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LEADERSHIP CASE PROBLEM B Turnaround Ashley At age thirty-two, Ashley believed that she had landed an opportunity to accelerate her career as a leader and manager

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LEADERSHIP CASE PROBLEM B Turnaround Ashley

At age thirty-two, Ashley believed that she had landed an opportunity to accelerate her career as a leader and manager. Ashley had worked four years as a manufacturing manager in the industrial pump division of a conglomerate. Based on her outstanding performance, she was offered the opportunity to be the division head of a small and troubled unit of the company, Ultra Covers. The division in question manufactures after-market stylish covers for smartphones, laptops, and tablet computers. Although the products are of high quality, Ultra Covers has been losing money for several years. Competition in the field of stylish covers for electronic devices is intense, and profit margins are thin. Despite these challenges, Ashley took just one hour to accept the offer. She told the top-management committee, “I know I can convert Ultra Covers into a proud and profitable business unit.

” Thirty days later, Ashley began her new position as division president. The former president was reassigned to a plant manager position in another unit of the conglomerate. Ashley’s first move was to conduct a listening tour of the company, interacting with workers and managers at all levels of the division. She also spoke with the major customers and several kiosk operators who sold Ultra Covers at shopping malls. After listening to so many people, making observations of her own, and analyzing financial and production data from the Ultra Cover division, Ashley swung into action. Her first step was to inform the manufacturing group that if they could not reduce manufacturing costs by 10 percent within six months, she might shut down domestic manufacturing and outsource all manufacturing to China. Ultra Covers would then become a sales and distribution unit, with almost no manufacturing.

Ashley’s next major initiative came in a meeting with the sales manager, Ken. She told him that his goal for the upcoming fiscal year is to increase sales by 15 percent, and that no excuses would be acceptable. Ken explained that his sales force is highly motivated, and that they are doing everything they can to boost sales, including intense Internet marketing. He said, “The channels are already saturated with decorative covers for portable electronic devices. A 15 percent jump in sales is unrealistic.” Ashley told Ken it was his job to find a way to increase sales—particularly if he wanted to keep his job.

Another initiative Ashley took was to order man-agers and supervisors to find ways to reduce division costs by 10 percent in the upcoming fiscal year. “Do whatever it takes,” said Ashley. “Our costs are too high for our sales volume. Adjust the thermostats, do not replace some of the workers who quit or retire, cut back on scrap. And when you make photocopies, remember to print on both sides of the sheet of paper.”

Ashley began to sense from comments she heard from her staff that perhaps her turnaround efforts appeared to be a little harsh. Based on this feedback, she decided to prepare a video that would be distributed on the Ultra Cover intranet. A central part of her message was that about four billion people in the world use some type of mobile device or computer, and that only 3 percent of them are purchasing a cover for these devices. She concluded, “We have a potential market of about 3.9 billion people throughout the world who could use at least one Ultra Cover. We have just begun our journey to greatness.”