“Can you tell me what brought this about?”
“Yes, we’ve felt for some time that the company hasn’t been growing as fast as it should. You know we’ve discussed this. Take a look at the letters. I think you’ll find that they’re to you advantage.”
Chapter 13
(190th dawning of the 3,687th orbit)
3rd Planet
Walter is sitting in the conference room, having deliberately chosen a chair at the side of the table and not at the head of the table. Walter looks elegantly business-like in his new Ermengildo Zegna grey herringbone wool suit, striped red tie and black wingtip shoes. Mary Hammersmith, the company executive secretary, comes into the room. She is an attractive thirtyish young woman with close cropped blond hair.
“Good morning, Mary, I’m Walter Karnaugh. Please have seat. The board has just appointed me as the new president and CEO effective immediately. Mr. Stoltzfus will be leaving today. I’d like you to continue in the same capacity as my executive secretary, if you’re willing. If you’re not comfortable with that, we will find some other position for you in the company.”
“This is very sudden, Mr. Karnaugh.”
“I’m sure it is. What do you say, Mary? Will you help me run this company?”
“I’ll give it a try, Mr. Karnaugh.”
“That’s great, Mary, and please call me Walter. Let’s set up some meetings so we can get things organized. I need to see the following people in 15-minute intervals in whatever order you can arrange them. Peter Hunter, Scott Hughes, Baker Anderson, Alice Schmidt, Ralph Steinmark and Betty Rodriguez. As soon as that’s arranged, you can set up a staff meeting for two hours from now for that group and yourself.”
“What about the other people that reported to Mr. Stoltzfus?”
“No, just the group I gave you. I’m not going to have as many direct reports as Ben did.”
“And you want me to attend also?” says Mary doubtfully.
“Absolutely. You’re part of the senior management of the company.”
“Thank you, Mr. Karnaugh, eh … Walter. I’ll do my best!”
Chapter 14
(190th dawning of the 3,687th orbit)
3rd Planet
Peter Hunter comes into the conference room. He’s a trim young man wearing grey slacks. His white shirt has thin vertical strips. His collar is open and his tie pulled down. “Mr. Karnaugh, I’m Peter Hunter.”
“Hi, Peter, I’m Walter Karnaugh. As I’m sure you’ve heard by now the board has appointed me President and CEO. I’m hoping that you’ll continue as the CFO of the company. We’ll need a strong finance department if we’re going to make this company more successful. Mr. Stoltzfus had 27 direct reports. I’m not going to do that. We need to streamline the management of the company. Are there finance department functions that previously reported to the president that you think should report to you?”
“Walter, I’m delighted to meet you. I look forward to serving as your CFO. Yes, there are four managers that reported to the president that I felt should have reported to me. There’s a cost accounting manager, accounts receivable manager, accounts payable manager, and a credit manager. I had a battle royal with the cost accounting manager when I tried to introduce ABC accounting.”
“Interesting that you should mention ABC accounting. I can well imagine that standard cost accounting would not shed any light on the true cost of the customizations that we do on each machine order.”
“Exactly! That was my thesis! “
“OK, let’s have the four managers that you mentioned to report to you. If that doesn’t persuade the cost accounting manager to work with you on projects like ABC accounting then I’ll assume that you’ll know what to do. I’m going to talk with each of my direct reports and then we’ll have a staff meeting. I’ll see you later at the staff meeting.”
***
Scott Hughes walks into the conference room. “Mr. Karnaugh, I’m Scott Hughes.” Hughes is wearing a brown suit. His starched white shirt is set off by a red stripped tie.
“Hi, Scott. As I’m sure you’ve heard by now the board has appointed me President and CEO. One of the things I’m going to do is try to streamline the management of the company. Mr. Stoltzfus had 27 direst reports. I’m not going to do that. I’d like you to work with me as director of sales and marketing. Are you up for that?”
“I am. Will I have customer service and order entry reporting to me?”
“Yes, I think that’s appropriate. One of the things we need to work on is the idea of each order being a custom design. When we do that, our capacity is limited by our engineering manpower. You’ll have to work with engineering to establish standard options and make the structure of the order entry as the specification for the final product.”
“One of the struggles that I’ll have is retraining the sales staff. Under Mr. Stoltzfus they ran wild. His motto was offer anything, just get an order.”
“That sounds like an interesting problem, I’ll be interested to see how you solve it. As soon as I’ve had a chance to talk with all my direct reports, we’ll have staff meeting. I’ll see you at then.”
***
Baker Anderson walks into the conference room and introduces himself, “Mr. Karnaugh, I’m Baker Anderson. I’m the engineer.” Baker is wearing a short-sleeved dress shirt with a pocket protector in the right-hand pocket.
“Hi, Baker. As I’m sure you’ve heard by now the board has appointed me President and CEO. I’m hoping that you’ll continue as our Chief Engineer.”
“Mr. Karnaugh, I’d be delighted to continue as Chief Engineer.”
“Baker, please call me Walter. I believe the strength of this company is the design of the machines. I believe a weakness is that we allow the sales force to add any feature to our machines making each order a custom machine.”
“Amen to that, Walter! Half the engineers in the company are tied up in Sales Engineering making modifications to our machines to accommodate the custom orders.”
“Well, let’s start by having the Sales Engineering department report to you. Then I’ll want you to work with Marketing to curb the practice of offering unlimited option to existing designs.”
“That will help solve the problem. Sales Engineering was broken off into a separate department by Ben Stoltzfus when I resisted the “any order is a good order” trend. While we’re changing reporting structures, I think the Drafting department should also report to engineering.”
“That’s exactly right, Baker. The other area I want you to look at is standardizing subassemblies and components. If we can use the same subassembly across all models, that would streamline the manufacturing process. Do you have manufacturing engineering capability in your department?”
“Not really. I’ve tried to hire manufacturing engineers in the past but got turned down,”
“OK, well, you won’t be turned down by me. We’ll talk more about all this later. As I’m sure Mary has told you, we’re going to have a staff meeting as soon as I’ve met with all the people who are going to be my direct reports. I’ll see you at the staff meeting.”
***
Alice Schmidt enters the conference room. “Mr. Karnaugh, I’m Alice Schmidt.” Alice is wearing a white lab coat with her name embroidered over the left pocket.
“Hi, Alice, it’s nice to meet you. The board has appointed me the new president. I understand that you’re the quality manager. I’d like you to continue in that capacity. Are you in agreement with that?”
“That depends, Mr. Karnaugh, what would be the scope of my responsibilities?”
“Just what are your concerns, Alice? And please call me Walter.”
“Well, the way the company is now organized, the quality function is spread across four departments; Quality, Incoming Inspection, Manufacturing in Process Inspection, and Final Inspection. All of that is very cumbersome. If I’m going to be the Quality Manager, I’d like all of those departments reporting to me.”
“That’s
a very good point, Alice. The present organization has twenty-seven direct reports to the President. That, as you say, is cumbersome. I think your idea is a much better one, so we’ll do it your way. That being said, will you be my quality manager?”
“Thank you, Walter, I’d be delighted.”
“That’s wonderful. We’re going to have a staff meeting in a few minutes, so we can go over all the things I want to go over with everybody. Thanks for stopping by. I’ll see you at the staff meeting.
***
Ralph Steinmark opens the door to the conference room. [Hi, Walter, it’s Ralph. Are you ready for me?]
“Sure, Ralph, come on in. Thanks for meeting with me last night. That was very helpful. I see on this organization chart that you gave me last night that almost everyone in operations was a direct report to the president. How did that come about?”
“Well, every time Ben and I had a disagreement he would break off another group as a direct report.”
“Let’s put an end to that right now. Have production control, 2nd shift, 3rd shift, materials, purchasing, shipping, and stock room report to you. I’m undecided about field service. You and Scott discuss that and decide where you think it’s best to have that function report.”
“OK, we’ll do that.”
“So, is the company buzzing with rumors this morning?”
“Well, that’s putting it mildly. Some people are excited that changes are afoot, most are a little scared about the unknown.”
“I think that’s to be expected. I’d like your new title to be VP – Operations/COO. I’ll want you to run things when I’m not here. Is that OK with you?”
“Yes, absolutely.”
“Good. Then I’ll see you at the staff meeting in a few minutes.”
***
Betty Rodriguez enters the conference room as Ralph leaves. “Good morning, Mr. Karnaugh, I’m Betty Rodriguez.” Betty is a slightly overweight, fortyish woman wearing a grey business suit. Betty would be better served if fashion would allow a little longer skirt.
“Hi Betty, please call me Walter. As I’m sure you’ve heard by now the board has appointed me President and CEO. I’m hoping that you’ll continue as our HR Manager.”
“Certainly, Mr. Karnaugh, I was hoping you ask me that.”
“Betty, please call me Walter. I need your help in streamlining the management of the company. I see that the present organization has 27 direct reports to the president. I have neither the time nor the inclination for that kind of micro-management. My direct reports are going to be: Peter Hunter, Scott Hughes, Baker Anderson, Alice Schmidt, Ralph Steinmark, Mary Hammersmith and yourself. This is going to be a culture change for this company. Your job is going to be to manage that change with the least disruption possible. See who’s outside waiting for the staff meeting to start.”
“Certainly, Walter. Here are the forms to bring you on board as an employee. What’s your salary going to be?”
“Make my salary ten percent of whatever Ben Stoltzfus’ pay was. As for the forms, introduce yourself to my executive assistant, Paul Snyder, and have him fill them out.”
“OK, Walter, I’ll get the staff in for the next meeting.”
Chapter 15
(190th dawning of the 3,687th orbit)
3rd Planet
As the staff filters into the conference room Walter maintains his seat at the side of the table. The aliens on the staff are slightly amused to see cats sitting on the conference room table. When everyone is seated he begins.
“As you all now know, I’ve taken over this morning as your new president. This group here constitutes all my direct reports.”
“I’d first like to introduce Liz Mosby. Liz is our new Chief Legal Officer. Next, I’d like to introduce Paul Snyder, who is my executive assistant. Paul won’t be a Montana Mining Machines employee but works closely with me in all my companies.”
“Ralph is our new Chief Operating Officer and will be in charge when I’m not here. As you we soon find out I have a number of interests, and Mary, one of your new duties is to keep track of where I am so that if anyone needs to discuss something with me, you’ll know how to reach me. Paul Snyder will help you with that. Peter will be our Chief Financial Officer; Scott is our Director of Sales and Marketing; Alice is the Quality Manager; Baker is Chief Engineer; Betty is the HR Manager; and Mary is my Executive Secretary.”
“We need to put out an announcement about the changes in management. Betty, please put something together, discuss it with Liz and then show it to me before you publish it. That needs to happen before lunch today. Each of you, as soon as you get the announcement, should gather the people in your department and give them the word. The message you need to convey is that we’re going to grow the company and make it more profitable.”
“Peter, you need to get me a copy of the latest financial reports. From what I know so far we need to increase sales.”
Peter observes, “Walter, increasing sales is going to be tough with 26 weeks delivery.”
“What would be a good delivery schedule?” Walter inquires.
“I think four to five weeks would be a vast improvement, if that’s possible.”
“I agree. But I think we can do better. Let’s set a goal of making our delivery schedule 3 weeks. Would that blow the socks off the competition?”
“Sure, it would but I don’t see how that’s possible.”
“Well, it is possible but don’t go promising it until we work out the details and we’re sure we can make it happen. That’s on your plate, Ralph. Peter, I would think that that will greatly reduce our work in process inventory, wouldn’t it?”
“Yes, it would!”
Walter continues, “Baker, the strength of this company is the design of our machines. In order to facilitate the reduction in lead time, I’d like you to look into standardizing our designs so that the same components can be used in multiple machines. Also, all our different models need to be structured so that options can be added. Rather than design a new model every time a new order is taken, other companies structure their order entry process so that the order designates the options that are to be added to that order and the order becomes the bill of material for that particular machine.”
“Ralph, I need you to make sure we ship the parts we have on order from Jupiter Mining and Satellite Mining. We had an RFQ (a Request for Quote) from Jupiter for 50 new machines. I told Ben yesterday to forget about that. But, Scott, that’s back on the table. Send that quote to Jupiter Mining and give me a copy. Peter, see if you can develop some kind of “sister company” pricing structure that would allow us to sell to them at a lower price. Work with Liz and Paul to set that up.”
“Ralph, we’re going to need a sales and operating planning system. I would think that we’ll also need an ERP (Enterprise Resource Planning) system. I would suggest you contact SAP and Oracle. I also think you’re going to need some outside help with this. Do you know anybody you could bring in?”
“Yes, I have a friend, Alan Severance. I think he would be an immense help.”
“I know that name. He wrote two terrific books on lean operations: The Human Side of Lean Enterprise and The Lean Production Warehouse. Mary, order enough copies of those so that you can give those to each of our managers.”
“Ralph and Baker, the next thing I think we need to consider is additive manufacturing. As you know, additive manufacturing is using 3d printing to make parts rather than carving our parts out of a piece of metal and producing a pile of scrap in addition to our part. Using additive manufacturing might also reduce our parts count. There’s a company, Additive Machines, that makes a 3d sintered metal printer that could produce some of our parts and would help reduce the parts lead time. They have a program where their machine sends an email to the design owner whenever you make a part so that the design owner can then invoice the agreed upon royalty. If we had one of those 3d printers in engineering, that would speed up the design process. We could also get some
of our bigger customers to install a 3d printer for spare parts. I believe Additive Machines would be willing to work with us on an OEM arrangement. Liz has been working with them and has all of the contacts.”
“The last item on my agenda is an organization chart. Mr. Stoltzfus had 27 people reporting to him. I’m not going to do that. My direct reports are those of you sitting here. Betty, why don’t you put something together and pass it by the staff here so that you can put out a second announcement later today.”
“This reorganization is going to be a culture shock in the company. Most people are going to be OK with that. Some are going to have a problem. My advice is to be as patient as you can be but not too patient. Any few that become disruptive will need to be cut loose.”
“Just a word about my management style. My job is not to hold your hand. I don’t want to play “Mother, May I” with you. You all know how to do your jobs and I expect you to do them. Remember it is better to have to ask forgiveness than to have to ask permission.”
“That’s all I have. Any of you have anything that needs my immediate attention.”
Walter looks around the room. All he sees is smiles.
“OK, thanks. Let’s get to work.”
As everybody files out of the conference room, he motions to Mary.
“Mary, you’ll want to help Ben clear his personal things out of the office. Have Liz review any files that he wants to take with him.”
Chapter 16
(193rd dawning of the 3,687th orbit)
3rd Planet
“Paul, tell the pilots to gas up the plane, we’re going to the Marshall Islands. Claude Applebee has arranged for us to visit a seabed mining operation as a potential investment and as a potential future solution to our rare earth supply problem. Our appointment is for next week. Check with the pilots to see how long the flight will be and plan our departure accordingly. Check to see what the weather is like in the Marshall Islands this time of year so everyone will know how to dress.”
Alizar and the Crisis: An Alizar Adventure (The Adventures of Alizar Book 2) Page 4