Difficulty:
Easy
Average Score:
94%
Case Study: The vice president of operations of Cellular Systems Inc., Catherine Brown, had convened one final planning session with the general manager, Jim Jackson, and the directors of the five largest business units in the company, as Cellular Systems had been putting together a new long-term growth plan called "20/20 Vision," and in this meeting Brown hoped to finalize the financial targets for the 20/20 growth initiative; the group sat around a large, rectangular table in a conference room at the corporation's head offices in Silicon Valley, where posters on the walls illustrated their most recent advertising campaigns and reminded them that they were working in the fastest moving and most innovative technology center in the world, with the charismatic CEO- known for his intense demeanor and "take no prisoners" attitude- smiling down from each poster. "Who could disagree with that in principle?" David Sanford asked, having been director of the car stereo business for ten years and known for his directness, continuing, "In practice? I don't think so. We should set goals that can be achieved. Otherwise we discourage our frontline managers and we set ourselves up for failure." "There's some merit to that," Jim Jackson said, who during his six-year tenure as general manager had proven skillful in handling both the executive staff and his own directors, adding, "There's a danger, as well. If we send the message that we're okay with baby steps, we'll continue to lag behind the market leaders. That's not good enough. We'll never make 20/20 Vision happen if we take baby steps." David Sanford looked across the table at Jim Jackson and asked, "Why weren't any directors or front-line managers involved in setting the five billion dollar goal? I've been in this company a long time. I've seen what happens when you give people unrealistic goals. They quit on you and find a job across town. Why don't we create some relatively easy benchmarks at the start to get some early wins? If we build confidence among our business teams early in the program, we can always increase the goals as the program progresses." "You're right; we did not seek input from the directors when we set the goal," Catherine Brown said, explaining, "The 20/20 Vision target is a stretch goal. It's meant to make our business units number one in sales in every market that we serve. I'm not going to apologize for the way we developed the goal. It reflects the thinking of the CEO about what needs to be done to provide continuing growth in dividends for our shareholders." Jackson nodded in agreement, stating, "We all need to face the reality sooner rather than later that we have to dramatically improve our sales growth if we are going to become the market leader. That means our managers will have to perform at a higher level. There's no escaping it." "We have to think about the shareholders' expectations too," Sanford said, warning, "If we publicly set challenging goals and then fall short, there will be lots of angry shareholders at our board of directors meeting asking some hard questions." "What about Company A?" Jennifer Bennett asked, noting, "They didn't get to be number one in the market by setting easy goals. They moved from just a 30% share five years ago, to over 60% market share today. In my own business, we're at 24% and my goal is to move us to 50% over the next two years." "Let's not forget that your mobile device business is the most vibrant of our five markets," Sanford said, adding, "And now that Phone Business Inc. has fallen on hard times, your business unit draws in a lot of their old customers. The rest of the company doesn't have the same competitive landscape." "Does anyone want to suggest an intermediate set of goals to the CEO and board?" Catherine Brown asked, pointing up at the posters above her chair, concluding, "We know where we have to go. So do we start with aggressive milestones? Or do we ease into it?" The room fell silent.