Leadership Case Study - Music Web

MusicWeb: Implementing Change: Business Leadership Review Case Study Series Associate Professor Eoin Banahan, Roundrose Associates
Ltd
Music Web: Implementing Change

CASE STUDY Leadership in Perspective
This case has been prepared as a basis for class / group discussion and is not intended to illustrate best practice, or otherwise, in a business situation.
Business Leadership Review VIII:I January 2011 Page 1 of 17
www.mbaworld.com/blr 2011 Association of MBAs
MusicWeb: Implementing Change: Business Leadership Review Case Study Series Associate Professor Eoin Banahan, Roundrose Associates Ltd
Background The Business Leadership Review Case Study Series is an opportunity to participate in a collective debate of key management issues, to enhance the understanding of leadership through mutual interactive learning. Readers are asked to make comments on the situation at hand and get responses to their views from the case writers. The Case Study Series is a chance to discuss key topics of leadership and management within an interactive forum. The fifth case in this series, MusicWeb, is about implementing change, an issue which appears to be at the cornerstone of current leadership thinking given its prevalence in both theory and practice. The case itself continues after these introductory comments. The Case Study Process The key to the success of the Case Study Series is interaction. Our main objective is to make this case analysis lively and rich in personal discoveries. To this end, please contribute to the process by responding with your comments and answers to the questions below. Your input and analysis will be published in a later issue of Business Leadership Review, along with responses and conclusions from the case writer, Associate Professor Eoin Banahan. The Case A Word on Implementing Change The latest case in this series, MusicWeb: Implementing Change, is about the demanding situation of dealing effectively with a large scale change operation, in this instance associated with the acquisition of a new company abroad with seemingly opposing values, cultures, and business models. This is a very complicated situation and the answers, if there are any at all, are not obvious. What do you think? What is your experience? What is your perspective?
__________________________________________________________________________ Online Discussion Questions 1. What is your overall diagnosis of the situation in the case MusicWeb? 2. What is wrong with MusicWeb's CEO Sean McCutcheon's leadership style in the merger with Bernberg? 3. What should he have done differently? 4. What key lessons on change management can be learned from the case? The Case questions can be debated on the BLR LinkedIn group. The best responses will be published and discussed in the MusicWeb Case Conclusion to be published in a later issue of BLR! CLICK HERE TO DISCUSS NOW! __________________________________________________________________________
The MusicWeb: Implementing Change Case continues on the next page.
At 9.30am on Wednesday 6 April 1999, Sean McCutcheon, CEO of American web-based music retailer, MusicWeb, drove to his office in downtown Philadelphia where he was scheduled to meet with the members of his newly formed European team, to discuss how to integrate the companys latest acquisition into existing operations. At 10am sharp, his team members filed into the meeting room and took their places around the conference table. Welcome everyone, Sean began, you know why we are here. Now that we have acquired the German company, Bernberg, it is crucial that we absorb them into our organisation as quickly and cleanly as possible. It will be your task to see that its done. They discussed the challenges facing the team and what strategies and action plans they should adopt. There was considerable doubt as to the thinking behind the acquisition and Sean tried to clarify the situation. At a meeting of the Board last September, Sean explained, senior management approved the takeover for three main reasons. If we are to generate sustainable growth, we need firstly, to diversify and open up new lines of business. Secondly, we need to gain a foothold in the European market and Bernberg will give us that opportunity, and finally, we need to establish MusicWeb as a strong global brand. This acquisition is a step in that direction. Sean made his expectations clear. following key objectives.

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The European team would be responsible for the
Ensuring a smooth transition to a unified and integrated organisation. Laying the groundwork for transfer of Bernberg's business to an Internet based business-to-consumer service. Maintaining staff morale in both organisations. Minimising costs, including shedding unnecessary staff.
It was clear that achieving these objectives would prove far from easy, given the differences between the two companies. After some discussion they agreed to contract a firm of management consultants to conduct a comparative analysis between the two companies as a preliminary step to devising a strategy to address the challenges. The Take-Over The take-over was completed end of January 1999 and the press announced it as clear evidence of the increasing trend towards online music retailing. The news sent shock waves throughout the market and the value of MusicWeb shares soared as a result. However, the one crucial factor that was overlooked in the excitement was that the two companies, MusicWeb and Bernberg, could not have been more different.
MusicWeb Inc. MusicWeb was launched in Philadelphia, USA in 1996. The idea behind the venture, for which considerable start up capital had been raised, was to offer customers online access to a catalogue of music, which they could download in digital format, for a fee, and store on compact disk. With some basic software and recording equipment, customers would thus be able to compile their own personalised music collection, for a fraction of the cost of more traditional means. The company opened with a staff of 10, but following 4 years of steady growth, the workforce rose to almost 200. MusicWeb was typical of the young, new breed of Internet based ebusinesses with a young and 'alternative' staff, an informal atmosphere and very loose management structures, where first names were used from top to bottom. Senior management was keen to encourage a strong entrepreneurial spirit and most of the employees held shares in the company. Furthermore, MusicWeb had a strong team-based culture and considerable investment was m ade in developing peoples potential. Expressing creativity and taking calculated risks were behaviours much encouraged. The company was famous for holding regular fun-days throughout the year as means of fostering a good team spirit and strengthening links across the firm. Bernberg Gmbh Bernberg, on the other hand, was quite different. The company had been a player in the German music industry since the early days of recorded music. The firm began life as a brass instrument manufacturer in the first years of the century and was a pioneering music label using shellac in the 1930s, before moving over to vinyl in the 1950s. In the 1970s Bernberg found easy expansion into retail and its core business developed into an extensive mail-order service to customers. Business at Bernberg had not changed much since then. As the firm moved through the early 1990s, market share gradually began to ebb away under intense competition from small independent producers. Research conducted in 1997 showed that over the previous 2 years, customers were turning to new Internet music retailers in increasing numbers. Dr. Freidrich Baumann, executive Chairman of Bernberg had initially been opposed to the takeover by MusicWeb. He found it hard to accept the fact that technology was changing the rules of the competitive game. However, following an early meeting with Sean McCutcheon in October 2008, Freidrich and the rest of the Bernberg Board were finally convinced that MusicWeb intended to build on Bernberg's strengths, and better position the company for the challenges of the future. In any event, they had little alternative, and so with some reservations, they recommended the take-over to the Bernberg shareholders, who accepted the realities put before them. Bernberg had a workforce of 500 and with an average age of 43, was much older than that of MusicWeb. Many of the staff were classical music enthusiasts. The management team was well respected and there was a tradition of rewarding long service with promotion. Communications within the firm were paper-based; the office 'registry' received a copy of any
internal and external memo, report or letter. Computers were used only in the typing pool and the accounts department. MusicWebs European Team MusicWebs CEO, Sean McCutcheon, was well known in the corporate music world as a moderniser. He was determined, focused and loved a challenge. He started his career as an executive with a number of independent record companies and in time grew to know the dynamics of the business extremely well. When a group of investors were looking for a suitably experienced person to head the new venture, they approached Sean as their preferred choice. He jumped at the opportunity, feeling strongly that the gradual emergence of network technologies would revolutionise the entire music supply chain. Since he started at MusicWeb, the financial press had praised McCutcheon for focussing on the key aspects of an e-business aiming for long-term success, i.e. web content, an extensive catalogue catering to a wide range of music tastes, and significant tangible income at an early stage. In the days following the announcement of MusicWebs takeover of Bernberg, Sean began to assemble a small, dedicated team to run the European operation, (see annex 1). He wanted the right balance of knowledge and expertise, to facilitate a seamless transition, particularly for Bernbergs staff and customers. With this in mind, he chose Jack Wilstone as Director of European strategic development. Jack was a member of the senior management committee at MusicWeb and was someone for whom Sean had a lot of respect. He had been an important figure in establishing MusicWebs market in the US following the launch and the CEO hoped that Jack would do the same for the company in Europe. Jack would report directly to Sean himself at head office in the US. Fiona Samuel was headhunted from a European competitor and assigned responsibility for European Human Resources. Sean had met Fiona at a couple of industry conferences and was impressed at her knowledge of the challenges inherent in managing the HR function in companies experiencing accelerating growth. Franz Hoffman, a senior executive with Bernberg, was given the post of Director, Sales and Marketing. The CEO believed it important to maintain a sense of continuity among Bernbergs existing customer base. Franz differed from his colleagues in that he was older and had very traditional views with regard to the business. Nevertheless, he knew the market well. George Higham was given the position of Director of Operations. George had been with MusicWeb since the beginning and was an experienced software engineer. He had little knowledge of the European business scene but he was one of the best around when it came to technical issues.
The European Teams Strategies & Plans On Friday 20 May 1999, Sean McCutcheon arrived at Bernbergs offices in Augsburg, Germany for a meeting with his European team. MusicWebs consultants, Rolfson Consulting, had submitted the results of their comparative analysis on MusicWeb and Bernberg (see annex II for summary) and the team wanted to discuss the consultants report and decide on appropriate strategies and plans to meet the objectives set at their meeting on th th April 6 . Seans three senior European managers had been in Augsburg since April 11 . During the meeting, they discussed the CEOs desire to cut Bernbergs existing staff by almost 50%. The reasons for why such a step would have to be taken were clear. Firstly, they would have to re-engineer most of the companys business processes as a result of the changeover from mail order to a Web based business. Secondly, since Bernberg would become more of a network rather than a hierarchy, most of the middle management functions could be eliminated, thus increasing management efficiency. Thirdly, many members of staff, particularly those closest to retirement age, did not have the necessary skills to work in an ebusiness environment, and finally, the companys oper ational costs, in particular its payroll and associated costs were far too high. The CEO was keen to hear the ideas and suggestions for future action from each of his team members. Jack Wilstone, (Director of European strategic development), began by stressing the difference in e-business penetration between Europe and the US. He admitted that although the growth in the use of network technologies was significant, Europe had a long way to go before business-to-customer transactions were the norm, rather than the exception. This, in his opinion would inevitably mean that MusicWeb would have to be very creative in its efforts to increase market share rapidly, as they had done in the US. Franz Hoffman, (Sales and marketing), underlined the fact that Bernberg was a traditional mail-order business specialising in classical music and this was reflected in the kind of customer with which the company dealt. Many of its more loyal customers, in his opinion were very technology averse. The CEO acknowledged his viewpoint but argued that tastes in classical music were becoming more mainstream and the technology was well on the way to ubiquity. Franz also reacted with hostility to the scale of the proposed cut in Bernbergs workforce. Since he had been with the company for 12 years, he felt a certain degree of responsibility for those who worked for Bernberg and he admitted that the idea of making so many people redundant left a bitter taste in his mouth. Fiona Samuel, (HR), responded to Franzs concerns by saying that many of Bernbergs staff were nearing retiring age anyway and might welcome the opportunity to retire early. Nevertheless, she felt that the scale of change facing Bernberg was bound to generate considerable resistance. In any event, MusicWeb would have to invest heavily in retraining to bring Bernbergs skill base up to required standards. George Higham, (Operations), responded by saying he was appalled at how computer illiterate Bernbergs staff was and agreed with his colleague from HR with regard to the need for training.
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Sean agreed that the challenges were monumental but said that he had every confidence that his team would succeed. Before turning to the question of project plans, he announced that the board at MusicWeb had decided that Bernberg would have to shift its offices from Augsburg to Frankfurt, since by so doing, communication costs would be reduced. Franz Hoffman who was a native of Augsburg, reacted angrily to the suggestion but the CEO responded by saying that the boards decisi on was final and not subject to discussion. The team then turned to the question of project plans, (see annex III). Jack Wilstone presented an overview of the plan, explaining that George Higham had completed the user requirements definition ahead of schedule and was moving toward technology implementation. Fiona Samuel had completed the list of people who would be invited to take early redundancy and letters had been sent out to those on the list. She was now preparing the training programmes, which would be delivered through the months May to July. Franz Hoffman was preparing the marketing campaign, which would run from June through to October. Bernberg Resists Change On Thursday 26 May, Fiona Samuel was sitting in her office, planning the schedule of software training for the month of June, when she had a visit from Hans Niemeier, the workers representative on Bernbergs Works Council. He told her that the redundancy notices received by 300 of the staff had come as a shock to all concerned and requested a meeting with the management team to discuss the matter. Fiona contacted Jack Wilstone and they scheduled a meeting of the Works Council for the th following afternoon, Friday 27 May. At the meeting, the workers representatives expressed their anger at not having had any prior warning of the redundancies. They underlined the adverse impact on the workforce as a whole. The redundancies had created an atmosphere of intense uncertainty and those remaining wanted assurances that their jobs would be safe. Jack Wilstone and his colleagues announced that they would address staff concerns through a newsletter, which was being drafted by the HR department. During the weekend of May 28 -29 , Fiona prepared the internal newsletter, which the management team hoped would address staff discontent at Bernberg. In the newsletter, the CEO addressed staff directly and outlined his vision for the company, (see Annex IV). At their weekly team meeting on Friday 3 of June, the management team assessed the situation on the ground. Fiona said that whilst the newsletter was well received and appreciated, it had done little to eliminate uncertainty among Bernberg staff. The fact was that Bernberg people had little trust in what management had to say. Despite the fact that most of the people who were offered early retirement had indeed accepted the offer, those remaining were deeply unhappy about the move to Frankfurt and a number of those who were due to stay had resigned as a result. George Highham, Director in charge of Operations, said that the new information and communication technology had been
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implemented but the test phase was proving very difficult and slow, mainly because Bernberg staff refused to co-operate. The Marketing Director, Franz Hoffman updated his colleagues on the launch of the new marketing campaign, which was due for roll out the following week. He said that whilst many of Bernbergs existing big order clients, such as Music stores and other retail outlets had welcomed the changes, some customers were worried that MusicWeb was planning to cut them out of the picture altogether. Jack Wilstone noted that recent media hype over the latest MP3 technology, a software product developed by a German research institute, which allowed a customer to download music directly from the Web, had unsettled the market. When discussing the issue of staff training, Fiona reported that there was little interest and motivation among Bernbergs staff for the courses on offer. She felt that she would be forced to compel everyone to attend, something she had hoped she would not have to do. Jack Wilstone said that he had informed the CEO of the difficulties they were encountering and Sean McCutcheon had asked that an Away Day be organised for Bernbergs staff and their families at which he would address them in person. They scheduled the event for th Saturday, 25 June. Fiona agreed to organise the event. During the month of June, the atmosphere at Bernberg became increasingly tense. Most of the key staff had had computer skills training but the operations director, George Higham was convinced that it would be at least October before they were up to full speed. Fiona Samuel had begun orientation training for Bernbergs staff but there was considerabl e resistance to it. Many people were uncomfortable with the informality of the MusicWeb culture and complained that MusicWeb management was destroying their lives. Furthermore, many of those who had been made redundant insisted in working out their statutory notice, and had added to bad feelings by spreading rumours about what might happen to those who were left. MusicWeb Away Day On Saturday 25 June, MusicWeb took over a popular theme park for the day. Around 300 employees and their families attended, and everyone enjoyed the sunshine and the activities that had been organised for their amusement. A stage was set up in the middle of the park and at 3pm, Jack Wilstone mounted the stage to address those who had come to hear what MusicWebs CEO had to say. Jack introduced Sean Mc Cutcheon who took the microphone and began: I am pleased to see everyone having such a good time. I think that under the circumstances we all deserve some relief. I wanted to take this opportunity to talk with you about the changes that have been affecting us all at MusicWeb. I can appreciate that for those of you who have had to make the transition from Bernberg to MusicWeb, the changes have been particularly stressful. Today I want to give you the opportunity to put forward your thoughts and feelings about
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the changes to me personally because what you think and how you feel matter to me. MusicWebs future success is in your hands and I believe that together we can be the market leader in a new business scene. But such a vision is only possible if we are committed to moving forward together. Jack Wilstone, who had been standing by, invited anyone in the crowd who may wish to do so, to put a question to the CEO. A number of hands went up and the microphone was passed to one of those standing near the front. I do not understand why we have to move our offices to Frankfurt. Does the CEO realise what such a move means to us and our families? I realise that such a move is disruptive, began the CEO, but if we are to improve our efficiency and address a global market, we need to manage our communication costs very carefully. Frankfurt is a better place for us to be, in that respect. The issue of relocation to Frankfurt was obviously a sensitive one. Those present d idnt seem convinced by the CEOs arguments. The questioner replied, I dont see what we will gain by this move. I understand that costs to MusicWeb may be reduced but what will we get out of it? As the company goes from strength to strength, everyone will benefit. At MusicWeb we are committed to investing in our people because our people are our most valuable asset. Many of those listening to the CEO believed that his words were nothing but hot air. They heard such words so often from management and had come to consider them as meaningless. Another employee put a question to the CEO. If, as you say, MusicWeb is committed to its people, can you guarantee that our jobs will be secure and that there will be no need for further redundancies? The CEO seemed irritated by the question. He paused before answering. The redundancies were an unfortunate necessity but I think we did the best we could to ease the blow. As to job security, I dont think that any company in todays business world can gu arantee a job for life to anyone. Those days are over, the future is far too uncertain for that. However, I can say that at present, I dont anticipate further redundancies.
The CEO explained that it would have been unwise to hold on to people who were not needed. It would not have been fair to them or the company. Another issue was raised. I dont see the point behind the orientation training which we are compelled to do. Why should we have to do everything the same way as you do it in the US? We have our own way of doing things, which has proved effective in the past. You must remember that this isnt America. There was a round of applause following the question. Bernbergs employees were angry at being told that the way they worked was inappropriate. Many who had been in the music business a long time resented some outsider coming in and telling them how to do their jobs. They resisted the new training programmes because they felt that management was telling them that they were incompetent. The CEO tried to explain that network technologies were changing the way in which the industry operated. Doing business in the new economy required that old skills be updated. He stressed that this did not mean that old skills and expertise were obsolete; nothing was more valuable to MusicWeb than the knowledge of its people. All it meant was that if the company were to remain competitive in the new digital economy, then everyone would have to be flexible and ready to adapt and learn new things. Getting Commitment On Monday 27 June, Sean McCutcheon and his European team met to discuss what they had learned from the Away Day and decide if any specific actions would be needed to address employee concerns. The CEO admitted surprise at the strength of feeling among the ex-Bernberg employees. He questioned the effectiveness of the orientation training and asked why it was that employees did not see the take over as a golden opportunity for them. Fiona Samuel defended her training initiatives but said she thought that staff resistance was due to the fact that they felt no ownership over the MusicWeb way of doing things. Rather they were being told; this is the way you have to think and behave from now on, so just get on with it. With no sense of ownership, there could be no commitment. Jack Wilstone agreed with his colleagues and asked for ideas as to how they should get commitment. Franz Hoffman, Director of Sales and Marketing, who, having been with Bernberg for a long time, said that he felt that employees saw MusicWebs approach as rather arrogant and typically American. He suggested that they find a softer and subtler approach to bringing everybody on board. George Higham, Director of Operations, suggested bringing people together in focus groups to discuss the MusicWeb way of doing things. People should be encouraged to make suggestions for improvement. He felt strongly that such an initiative would give people a greater sense of involvement. Jack Wilstone disliked the approach because he thought that
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such an initiative would frustrate and delay progress. The CEO stressed that they could not afford to lose time since the competition was exploring the benefits of electronic business and it was imperative that MusicWeb stay one step ahead. Fiona Samuel suggested that they devise a reward mechanism to encourage suggestion for improvement. Anyone who submitted an idea, which was then implemented, would receive a cash bonus and have the matter profiled in the company newsletter. Her colleagues liked the idea and gave the go-ahead. The CEO raised the issue of redundancies. Fiona reported that of the 300 redundancy notices sent out, approximately 250 people had accepted the companys terms; the rest had refused. However a further 10 people had decided to go as a result of the move to Frankfurt. The CEO said that they would have to lose a further 40 if they were to keep to targets. Franz Hoffman, (Marketing), warned that employees would react adversely to further redundancies. Nevertheless, the CEO was adamant that redundancy targets had to be met and if people wouldnt go voluntarily then they would have to be compelled to go. On Friday, July 1 , Fiona sent out a memo to all staff informing them of the new cash for ideas scheme. It captured the imagination of staff and caused much excitement. During the following week, she was inundated with suggestions for improvement. In her report to Jack Wilstone, she said that the number and quality of suggestions coming in were clear evidence of commitment to the companys success. On Monday, July 11 , Jack Wilstone sent out a letter of compulsory redundancy to 40 members of staff. The move caused considerable distress and ill feeling among the workforce. The workers representatives called for an urgent meeting with management. th Jack and his colleagues scheduled the meeting for Thursday July 14 . At the meeting the workers representatives expressed their anger at the redundancy notices. They said that they the CEOs speech at t he Away Day had given everybody the impression that there would be no more redundancies. Jack Wilstone explained why another 40 people had to go and reassured them that there were no plans to reduce the workforce any further. The workers representatives declared that as far as they were concerned they didnt believe a word management said. They couldnt give their fellow workers any guarantees because they didnt trust management to keep to its word. Jack and his colleagues tried to calm things down but the anger ran too deep. The meeting broke up when the workers representatives stormed out of the meeting threatening to take drastic action. From Conflict to Crisis On Monday July 18 , Fiona reported that workers were boycotting orientation training and her colleague, George Higham, complained of people being extremely uncooperative. Jack called the CEO in Philadelphia to inform him of the problem. The CEO declared that he was too tied up with other matters and told Jack to do whatever was necessary to sort things out.
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On Wednesday July 20 , Jack met with the workers representatives and demanded to know what was going on. He was told that the workers simply refused to stand back and do nothing while their jobs were gradually taken away one by one. They demanded that the 40 people who had been told to go, be reinstated. Jack explained that reinstatement was impossible but reassured them that no further redundancies were planned. They demanded assurances from the CEO in person. Jack told them that he would inform the CEO of their demands later in the day. When he spoke with Sean McCutcheon later that day, the CEO was in an angry mood. The company was having some technical difficulties in the States and he said that he didnt have the time to jump a plane to Frankfurt just because some workers rights fanatics had decided to be difficult. Nevertheless he agreed to send them a memo. The workers rejected the CEOs memo demanding that he appear before them in person. Jack explained that the CEO was tied up but that as soon as he was free, he would no doubt come and see them. The workers were appalled at what they saw as the CEOs indifference th to their concerns and they voted for strike action to begin on Monday July 25 . On Thursday July 21 , Jack and his colleagues met to discuss the situation. They had a videoconference with the CEO, who reminded them of their original objectives,

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Ensuring a smooth transition to a unified and integrated organisation. Laying the groundwork for transfer of Bernberg's business to an Internet based business-to-consumer service. Maintaining staff morale in both organisations. Minimising costs, including shedding unnecessary staff.
He accused them of making a complete disaster of the whole affair. Reluctantly he agreed to fly to Frankfurt the following Monday but demanded that the team have a coherent plan of action awaiting his arrival. When the video link terminated and the CEO disappeared from screen, Jack turned to his colleagues and asked, So we have the weekend ahead of us to come up with something. Now how do we turn this crisis into an opportunity?
Annex I MusicWebs European Team
Sean McCutcheon CEO MusicWeb
Jack Wilstone MusicWeb Europe
MusicWeb Nth America
Fiona Samuel Human Resources
George Higham Operations
Franz Hoffman Sales & Marketing
Annex II Consultants Comparative Analysis Executive Summary

MusicWeb
Organisational Culture Leadership/Management Styles Communication Technology maturity 200 employees Average age 28 90% degree level 93% American English speaking
Bernberg
500 employees Average age 42 24% degree level Multi-cultural Mostly German speaking Formal Time served-related pay Rigid Task differentiation and specialisation Emphasis on management Organise and control Restricted top down Management control information flow Vertical interactions Technology used for information management only
Workforce
Informal Performance-related pay Flexible Job rotation learning by doing Emphasis on leadership Motivate and mobilise Open and extensive Free flow of information Lateral, diagonal and vertical Ubiquitous use of information and communication technology
Annex III Project Plan
March 99 User Requirements Implementation Plan Test Phase User Training Redundancies announced Orientation Training to Bernberg staff Contracts preparation Marketing Plan & Campaign Operations testing & Rollout
April 99
May 99
June 99
July 99
August 99
Sept 99
Oct 99
Annex IV Newsletter Issue 1 June 1999

CEOs Address to Staff
"Colleagues, Welcome to this first issue of MusicWebs internal newsletter. I know that some of you are feeling rather insecure following the many changes that have taken place since the beginning of the year. I wanted to try and address some of your fears. I want to say from the start that it is my belief that MusicWebs greatest asset is its people and now that we have expanded into Europe through acquiring German company Bernberg, the value of that asset has risen significantly. With Bernberg, we are fortunate to have a wealth of talent and experience to add to what we have already. In today's marketplace, diversity of skills among teams of people who can work together is not just an advantage but also an imperative for any company intent on success. We have a great opportunity to make the most of our differences and show that by working together we can succeed and be a leader in a new competitive world. As you know the development of network technologies is changing the way everyone works and MusicWeb will be a market leader in leveraging the benefits to be gained from the new digital marketplace. But lets keep our feet on the ground; we have considerable challenges ahead. There is uncertainty - we don't know exactly where the Internet is going to lead us. Who would have predicted that the way we sell retail products like CDs could have changed so radically in just a few years? But we are in as good a position as any other firm (if not better) to make the most of these challenges and with your help that's what I intend to do. There will be some tough decisions to make along the way. To remain competitive we have to be efficient while offering a quality of service of which we can feel proud. There will be some restructuring and we are working on how to do that. We want to build a strong organisation with a bright future. We want to do that with all our staff working together and not against each other. That means cooperation from everyone at all levels. It means thinking about communication, who needs to know what I am doing, how can I help others to do their job better, when do they need to know it. It means making our communication effective so that we all know what we are doing and feel confident that we are all moving forward as one.

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MusicWeb: Implementing Change: Business Leadership Review Case Study Series Associate Professor Eoin Banahan, Roundrose Associates

Music Web: Implementing Change

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The MusicWeb: Implementing Change Case continues on the next page.

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The European team would be responsible for the

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Annex I MusicWebs European Team

Sean McCutcheon CEO MusicWeb

Jack Wilstone MusicWeb Europe

MusicWeb Nth America

Fiona Samuel Human Resources

George Higham Operations

Franz Hoffman Sales & Marketing

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Annex II Consultants Comparative Analysis Executive Summary

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Annex III Project Plan

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Annex IV Newsletter Issue 1 June 1999

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