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Case study: New Blood Saving or Devastating

by on March 1, 2010

 Executive Summary:

One of the main responsibilities of a manager is making decisions based on a set of information that is incomplete, unreliable, unrelated to each other and sometimes distracting. Each decision that a manager makes could lead to the organization’s long-term viability at the expense of the short-term costs and risks. A challenge each manager faces is determining how to predict these effects, and then making the best possible decision. This case describes a difficult situation that Jake, the CEO of the Vizia, faced. Vizia’s major project, the development of a prototype of an operating system for Shimada’s next generation CT scanner, has recently faced new challenges.  Drake, the Chief Development Officer, had proposed the acquisition of another software company, Nsoft, and the utilization of its latest technology of image processing to improve the performance of the prototype that Vizia had developed.  During an executive meeting, other executives expressed their concerns about how the decision might impact the company. Jake listened to various opinions, and then had to make a decision quickly to help the company get out of this difficult situation.

Xiaopu Yu, Zheng Zhong, Jitsuko Hasegawa

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From → Coursework

3 Comments
  1. Mansi Sharma permalink

    The proposals from Vizia and OSG, to develop an operating system for Shimada’s next generation CT scanner have been neck to neck. In order to win the contract from Shimada, it is important for Vizia to make sure that their operating system has something extra to offer. Incorporating extra features in addition to the existing requirements of Shimada is a good proposal made by Drake. As seen in the case study, Drake offers to acquire NSoft company for three major reasons. Firstly, they can improve their current OS for CT scanner by incorporating the algorithms of NSoft. This collaboration will help them achieve more in less time. Additionally, the features of NSoft’s products will help Vizia even in future. Secondly, Drake feels that if they acquire NSoft, Vizia can use NSoft’s current media popularity to increase their market share. Thirdly, because the algorithms feature of NSoft is compatible with the current OS of Vizia, the integration of features would be simpler.

    Due to these reasons, it is natural to feel that acquiring NSoft is a good decision to make. However, if we evaluate more carefully, we notice from Vizia’s standpoint that there are other factors we need to consider before making a decision.

    In our opinion, Vizia should not go ahead with acquiring NSoft. This is due the four major reasons:

    1.Budget standpoint – as it was raised in the meeting, the calculations show that the project is tending towards being over the budget. If Vizia acquires NSoft, it will further increase the total amount of money spent for this project. It might not be worth to spend so much money for this purpose at this stage.

    2.Employee’s standpoint – Firstly, it is important to consider the emotions of employees of both the companies. The current employees will feel insecure due to new employees. Whereas, the acquired employees will be stressed as they have to accustom to a new work environment. Also, there is a possibility of conflict between the current and acquired employees. All these may lead to delay and inefficiency in working. Secondly, both companies have different cultures and policies, the employees’ approach to execute tasks may significantly different. A training period is required for developing members from different groups. This will further raise the overall budget.

    3.Motivate programmers – As mentioned by Stacy, the young programmers have creative opinions about this project. Drake should propose to use Stacy’s reputation with senior developers and young programmers to motivate them and improve internal innovation.

    4.NSoft’s position – The CEO of NSoft, James, mentioned that he wanted to sell his company as he intended to enter academia again. However, that might not be the actual reason. There could be a possibility that there are internal problems within NSoft which Vizia is unaware of.

    Overall, Vizia should just focuses on improving internal innovation for making its proposal for Shimada’s CT scanner stronger than OSG. This way they can control their budget and prevent it from crossing over the line. It will also curb the potential problems of employee collaboration from two different companies.

  2. General Perspective:
    My executive perspective in analyzing this Business Case is the recognition that the root issue about innovation and its role in productivity. “Invention is an idea made manifest, while an innovation is an idea applied successfully in practice, resulting in incremental and emergent or radical and revolutionary changes in thinking, processes, products, or organizations” (Tim Moon 2009). Put another way, invention is about “process” (including product), while innovation is about “culture” ( changes in attitudes, ideals, and behaviors). Productivity, like invention, is also about “process”. But productivity improvement is about innovation (product, process, engagement method, and/or organizational method) — which is about culture.

    When a problem presents with both process and cultural issues, it falls into a category that Tim Moon (MSIM alum) and I call a “wicked problem”. Thus, “wicked problems” are problems that simultaneously involve both “process” and “cultural” issues — where from the “process” side there doesn’t seem to be sufficient time, information, and/or resources to adequately address the critical issues; and where from the “cultural” side any solutions will necessarily be highly “cultural” in nature — requiring individual awareness of and changes in physical, emotional, cognitive, and spiritual models and behaviors (lifestyles) at both the individual and collective levels. They are “wicked” problems because the solutions must address consideration of imminent extinction of some sort — like losing a critical contract and starting down the steep path to insolvency.

    The Problem Context:
    The recognition of, and the solving of “wicked problems” is not limited to the “C-Suite” (CEO | COO | CFO | CIO | CTO | . . . ). In fact, in my experience the most likely place for “wicked problems” to become visible is on the “Frontline” (design, production, sales, customer service, . . . ) — where productivity measurements are also most likely to be visible. And inevitably, the most likely successful solutions will require engagement, acceptance, and implementation from the “Frontline”. This appears to be the situation described in the business case, where the “Frontline” is the Vizia Image Processing Development Team led by Stacy — bearing in mind that Drake is part of the “C-Suite”.

    The presenting elements of the “wicked problem” in the business case are:
    • Process Issues —
    o Insufficient Time — scheduled release date of “Prototype”; and the timing on acquiring Nsoft
    o Insufficient Information — algorithms for improving image processing speeds; and the applicability of Nsoft technology
    o Insufficient Resources — burn-rate overrun on “Prototype”; and the potential additional human capital needed to develop algorithms for improving image processing speeds
    • Cultural Issues — the rift between the senior developers (who are familiar with the Vizia R&D and integration processes), and the younger programmers (who want to explore new theories and new development and implementation strategies); and the awareness and information “gap” between the “Frontline” and the “C-Suite”

    The Solution Context:
    It should be clear that any successful solution will require integration of both the Process Issues (optimization of business processes, practices, and tools), and the Cultural Issues (changes in attitudes, ideals, and behaviors). Failure to achieve this integration will manifest as a schism that essentially cleaves the pursuit of efficiency (process) from the pursuit of effectiveness (culture). And the results will be disastrous: process improvements that are defeated by the “culture” of the organization and the ineffectiveness of the project teams; and cultural change (OD) efforts that simply won’t translate into operational (“bottom-line”) benefits.

    I believe that the optimal way to quickly achieve a successful solution, will be to create an “Opportunity Analysis Team” (OAT) representing the key internal Stakeholders of the project — consisting of the “Frontline” leader (Stacy) and the “C-Suite” (Drake and Jake). The OAT would meet immediately — and then regularly until the Vizia Board of Directors meeting in two days — to collectively assess the Process and Cultural Issues and discern optimal solutions for addressing this “wicked problem”. They would ask the whole-system of key Stakeholders such as James Stone (Nsoft), and key members of Nsoft and Vizia staffs (including other “C-Suite” members) — to be available for telephone/Videocon consultations. This is a “time-is-of-the-essence” scenario.

    In addressing the “wicked problem”, the OAT must not unwittingly assume that there is a uniformity of ideals, motives, customs and norms, responses, behaviors, and understandings — among the whole-system of Stakeholders. Such an assumption could cause the OAT to miss the observation that an authentic protagonist in one context may in fact be acting as an antagonist agent — vice versa. It simply might not be obvious that there could be an intense “separateness” (actual diversity) of perceptions driving each context.

    The critical activity of the OAT is to discern and strategize based on — “Destabilizing Competitive Intentions”:
    * Multiple Competing (Possibly Polarized)
    — Ideals (“Normal” & “Under Stress”) among Stakeholders
    * Multiple Competing (Possibly Polarized)
    — Motives (“Needs & Greeds”) among Stakeholders
    * Multiple Competing (Possibly Polarized)
    — Customs & Norms among Stakeholders
    * Multiple Competing (Possibly Polarized)
    — Responses (physiological | emotional | cognitive | spiritual) among Stakeholders
    * Multiple Competing (Possibly Polarized)
    — Behaviors (“Normal” & “Under Stress”) among Stakeholders
    * Multiple Competing (Possibly Polarized)
    — Understandings (Interpretations) among Stakeholders

    The inquires the OAT should explore in addressing the “wicked problem” are:
    • Process Issues —
    o Insufficient Time — scheduled release date of “Prototype”; and the timing on acquiring Nsoft
     How can a quick acquisition of Nsoft actually improve schedule performance?
     How might a quick acquisition of Nsoft hinder schedule performance?
     How can establishing a new Advanced Concepts Team (ACT) consisting of Vizia employees (both young and senior) who want to explore new theories and new development and implementation strategies — actually improve schedule performance?
     How might establishing the ACT hinder schedule performance?
     Is an exclusive “Joint Partnership” arrangement between Vizia and Nsoft possible, and would it actually improve schedule performance?
    o Insufficient Information — algorithms for improving image processing speeds; and the applicability of Nsoft technology
     What theoretical models (new and proven) are available that address algorithms for improving image processing speeds?
     What people are most knowledgeable about the theoretical models (new and proven)?
     What is required (policy | organization | processes | culture) to make these knowledgeable people available to the project?
     How likely is it that Nsoft technology will sufficiently address algorithms for improving image processing speeds?
     How can the product differentiation value between “image speed” and “image quality” be determined and validated in a trade-off analysis? Ask Ted? Ask ___?????
    o Insufficient Resources — burn-rate overrun on “Prototype”; and the potential additional human capital needed to develop algorithms for improving image processing speeds
     What are the current month-to-month burn-rate projections to completion date, and how are they substantiated?
     How many people with what KSAOs ( Knowledge, Skills, Abilities and Other attributes) are required to complete the project on-time, on-budget, on-requirements — and are these people currently available to the project?
     Is image speed optimization a “new” requirement, or is it already within the current budget scope?
     What would the month-to-month burn-rate projections to-completion-date be with establishment of an ACT?
     What would the month-to-month burn-rate projections to-completion-date be with acquisition of Nsoft?
     What would the month-to-month burn-rate projections to-completion-date be with a joint partnership arrangement with Nsoft?
    • Cultural Issues — the rift between the senior developers (who are familiar with the Vizia R&D and integration processes), and the younger programmers (who want to explore new theories and new development and implementation strategies); and the awareness and information “gap” between the “Frontline” and the “C-Suite”
    o Proven Methods Team (PMT) consisting of Vizia employees (both young and senior) who focus on use and refinement of theories, and development and implementation strategies
     How would separating PMT and ACT increase employee satisfaction, productivity and delivery?
     How would separating PMT and ACT decrease employee satisfaction, productivity and delivery?
    o Advanced Concepts Team (ACT) consisting of Vizia employees (both young and senior) who want to explore new theories and new development and implementation strategies
     What cultural issues might emerge by establishing ACT ?
     What additional management-leadership infrastructure would be required for Act — how much would it cost and how would it be funded?
    o Nsoft Team as either an acquisition by Vizia
     What cultural issues might emerge by acquiring Vizia?
     What additional management-leadership infrastructure would be required for supporting the Nsoft acuisition — how much would it cost and how would it be funded?
    o Nsoft Team in a joint partnership arrangement with Vizia
     What cultural issues might emerge by establishing a joint partnership arrangement between Vizia and Nsoft?
     What additional management-leadership infrastructure would be required to support the joint partnership arrangement — how much would it cost and how would it be funded?

    Many of the answers to these questions are going to be “best-available” information during the allotted timeframe. There is no certainty involved in solving “wicked problems” — emergence due to unknowns and unknowables is the rule. As the science fiction writer Richard K. Morgan says, “You take what is offered, and that must sometimes be enough.” This is always the dilemma of the CEO.

    A Parting Thought:
    The job of the CEO is to sense into the whole-system of internal and external human ecosystems — to discern what is existent, arising, and becoming possible. This discernment is gridded against the flux of current and emerging ideals (values-in-practice), views, intentions, visions, goals, objectives, strategies, tactics, and resources. And the resulting activity ideally manifests wisdom, compassion, and skillful means as efficiency, effectiveness, and organizational resilience. So for me, the ideal CEO must live in the following two inquiries in sensing-into both the whole-system of internal and external human ecosystems:
    1. What becomes possible, or can be done more efficiently and effectively together — than can be accomplished separately?
    2. What are the activities — important issues and solutions — where there is readiness and benefit from the collective support of our ecosystems of organizations and communities?

    Mark R. Jones.
    Chief Executive Officer
    The Sunyata Group
    PO Box 58788
    Renton, Washington
    USA 98058-1788
    Phone: 425-413-6000
    e-Mail: mark.r.jones@sunyata.ws
    Info@: http://www.sunyatagroup.ws

  3. Executive Response:

    Apparently, it is not worthwhile for Vizia to acquire Nsoft. What Jake is facing is people’s issue, not an issue of technology, even though it looks like it is. Jake needs to make his decision to 1) figure out its workable plan with a timeline for how to win the contact with Shimada, and 2) figure out its long term strategy how to bring the Vizia Company back to its market share. Acquiring Nsoft and bring in new team and technology might be a choice, but considering the cost and risks, it doesn’t make sense to be the best solution at all. Vizia Company needs to emphasize on it core competence and strength in the image construction algorithm. More importantly, Vizia needs to make the best use of its younger programmers: letting them try new ideas they have, allowing them to search new theories, and giving them a chance to apply their ideas to Vizia’s system. I would encourage Jake to clear out the obstacles in front of the younger programmers. Perhaps, Stacy could play a better role in the development team for this prioritized project.

    Lizhong Geng

    Country Head

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