In one case, the acquisition went through smoothly due to a well-defined communication plan while in the other case, the lack of a clearly defined communication plan hindered the cross cultural integration process resulting in distrust and lack of mutual respect and an eventual breakdown in intra-organizational coordination .Given below is a brief synopsis of the two cases:
The first case which deals with Federal express’s acquisition of Flying Tiger line shows how an effective communications strategy helped make the acquisition process go through smoothly despite the huge cultural and organizational differences between the organizations (Federal express was a young company which had a flat hierarchy while Flying Tiger line was a older company with a strict hierarchical structure where each organizational unit was unionized and the compensation structure was determined by the union negotiations).
The second case dealt with the famous DaimlerChrysler “merger” which was considered to a fairy tale wedding as it seemed like both companies had the potential and the background to take advantage of each other’s strong points to establish a successful and working relationship. However the lack of strong and comprehensive corporate communication plan to help handle the strong cultural differences and the unwillingness of the management in trying to bring the whole organization under one unified work environment with a common communication and interaction methodology led to considerable losses to the tune of almost $512 Million in the third quarter of 2000. Declining sales and future losses eventually led to Daimler pay Cerberus $650 million in 2007 to take Chrysler and its associated liabilities off its hands which was a total contrast to the $36 Billion initially paid to acquire Chrysler in 1998.
The comparative case study analysis gave some key insights into what companies can do to ensure that the required information is communicated to all the employees as soon as possible and how companies can use communication as a medium of melding culturally diverse companies together to create a homogeneous blend. The analysis also gave key insights into how communication can pay a key role in unifying the companies under one common compensation package as it was significant to establishing a cohesive work environment.
In closing,I would like you to look at what you think defines a strong communication strategy during an acquisition and provide your inputs on that .I would also be really interested in seeing your inputs on how you think cultural clashes and inter-organizational structural differences affect the way a communication strategy is defined and implemented.
By Mervin F Johnsingh
There are, at present, three distinct generations in the American workplace: the Boomers, moving steadily towards retirement but still commanding a great deal of senior and executive management; Generation X, the current backbone of the workplace; and Generation Y, the present rising star. The challenge, then, is for members of one generation to learn to work with — to manage up or down, as the case may be — older and younger generations.
Our first case study presents a brash young Generation Y employee, Josh, who bypasses the hierarchy to present his ideas straight to the CEO while skimping on the tedium of his main duties. Our second case study tells the story of a senior manager, Bob, who was once the most successful salesman in the company. But he has failed to adapt to the changing market, and has an abysmal sales performance now. Each case highlights the challenges faced by their managers who know they need to actively mentor them, but are unsure how to approach the generational chasm.
In comparing the cases, we saw that each employee had a great deal of energy and value to bring to the company, but they would need to be managed with the same amount of energy to really contribute to the company’s goals. For a twist on the cases, we imagined both employees working at the same company and considered the potential benefits of the older employee, Bob, mentoring the younger one, Josh. Bob’s enthusiasm for the job, interpersonal skills, and loyalty to the company are just what Josh needs to develop. Each employee is well-worth the investment – they both have years of potential work ahead of them and could accomplish great things for the company with them.
So, what do you think? What are the pros and cons of Bob mentoring Josh? If you’re part of Gen Y, would you appreciate having a mentor? Could you foresee any potentially negative outcome?
Ahsan Ali
Ross Donaldson
Sanjeevi Sturges
Change Management applies everywhere. Be it on a football ground or in a closed cubicle. And every company has outstanding minds driving the organization to the path of success. Leading such minds has never been an easy affair for a manager. These extremely gifted professionals can often navigate a once-ailing company into a lucrative venture. Often such professionals are notorious in their outside world and consider work protocols as a hindrance to getting their job done. Top talents in an organization feel that the leaders are beholden to them and not the other way round. Moreover, they always have an option outside the organization to choose lucrative offers giving them a strong sense of independence. Eventually, the performance curve of these stellar minds drops down for a period of time, leading to criticism and depression for them as well as the organization. These are several issues that a manager has to tackle while leading a team having superstars. As a manager, you have to maintain the organizational culture and success while making sure that you do not lose the key players of the game. There have been contradicting theories on tackling superstars: either by letting them use their way of work or by encouraging them but making sure that rules are the same for everyone within an organization. And at times, situation demands to get rid of those talented minds if they are not willing to work for the good of organization.
Case DescriptionDavid Beckham was kicked out of Manchester United club in 2003 by the manager, Sir Alex Ferguson. He was a star player of the team and had scored dozens of goals for Manchester United and English national team. His off-field involvements and focus on celebrity status led to his loss of concentration in the game. The second case explores the relationship of Wayne Rooney and Sir Alex Ferguson. Wayne Rooney, another stellar player of Manchester United club, recently created controversies about leaving Manchester United due to several reasons like strict rules by Sir Ferguson, unable to foresee the future of the club and financial offers from other competitive clubs. Even after his poor performance in 2010 World Cup and numerous controversies, Sir Ferguson eventually got Rooney to sign the contract with Manchester United till 2015. Sir Bobby Robson, a famous footballer said – “How do you make a millionaire sweat? – ask Ferguson”.
Why did Sir Ferguson use two different strategies for Beckham and Rooney?
Both of them had made incredible contributions to the club in their pasts but showed poor performance later. Their poor performance triggered the need of change but the question that comes to our mind is – Why did Sir Ferguson plan to kick out Beckham but kept Rooney despite of his controversial media statements?
Based on the two cases, what are the key things that are important in handling superstars in your organization?
Do you evaluate the companies current situation against the stars’ performance? How do you motivate such employees to stay with the organization?
Our Thoughts:
Sir Ferguson changed his strategy based on his judgment of the star as well as the context. The changing nature of the football industry made him never stop moving forward. His approaches of leading the stars were always aligned with the team’s strategy. When a star brings negative impact to the team and is no longer indispensable for the team’s future, he considers selling him whatsoever. When a star is valuable for the team’s future strategy, he would lead him with motivation, protection and more space. Managers in industries can learn from this approach about taking a proactive and sensible approach to handle stars. They should evaluate the contributions of that employee, reasons for his poor performance and the current state of the organization. Evaluation of these factors would help a manager to understand the context and take a right decision. Therefore, implementing right strategy in right situation is important to lead through a change where talented minds are involved.
By: Shirish Munshi and Ke Ding
Managing Information for Innovation 