Stone Finch Inc. Case Study Analysis

Stone Finch Inc. is a business in trouble. The organizations top producing division is losing talent and market share because of an innovative company revision that inspires and supports innovative subsidiary groups to sprout up within Stone Finch and then be decoupled from the organization in their infancy but remain tethered by a contract to merge the subsidiary after a period of time. The idea to innovate and grow is an effective one but in this case, does not consider the large differences in corporate team management style, team building characteristics or esprit d’ corps.

This case report will discuss background, pertinent issues, recommendations and conclusions. Falcons and Buzzards Understanding how to build and lead teams successfully is an ever-changing and full time job. Matching people to different types of employment is very challenging when the reasons for employment are varied. Many organizations use a Myers-Briggs personality analysis or similar tool as a consideration in hiring and making job assignments that consider the strengths of an individual. Finding a job for more money, or location, or to live a certain lifestyle are three possible reasons why a person might pick a specific job.

The missing reason should be the most obvious: Job! Many times people sign on to an organization specifically because of the job. Of course other factors might be considered but if the primary reason for employment is job-related, some personal factors need consideration by the employer and the employee. The premise of this case is that Jim Billings has a mandate by the Board of Directors through his selection as CEO to grow and develop Stone Finch Incorporated (SFI). He, after one night of number-crunching, developed this idea of innovative subsidiaries.

The concept is sound in theory but in application, requires a deft managerial touch to ensure the right people are in the right places. Objective Relevant Facts Falcons is the term used in the case to describe those entrepreneurial-spirited employees that would be branching out to develop innovative ideas and structures and bring them to the market. One of the falcons, Beth Suarez was made Vice President of the Solutions division, the division where the merged subsidiaries were to be reassigned (Hamermesh 2010).

Stone Water Products, the original company, was renamed Water Products (WP) Division under the new parent company, Stone Finch Inc. Water Products was headed by Eli Saunders, a long-time employee who had been with Stone Water for 25 years. A buzzard. Eli provides a great deal of tacit knowledge (Keitner 2010) and now try to convey his concerns to Billings. Water Products is the division that originally produced the financial wherewithal that enabled the solutions division to fund the innovative offshoots (Hamermesh 2010).

Financial reports indicate the solutions division is growing and surpassing the income generated by the WP division (Hamermesh 2010). From the open communications exercise, there is a disconnect between personnel of the older WP division and the newer entrepreneur-like structure. The indicators are that three top WP salespeople are leaving and a perceived gap between the “have’s” and the “have-not’s” thus creating an in-group-out-group mentality (Krietner 2010). Subjective Relative Comments The plan to innovate and grow is put in place by the former President/CEO and Founder, Mr. Stone. The idea to hire Billings was specifically to take the risks that he (Stone) was incapable of engineering. The financials indicate growth and improvement with the present system and while that is encouraging, the unintended consequence might actually be the demise of the WP division. WP’s ability to produce should not be overlooked and especially now, that expressions of a growing divide appears to exist. Billings is doing the right thing by thinking strategically and seeking to understand what is happening in the corporate culture.

In Kenneth Shaw’s Intentional Leader, Shaw discusses how a leaders ability to connect with diverse groups is critical in the group-lead process and how effective communications methods are key elements in corporate success (Shaw 2005). Billings reinforces those concepts through his thought process. These are diverse groups. WP personnel are successfully entrenched in their way of doing things. Their mode involved building and maintaining those relationships critical to their divisions success. At one time, they were the only division and their culture was the company’s culture.

The integration of the newer divisions and their corporate persona were not considered which contributes to the alleged divide that appears to exist. Losing eight personnel in the solutions division should be a planned for and intended consequence of having that many “birds of prey”. My analogy for what I read in the Stone Finch case is that once the kill is made, the carcass is not nearly as interesting and a new chase must be mounted. These people learned how to design, develop and plan a new business from conception to implementation.

It should be obvious that many will look to develop their own niche after already successfully having done it. Beth Suarez was making things happen as the entrepreneur and not as a corporate administrator. There are many other subjective snippets in the case that by themselves are insignificant but as part of a big puzzle, indicate to me that the corporation changed from a team-oriented and focused business to a multi-faceted organization without the appropriate organizational preparation. The time for damage control is now.

Recommendations These recommendations are a mix of what I would do along with Jim Billings’ way forward. This is a pretty sizeable problem. Trying to combine water and oil does not work no matter how much stirring is done. The ingredients simply reconstitute when the stirring stops. In this case, there needs to be an additional ingredient where the two opposites can bond. It might be a new corporate mission and vision statements along with guiding principles that are jointly developed by the differing corporate philosophies.

In the case, there are differing philosophies; one is a traditional corporate design and the other is a progressive, free-wheeling bastion of innovation. Everyone needs to understand the risks that the others are taking and how the end result is a benefit to all concerned and not just a select few. I’m curious to know if there are any falcons in WP’s structure that are just dying to help WP make the leap into innovation? Jim Billings has done a good job at this point in realizing there are issues of concern. Mainly, these issues are connected to people and not to numbers.

In fact, the numbers presented in the appendices of the case are reasonable and indicate current and projected growth as it pertains to development of the strategic subsidies idea. Billings’ task list should include:

  • Communicate immediately to the entire corporation the success of the open jam and the number of submissions and thank them for the number of great comments and suggestions. Also communicate a timeline for future communications about issues and suggested improvements and stick to it!
  • Conduct follow on interviews and additional data analysis before developing new action plans.
  • Pay specific attention to WP and Strategic Solutions. Also make personal contact with cancelled WP accounts and try to win back their business or at least gain data points on why the business is lost.
  • Communicate globally.
  • Place special emphasis on the perception of corporate division and determine the if one perception takes precedence over another as an end state or if the corporate culture can be successfully mended and combined. Then determine how to communicate that as policy going forward.
  • Interview Suarez and see if she is happy as an administrator.
  • It is apparent from past performance that she is highly competent and successful. If she desires to excel in her current position, she will if given the proper tools. If she is unhappy not soaring like a falcon, set her onto a new project or set her free to soar again elsewhere. At least after the discussion, it might be a relief for all concerned.
  • Look into the IT capabilities of WP. If lacking, bring them up to speed with current technologies and knowledge sharing software (Krietner 2010). If they are unwilling because “this is the way we’ve always done it”, make them willing through providing a compelling rationale.

If the WP culture is unable to adapt and retraining is unsuccessful; that is an indication that WP has outlived its usefulness and as unromantic as it may seem, Billings might have to consider selling off the asset. Personally, I don’t think that is the case here. I think WP feels used and abused and could probably use an infusion of capital resources to show they are still important to the organization. Perhaps an IT upgrade and training will show them a more efficient way to work and improve the morale of the group. Or looking for any WP personnel to work in the up and coming subsidiaries if they are so inclined.

This could help ease the differences or at least help with understanding. Billings is on the right track because he recognizes there is an issue. Albeit a strongly worded email from SVP Eli Saunders seems to have helped strike a nerve with Billings; the fact is, that it did make an impact.

Conclusions

The describe Billings to have crunched the numbers in one night and developed his strategic solutions concept. It might be that I misunderstand the context of the case but coming up with a plan like this in a short period of time does not consider the unintended consequences of corporate division as it appears in this case.

I conclude that with appropriate planning and communication, many of these problems could be have been avoided. In the recommendations section of this paper, bringing together the affected parties to jointly develop mission and vision would have helped both sides (WP and Solutions) understand the perspectives of their corporate brothers and sisters. As Billings himself is a falcon, he may not have seen that type of collaboration as necessary but at least he has the foresight now to correct the current situation.

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