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Business Case Study - CLEM GRANT




CLEM GRANT*;Clem Grant was Manager of the Ottawa branch of the Milcroft Concrete Forms Corporation (Milcroft;Corp.). Milcroft Corp. was established in 1932 and based in St. Anthony, Newfoundland, with branch;offices in several major cities across Canada. The Ottawa branch was their most successful, having been;a consistent moneymaker until last January, when Clem Grant was brought in as Manager of the Ottawa;branch. Clem came from the Vancouver branch office of a competing Canadian concrete firm;CementWorks Inc. (Cl).;Up until his retirement in January, the Ottawa branch was managed by Bartholemew (Bart) Stallone.;Stallone was born and raised in Ottawa and was a graduate of the University of Ottawa's School of;Management (then known as the Faculty of Administration). He had worked for Milcroft Corp. first as a;student during his time at university, and after graduation, signed on full-time, working his way up to;become manager of the most successful branch of the company. It was, in fact under Stallone's;leadership that the Ottawa branch eventually became the most successful branch of Milcroft Corp.;During Stallone's thirty years as manager of the Ottawa branch, the'branch had never fired or laid off a;single employee, and staff turnover was well below industry standards.;Stallone was a very confident and likeable person, and believed strongly in developing an environment;in which his employees would become self-motivated. He encouraged everyone to have a voice and;strongly preached that if employees worked hard, the company would take care of them. He was;charismatic and believed in, and demonstrated delegation and empowerment. He was regarded as a;cautiously optimistic risk-taker who earned employees respect and loyalty by sharing his knowledge and;showing them how to do things.;Clem Grant was the second-in-command at the Vancouver branch of Cl. As with the Ottawa Branch of;Milcroft Corp., the Vancouver branch of Cl was also very successful - the branch had experienced ten;consecutive years of growth and profitability, and was regarded as the most successful branch of Cl.;As second-in-command in Vancouver, Clem was responsible for managing all the construction workers;employed at the branch. He was task-oriented, actively assertive and was accustomed to exercising;control and influence. He was also strongly motivated to "make the numbers" given to him by the;Vancouver branch manager in terms of revenues, expenses and people. While staff turnover at the;Vancouver branch of Cl was considerably higher than the industry standard, for the past 10 years he;made the numbers" ? often with margin to spare.;Clem had worked "in concrete" for over fifteen years and like Bart Stallone, had worked his way up in;the same company since graduating from a Canadian west coast university in civil engineering.;One of the reasons frequently cited for Milcroft Ottawa's success was the shrewdness of Bart Stallone in;recruiting division chiefs of different cultures, given Ottawa-Gatineau's multicultural environment. It;was this management team that Clem inherited when he accepted the job as Manager of Milcroft;Ottawa. This management team was made up ofYoshi Mundansha, Chief of Engineering, Susan;Comfort, Chief of Sales and Marketing, Wilhem Thiele, Chief of Finance and Administration, and Jacques;(Le-grand) Fromage, Chief of Quality Control. Clem also had an Executive Assistant, Martin Campbell;whom he recruited from his old office in Vancouver.;Yoshi Mundansha was born and raised in Japan where he earned his undergraduate degree in civil;engineering from the University of Tokyo. He subsequently completed a master degree in architecture;from Carleton University in Ottawa, Canada, and was recruited by Stallone five years ago to head up the;engineering division of Milcroft Ottawa. With forty persons reporting to him, Yoshi was responsible for;engineering, construction and transport.;Susan Comfort was born and raised in New York City and held earned degrees in business administration;and marketing management from the State University of New York. After working for ten years as a;marketing manager for a major American construction and development company, she married a;Canadian from Ottawa and moved north. Her first job application in Canada was successful-Stallone;hired her, impressed with her credentials and successful work record-and instructed the Milcroft;attorneys to 'take care of the citizenship thing post-haste'. That was seven years ago. Comfort had a;staff of twenty employees, ten of whom were salespersons paid on commission.;Wilhelm Thiele was born, raised and educated in Munich, Germany. He held an undergraduate degree;in Accounting Science and a Master degree in Finance from the University of Munich, and had worked;for 10 years as an Accounting Manager for a major public accounting firm in Munich. Three years ago;while on vacation in Canada and driving a rental car from Slick Rick's Rentals, Wilhelm had car trouble on;highway 417 in Ottawa and the good Samaritan that stopped to help was none other than Bart Stallone;who was driving a cement mixer at the time. Stallone needed an experienced finance and;administrative manager to replace the current manager who was retiring in three months, and given the;credentials and experience of Wilhelm as well as his cultural background that Stallone thought would;enrich his current management team, Stallone hired him. Wilhelm's staff consisted of a senior assistant;four accounting clerks and a secretary.;Jacques Fromage was an internationally recognized expert in quality control. Born and raised in Lyon;France, Fromage held the French equivalent of an undergraduate and master degree in quality;engineering from the Universities of Paris and Marseilles. He had worked for 10 years for two major;quality assurance consultancy firms in France. Stallone met Jacques at a conference in Nice-Jacques;was looking for a change of scenery and Bart was looking for expertise in quality control and assessment;for his management team. Jacques joined Bart six years ago and now headed a team often inspectors.;Clem's policy was to have a management meeting every Monday morning at 7:OOAM. This morning's;meeting was extremely important because Wilhelm had recently tabled his financial reports, showing;that for the first time in years, the Ottawa Branch of Milcroft was losing money. Also, in the past six;weeks, six persons had resigned. Further, Sales and Marketing reported earlier in the week that several;long-term Milcroft commercial contracts worth $500,000 had been lost to the newly established Ottawa;branch of CementWorks Inc., apparently due to "less than competitive pricing.;Clem was deeply concerned about these recent developments and, at the staff meeting, brought these;issues forward in his usual forceful manner.;People, you have put me in the very awkward position of having to explain to St. Anthony why, after all;these years, this branch is costing them money. Now I want to get to the bottom of this, and I am;prepared to sit here all day if necessary. Thiele here, has provided his financial report which clearly;shows a quarterly operating loss of $125,000. I assume the figures are correct, but I'll have Martin check;the arithmetic just to be certain. And I hope there are no errors, Thiele! As for the rest of you, do you;have any suggestions, comments or care to shed some thoughts on these financial problems?;Susan Comfort spoke first. "Mr. Grant, the impact of losing the commercial contracts has undoubtedly;caused this operating loss. As I indicated in my report, the loss of these contracts was simply because a;new entrant into the Ottawa-Gatineau market is willing to suffer a short-term loss, performing these;jobs at less than cost, in order to break into the market. It is very difficult to compete against this type;of predatory marketing, and...;Look Susan," interrupted Clem, "I really don't give a hoot about all your fancy marketing explanations.;The bottom line is that you're paid as a sales and marketing professional to figure out how to combat;any type of marketing tactic. I want solutions that will work, not a pile of theoretical gobbly-gook. I;want you to fix the situation NOW, and don't allow this company to lose any more contracts. Do;whatever is necessary." Clem stared hard at Susan, shook his head and gazed toward the ceiling lifting;his arms over his head and said, "Look, you wanted a man's job, you somehow broke through the glass;ceiling-good for you, congratulations! Now deliver!!;Yoshi couldn't resist a wide smile. "You know, Mr. Grant," began Yoshi, "these are difficult economic;times. Perhaps it would be in the best interests of the company and this management team to take a;lower margin on certain contracts and at least generate some revenues, as opposed to maintaining our;regular prices and losing additional contracts. We have to think about what is best for us, for our;team...;So now, in addition to being an engineer, you are also an expert on pricing, sales and accounting!;Clem leaned across the table within about six inches of Yoshi's face and said, "Look, Mundansha, I pay;you to worry about transporting concrete and building structures so they don't fall down. We'll let;Thiele over there worry about the bean-counting, and sweet Sue can worry about the sales and;contracts. You just make sure my structures don't fall down!;Yoshi folded his hands on the documents in front of him and looked down and away from Clem, without;saying anything.;Monsieur Grant, I would like to raise a concern I have regarding the number of recent resignations," said;Jacques Fromage as Clem leaned back in his chair.;Look, Fromage, I really don't think this is an appropriate time to discuss this issue. We are facing;serious financial problems, un catastrophe as you would say in your country! The fact that a few people;have resigned might actually save us enough money to offset this operating loss!;But Monsieur Grant!" continued Jacques undaunted, but with a somewhat raised voice, "these were;long-time staff members who knew the company and whose daily contributions cannot be replaced;merely by reassigning tasks! And as far as replacing them, you will know there is a considerable learning;curve...;LOOK!" roared Clem Grant, "I am not interested in hearing any more bleeding heart stories or;dimestore psychobabble. Everyone is replaceable, including you Fromage, and every other member of;this country club so-called management team. Now the bottom line is this-before the end of the day, I;want each of you to prepare a report on how you will operate your respective sections after I impose a;20 percent staff reduction. I want written suggestions on what I should tell head office. I want all of you;to understand-your careers are on the line and you're betting your pay cheque on your suggestions! I;am not happy with the performance of this team. From what I see around this table I don't know how;they manage even to get water flowing down hill in Germany, Japan and France, but I do know that THIS;is how I manage in Canada, and if I have to change this team and replace everyone with Canadian;managers, I will!;Now look people, we have work to do. We're all in this together. If you need any further direction;come and see me. My door is always open....


Paper#23138 | Written in 18-Jul-2015

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