Section: CASE STUDY Bert Donaldson was a star performer in the States. What's going wrong in Europe?
At exactly 1:40 on a warm, sunny Friday afternoon in July 1995, Frank Waterhouse, CEO of Argos Diesel. Europe, leaves his office on the top floor of the Argos Tower, overlooking the Zürichsee. In the grip of a tension headache, he rides the glass elevator down the outside of the mirrored building. To quiet his nerves, he studies his watch. In less than half an hour, Waterhouse must look on as Bert Donaldson faces the company's European managers - executives of the parts suppliers that Argos has acquired over the past two years: Donaldson is supposed to give the keynote address at this event, part of the second Argos Management Meeting organized by his training and education department, But late yesterday afternoon, he phoned Waterhouse to say he didn't think the address would be very good. Donaldson said he hadn't gotten enough feedback from the various division heads to put together the presentation he had planned His summary of the company's progress wouldn't be what he had hoped. It's his meeting! Waterhouse thinks, as the elevator moves silently down to the second floor. How could he not be prepared? Is this really the man who everyone at corporate headquarters in Detroit thinks is so fantastic? Waterhouse remembers his introduction to Donaldson just over a year ago. Argos International's CEO and chairman, Bill Loun, had phoned Waterhouse himself to say he was sending the "pick of the litter." He said that Donaldson had a great international background-that he had been a professor of American studies in Cairo for five years. Then he had returned to the States and joined Argos. Donaldson had helped create the cross-divisional, cross-functional teams that had achieved considerable cost reductions and quality improvements. Loun had said that Donaldson was just what Argos Europe needed to create a seamless European team-to facilitate communication among the different European parts suppliers that Waterhouse had worked so hard to acquire. Waterhouse had proved his own strategic skills, his own ability to close deals, by successfully building a network of companies in Europe under the Argos umbrella. All the pieces were in place. But for the newly expanded company to meet its financial goals, the units had to work together. The managers had to become an integrated team. Donaldson could help them Together they would keep the company's share of the diesel engine and turbine market on the rise. Waterhouse deserved to get the best help, the CEO had said. Bert Donaldson was the best. And later, when the numbers proved the plan successful, Waterhouse could return to the States a hero (Waterhouse heard Loun's voice clearly in his head: "I've got my eye on you, Frank. You know you're in line.") Waterhouse had been enthusiastic reach top. He had met the man several times in Detroit. Donaldson seemed to have a quick mind, and he was very charismatic. But that wasn't the Donaldson who had arrived in Zürich in August 1994 with his Wife two daughters. This man didn't seem to be a team builder - not in this venue. Here his charisma seemed abrasive. The elevator comes to a stop. Waterhouse steps into the interior of the building and heads toward the seminar room at the end of the hall. Waterhouse keeps thinking of his own career. He has spent most of his time since Donaldson's appointment securing three major government contracts in Moscow, Ankara, and Warsaw. He has kept the ball rolling, kept his career on track. It isn't his fault that Donaldson can't handle this assignment. It isn't his fault that the Germans-and the French still can't agree on a unified sales plan. His thoughts turn back to Donaldson. It can't be all Bert's fault, either. Donaldson is a smart man, a good man. His. successes in the States were genuine. And Donaldson is worried about this assignment; it isn't as though he's just being stubborn. He sounded worried on the phone. He cares. He knows his job is falling apart and he doesn't know what to do. What can he return to at Argos in the States if he doesn't excel here in Europe? Let Donaldson run with the ball - that's what they said in Detroit. It isn't working. Waterhouse reaches the doorway of the seminar room. Ursula Lindt, his executive assistant, spots him from the, other side Lindt is from a wealthy local family. Most of the local hires go to her to discuss their problems. Waterhouse recalls a few of her comments about Donaldson: Staff morale on the fifth floor is lower than ever; there seems to be a general malaise. son must be having problems at home. Why else would he work until midnight? Waterhouse takes a seat in the front row and tries m distract himself by studying the meeting schedule. "Managing Change and Creating Vision: Improving Argos with Teamwork" is the title. Donaldson's "vision" for Argos Europe. Waterhouse sighs. Lindt nears him and, catching his eye, begins to complain. "A few of the managers have been making noises about poor organization," she says. "And Sauras, the Spanish director, called to complain that the meeting schedule was too tight." Her litany of problems continues: "Maurizio, the director in Rome, came up to me this morning and began to lobby for Donaldson's replacement. He feels that we need someone with a better understanding of the European environment." Seeing Waterhouse frown, Lindt backs off. "But he's always stirring up trouble," she says. "Otherwise, the conference appears to be a success." She sits down next to Waterhouse and studies her daily planner. The room slowly fills with whispers and dark hand-tailored suits. Groups break up and re-form. "Grüss Gott, Heinz, wie geht's?" "Jacques, ça va bien? .... Bill, good to see you...Great." Waterhouse makes a perfunctory inspection of the crowd. Why isn't Donaldson in here schmoozing? He hears a German accent: "Two-ten. Jaja. Amerikanische Pünktlichkeit." Punctuality. Unlike Donaldson, he knows enough German to get by. A signal is given. The chitchat fades with the lights. Waterhouse turns his gaze to the front as Donaldson strides up to the podium. Donaldson speaks. "As President Eisenhower once said, 'I have two kinds of problems, the urgent and the important. The urgent are not important, and the important are never urgent.'" He laughs, but the rest of the room is silent save for the sound of paper shuffling. Donaldson pauses to straighten his notes and then delivers a flat ten-minute summary of the European companies' organizational structure. He reviews the basics of the team-building plan he has developed-something with which all the listeners are already familiar. He thanks his secretary for her efforts. Then he turns the meeting over to Waterhouse,. who apologizes for not having been able to give the managers any notice that this session would be shorter than planned. He assures them that the rest of the schedule is intact and asks them to take this time as a break before their 4 P.M. logistics meeting, which will be run by the French division head. The managers exchange glances, and Waterhouse detects one or two undisguised smiles. Walking out of the seminar room, he hears someone say, "At least the meeting-didn't run overtime." Waterhouse fumes. He has put in four years of hard work here in Europe. This is the first year of his second three-year contract. He is being groomed for a top management position back in the States. The last thing he needs is a distraction like this. He remembers how Detroit reacted when, a little over a month ago, he raised the issue of Donaldson's failure to adjust. He had written a careful letter to Bill Loun suggesting that Donaldson's assignment might be over his head, that the timing wasn't right. The CEO had phoned him right away. "That's rubbish, Frank," his voice had boomed over the line. "You've been asking for someone to help make this plan work, and we've sent you the best we've got. You can't send him back. It's your call-you have the bottom-line responsibility. But I'm hoping he'll be part of your inner circle, Frank. I'd give him more time. Make it work. I'm counting on you." More time is no longer an option, Waterhouse thinks. But if he fires Donaldson now or sends him back to Detroit, he loses whatever progress has been made toward a unified structure. Donaldson has begun to implement a team-building program; if he leaves, the effort will collapse. And how could he fire Donaldson, anyway? The guy isn't working out here, but firing him would destroy his career. Bert doesn't deserve that. What's more, the European team program has been touted as a major initiative, and Waterhouse has allowed himself to be thought of as one of its drivers. Turning back would reflect badly on him as well. On the other hand, the way things are going, if Donaldson stays, he may himself cause the plan to fail. One step forward, two steps back. "I don't have the time to walk Donaldson through remedial cultural adjustment," Waterhouse mumbles under his breath. Donaldson approaches him in the hall. "I sent a multiple-choice survey to every manager. One of them sent back a rambling six-page essay," he says. "I sent them in April. I got back only 7 of 40 from the Germans. Every time I called, it was 'under review.' One of them told me his people wanted to discuss it-in German. The Portuguese would have responded if I'd brought it personally." Waterhouse tells Donaldson he wants to meet with him later. "Five o'clock. In my office." He turns away abruptly. Ursula Lindt follows him toward the elevator. "Herr Direktor, did you hear what Herr Donaldson called Frau Schweri?" Bettina Schweri, who organizes Donaldson's programs, is essentially his manager. She speaks five languages fluently and writes three with style. Lindt and Schweri have known each other since childhood and eat lunch together every day. "A secretary," Lindt says, exasperated. "Frau Schweri a secretary? Simply not to believe." Back in his office, Waterhouse gets himself a glass of water and two aspirin. In his mind, he's sitting across from Donaldson ten months earlier. "Once I reach a goal," Donaldson says, "I set another one and get to work. I like to have many things going at once - especially since I have only two years. I'm going for quick results, Frank. I've even got the first project lined up. We'll bring in a couple of trainers from the Consulting Consortium to run that team-skills workshop we talked about." Waterhouse comes back to the present. That first workshop hadn't gone too badly- at least he hadn't heard of any problems. But he, Waterhouse, had not attended. He picks up the phone and places a call to Paul Janssen, vice president of human resources for Argos Europe. Paul is a good friend, a trusted colleague. The two men often cross paths at the health club. A few seconds later, Janssen's voice booms over the line. "Frank? Why didn't you just walk down the hall to see me? I haven't seen you at the club in weeks." Waterhouse doesn't want to chat. "Donaldson's first training weekend, in February," he says. "How'd it go? Really." "Really. Well, overall, not too bad. A few glitches, but nothing too out of the ordinary for a first run. Bert had some problems with his assistant. Apparently, Frau Schweri had scheduled the two trainers to arrive in Zürich two days early to prepare everything, recover from jet lag, and have dinner at the Baur au Lac. They came the night before. You can imagine how that upset her. Bert knew about the change but didn't inform Frau Schweri." Waterhouse has the distinct impression that Janssen has been waiting for a chance to talk about this. "Go on," Waterhouse says. "Well, there were a few problems with the workshops." "Problems?" "Well, yes. One of the managers from Norway - Dr. Godal, I believe - asked many questions during Bert's presentation, and he became rather irascible." "Bert ?" Waterhouse asked. "Yes. And one of the two trainers wore a Mickey Mouse sweater-" "Mickey Mouse?" Waterhouse laughs without meaning to. "A sweater with a depiction of Mickey Mouse on the front." "What on earth does that have to do with Bert ?" "Well, Bert offered them a two-year contract after Frau Schweri advised him not to. He apparently told her he was satisfied with the trainers and, so far as he was concerned, questions about their personal habits and clothing weren't worth his time." "Yes, and-" "Well, there were complaints-" "They all went to Frau Schweri?" He is beginning to see. "One of the managers said the trainers provided too much information; he felt as though they were condescending to him. A bombardment of information, he called it. Other managers complained that Bert didn't provide enough background information. The French managers seemed to think the meeting was worthwhile. But Bert must think that because his style works with one group, the others will fall into place automatically. And everyone was unhappy with the schedule. The trainers always ran overtime, so everybody was displeased because there weren't any coffee breaks for people from various offices to network. Oh, and the last thing? All the name cards had first names and last names - no titles." "No titles," Waterhouse says, and lets out a sigh. "Paul, I wish you'd told me all this earlier." "I didn't think you needed to hear it, Frank. You've been busy with the new contracts." They agree to meet at the club later in the week, and they hang up. Waterhouse stares down at Donaldson's file. His résumé looks perfect. He has a glowing review from the American University in Cairo. There, Donaldson earned the highest ratings for his effectiveness, his ease among students from 40 countries, and his sense of humor. At Argos in the United States, he implemented the cross-divisional team approach in record time. Donaldson is nothing short of a miracle worker. Waterhouse leans back in his swivel-tilter and lets the scuttlebutt on Donaldson run through his mind. Word is that he's an Arbeitstier. "Work animal" is the direct, unflattering translation. He never joins the staff for a leisurely lunch in the canteen, preferring a sandwich in his office. Word is he can speak some Arabic from his lecturing days in Cairo but still can't manage a decent "good morning" in Swiss German. Word is he walks around all day-he says it's management by walking around - asking for suggestions, ideas, plans, or solutions because he can't think of any himself. Waterhouse remembers an early conversation with Donaldson in which he seemed frustrated. Should he have paid more attention? "I met with Jakob Hassler, vice president of human resources at Schwyz Turbines," Donaldson had said, pacing the office. "I wanted some ideas for the training program. Schwyz is the first company we acquired here; I wanted to show Hassler that I don't bite. When I opened the door, he just stood there. I offered him a chair beside the coffee table, told him to call me Bert. He nodded, so I asked him about his family and the best place to buy ski boots, and he answered but he acted so aloof. I took a chair across from him, listened to ten minutes of one-word answers, and then I finally asked him how things were going in general, to which he said, 'Everything is normal.' Can you beat that, Frank? I told him I was interested in his ideas, so he pushed his chair back and said, 'Please let me know what you expect.' I reminded him that we're all on the same team, have only two years for major change, gave him a week to get back to me with a few ideas, and you know what he said? He said, 'Ja ja.'" At the time, Donaldson's frustration seemed to stem from the normal adjustment problems that expatriates face. But he never did adjust. Why doesn't he just give Hassler what he needs to know and get out? Waterhouse knows this; why hasn't Donaldson figured it out? His phone rings - the inside line. It's Ursula Lindt. "Frau Direktor Donaldson just called. She said Herr Direktor Donaldson was expected home at 4. I told her you had scheduled a meeting with him for 5." She waits. Waterhouse senses that there is more to her message. "What else did she say, Frau Lindt?" "I inquired after her health, and she said she's near the end of her rope. Bored without her work. She said they thought Zürich would be a breeze after Cairo. Then she went into a tirade. She said that they're having serious problems with their eldest daughter. She'll be in grade 12 at the international school this fall. She's applying to college. Frau Donaldson said her daughter's recommendations from her British teachers are so understated that they'd keep her out of the top schools, and she keeps getting C's because they're using the British grading scale. She reminded me that this is a girl with a combined SAT score of over 1350." Lindt is done. Waterhouse thanks her for the information, then hangs up. Julie Ann is usually calm, collected. She has made some friends here. Something must have pushed her over the edge. And their daughter is engaging, bright. Why is this all coming to a head now? Waterhouse recalls his most recent meeting with Donaldson, a couple of days before Donaldson's vacation in May. "I've tried everything, Frank. I've delegated, I've let them lead, I've given them pep talks." Waterhouse remembers Donaldson sinking deep into his chair, his voice flat. "No matter what I do - if I change an agenda, if I ask them to have a sandwich with me at my desk - someone's always pissed off. We're talking about streamlining an entire European company and they're constantly looking at their watches. We run ten minutes overtime in a meeting and they're shuffling papers. I tell you, Frank, they're just going to have to join the rest of us in the postindustrial age, learn to do things the Argos way. I worked wonders in Detroit..." The clock in Waterhouse's office reads 4:45. What can he do about Donaldson? Let him blunder along for another year? And take another 12 months of...he closes the door on that thought. Send him back and forget? Morale on the fifth floor will improve, the Europeans will be appeased, but with Donaldson will go the training program, such as it is. Corporate will just think that Waterhouse has forgotten how to play the American way. They'll think that he mistreated their star. Can he teach Donaldson cultural awareness. With the Ankara, Moscow, and Warsaw projects chewing up all his time? You can't teach cultural savvy. No way. He hears Donaldson enter the outer office. A hanger clinks on the coat tree. How can he work this out?
Tasks: 1. Brief Summary of the facts of the case 2. different issues or challenges in the case 3. The main "problem" posed by the case. 4. a few alternative solutions or steps to ameliorate the problems posed in the case study