Case 5 - Datavision

15TH MARCH 2013

AJAY GOVADA- “DATAVISION” Case Brief 4 Background: 1.

Datavision is a small computer company specializing in process control industry. a. Started in 1985 by four engineers from MIT b. The company’s products based on workstation architecture were well received with constantly increasing demand over the years. c. Over the years Datavision successfully marketed products to the large businesses with a special concentration on the food industry. d. Datavision’s nature of business was characterized by high technology which was always rapidly changing. e. Despite being the innovators Datavision failed to be the leader of the industry with worries of further degradation in future. f. An important worrying factor is the overall turnover rate that has been constantly higher than industry levels at Datavision. g. The high turnover rates have further complicated Datavision’s ability to change with the rapidly evolving high technology markets. 2. Datavision has followed a very aggressive growth over the years, which for the first time is showing the tell-tale signs of down turn. a. Datavision has recorded sales growth of nearly 50% consistently over the years. b. For the first time during 1994 the sales have gone down below the 40% growth mark. c. In-spite of the decline, income before tax exceeded and is attributed to the lower costs coinciding with the sharp decline in turnover rate to 18%. d. Adding to the worry of the declining sales is the declining backlogs. 3. Data vision has a relay like structure with very centralized decision centers. a. Campbell is the ring master who makes all the major decisions with a very little say from others. b. Campbell’s decisions are implemented by the VPs through managers in their areas. c. Decisions have a one way flow from top to bottom and information the other way around. d. At the beginning of Datavision all levels of hierarchy were easily accessible which now has become difficult replaced with a sense of formality. e. The categorization of the 29 members of the top management seems to support the overall functioning of the organization. f. An interesting point is that all the VPs are from a technical background with MBAs from reputed schools but lacked any managerial experience 4. Datavision had a history with consultants trying to help bridge the gaps. a. All of these efforts at best had only lukewarm results creating a sense of skepticism among the employees about the exercise. b. However all recognized the gravity of growing situation and were willing to give the exercise a serious try. c. Recognition was coupled with Brennan’s straightforward attitude and capability, spurring the top management to see this work.

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Findings:

1. Teams built on weak foundations of trust with forced harmony. a. All the members of top management seemed to know one another well in a formal way. b. Doubts regarding each other’s competencies meant lack of collaboration. c. Questions were limited to verticals of the organization rather than along the horizontals. d. Many dark patches in the strategy as no single person had the full view of the long term goals. e. Marketing and engineering departments are the worst affected considering how they ideally complimented each other. 2.

They were driving blind without clear goals for Datavision a. Top management feels that the rapid growth has outstripped their managerial resources making it difficult to plan ahead efficiently. b. Lack of trust complicated the issue preventing knowledge sharing among the departments. c. Datavision no longer has the feel for the market that is highly technology intensive with the landscape changing very rapidly. d. Limited customers were targeted by the marketing department making it highly necessary to sell the product at any cost. e. This led to the inefficiency of engineering and manufacturing departments to design the non-existing products for the marketing department. f. Engineering department is also criticized for slow product development without insights in to the market scenario.

3. Frequent changes to finalized decisions led to a lot of confusion. a. Most of the strategic decisions were made by Larry. b. In general these decisions were premature constantly evolving from the continuous flow of information from various departments. c. Also led to inefficiencies in manufacturing and engineering departments as adopting changes requires lot of prior planning. d. Such situations were embarrassing and further eroded the confidence of the organization in senior management. 4. No clear organizational structure added to the problems. a. Service departments were shifted between departments frequently causing unnecessary confusion. b. Everyone had a clear problem with Sisco, head of service department which they did not recognize as a core department. c. All organizational decisions were under Larry’s control, most based on questionable assumptions. d. This was the first time Sisco was confronted like this, making apparent the bottled egos and trust issues.

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5. Sense of polity in the top management resulting from perceived patronization. a. Sisco is a close acquaintance of Larry, the person who calls all the shots. b. Top management members did not specially recognize his contributions to the company. c. Such feelings were made apparent for the first time bringing down the apparent walls of perceived friendliness. d. Top management members other than Sisco opined that such displays of friendship stood in the way of business. 6.

Conflicting managerial styles made collaboration difficult. a. Datavision as an organization was into logical and analytical styles of managing. b. Most decisions at Datavision are taken after exhaustive data gathering and analysis to back the decisions. c. Fowler is the sole member of the top management who followed a starkly different managerial style. d. He relied more on his intuition than data gathering to take important decisions. e. His ego played an important role in the process. f. Being head of the marketing division, this irresponsible managerial style of his generated a lot of inefficiencies in other divisions.

7. Lack of even general communication in the organization is painfully visible. a. Not all managers were aware of the off-site meeting. b. Even those who knew about the meeting were very skeptical of the results. c. The perception was all this was happening so that Campbell could enforce one of his ideas again. d. Everyone generally accepted Brennan’s capabilities but were skeptical of his impact on Datavision. 8. Problem is with the top management and not with Datavision. a. Lower levels in Datavision believed that the team problems were entirely confined to the top levels. b. Top management’s lack of experience was the major reason for the low confidence in them among the lower levels. c. The workforce believes that the strong egos and personalities in the top management will surely derail the team building project. d. Once again Fowler was considered as the starting point of most problems entailing Datavision. e. Campbell just awoke to Fowler’s misfit with Datavision which was widely perceived across the organization.

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Conclusion:

1. Datavision has to do a lot of team building to see the long term sustainability of Datavision. a. Most of this building must happen at the top level. b. Team member egos have played a major role in preventing the team’s progress. c. Communication and mistrust are the primary reasons for the team to not collaborate meaningfully. d. Highly hierarchical structure Datavision has grown to adopt is limiting the flow of issues from bottom to top. 2. Cross functional integration is the need of the hour. a. For a company like Datavision a sale depends on multiple departments which must be closely interacting. b. Marketing department should have an idea on what products are readily available and how to limit tailoring them realistically. c. Marketing should also be in touch with finance department to keep an eye on cash flows and backlogs. d. Following an individualistic approach is what resulted in Datavision’s current situation which could worsen further. e. Lack of communication has hampered effective planning and product development strategies at Datavision. 3. Marketing is the focal point for all activities relating to Datavision. a. Bob Fowler is in charge of this division who has adopted a very different style of management which is proving very disastrous to Datavision. b. Mistrust in Bob Fowler is very evident in the organization and many believe he is solely running the company into ground. c. Marketing for long has narrowed its scope to large clients in food and chemical industry leading to saturation issues. d. Unrealistic promises to clients was a reason for the small product turnover rate leading to long wait times. 4.

The off-site had mixed results. a. Dave was an efficient catalyst to help the top management bring out all the issues. b. He was instrumental in moderating the discussions and help the members take the criticizing constructively. c. The team feelings were restored and all seemed to be more comfortable and ready to work more efficiently with each other. d. However still there was a doubt as to how long these feelings would last.

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5. Datavision had very little trust in the top management’s capabilities. a. Uncertainty from the trust issues and inexperience of top management can be attributed as reasons for the high employee turnover rate. b. It would take more than simple proclamations and off-site team building to win back the trust. c. The solution should start with Bob Fowler’s issue. d. Nobody was expecting a sudden change but a gradual one resulting in flourishing of team principles of the top management. e. Everybody realized the major issues but seemed to have no viable solution to solve them as evident from the previous failed projects.

Emerging Recommendations:

1. Solutions must start with Bob Fowler. He must be given a time frame within which he can prove his commitment to the company and his team members. He should be given a chance to prove he can abide by his new lessons from the meeting. Also this should be communicated to all Datavision members. This in a way would make Fowler accountable to Datavisoin and hence making it easier for the team to give the new changes a serious try. 2. Communication among departments must be improved. One way this could be is to have all departments present at the weekly meetings. This could help in regulated open discussions and also prevent decision making and unmaking a source of confusion. This would also keep all departments informed of the strategy being followed and will help in making informed future plans. 3. In future it might be helpful to include the engineering and manufacturing teams with the marketing teams during the finalizing of customers. This would make the decisions more transparent. 4. The hierarchical system must become more accessible. Decision process must become more decentralized. Acknowledgements must be passed down to the lower levels to give them confidence that their issues have been recognized. Another advantage would be that the issues can be escalated and noticed faster.

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