>> Operation Management
At 7:30 a.m., Juan Para hit the snooze alarm for the third time, but he knew he could never go back to sleep. Rubbing his eyes and shaking off a headache, Para first checked his IPHONE and read an urgent message from his boss, explaining that Jack Nixon, chief security analyst, had resigned last night and needed to be replaced immediately. Frustrated, Para lumbered toward the shower, hoping it would energize him to face another day. After last night’s management meeting, which had ended after midnight, he was reeling from the news that his employer, Protection Insurance, was spiraling toward a financial meltdown.
Para scratched his head and wondered, “How could one of the world’s largest insurance companies plummet from being the gold standard in the industry to one struggling for survival?” At the end of 2007, Protection had $100 billion in annual revenues, 65 million customers, and 96,000 employees in 130 countries. One year later and staggered by losses stemming from the credit crisis, Protection teetered on the brink of failure and was in need of emergency government assistance. Protection had been a victim of the meltdown in the credit markets. The collapse of this respected financial institution sent shock waves throughout the world’s economy.
Within Protection’s Manhattan office, Para and his coworkers felt growing pressure to respond to this crisis quickly and ethically. But morale was sagging and decision making was stalled. New projects were on hold, revenues weren’t coming in fast enough, and job cuts were imminent. Finger-pointing and resignations of key managers had become commonplace. Strong leadership was needed to guide employees to stay the course. Para knew his first priority was to replace Jack Nixon. When leaving the meeting last night, his boss had told him, “It’s critical that we keep key managers in place as we weather this storm. If we lose any, be sure you replace them with ones who can handle the stress and can make tough, maybe even unpopular, decisions.”
Working up a sweat as he rushed into his office, Para began sorting through the day’s priorities. His first task would be to consider internal candidates to replace Nixon. He pondered the characteristics required of a chief securities analyst and scribbled them on a notepad: experienced in security and regulatory issues; strong decision-making skills; high ethical standards; able to make job cuts; comfortable slashing budgets; and respected for calm leadership. Para immediately thought of June Jacob, a senior analyst who had been vocal about her desire to move up and had recently shown steady leadership as the organization started to crumble.
Jacob had worked her way up through the organization, becoming a respected expert in her field. She had developed a strong team of loyal employees and made training and job development a priority. She was likable, sensitive to her employees, and a consensus builder. While many managers within Protection had made questionable business decisions, June had held herself to a high ethical standard and created a culture of integrity. Jacob was focused on the future—a go-getter who knew how to get results.
With the future of the company at stake, however, Para wondered if Jacob could handle the tough challenges ahead. Although he valued her team-building skills, she could be soft when it came to holding employees accountable. A large part of her motivation was to have people like her. When she reported a shortfall in earnings in the last company meeting and came under fire, she’d become defensive and didn’t want to point fingers at employees who were to blame. In fact, Para recalled another instance when Jacob recoiled at the thought of firing an employee who had developed a pattern of poor attendance while caring for her sick husband. She confessed a hesitation to confront poor performers and employees struggling to balance home and work life.
Para stirred his morning coffee and wondered aloud, “Is June Jacob capable of balancing kindness and toughness during a crisis? Can I count on her to be decisive and focused on top- and bottom-line results? Is she too much of a people pleaser? Will it impact her ability to lead successfully?”
Define the leader’s and manager’s approach (mindset) to solving the dilemma.
Determine Para’s solution if he used the leader’s perspective and then if he used the manager’s perspective. Do you see a difference? If so what differences? If not, why not? Could the outcome be the same and still benefit the company?