The Chief Operating Officer - Term Paper Example

Introduction This analysis will examine the various options available to Stephanie Fortas to restore Innostat’s competitive edge. Stephanie Fortas was hired by Innostat’s board of directors primarily due to her technological background and strong marketing skills. This had been demonstrated by her in her previous assignment as the Chief Operating Officer (COO) of a medical technology company, where her role was to oversee the development of new products in conjunction with the head of the Research and Development team. She had been chosen as the Chief Executive Officer by the board over Innostat’s chief of production Frank Timoshotsky. Frank was also the choice of the outgoing CEO, Frank Donnelly. This analysis will first identify Innostat’s problem and clearly define it; the next step will be to determine the various decision criteria available to Stephanie, analyze the identified decision criteria, various courses of action available to Stephanie will be generated using the analysis carried out, these courses of action will be appraised and finally this analysis will determine the most optimal course of action available to Stephanie Fortas to turn around the fortunes of Innostat. As enumerated by Mintzberg (1975) Stephanie will have to perform many different roles as the CEO of Innostat. The social cognitive theory and the TRD model as outlined by Bandura (1977, 1986, and 1987) will be useful theoretical constructs to analyze the given situation. Problem Definition Innostat was a world leader in manufacturing prosthetic appendages and surgical implants. Surgery is a continually evolving field with a rapidly changing technological profile. Any firm that caters to this niche segment should be able to keep pace with the changing requirements of the markets and continually offer new products. The utility of these products to the surgeons has to be ensured by constant interaction between Innostat and the surgeon community. Innostat had not offered any new products for the past four years and this was directly impacting the company’s bottom-line. Innostat has to regain its ability to innovate. Some aspects of the Karpin Task Force’s (1995) recommendation are valid with respect to the need for flexibility and change for the various department heads of Innostat. The next issue is the problem of motivating Innostat’s workforce. The death of Jack Donnelly has created a void in the company’s top leadership echelons. This has been compounded by the extremely personalized and forceful leadership style of Jack Donnelly. Stephanie Fortas should reassure the staff and motivate them to perform better. The principles of intrinsic and extrinsic motivation as specified by Steers and Black (1994) and Deci (1975 and 1996) are relevant in developing a motivational model for Innostat. Decision Criteria Available to Stephanie The first criterion is the input from Frank Timoshotsky, the head of production at Innostat. Frank feels that the main problem of Innostat is that it’s initiatives for innovations were always dependent on Jack Donnelly and his interactions with the surgeon community. The company did not have any culture for fostering innovation, this as per Frank was primarily due to two aspects; firstly the lack of confidence of the rest of the departments in the Innostat’s research and development wing, secondly the lack of incentives to respond to any initiatives for innovation. Bolman and Deal (1997) have outlined several frames of references for mangers, who have to select the most suitable frame so as to foster innovation. The ideas outlined by Northcott (1996) and Rokeach (1973) are also relevant here. The second decision criterion is the Henderson report. The report suggested a major reorganization within Innostat. The emphasis was on creating cross functional product development teams which would oversee the development of new products. The report recommended that the top management be isolated from the mechanics of product development and the creation of a strategic marketing team. The strategic marketing team was to be constituted primarily due to the absence of general management skills within the sales department. The next major recommendation was the creation of an incentive program to foster innovation. The report also suggested that the performance of all persons in the cross functional product development teams, be measured by the success rate of the new products developed by them. Teddy Adler was fiercely critical of the Henderson report due to the nature of changes recommended and the timeline for its implementation. It was his view that Stephanie should adopt Donnelly’s leadership style because of two reasons. Firstly the staff of Innostat was accustomed to a highly centralized leadership style and secondly the board of directors had hired Stephanie Fortas due to her marketing expertise and technological background. The last and the most important decision criteria is the potential of Innostat’s employees and their expected reception to change. This is crucial and will to a large extent influence the decision of Stephanie to adopt a particular leadership style. The various managerial behaviors as outlined by Yukl (1978) provide a useful template for Stephanie. Assessment of the Identified Decision Criteria The key to the long term sustainability of any company is its ability to continually redefine itself. The reorganization of Innostat is a step in the right direction, as it will endow the company with a structure capable of fostering innovation without external support. However the timeline for its implementation is approximately five years. This is unacceptable. Stephanie Fortas also does not have sufficient standing within the company to implement such a massive reorganization. The culture of innovation is totally absent within the company. The employees are used to a highly personalized and forceful leadership style. Any changes would only confuse them and send out mixed signals. The board of directors has hired Stephanie basically due to her skills in the development of new products with market potential. Evaluation of the Various Alternatives Available to Stephanie The first alternative available to Stephanie is to repeat the Jack Donnelly model of leadership. This would imply a highly centralized style of leadership with the entire onus of new product development on Stephanie Fortas. This would entail the least displacement in the company. The employees are already used to a strong leadership. This would however still leave the company dependent upon a single person and external ideas for introducing new products. The next option is to carry out a total reorganization as suggested by the Henderson report. This would endow the company with the capability to innovate and prove beneficial in the long run. But the timeline for implementation is five years, this is not acceptable. Restructuring the company alone is not sufficient, both formal and semi formal training programs would be required to inculcate a culture of innovation in the company. Such a large-scale reorganization would involve restructuring the responsibilities of almost all the department heads. Stephanie with her limited influence would have difficulties in pushing this reorganization through. The third option is to concentrate on the development of new products. With her technological background and proven market expertise, Stephanie is well suited for this task. Innostat’s board of directors had hired Stephanie primarily because of her expertise in developing new products with market potential. The board is expecting a new range of products from Stephanie to augment their obsolete product inventory. Here the ideas outlined by Locke (1996) will help Stephanie in formulating her goals and then decide upon the optimal; strategy to achieve them. The Recommended Course of Action for Stephanie Stephanie should ideally adopt a course action that incorporates the advantages of the alternatives mentioned above. She should clearly identify two courses of action, short term and long term. Stephanie’s immediate concern should be to develop a new product portfolio, as the culture of innovation is totally missing in the company; she has no option but to use her considerable skills in marketing and her technological background to develop new products. In order to ensure the market relevance of her products, she has to develop contacts within the surgeon community. She has to initially follow a strong leadership style reminiscent of Jack Donnelly to provide continuity to the employees through the period of change. For the long term, Stephanie will have to gradually replace the heads of all the major departments like Research and Development, sales, manufacturing etc. The new heads of these business units should clearly understand their individual responsibilities toward the overall innovation strategy of the company and they should restructure their business units accordingly. This would gradually foster a culture of innovation within the company. Another area of priority would be to quantify productivity in terms of innovation and link it to an appropriate incentive scheme. Conclusion Innostat faces a difficult road towards becoming a company with a vibrant culture of self innovation. Stephanie Fortas has to tread a difficult path; she has to oversee the immediate development of a new product line while simultaneously trying to inculcate the spirit of innovation within the company. This is best served by the recommended course of action. References Mintzberg, H. 1975. “The Manager’s job: Folklore and fact”. Designing and managing your career. (Ed) H Levinson. Harvard Business School Press. Karpin Task Force. 1995. “ Enterprising Nation”. Australian Government Publishing Service. Canberra Steers, R.M and J. Black. 1994. “Organizational Behaviour”. Harper Collins. New York. Bolman, L.G and T. Deal. 1997. “Reframing Organizations”. Aristry, Choice and Leadership, Jossey Bass, San Francisco. Yukl. G. 1978. “Leadership in Organizations”. Prentice Hall. Upper Saddle river, NJ. Bandura. A, 1977, “Self Efficacy: Towards a unifying theory of behavioral Change”, Psychological Review, no 84. Bandura. A, 1986, Social foundations of thought and action, Prentice Hall, EagleWood river, NJ. Bandura. A, 1997, Self Efficacy: An exercise in control, FreeMan, New York Northcott. P.H, 1996. “Normative ethical theories: An overview”, Business Ethics in Australia and New Zealand, Nelson, Melbourne Rokeach, M. 1973. The Nature of Human Values. Freeman Press. New York Locke. E, 1996, “Motivation through Conscious Goal Setting”, Applied and Preventive Psychology, vol 5, no 2. Deci E.L, 1975, Intrinsic Motivation, Plenum Press, New York Deci E.L, 1996, Why we do, what we do, Penguin Press, New York Heckhausen, H. 1991. Motivation and Action. Springer Verlag, New York. Read More