Introduction:
In this paper were will be covering our analysis of the BoldFlash: Cross-Functional Challenges in the Mobile Division case, written by Michael Beer and Rachel Shelton. The analysis will cover the history of the company, symptoms and problems, alternatives, and our recommendations. The given case expounds over the situation when Roger Cahill – Vice President of BoldFlash Mobile Division came across the situation where BoldFlash is struggling to adjust to a progressing and challenging marketplace. In the case study, there are four departments (marketing, sales, manufacturing, and product development) within a division that refused to work collaboratively. As a result, the division has failed to make the most of some exceedingly significant new product opportunities. In order to address these issues, Roger Cahill undertakes a number of personnel and organizational changes since he takes his designation in control. While facing eroding profit margins and low employee morale, Cahill has to work towards reforming the new product development process in order to save the Mobile Division.
Bold Disk was founded in 1982 as a company that focused on developing computer storage media like floppy disk. The company’s headquarters was located in Waltham Massachusetts. In 2012, the company was renamed to BoldFlash and focused on developing flash memory components for electronic devices. BoldFlash has a significant customer base in OEM, original equipment manufactures, and direct-to-consumer markets. Due to the economic constraints of pricing pressure the company decided to move the main manufacturing facility out of the United States to Shanghai, while they also continued to operate smaller manufacturing facilities in Austin, TX and Hamilton Ontario Canada. Dr. Roger Cahill was promoted to VP of the mobile division and had been in his position less than a year at the time of the case. Dr. Cahill has remarkable experience in Engineering as research and development, he has worked for BoldFlash for 24 years and is a highly respect research scientist. At the time that Dr. Cahill took over the mobile division, they have fallen behind their competitors in several areas. The biggest disaster was missing a critical release of storage devices for tablets, giving its competitors and who advantage in the critical growth stage for this product.
Problems:
Major issues in the given case are the deteriorating profit margins and declining market share, as well as, growth rate of the business, which is due to a number of economic and organizational issues. Apart from this major issue, BoldFlash was also encountering cross-functional, interdepartmental and sub-divisional conflicts, which were detrimentally contributing towards organization’s goal attainment of timely market delivery, quality issues, market performance, and abating profitability (Beer et.al 124). In this section we will be discussing organizational problems that were preventing the organization from attaining its goals, which are leadership, organizational change, communication, team work and low employee morale leading to lack of motivation.
Roger Cahill was appointed to a role that did not suit his experience and skills, which caused a great deal of leadership issues. He did not have any experience managing employees and making key decisions that were not related to research and development. Cahill took over the mobile division shortly after he predecessor, Jim Harrison, un-expectantly passed away. Cahill stated that his predecessor was viewed as an “autocrat who fostered a complaint culture” (3), which promoted a complaint style culture within the organization. This caused people keep to themselves and their specific departments in order to feel protected. Cahill questioned, if the leadership style of his predecessor was cause of the conflict he was observing, this lead to Cahill to be unsure of what to expect from any of the departments within the Mobile Division. There is clear difference between Roger Cahill’s leadership style and his predecessor Jim Harrison. One employee, Carl Melzer director of product development, emphasized “Jim could be overpowering [] but you always knew where he stood” (3-4). Roger on the other hand “is more open and generates trust and involvement” (4). Carl Melzer really perceives Roger as a scientist and doesn’t understand his motives behind the changes he is making within the organization. This seems to be a general assessment of Cahill’s leadership style. Additionally Cahill overwhelms his colleagues with is extensive technical knowledge and focuses on the new product development rather than strategic management on the organization. Stated by Kavita Pavel “his expertise is incredible, but it didn’t help me with my [project].” This shows that Cahill is very knowledgeable of the Research and Development side of the business, but lacks the leadership capabilities to help the managers solve their problems.
His leadership style was a major problem since he introduced rapid changes within the organization, which were not positively received by some of the long serving management team. When Roger Cahill took over the mobile division he was pressured into making quick changes in order to get the mobile division back on track. Cahill consolidated the division’s non-manufacturing employees and moved all managers to the corporate headquarters. This was to ensure all of his managers were in the same time zone. He separated the sales and marking division because he thought “the two are essentially different functions and were separate units in the Consumer Division” (3). The functions of the marketing group were described as “a strategic function” and the functions of sales “were to knock on doors and sell” (3). With these changes Cahill appointed Kavita Patel as the Director Marketing and Chip Bryant, former director of Marketing and Sales, was appointed as the Director of Sales. The separation of Sales and Marketing was idle, but Cahill failed to define the roles of each department therefore causing additional issues. During the organizational changes the director of manufacturing division was unwilling to move to from Shanghai to Waltham, MA, therefore he appointed Kevin Chang as Director of Manufacturing, who was previously the plant manager in Shanghai. The reasons behind these organizational changes were the conflict between the departments and they were unable to work together as a team.
Another one of the major issues within this case was communication, which caused conflict between the functional departments. During the quarterly meeting, all division managers should be discussing opportunities for new product development, but due to the lack of communication between the division leads, there was difficulty summarizing what accomplished. During these meeting the various departments were missing their objectives therefore causing them to work in small groups after the meetings to complete their objectives. One specific example of lack of communication was between division managers of the manufacturing and sales departments, where important information was not supplied to lower level staffers. One Austin Plant manager complained, “our sales teams rarely consults with us before sending out proposals”, furthermore the team feels they are not being listened to when they present strong ideas. At times staff was directed to push beyond capacity, which leads to poor productivity. This could have been prevented if the division managers would have listened to the expertise of the individuals within each division. The sales and marketing team have difficulties communicating, for example “Anytime I ask Chip for anything, he says ‘ask Kavita’. When I ask Kavita, she tells me to see Chip.” (6) This type of miss communication as cause people to stop asking for help all together. The product development team isolated themselves, preventing key communication between the various departments. Product development team has issues communicating with sales on product development issues. For example, Sale Director Bryant mentions “I have been trying to meet with Karl about a new product launch, but he is always out presenting at a conference.” This shows a lack of communication and an inability to schedule meetings to discuss important items.
The company has maintained a strong relationship in research but lacked in other areas. The company had over 600 patents solely in the US; however it was unsuccessful in commercializing its technology it developed. The development did not always align with target markets. The research and development team is not working with the other departments in order to launch successful products. Marketing has an issue with getting people in product development, sales and manufacturing to follow through on commitments that were made in quarterly meetings. This lead to problems such as companies doing overlapping work, for example the marketing director is tasked with suggesting new products, but product development is doing this as well. Ultimately each department wishes that their roles were more defined. Another example of lack of team work is each manufacturing division is operating independently as its own profit center and is being evaluated individually based on quality or on time delivery. When a department does not meet meets its goals it is criticized by the others within the organization. The Managers from the three manufacturing facilities are a competitive group and often ridiculing the peers on low performance. The manufacturing divisions had conflict with sales, since sales would do anything in order to meet revenue goals. This includes promising “one of our best customers a high level of product at a low price in a short amount timeframe” (4). By doing so, Sales is making their department meet their revenue goals, while causing the manufacturing department is struggling to meet the cost structure. The sales and manufacturing are not working as a team in order for the company to succeed as a whole.
Alternatives:
After reviewing the case we have determined three alternatives to the problems noted above. The first alternative would be to remove Roger Cahill as Vice President of the Mobile Division and appoint a more experience manager to the position with preferred leadership qualities. First of all, leadership is defined as the ability to influence, motivate, and enable others to contribute toward the effectiveness of the organizations of which they are members. Therefore the qualities we are looking for in a leader are to have a strong Managerial leadership style. Managerial leadership includes daily activities that support and guide the performance and well-being of individual employees and the work unit to support current objectives and practices. Since the mobile division was having difficulties working as a team, strong managerial leadership would mobile division improve inter-departmental conflicts, so mobile division can achieve their current objectives. This can be achieved by implementing several steps to help improve communication and the overall corporate culture. Since there are many challenges when trying to correct inter-department cooperation and enhance the company’s culture, we would take the following steps. First would be to develop clear defined responsibilities of each department; therefore this will help resolve inter-departmental conflict of overlapping responsibilities. Another implementation would be to require employees to attend communication and leadership training programs, in order to adapt an open corporate culture at BoldFlash. This would also help to encourage upward communication within the corporation. The third step would be to create teams of member at all levels in order to drives these changes throughout the entire company.
Another alternative would be to outsource manufacturing in order to minimize cost focus on the research and development, which is their competitive advantage. There are many benefits to outsourcing manufacturing to other countries with low cost labor, with help minimize their cost structure. With outsourcing, there are also several steps that BoldFlash would need to implement, in order to ensure this a successful alternative. According to Forbes “India is the leading recipient of the outsourcing of information technology functions like software development and maintenance” (), therefore BoldFlash should outsource their manufacturing to India. Since India is the leading recipient there should be no issues finding local suppliers. In order to ensure a quality product BoldFlash would be to develop a quality control department. Another key strategy for outsourcing is developing a supply chain strategy that would ensure on time deliveries.
A third alternative would be to utilize the patents available, to diversify into other products and markets. “The purpose of a diversification is to allow the company to enter lines of business that are different from current operations”(). A diversification stagey will allow BoldFlash to expand their operations by adding “markets, products, services or states of production to the existing business” (). Diversification can be done internally or externally. One way BoldFlash can diversify internally would be to market their existing products in new target markets, this can be done by expanding in to broader geographic markets or by finding new users for their product. Another way BoldFlash can implement internal diversification would be to market new products in their existing markets. This “strategy involves using existing channels of distribution to market new products. Retailers often change product lines to include new items that appear to have good market potential.” (). On the other hand BolFlash can also use the external diversification strategy, which “occurs when a firm looks outside of its current operations and buys access to new products or markets. Mergers are one common form of external diversification”(). Since BoldFlash is struggling with to gain market share, they can look to merge with another company that has a competitive advantage within the Sales and Marketing Division. Since BoldFlash has a competitive advantage in Research and Development and a weak Sales and Marketing Division, this would help them to excel within the industry.Recommendations:
In order to change the situation, BoldFlash should take some strict steps in all problematic zones. It should include changes in management, communication, marketing and manufacturing – all those key problems that are reasons of current situation in the company.
First of all, our recommendations would be to remove Roger Cahill as Vice President of the Mobile Divisions and hire a new Vice President with management experience, preferably from the flash memory industry. It is well known that Roger Cahill is great in engineering and he know a lot about the company (he is working in BoldFlash for more than 20 years), but his leaders abilities are too low for successful development. Company needs to hire external CEO that could look on the problems from the different point of view. He\she needs to have strong leader position (as former VP had) that will help to build well-structured management system.
Secondly, the company needs to solve the problem of communication. And we consider lack of internal communication opportunities as a key reason of this situation. Our recommendation is that all departments’ heads, regardless of location, should meet at least 4 times per year to create targets and develop forecasts based on the resources and abilities of every department. These meeting will be managed by the new VP of the mobile division. Despite this meeting, a new online-platform for information collection should be created. It should be an instrument of all-time-round communication process inside the company, so that each department will be able to see what is going on in other departments. The main message in communication changes should be that all workers and departments are working to achieve the same goals – not separate indicators are most important, but the company’s ones.
In addition to communication changes, there should be several steps in Marketing and Sales. Our recommendation is that these two departments should be reorganized in the one Sales & Marketing department as it was before Cahills’ decision. This step will allow to solve the problem of internal conflict between Marketing and Sales, because both of them will be managed by one management team, so vision, strategy and KPI will be the same for all workers. Department should shift its focus from sales revenue to profit margin so that they can set the appropriate prices. The company should take advantage of emerging markets before it is too late to ensure the company does not miss some lucrative opportunities – and this is the main goal of Marketing.
Conclusion:
The company has immense potential but is affected by a disorganized workforce. Every department works on its own targets, ignoring those of the other departments and developed without considering the effects of other departments and a company as a whole. Lack of the right leadership seems to be the main problem, which has led to the development of the prevailing issues. The current managers should be replaced with experienced successful managers with the right track record.
