Celeritas, Inc.: Leadership Challenges in a Fast-Growth Industry

Context:

Celeritas was a leading firm in the enterprise network optimization industry, in an industry where it was becoming highly competitive. Celeritas have lost their market share and they’re steady growth has slowed. SVP’s have stopped communicating and sharing information amongst each other and blame each other for missing deadlines. Boyer is not seen as an effective leader since he doesn’t not involve nor hear any SVP’s opinions on decision-making matters. So did VP’s loose trust in Boyer’s leadership skills.

Key People:

Philip Boyer is the President & CEO who does majority of the end decision-makings himself. He believes in the philosophy where he only takes information from his SVPs and not their opinion on final matters. He has the most influence in the company because not only he makes the final decision mostly on his own but also chooses which information and data to share with the board of directors (VPs) and what not to share. He has the position of the leader in the firm for the managers. However, many argue including the VPs that he lacks traits and character of an effective leader due to mainly his “I” approach in the firm rather than “We as a team”.

Dave Lloyd is the SVP of sales & marketing department. He took most of the heat for firms slowed growth from all sides. At the executive offsite meeting, A lot of SVP’s revealed their frustration on Lloyd with lack of cooperation with the R&D and was blamed for decreasing growth rate. There were angers almost at personal level rather than business level, which already shows how the organization had lost its control within the SVP, levels. Lloyd was criticized for his personality and management style

Rest of the SVP’s:
It consists of Shawna Davis (SVP business & CFO), Vishal Arul (SVP R&D & chief scientist, Carlos Rivera (SVP engineering & CTO) and Mike Harper (SVP Operations & COO). They play a key role in the organization and in charge of managing all aspects of the business.

Carla Reese:
She was hired by Boyer as an organizational consultant who had experience with fast-growing high-tech companies. Over the course of days, she realized that the problems were not mainly what had been explained by the CEO but also included the relationship and coordination issues.

Issues:
Lack of trust and communication amongst SVP’s
Information’s were not being shared amongst divisions and there were mistrust between SVP’s. Lloyd was getting most of the blame because all the rest of the divisions were connected, working together and were to do more with numbers whereas Marketing & Sales division works with clients. Due to lack of communication between marketing & sales department and R&D, a lot of promises were being made where one could not deliver, inevitable affecting firms sales growth. The motivation of the managers dropped because past behavior of their colleagues, they were already expecting other divisions to miss deadlines therefore, each division with the same thought would not strive to give their best and end up blaming each other at the end of the day. Motivation within the organization is very crucial since its directly correlated with work output.

Inconsistent decision making
Instead of coordinating together amongst the division, individual SVP’s would go up to the CEO with new propositions and ideas without the approval of other divisions. This creates mistrust and decision-makings without any calculations and preparations, which leads to disappointments from both within the organizations and clients. Majority of the end decisions are taken and decided without any set, fixed firm guidelines/ policy but more with the believe of one single individual which makes it inconsistent since the SVP’s are clueless of why and how the decisions were chosen and made.

Confusion about goals and priorities
Each division has goals which its striving, however, the goals and the direction to reach them are all different from each other inevitably loosing focus of the organizations goal. This creates not only mistrust amongst divisions but also confusion, which leads to de-motivation.

Poor coordination amongst divisions
Sales department making promises that R&D could not cope with created tensions and blames and mistrust amongst divisions. No division was taking any reasonability of wrong doing and not reaching deadlines, instead blaming each other. Necessary information’s were not being shared along division to work together to strive a common goal that did not exist.

1. How to address the VP’s concerns and their resistance to the organizational change process? It is clear that VP’s main concern is not directly issues that were mentioned above but more with the leadership of Boyer that is failing in leading his managers and guiding them through difficult times. What’s worse is that, instead of Boyer acknowledging his wrong doings and setting up a course to fix them, his turning into his management and division which initially lacked leadership and effective guldens. VP’s seem to have lost hope and trust that they no longer believe in any change under such leadership.

Another negative factor from Boyer was that he did not consult major decision-making that affects the whole company and information with VP’s but took actions while VP’s perfectly had knowledge of how his personal and individual perception played major role in the final decision making rather than structured, strategic planning. The VP’s are not necessarily resisting to the organizational change process but had lost trust in Boyer’s leadership and were not sure if he could continue leading the firm. The way to approach their concerns would be to start with Boyer and his leadership skills. Since many VP’s lack of trust in him and his leadership skills, the first step for Boyer as a leader to acknowledge and address the real issue in the firm. And from there, set up an action plan that would both affect short and long term.

2. How to get his senior team back toward growing sales and increasing market share. Boyer should firstly restructure the and or create a structure and step for decision makings where all divisions not only would share information amongst each other and with Boyer but also be able to share their opinions and have some voice in the final decision makings. This would encourage them to work together and create a bond between and eventually, as a team create one single goal for the firm and strive to reach it all together. When the competition started increasing and the market started decreasing, Boyer as a leader, wasn’t able to adapt to the changing environment and instead relied on his managers when its should be visa versa. The managers could not cope with the change and ended up blaming each other. If managers are set on the correct path and lead by an ambitious leader, they are able to adapt and change and once again grow to gain back their market shares.

3. Whether he should keep Reese on to help salvage the process – or had she lost all the credibility with the VP’s? Boyer should keep Reese because she broke the growing tensions amongst the SVP’s and created an environment where they and Boyer understood what the firms actual problems were with its management. Reese also understood what Boyer’s actual position as a leader stood in the eyes of VP’s and SVP’s. They did not see him as a great leader. Boyer should understand that Reese will be able to guide him in changing his leadership roles to be more effective

Recommendations:

A. Boyer should replace his SVP’s so the firm can have a fresh start and gain back their market shares. Pros:
The tension and miscommunication between SVP’s would be gone Cons:
Time consuming
Costly
Employees at operating core level loose trust in CEO
B. Change leadership style from authoritative to democratic style for Boyer. Pros:
Will increase motivation of employees and SVP’s
Will create bond between them
SVP’s will be able to share their ideas and opinions in decision makings
Structure for decision-making will be created inevitably making decision-makings more consistent. Cons:
SVP’s starting to trust Boyer’s change is questionable
Will not be an easy task for Boyer to comprehend and take action C. Boyer steps down as the CEO/ president, and is replaced by a new leader while remains in the board. Pros:
New leader motivates SVP’s and works together with VP’s
Easier to bring new needed changes
Cons:
Its not guaranteed that new leader will be better
Adaptation is time consuming

Course of action:

The best course of action is option B.
Its clear that Boyer has an authoritative leadership style, where he makes the final decision-makings, the final decision are made solely through information, gut feeling and vision. The decisions are not even consulted with VP’s. Therefore, the SVP’s and VP’s have lost trust in the leader are becoming aware of his insufficient of leadership skills or wrong use of leadership style. An effective leader must be able to share ideas and listen to opinions of his subordinates to make final decision’s. By changing his leadership style to more Democratic, this would: Show VP’s and SVP’s an acknowledgement of finding the real issue in the firm’s organization which is one of the traits of an effective leader Allow SVP’s to intervene and share their insights on the firms major decisions which brings out motivation and encouragement to pursue a common goal.

Would allow much more coordination amongst divisions and make their goals emerge to one single organizational goal. The VP’s should give some time frame and then analyzes results before and after the implementation of the course of action to see if the change of leadership style of Boyer has improved the firm’s productivity. The results should give another two recommendations: Recommendation 1: if the results show no sign of change in working productivity of the firm over course of time, proceed to recommendation C: Boyer steps down as the CEO, new leader is appointed. Recommendation 2: If the results show increase in work productivity and market share, Boyer remains as the leader and CEO and constructs a long term plan to increase growth rate and gain back their lost market share.

Recommendation A. is the least favorable because it would be hugely costly and time consuming to replace all the de-motivated SVP’s. Another reason would be that VP’s would rather change one leader/CEO rather than to replace five SVP’s.

Action Plan:

Short term:
Create a sense of urgency about the need for change
Identify current issues
Make an announcement to SVP’s and VP’s of a new leadership approach Give structured guidelines of its importance and high light the time frame Create a structured guidelines for important decision makings Align all the division’s goals with the organizations and make it as one.

Long Term:
Make a secondary long term plan outlining the importance of changing environment. Implement sharing information and working together idea along all the divisions to strive for a common goal.

Boyer needs to change his leadership style and concentrate more in implementing “We as a team” than “I” in the business. It will be a difficult change, however, an effective one. By leadership changing, it will have a positive affect on management too, and encourage for all divisions to have trust amongst each other, voice and opinion in the firm and a common goal to strive together.