Leadership Failures in Crisis Management: Keene & Ryan's Missteps

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1. What were the main mistakes made by Keene & Ryan in the way they dealt with the different situations described in the case: from the discovery of significant losses in the first quarter of 1975 to their handling of the meeting during which the members of the task-force made their presentations? 30% It was clear that Baker had little to no control over the task force.

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Baker had not created the team and had no real authority (aside from being designated as the head) over the task force.

The task force was a formality in the Keene & Baker’s eyes, thus they concluded the area that needed to be studied was marketing division (market managers made final forecasts based on info from prod mgrs, VP of sales, VP of manufacturing, & econ forecasts from VP of econ). At this point Keene & Baker never gave much thought or importance to the task force therefore they were just content to “formally” state that the situation was being analyzed.

In reality neither of the VP’s actually gave much importance to the two losing quarters situation. This in turn showed when the task force report meeting had gotten out of control and they were headed to a break, Keene told Baker “…you better figure out what you’re going to do at 3:00 (when they returned from the break)”. This statement from Keene showed that he had little authority or control over the situation, he was placing the blame on Baker instead of backing him up.

The following is a broken down analysis of the mistakes that Keene & Ryan committed: Greenhorn choice (assigning David Baker to be in charge of the task force - taking it likely to not deal with it themselves - initial analysis and diagnosis of the problem): The first mistake the Vice President’s made was to take the issue of sales dropping two straight quarters so lightly as to just appoint a task force. For a market leading company like Acton-Burnett to have the first two losing quarters in 39 years was a big issue, an issue large enough that there should be personal involvement of Ryan, Keene and other VP’s.

Even though an executive committee meeting had been held, Ryan and Keene were too short-sighted to see themselves responsible for the company’s poor results, failing to address the issue amongst themselves (executive committee) before delegating the dirty work to an inexperienced taskforce. While both Keene and Ryan regarded Baker as an especially promising and capable individual, Baker was a young and relatively inexperienced special assistant (Keene’s); in putting Baker in charge of a politically charged and important for the company task orce, they took a risk that turned out to be a mistake.

It is fair to assume that Keene and Ryan wanted to test Baker’s potential as a leader (alternatively, given the fact that both Keene & Ryan were MBA’s graduate and maybe biased against putting a non-MBA in charge of the task force) however Cassis, a respected company veteran, might have been a better choice to lead the task force. When observing the composition of the task force more closely one can identify a clear gap in background, experience, career path, and education levels.

There was no real seniority (at the corporate level) leading or backing up the task force. Ryan and Keene simply did not seem to put much thought in the cohesion of the task force itself, and they did not seem to properly consult with Robert Herd, thus showing an insufficient use of resources. Stakeholders (Ryan did not involve market managers); Keene and Ryan, given past resistance to changes in the forecasting process by the market managers, decided not to involve them in the current task force, nominating the product managers instead.

This decision created a twofold problem; on one hand the decision removed key stakeholders from an important process study (a key process for the company nonetheless); on the other hand it put the product managers in an uncomfortable situation as they found themselves in a position to study and possibly criticize a process that the market managers, their direct supervisor, were responsible for.

Additionally, both Ryan and Keene were aware that the “MBA’s” were not well received by the “old-timers” and they had to have known that the taskforce might uncover some controversial issues and could very well end up in a politically charged situation. Ryan and Keene had also foreseen the difficulties Baker would face, from the Market Managers, whom had been resistant to procedural changes in the past and did nothing to address the problem.

Political Dynamics; As Vice President’s Ryan and Keene were naive to believe that the Market Managers wouldn’t end up having a run in with the taskforce, and they should have addressed that situation prior to the creation of the task force instead of just looking the other way. Had Keene stepped in earlier and backed up the task force (especially Baker) during the report, the situation would not have gotten out of hand with the Market Managers. Supervision; Keene and Ryan did not provide any guidelines/guidance to Baker, they just told him to “report back to them and the market managers on Aug 4.

As the taskforce sponsors, Keene and Ryan had a very “hands-off” approach in regard of the task force supervision, telling Baker together with his team that they were to report the results on August 4. Thus leaving Baker, an inexperienced manager with a challenging task on hand to advance the project on his own. Given Baker’s relative inexperience it might have been better to organize at least one (ideally I would have suggested bi-weekly) brief task force steering committee at the halfway point to verify the direction Baker and his team was taking.

Additionally, neither Ryan nor Keene were prepared for the task force report. They didn’t ask to be briefed in advance, thus had no chance to avoid the complicated situation the report meeting became. Had they done so, they would have been able to openly discuss certain topics and avoid the sensitive ones, giving them time to address the sensitive issues at a VP level, thus having a productive meeting and avoiding the messy situation.

Finally, had Ryan and Keene organized a meeting among the divisions VPs touched by the initiative in order to inform them about the task force goals and get their buy-in into the initiative they could have avoided or dampered the situation greatly. 2. Use the data in the case to identify the most important mistakes by David Baker. 20% Baker seemed like he wanted to handle everything on his own, almost like he felt this was his moment to shine in the company. He failed to realize that the situation had gotten too big for him to handle (with the sensitive findings) and failed to ask for help.

Going back to prior the Baker’s realization (or lack thereof) that the situation had gotten out of hand, Baker had a bias towards some members of task force before starting (Schraftt - admired analytic ability, quickness, perceptiveness; Cassis - whom he widely respected for his in company for competence, knowledge and thoughtfulness); Eldredge whom he had some previous experience working with and had found to be “less than satisfying,” thought Eldredge resented him bc of his rapid progress; and Bowe - whom he thought was well-liked and widely respected.

Task force = ineffective leadership and group management; Baker did not introduce himself or try to get to know members of task force with whom he was unacquainted before first meeting, he did not define objectives of task force and allowed Cassis to dictate what to do and who was to do it. Also each subgroup communicated only with Baker, and not amongst each other. Finally Baker never outlined the agenda or went over specific details of what each sub-group of task force would present to Keene and Ryan.

During the first task force meeting Baker didn’t seem to be in charge of the meeting, allowing other members of the team to take over the discussion regarding key issues. For instance Eldredge was quite adamant in pushing his agenda and started a discussion with Schrafft about the need to develop a forecasting model as the main task force goal. Additionally Baker went along with Cassis’ idea to split the group into subgroups that would work on specific tasks.

While the latter is a fairly common practice in this type of situation I think that the fact that the proposal did not come from Baker himself may have subtly undermined his control over the task force member. Moreover, while the case doesn’t explicitly mention it, it seems that Baker didn’t clearly inform the task force members on the group norms and values the task force would be following.

We also believe that Baker had another oversight by not setting up regular task force meetings where the whole group would sit together and discuss the issues on the table, instead opting for a two-way communication between the sub-groups and himself. This set-up contributed in creating a poor communication system within the group, which arguably resulted in a poor group spirit. Finally, once knowing sensitive information was going to come out in the task force report, Baker should have proposed to Ryan and Keene a meeting to discuss the findings before presenting them to the rest of the company.

Baker should have also postponed the task force report altogether, as he knew that very sensitive findings were made, even if they weren’t going to be reported, Baker should have known the situation was going to get ugly at the meeting as the Market Managers were going to be in a very aggressive stance (over Bowe’s findings). Had Baker been more involved in the progress / development of the findings, he would have been able to steer the report in a better way avoiding difficult situations and he would have also gotten to know his team better thus anticipating their reactions.

Eldredge; Baker worked with Cassis, the product managers and Schrafft/Bowe but not Eldredge, their exchanges were brief, infrequent and strained. Baker lacked the ability to properly engage, manage and guide Eldredge, giving him the freedom to pursue his own goals when in fact Eldredge was spending most of his time on the road to collect the necessary data for the modeling. Baker had only brief and infrequent exchanges with him on his progresses.

Additionally these exchanges were occasionally strained. I believe that the fact that the two had previously worked together with mixed results (they disagreed over several issues while working on a project within the Corporate Planning group), coupled with Eldredge’s possible resentment given by Baker’s faster career progression, might have induced Baker in giving this freedom to Eldredge as a way to avoid heated discussions.

However this freedom proved to be fatal as ultimately Eldredge took advantage of Baker when he used the sensitive information gained from Baker to further his, and his division, interests. As the leader of the task force Baker should have been more proactive in knowing what Eldredge was up to and what exactly Bowe and Schrafft were finding. Baker took a passive approach and waited for the team’s conclusions, which ultimately led to the surprise report and to Baker not even knowing how his task force would react under pressure.

Stakeholders: Ryan decided to assign the product manager instead of the market managers to the task force. This decision created problems to Baker during the final presentation as the market managers started making “fun” of the task force proposals. Considering that in the past the market managers proved reluctant to the kind of changes the task force was studying, Baker should have insisted, with Keene and Ryan, to include the market managers into the task force.

In fact it is key to have all the principal stakeholders (while it is true that Ryan assigned the product managers to the task force, it is fair to say that the product managers were not the most important stakeholder in the marketing division, as ultimately they report to the market managers, who make the final call on the forecasts) involved in any discussion about changes on processes in order to secure the stakeholders commitment to the changes coming out of the task force.

Sensitive information - Baker didn’t chastise Eldredge for going through confidential report; After the July 24 task force meeting it was clear to Baker, and to the task force, that the subgroup working on the Sales division’s inputs into the forecast (i. e. Bowe and Schrafft) wouldn’t be able to provide any final recommendations at the August 4 presentation to the task force sponsors. In addition, Bowe and Schrafft reported that the input coming out of the Sales Division seemed to be biased and manipulated, and that given the sensitivity of the information the findings might have embarrassed the Sales division) Bowe would have to pass any finding through the Sales division VP (Ernst) before anything could be used, a process that might take a long time. Baker agreed with Bowe and Schrafft that partial general recommendations for the August 4 meeting would be sufficient, however we believe that he failed to grasp the climacteric nature of the situation.

In fact, Baker considering the sensitive and potentially destabilizing missing information, should have requested a postponement in order to gather all the information and to be able to present a set of complete recommendations. With hindsight integrating the sensitive information within the report could have avoided parts of the problem encountered later on during the August 4 presentation. Lastly, Baker should have secured Bowe’s report in a safe or at least a drawer to avoid unintended readings.

Political Naivete; Baker was simply too innocent to realize the potential benefits for others in the situation. Granted this was due to his lack of experience and the overwhelming responsibility that was handed to him. But in the end his failure to recognize the potential benefits to others out out this complex situation only aggravated his personal standing within the company and allowed others to take advantage.