Question: The Leadership Advantage at Student Advantage
Student Advantage LLC, based in Boston, provides college students at over a thousand U.S. campuses with credit cards that give them discounts in shops and restaurants nationwide and with companies like Alamo Rental Cars, AT&T, Amtrak, Barnes & Noble, Dick's Sporting Goods, Foot Locker, Toshiba, Greyhound, Target Stores, and Verizon Wireless. Student Advantage started as a small entrepreneurial company and experienced explosive growth. The challenge for Ray Sozzi, the company's founder and CEO, was to keep the spirit and culture that made the company an initial success while bringing in needed new processes (and the bureaucracies that came with them) as the company grew. His approach was to tie empowerment to accountability- that is, to make sure his managers take ownership for their decisions. Sozzi does not create plans and direct the organization to execute them. Rather, he lets his managers develop plans and then empowers them to execute them. Sozzi believes one of the most powerful management strategies is to let people tell him what they want to do and then let them do it.
His managers know that if they mess up either side of that equation, they're going to fail. Another way in which Sozzi empowers his managers is to give them a different perspective on what they want to do. Middle managers often have so many day-to-day tasks to confront and people reporting to them that they have difficulty finding time to step back and look at the bigger picture. That's where Ray Sozzi plays an important role as a sounding board or devil's advocate. As CEO he also has a different perspective from his managers. He's more aware of what is happening in the competitive environment, he is better acquainted with the needs and preferences of company shareholders, and he understands the need to balance investing in the company with providing shareholder value. Thus he helps his managers either firm up the position they're taking or step back and rethink it. Responsibility, delegation, and accountability are central to the company's management style, and these principles have become even more important as Student Advantage has grown to over 400 employees. The company is organized into a number of teams, including Business Development, Marketing, Finance, and Human Resources. It is each team manager's responsibility to make that team's plans work.
Communication is key in delegation. All team members need to understand what the team wants to accomplish and each person's role in making it happen. It's hard sometimes for a manager to give up control, and it requires a certain amount of trust to give other people responsibility. Yet it's critical for an effective organization. As one Student Advantage manager put it, "if you don't delegate, you die!" The chain of command from CEO to COO to Department Head to Assistant Manager is pretty clear, but how does an effective organization work laterally, as opposed to vertically? Within Student Advantage's marketing department, the marketing project manager is responsible for acquiring new members (that is, students) and communicating with them. This person works with the account manager, who supports the partner companies that pay for the member discounts.
These employees don't have rigidly defined roles; rather they help each other serve their respective members and partners, brainstorming together and using the resources they need to accomplish the department's common goals. The lines between the various job functions in marketing (as well as in the other teams) are very soft. Decisions are never made by just one department within marketing; everyone discusses everything with everyone else. This lateral way of working leads to better decisions and also allows each person to get experience beyond his or her job title and responsibility. Student Advantage is still a relatively small company so its employees wear many hats. With flexible job descriptions, teamwork, and staff empowerment, it appears poised to continue its strong growth in a very challenging marketplace.12
1. How would you describe Ray Sozzi's leadership style?
2. In terms of the management process (shown in Figure 6.2), how does Ray Sozzi control the planning function?
3. What are some advantages and disadvantages of the management practices at Student Advantage?
