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C A S E S T U D Y

With a group of talented, hard-


working people, why isn't this
team working^

The Team That Wasn't

by Suzy Wetlaufer

The last thing Eric Holt had ex- the tension level becoming unbear-
pected to miss about New York City able. Six of the top-level managers
was its sunrises. Seeing one usu- involved seemed determined to turn
ally meant he had pulled another the company around, but the sev-
all nighter at the consulting firm enth seemed equally determined to
where, as a vice president, he had sabotage the process. Forget cama-
managed three teams of manufactur- raderie. There had been three meet-
ing specialists. But as he stood on ings so far, and Eric hadn't even been
the balcony of his new apartment in able to get everyone on the same side
the small Indiana city that was now of an issue.
his home, Eric suddenly felt a pang Eric stepped inside his apartment
of nostalgia for the way the dawn and checked the clock: (inly three
plays off the skyscrapers of Manhat- more hours before he had to watch
tan. In the next moment, though, he as Randy Louderbaek, FireArt's
let out a sardonic laugh. The dawn charismatic director of sales and
light was not what he missed about marketing, either dominated the
New York, he realized. What he group's diseussion or withdrew en-
missed was the feeling of accom- tirely, tapping his pen on the table to
plishment that usually accompanied indicate his boredom. Sometimes he
those sunrises. withheld information vital to the
An all-nighter in New York had group's debate; other times he coolly
meant hours of intense work with a denigrated people's comments. Still,
cadre of committed, enthusiastic Eric realized. Randy held the group
colleagues. Give and take. Humor. in such thrall because of his dynam-
Progress. Here, so far anyway, that ic personality, his almost legendary
was unthinkable. As the director of past, and his close relationship with
strategy at FireArt, Inc., a regional FireArt's CEO that he could not be
glass manufacturer, Eric spent all his ignored. And at least once during
time trying to get his new team to each meeting, he offered an insight
make it through a meeting without about the industry or the company

22 DRAWINGS BY DAVID CROLAND


C A S E S T U D Y

that was so perceptive that Erie "You bave (me responsibility as


knew he shouldn't he ignored. FireArt's new director of strategy,"
As be prepared to leave for the of- Jack had said to Eric on his first day.
fice, Eric felt the familiar frustration "That's to put together a team of our
that had started building during the top people, one person from each di-
team's first meeting a month earlier. vision, and bave a comprehensive
It was then that Randy had first in- plan for the company's strategic re-
sinuated, with what sounded like a alignment up, running, and winning
joke, tbat he wasn't cut out to be witbin six months."
a team player. "Leaders lead, follow- Eric had immediately compiled a
ers...please pipe down!" had heen list of the senior managers from bu-
his exact words, although he had man resources, manufacturing, fi-
smiled winningly as he spoke, and nance, distribution, design, and mar-
the rest of the group had laughed keting, and had set a date for the first
heartily in response. No one in the meeting. Then, drawing on his years
group was laughing now, though, as a consultant who bad worked al-
least of all Eric. most solely in team environments,
FireArt, Inc., was in trouble-not Eric had carefully prepared a struc-
deep trouble, but enough for its ture and guidelines for the group's
CEO, Jack Derry, to make strategic discussions, disagreements, and de-
repositioning Eric's top and only cisions, which he planned to propose
task. Tbe company, a family-owned to tbe members for their input he-
maker of wine goblets, beer steins, fore tbey began working together.
asbtrays, and other glass novelties Successful groups are part art, part
had succeeded for nearly 80 years as science, Eric knew, but be also be-
a high-quality, high-price producer, lieved that witb every memher's full
catering to hundreds of Midwestern commitment, a team proved tbe
clients. It traditionally did big busi- adage that the whole is greater tban
ness every foothall season, selling tbe sum of its parts. Knowing tbat
commemorative knickknacks to the managers at FireArt were unaccus-
fans of teams such as the Fighting tomed to tbe team process, however,
Irish, the Wolverines, and the Gold- Eric imagined he might get some re-
en Gophers. In the spring, tbere was sistance from one or two members.
always a rush of demand for senior
For one, he had heen worried
prom items-champagne gohlets em-
ahout Ray LaPierre of manufactur-
blazoned with a school's name or
ing. Ray was a giant of a man who
beer mugs witb a school's crest, for
bad run tbe furnaces for some 35
example. Fraternities and sororities
years, following in his father's foot-
were steady customers. Year after
steps. Altbough he was a former
year, FireArt showed respectahle in-
high school foothall star who was
creases at the top and bottom lines,
known among workers in the facto-
posting $86 million in revenues and
ry for his hearty laugh and his love of
$3 million in earnings three years
practical jokes, Ray usually didn't
before Eric arrived.
say much around FireArt's execu-
In tbe last 18 months, tbough, tives, citing his lack of higher educa-
sales and earnings had flattened. tion as the reason. Eric bad thought
Jack, a grandnephew of tbe compa- the team atmosphere might intimi-
ny's founder, tbought be knew wbat date him.
was happening. Until recently, large Eric had also anticipated a bit of a
national glass companies had heen fight from Maureen Turner of the de-
able to make money only through sign division, who was known to
mass production. Now, however, complain that FireArt didn't appre-
thanks to new technologies in tbe ciate its six artists. Eric had expected
glassmaking industry, tbose compa- that Maureen migbt have a chip on
nies could execute short runs prof-
itably. They had hegun to enter Suzy Wetlaufer is a Boston-based
FireArt's niche. Jack had told Eric, writer. Formerly, she was with Bain
and, witb their superior resources, it &) Company, where she worked
was just a matter of time before they with manufacturing clients on
would own it.
strategy formulation.

HARVARD BUSINESS REVIEW Novt-mbtT-December 1994 23


E 5 T U D Y

her shoulder about eollaborating planned an agenda for each meeting formed into his usual ebullience.
with people who didn't understand and tried to keep the discussions on "That wasn't so bad!" he laughed to
the design process. track, Randy always seemed to find himself as he sat down at the end,
Ironically, both those fears had a way to disrupt the process. Time flashing a grin at Eric. "Maybe we
proved groundless, but another, and time again, he shot down other can turn this old ship around."
more difficult problem had arisen. people's ideas, or he simply didn't Maureen Turner had followed
The wild card had turned out to be pay attention. He also answered Ray. While not disagreeing with
Randy. Eric had met Randy once be- most questions put to him with him - she praised his comments, in
fore the team started its work and maddening vagueness. "I'll have my fact - she argued that FireArt also
had found him to be enormously in- assistant look into it when he gets needed to invest in new artists,
telligent, energetic, and good-hu- a moment," he replied when one pitching its competitive advantage
mored. What's more. Jack Derry had team member asked him to list in better design and wider variety.
confirmed his impressions, telling FireArt's five largest customers.
Unlike Ray, Maureen had made this
him that Randy "had the best mind" "Some days you eat the
at FireArt. It was also from Jack that bear, and other days
Eric had first learned of Randy's the bear eats you," he
hardscrabble yet inspirational per- joked another time, Ironically, the people
when asked why sales
sonal history.
to fraternities had re-
Eric thought would be
Poor as a child, he had worked as a
security guard and short-order cook
cently nose-dived. problems v^eren't.
to put himself through the state col-
lege, from whieh he graduated with
Randy's negativism,
however, was coun-
Randy vs^as the problem.
top honors. Soon after, he started tered by occasional
his own advertising and market re- comments so insightful that they case to FireArt's top executives
search firm in Indianapolis, and stopped the conversation eold or many times, only to be rebuffed, and
within the decade, he had built it turned it around entirely - com- some of her frustration seeped
into a company employing 50 people ments that demonstrated extraordi- through as she explained her reason-
to service some of the region's most nary knowledge about competitors ing yet again. At one point, her voice
prestigious accounts. His success or glass technology or customers' almost broke as she described how
brought with it a measure of fame: buying patterns. The help wouldn't hard she had worked in her first ten
articles in the local media, invita- last, though; Randy would quickly years at FireArt, hoping that some-
tions to the statehouse, even an hon- revert to his role as team renegade. one in management would recognize
orary degree from an Indiana busi- The third meeting, last week, had the creativity of her designs. "But no
ness college. But in the late 1980s, ended in chaos. Ray LaPicrre, Mau- one did," she recalled with a sad
Randy's firm suffered the same fate reen Turner, and the distribution shake of her head. "That's why when
as many other advertising shops, and director, Carl Simmons, had each I was made director of the depart-
planned to present cost- ment, I made sure all the artists were
cutting proposals, and at respected for what they are - artists,
first it looked as though not worker ants. There's a differ-
If Randy can't help you, the group were making ence, you know." However, just as
no one can," CEO Jack good progress. with Ray LaPierre, Maureen's com-
ments lost their defensiveness as the
Derry had told Eric. Ray opened the meet-
ing, proposing a plan for
group members, with the exception
of Randy, wbo remained impassive,
FireArt to cut through-
greeted her words with nods of en-
he was forced to declare bankruptcy. put time by 3% and raw-materials
couragement.
FireArt considered it a coup when it costs by 2%, thereby positioning the
landed him as director of marketing, company to compete better on price. By the time Carl Simmons of dis-
since he had let it be known that he It was obvious from his detailed tribution started to speak, the mood
was offered at least two dozen other presentation that he had put a lot of in the room was approaching buoy-
jobs. "Randy is the future of this thoLigbt into his comments, and it ant. Carl, a quiet and meticulous
company," Jack Derry had told Eric. was evident that he was fighting a man, jumped from his seat and prac-
"If he can't help you, no one can. I certain amount of nervousness as he tically paced the room as he de-
look forward to hearing what a team made them. scribed his ideas. FireArt, he said,
with his kind of horsepower can "I know I don't have the book should play to its strength as a ser-
come up with to steer us away from smarts of most of you in this room," vice-oriented company and restruc-
the mess we're in." he had begun, "but here goes any- ture its trucking system to increase
Those words eehoed in Erie's way." During his presentation, Ray the speed of delivery. He described
mind as he sat, with increasing anxi- stopped several times to answer how a similar strategy had been
ety, through the team's first and sec- questions from the team, and as he adopted with excellent results at his
ond meetings. Though Eric had went on, his nervousness trans- last job at a ceramics plant. Carl had

24 HARVARD BUSINESS REVIEW NovcmbcT December 1994


joined FireArt just six months earli- "EVA is today's
er. It was when Carl hegan to de-
scribe those results in detail that
Randy brought the meeting to an un-
hottest financial
pleasant halt hy letting out a loud
groan. "Let's just do everything, why
don't we, including redesign the
idea and
kitchen sink!" be cried with mock
enthusiasm. That remark sent Carl
back quickly to his seat, where be
halfheartedly summed up his com-
getting hotter." Fortune Magazine
September 20. 1993

ments. A few minutes later, he ex-


cused himself, saying he had another
meeting. Soon the others made ex-
cuses to leave, too, and the room be-
The EVA Management Guide!
came empty. The Quest for Value is the originiil source iind definitive guide to
No wonder Eric was apprehensive Stem Stewart's EVA framework for financial management and
about the fourtb meeting. He was incentive compensation. Adopted by such leading companies as
therefore surprised wben he entered
tbe room and found tbe whole group, Coca-Cola and AT&T, EVA {or '^Economic
save Randy, already assemhled.
Value Added") focuses an entire
Ten minutes passed in awkward
small talk, and, looking from face to organization on increasing shareholder
face, Eric could see bis own frustra-
tion reflected. He also detected an v;due. As an indispensable guide for
edge of panic - just what he had senior managers, The Quest for Value
hoped to avoid. He decided he had to
raise tbe topic of Randy's attitude shows how to re-engineer a
openly, but just as he started. Randy company's financial niiuiagemenl
ambled into the room, smiling. "Sor-
ry, folks," he said lightly, holding up system to introduce more account-
a cup of coffee as if it were explana- ability and incentive for creating
tion enough for his tardiness.
"Randy, I'm glad you're here," Er- shareholder value. By addressing
ic hegan, "hecause I think today we such issues as capital allocation,
should hegin hy talking ahout the
group itself-" corporate governance, executive compensation,
Randy cut Eric off with a small, (|Uidit)' and re-engineering. The Quest for Value presents a
sarcastic laugh. "Uh-oh, I knew this
was going to happen," he said. comprehensive new paradigm for niiuiagement.
Before Eric could answer, Ray
LaPierre stood up and walked over to Ib order The Quest for Value.
Randy, bending over to look him in plfUNC st-nd tliivk or money order to
the eye. Stern Stewart Management .Services.
Ann.:V Butler:
"You just don't care, do you:" he
began, his voice so angry it startled Please send copies at S4'S.(K) each
everyone in the room. Total for Books
Everyone except Randy. "Quite Shipping & ilandling
the contrary-I care very much," he ($S per book)
'''..
answered hreezily. "I just don't he- Sales Tax
lieve this is how change should he iH.2=i% only liir NY-
residents)
made. A hrilliant idea never came
Total Stern Stewart & Co.
out of a team. Brilliant ideas come
40 West 57th Street
from brilliant individuals, wbo then Name
inspire others in the organization to New York, NY 10019
Title _
implement them." (Company
Tel:212-261-0b00
"That's a lot of hull," Kay shot Address _ Fax:212-581-6420
back. "You just want all the credit
L'V.V" SfiTiccs:
for the success, and you don't want
Plume Valtie-Added Financial Manajjement
to share it with anyone."
crftlil ciird orders a Incenlive Compensation
Corporate Financial Advison
C A S E S T U D Y

"That's absurd," Randy laughed It was Eric who broke the silence. ego surrender that any kind of team-
again. "I'm not trying to impress "Randy, tbis is a team. You are work requires.
anyone here at FircArt. I don't need part of it," he said, trying to catch "Listen, everyone, I know this is a
to. I want this company to succeed Randy's eye without success. "Per- challenge," Eric began, but he was
as much as you do, but I believe, and haps we should start again-" cut short by Randy's peneil-tapping
I believe passionately, that groups Randy stopped him hy holding up cm the table. A moment later, Ray
are useless. Consensus means medi- his cup, as if making a toast. "Okay, LaPierre was standing again.
ocrity. I'm sorry, but it docs." look, I'll behave from now on," he "Forget it. This is never going to
"But you haven't even tried to said. The words held promise, but work. It's just a waste of time for all
reach consensus with us," Maureen he was smirking as he spoke them- of us," he said, more resigned than
interjected. 'Tt's as if you don't care somctbing no one at the table gruff. "We're all in this together, or
what we all have to say. We can't missed. Eric took a deep breath be- there's no point." He headed for the
work alone for a solution - we need fore he answered; as much as he door, and before Eric eould stop him,
to understand each other. Don't you wanted and needed Randy Louder- two others were at bis heels.
see that?" back's help, be was suddenly struck
by the thought that perhaps Randy's HBR's cases are derived from the
The room was silent as Randy experiences of real companies and
shrugged his shoulders noncommit- personality and his past experiences
real people. As written, they are
tally. He stared at the tahle, a blank simply made it impossible for him to hypothetical, and the names used
expression on his face. participate in the delicate process of are fictitious.

Why Doesn't This Team Work?

Seven experts discuss what teamwork takes.

the implications of tbose words,


draw any meaningful focus from
them, or recognize any need to work
together to make "strategic realign-
ment" a performance reality.
\I\The "rules of the road" are ex-
tremely unclear. While the team has
a good mix of skills and experience,
Real teams do not have to get tbe members do nut know how each
is expected to eontribute, how they
along. They have to get things will work together, what they will
accomplished. work on together, how the meetings
will be conducted, or how each per-
son's "nonteam" responsibilities
will be handled.
is elear that Randy can-and might-
destroy the team for good. But there riEric's consultant "team" experi-
ION R. KATZENBACH is a director are other factors hindering this team ence is misleading. In the past, Erie
of McKinsey &) Company and co- besides Randy, and unless Eric rec- was really a part of a consultant
author, with Doughi.s K. Smith, of ognizes and addresses them, the "workinggroup," which is complete-
The Wisdom of Teams: Creating the team will not make progress, what- ly different from a team. For one
High-Performanee Organization
(Harvard Business School Press, ever its makeup. thing, consultants generally have
1993. HarperCollins, 1994). Their n\There is no evidence of a common prior experience dealing with the
video. The Discipline of Teams, was commitment to a team purpose or client assignments they obtain. For
published by Harvard Business a working approach. Eric is trying another, consultant working groups
School Management Productions. valiantly to hold the members to an expect to have leaders,- they're usu-
agenda based on the CEO's charge: ally formed with the understanding
Eric has his hands full with this "to have a comprehensive plan for that one person knows best how to
team, particularly with Randy. In strategic realignment." At best, accomplish the task at hand effi-
fact, a skeptic might well advise Eric that's a vague directive. Consequent- ciently with minimal risk. Finally,
to throw in the towel now hecause it ly, the members do not understand most of the real work in such a

26 PORTRAITS BY CHUCK MORRIS

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