GlobalTech

Player’s Guide

Contents Within this Player's Guide you'll find: the GlobalTech case study, a section for taking interview notes, and a detailed list of all the tactics available to you in the simulation.

last revision: February 24, 2010 © ExperiencePoint Inc. All rights reserved.

www.experiencepoint.com, support@experiencepoint.com

CASE STUDY

GlobalTech: Navigating Change 1

The Early Years 2

Transition in Leadership 3

A Changing Market 4

The Current Situation 5

Financials: Income Statements 6

Key Figures in the Company 6

Organization Chart 7

INTERVIEW LIST 8

TACTICS LIST 11

Author’s Note: The GlobalTech Case provides a snapshot of a company at a critical time in a particular industry. The case reinforces just how quickly times change. Think back to the mid-1990s. Technologies such as GPS and the Internet were just starting to get mainstream traction. Today, both of these technologies are everywhere. In fact, we are often left to wonder how we would live without them!

This is the pace of change that organizations today are challenged to navigate. Will GlobalTech make it? That’s up to you!

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CASE STUDY

GlobalTech: Navigating Change “…Gagnon recognized GlobalTech's survival was dependent upon the welfare of his customers - the local electronics manufacturers - and he sought to develop, manufacture and market his own products…”

GlobalTech was founded by Maurice Gagnon in the spring of 1975 to meet the growing electronic assembly demands of high-tech manufacturers in the local area. By the early 1980s, GlobalTech had grown to 40 employees and had built a reputation as a quality assembler of low-volume, highly-specialized electronic components for local military manufacturers. GlobalTech was by all accounts "quite a profitable and tightly run shop". Despite this early success, Gagnon recognized GlobalTech's survival was dependent upon the welfare of his customers - the local electronics manufacturers - and he sought to develop, manufacture and market his own products. In the early 1980s Gagnon was introduced to Brian Johnson, a senior research scientist at the National Research Council. At the time, Johnson had made significant breakthroughs on a new satellite technology that enabled individuals to pinpoint their exact geographic coordinates. Johnson was looking for a partner interested in commercializing this global positioning system (GPS) technology. GlobalTech had the manufacturing expertise Johnson was in search of, and Johnson’s GPS technology would give Gagnon his own product to take to market.

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CASE STUDY

The Early Years “…DND was interested in supporting the development of the GPS technology for use in aircraft, naval vessels and possibly for land vehicles. Gagnon and Johnson both recognized that the military establishment was keen to integrate this new technology into its transportation infrastructure…”

Over the next couple of years, Gagnon secured financing to build and staff an R&D department around Johnson. He also hired some experienced sales personnel. Johnson stayed on at the NRC where he solidified his relationship with his primary funding source - the Department of National Defense (DND). DND was interested in supporting the development of the GPS technology for use in aircraft, naval vessels and possibly for land vehicles. Gagnon and Johnson both recognized that the military establishment was keen to integrate this new technology into its transportation infrastructure. Johnson eventually joined GlobalTech as a 40% equity owner and the company's first vice-president of Research and Development. He brought with him a small group of scientists that he had worked with in the past. GlobalTech now had the R&D department that Gagnon had envisioned only two years prior. Working closely with employees from manufacturing and actively seeking input from military customers, R&D was quick to develop a first generation design from Johnson's original prototype. By the mid-1980s, GlobalTech had secured its first military contract - supplying 45 global positioning systems to a manufacturer of "search-and-rescue" helicopters. In short time, GlobalTech built a reputation as one of the world's leading manufacturers of rugged, all-weather global positioning systems. During this period GlobalTech won several awards recognizing both its engineering prowess and manufacturing quality. The partnership had grown very profitable.

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CASE STUDY

Transition in Leadership

“A group of employees...used the confusion surrounding the leadership transition to push for plant unionization...The vote was unanimously in favour of unionization.”

Gagnon slowly scaled back his involvement in the company. His health eventually compelled him to step aside as President and CEO, and he subsequently appointed Johnson to the position. Although he retained majority ownership of GlobalTech, Gagnon reduced his involvement to the position of Chair of the Board of Directors. Johnson was immediately faced with a major human resource challenge when a group of employees, led by Robert Brown, an electronics technician in the manufacturing department, used the confusion surrounding the leadership transition to push for plant unionization. Gagnon's tough and often confrontational management style had created tensions on the plant floor that had been growing for several years. The vote was unanimously in favour of unionization. Amidst this internal chaos, GlobalTech nevertheless continued to thrive. The company had grown to over 120 employees and it was now recognized as one of the premier manufacturers of global positioning systems in the world. Its product line continued to boast cutting edge technology and its advertising brochure listed numerous customer references to the "bomb-proof" quality of its products. GlobalTech remained committed to developing products for the military market as this segment continued to account for over 97% of the company's total revenues. The dynamics of the marketplace, however, were changing. Military contracts started to peak and with the end of the cold war and as a "New World Order" emerged, defense spending in many countries was slashed. Johnson understood these changing dynamics: "I knew that if we were going to survive in the 1990s, we would have to do something different."

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CASE STUDY

A Changing Market “The commercial market for GPS technology was still young... If this commercial orientation was going to be our future, and at the time I wasn't convinced it was, then we needed to shift our focus…”

When asked to reflect on the state of his company during this time, Johnson replied: "The commercial market for GPS technology was still young. A number of companies had sprung up to address the perceived future GPS needs of the general public. But from our perspective, their technology was quite primitive. Their strategy was to package basic technology … product features our military products offered years ago … surround this with a nice looking console and slick interface, and sell it for $2,500. We were used to producing cutting edge GPS technology that would start at $25,000 and climb to $100,000. If this commercial orientation was going to be our future, and at the time I wasn't convinced it was, then we needed to shift our focus quickly." With military contracts continuing to decline and the commercial market starting to grow, Johnson made two key strategic decisions. Recognizing that GlobalTech had little experience in developing or marketing products for the commercial sector, he lured Jennifer Smith, an accomplished engineer and product manager from the telecommunications industry to head up the R&D department. Johnson's second move was to strengthen the company's marketing department. Prior to this point, marketing was focused on procuring military contracts. The department had very little experience with commercial customers. To address this weakness, Johnson brought in another outsider, Catherine Lalonde, a marketing executive from the software industry. Lalonde's mandate was to build a strong team and develop key distribution channels around the commercial market.

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CASE STUDY

The Current Situation “GlobalTech lost $732,000, its first loss since the year it was founded. Last year, GlobalTech lost a further $1.63 million... forced the company into a series of austerity measures - laying off employees and reducing departmental budgets.”

The demand for personal global positioning systems was starting to gain momentum. Individuals were purchasing GPS units for their sailboats, private airplanes, and for other general adventuring activities. Two companies had emerged as industry leaders: NaVisionTech and Sateye International. GlobalTech meanwhile had only 6% of the total commercial market for GPS. Both competitors had entered the commercial market well before GlobalTech and had built solid brands. They produced attractive and competitively priced GPS products and were known to introduce new products at a rate twice that of GlobalTech. Jennifer Smith was recently promoted to a newly created position: Executive VP Technology. Her new mandate was to better integrate the efforts of R&D, Marketing and Manufacturing to produce more commercially-oriented products. The VP R&D vacancy was filled by distinguished GlobalTech scientist Scott Bell (See Exhibit 1: GlobalTech's Organizational Structure). Two years ago, GlobalTech lost $732,000, its first loss since the year it was founded. Last year, GlobalTech lost a further $1.63 million (See Exhibit 2: Income Statements). This situation has forced the company into a series of austerity measures - laying off employees and reducing departmental budgets. Forecasts for next year were unavailable at the time of this report's preparation.

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CASE STUDY

Financials: Income Statements (1990-1995, $ thousands)

Key Figures in the Company

Maurice Gagnon Chair of the Board

Brian Johnson President & CEO

Robert Brown Union Representative

Jennifer Smith VP Technology

Cathy Lalonde VP Marketing

Scott Bell VP Research & Development

1990 1991 1992 1993 1994 1995 REVENUE 14,000 13,500 12,000 10,700 10,000 9,500

COST OF GOODS 6,860 6,075 5,640 4,922 4,300 4,275

GROSS MARGIN 7,140 7,425 6,360 5,778 5,700 5,225

EXPENSES 3,940 4,800 3,760 4,578 6,300 6,725

OPERATING INCOME 3,200 2,625 2,600 1,200 -600 -1,500

DEPRECIATION 140 104 106 103 110 106

PROFIT BEFORE INTEREST 3,060 2,521 2,494 1,097 -732 -1,628

INTEREST 22 23 18 21 22 22

PROFIT BEFORE TAX 3,038 2,498 2,476 1,076 -732 -1,628

TAXES 1337 1140 1100 410 0 0

DIVIDENDS 500 0 0 0 0 0

PROFIT AFTER TAX 1,201 1,358 1,376 666 -732 -1628

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CASE STUDY

Organization Chart

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INTERVIEW LIST

Please use the space below if you would like to take notes during the interview process.

Administration Maurice Gagnon | Chair of the Board Notes:

Brian Johnson | President & CEO Notes: Jennifer Smith | VP Technology Notes:

Guy Tremblay | VP Human Resources Notes:

Ann Price | Personnel Manager Notes: Cheryl Stewart | VP Finance Notes: Fred Williams | Accounts Manager Notes:

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INTERVIEW LIST

Marketing Catherine Lalonde | VP Marketing Notes: John Simons | Marketing Coordinator Notes: Roger Thomas | Military Market Manager Notes: Sam Seto | Commercial Market Manager Notes:

Manufacturing Richard Wright | VP Manufacturing Notes: Ralphy Jones | Shop Supervisor Notes:

Jane Cowan | Quality Assurance Manager Notes:

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INTERVIEW LIST

Rob Brown | Union Representative Notes:

Research and Development Scott Bell | VP Research & Development Notes:

Ganesh Seth | Technology Manager Notes:

Seanna Grey | Military Development Notes: James Clarke | Commercial Development Notes:

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TACTICS LIST Build and execute a change plan at GlobalTech by selecting from the following list of tactics. * denotes ‘How’ tactic (additional options provided that specify ‘how’ to implement)

* Appoint Core Change Team | Entire Organization | 3 weeks | $ 40,000 Build a project team to lead and coordinate the change process.

Benchmarking | Managers | 2 weeks | $ 2,000 Arrange for senior managers to tour several local organizations who have been successful commercializing new technologies.

Briefing on Vision and Strategy | Managers | 1 week | $ 2,000

Bring in managers and directors for an extensive briefing on the vision and strategy. Be prepared to answer their questions.

Celebrate Successes | Entire Organization | 1 week | $ 2,500

Plan for a product-launch celebration rewarding the members of the New Product Development team for the launch of a new product.

CEO Gives Upbeat Speech | Entire Organization | 0.5 weeks | $ 500

Have Johnson tell employees not to worry and that if teams don't work in the near future, that the company will explore another structure to achieve its aims.

Competitive | Entire Organization | 2 weeks | $ 2,000

Develop and execute a formal program to share competitive information within the Company. The program would include prepared documents to be circulated and departmental meetings for discussion.

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Competitive and Financial | Managers | 0.5 weeks | $ 1,000 Prepare and deliver an extensive briefing to all managers on the competitive landscape and the company's current financial situation.

Constant Repetition of Vision | Entire Organization | 2 weeks | $ 5,000

Plan for constant repetition of vision using multiple methods. Appoint a core change team member to oversee all communications to ensure consistency.

Core Change Team Presentations | Entire Organization | 2 weeks | $ 5,000

Make presentations at the departmental level regarding the discussions taking place within the core change team meetings. Outline the challenges facing the company and the chosen vision and strategy.

Cost Rationalization | Entire Organization | 4 weeks | $ 5,000

Save costs by selling corporate art collection and leasing excess office space in administration building.

Departmental Liaison Team | Several Departments | 6 weeks | $ 60,000 Ask John Simons to set up and lead a pilot project team to improve the co-ordination and communication between Marketing and R&D. The team would be comprised of all managers in the two departments as well as Jennifer Smith.

Departmental Q&A Sessions | Entire Organization | 3 weeks | $ 5,000

Q&A sessions in each department to discuss competitive and financial information. These sessions are led by Johnson, the change agent and the appropriate core change team members.

Develop Training Infrastructure | Entire Organization | 4 weeks | $ 30,000

Ask HR to identify and develop individuals from each department to promote and support teams training.

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* Develop Vision and Strategy | Entire Organization | 5 weeks | $ 15,000 Develop the new vision and strategy.

Disaster Scenario Video | Entire Organization | 4 weeks | $ 20,000 Contract a communications company to create a 15-minute video to show what may happen should the company continue business as usual. The video ends with an explanation of the new vision and strategy.

Downsize Company | Entire Organization | 7 weeks | $ 90,000

In order to save costs and generate much needed profitability, cut the workforce of each department by a set amount.

Financial | Entire Organization | 2.5 weeks | $ 5,000

Develop and execute a formal program to share financial information within the company. The program would include prepared documents for circulation and discussion at departmental meetings with Q&A support from the Finance department.

* Fire an Individual | Specific Employee | 2 weeks | $ 40,000

Fire a persistent resister. Bring in some 'new blood' to take over resister's role.

Focus Group Interviews | Managers | 3 weeks | $ 20,000 Commission focus group interviews with customers and present results to the senior managers.

Hire a Lobbyist | Managers | 6 weeks | $ 35,000 Hire a government lobbyist to advance GlobalTech's interests at the Department of Defense.

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* Identify Change Agent | Specific Employee | 1 week | $ 1,000 Appoint an individual to guide or champion the change initiative.

* Identify Problem | Managers | 2 weeks | $ 20,000 Identify the core problem or problem(s) underlying the need for change.

ISO 9000 Certification | Entire Organization | 6 weeks | $ 50,000 Implement a training program geared towards qualifying the company for ISO 9000 certification (ISO 9000 is a set of standards for quality management systems).

Large Group Intervention | Entire Organization | 12 weeks | $ 125,000

Plan a conference-style event for the entire organization featuring broad communication tactics, team-based experiential exercises and change readiness training.

Management Information System | Entire Organization | 3 weeks | $ 75,000

Introduce a new information system throughout the company that will enable Finance to better track performance.

New Product Development Team | Several Departments | 2 weeks | $ 5,000

Ask James Clarke to establish a New Product Development Team for commercial products with contribution from R&D, Marketing and Manufacturing. The team would include Clarke, Sam Seto, Ganesh Seth, Catherine Lalonde, Richard Wright and Jennifer Smith.

Outline Changes and Challenges | Entire Organization | 0.5 weeks | $ 500

Have Johnson outline to employees what will remain the same as well as what is likely to change.

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Product Improvement Team | Several Departments | 6 weeks | $ 60,000 Ask Sam Seto to set up and lead a cross-functional product improvement team focused on the next commercial product release. Team will include Seto as well as Jennifer Smith, James Clarke, John Simons, Ganesh Seth and Jane Cowan.

Professional Objectives | Managers | 0.5 weeks | $ 500

Have Johnson meet one-on-one with every senior manager and team leader to set objectives relating to the change initiatives for the next year.

Publicize Team Successes | Established Teams | 0.5 weeks | $ 500

Publicize team successes in meeting targets.

Quality Improvement Seminar | Managers | 2 weeks | $ 20,000 Provide training for managers and supervisors in quality management and its relationship to teams.

Reassuring Announcement | Entire Organization | 0.5 weeks | $ 500 Have Johnson reassure everyone that things are going well and that markets are expected to improve in the future.

Reengineer Company | Entire Organization | 7 weeks | $ 80,000

Introduce reengineering to streamline departmental processes and save costs.

Restructure Company Into Teams | Entire Organization | 7 weeks | $ 90,000 Move beyond pilot and project specific teams and roll out teams across the organization where appropriate. Have Change Agent and HR set a clear mandate and parameters.

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Restructure Compensation | Entire Organization | 4 weeks | $ 50,000 Change the compensation structure to base some compensation on team performance for appropriate situations.

Review Structure | Entire Organization | 3 weeks | $ 5,000

Review structure for other co-ordination or improvement needs.

Reward Individual Efforts | Individuals | 1 week | $ 10,000 Reward and publicly recognize those individuals who have produced the desired changes.

Set New Commercial Targets | Entire Organization | 1 week | $ 1,000 Set new stretch targets for next year's commercial market products in terms of quality and cost.

* Stakeholder Mapping | Entire Organization | 2 weeks | $ 10,000 Map resistance and support across key stakeholders in the company.

Suggestion Program | Entire Organization | 4 weeks | $ 30,000 Set up a suggestion program through which everyone can submit ideas about the direction and vision of the company.

Team Mentoring | Established Teams | 2 weeks | $ 5,000

Get the core change team members, HR advisors, or other skilled team players to mentor and/or train new teams.

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Team Pilot Project | Manufacturing | 4 weeks | $ 30,000 Ask the head of Manufacturing to set up and lead a team focused on department improvements as a pilot project. Have the Change Agent help to set a clear mandate and parameters.

Team Site Visits | Established Teams | 1.5 weeks | $ 5,000

Encourage new teams to visit other sites that have increased quality, design, and/or decreased costs through the use of teams.

Teams Training | Entire Organization | 3 weeks | $ 20,000

Educate the organization about teams, their benefits and team dynamics.

Walk the Floor | Entire Organization | 3 weeks | $ 20,000 Speak with a cross-section of the front-line workforce to gain a better understanding of their day-to-day challenges and concerns.