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A ND COM M E NT ARYHBR CAS E ST UD Y

Bob’s Meltdown by Nicholas G. Carr

•

How should the CEO respond to his top manager’s tantrum?

Four commentators offer expert advice.

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HBR CAS E ST UD Y

Bob’s Meltdown

by Nicholas G. Carr

harvard business review • january 2002 page 1

HBR’s cases, which are fictional, present common managerial dilemmas and offer concrete solutions from experts.

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Your best manager just lost his cool and humiliated a colleague in public. Now what?

Annette Innella, Vice President, Knowledge Management: It was the most humiliating ex- perience of my life. I knew Bob Dunn didn’t see eye-to-eye with me, but I would never have imagined he’d attack me the way he did. I felt completely exposed and violated. Even now, nearly two days later, I’m angry and upset—I can hardly concentrate on my job.

The morning had actually started off quite well. Alex Brigham, one of the most respected consultants on knowledge management, had flown in from San Francisco to meet with me and go over our situation here at Concord Machines. It was an extremely productive meeting—Alex was surfacing all sorts of out- of-the-box ideas—and we decided to continue it over lunch. We had just come into the com- pany cafeteria when out of nowhere someone starts yelling. At first, I had no idea what was going on. Then I realized that it was Bob Dunn—he was at a table by the door, just a

few feet from me—and that it was me he was screaming at. I was stunned, speechless. I just stood there while he went on and on, ranting about how I didn’t know anything and how I was wrecking the company. It was very per- sonal. Then he stood up and threw his lunch tray against the wall and stormed out, passing within a foot or two of me. I was scared. I sin- cerely thought he might do something physical.

Needless to say, I couldn’t eat after that. Alex kindly escorted me out of the cafeteria and back to my office. The rest of the day is a blur. At some point after Alex left for the airport, Nathan Singer, the head of HR, came by and talked with me for a long time, and then Jay Nguyen, our CEO, called me from Toronto, where he was attending a conference. But to be honest, I can’t really remember much of what either Nathan or Jay said. Obvi- ously, though, they were both extremely upset by Bob’s outburst.

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Bob’s Meltdown•••HBR CASE STUDY

harvard business review • january 2002 page 2

I knew when I started here six months ago that I’d have a tough time. Concord Machines is an old-line manufacturer that’s very set in its ways. They don’t really understand that we’re in a fundamentally new economy now and that a company’s knowledge is its great- est competitive asset. Everyone here is still locked in their business and functional silos; there’s no cross-unit teaming, no sharing. Jay told me he wanted me to shake things up, and that’s what I’ve been trying to do. The Friday before this happened, Jay had okayed my proposal to establish a knowledge manage- ment committee—the Knowledge Protocols Group—that would bring together the best and the brightest from every unit to create a strategy and set an example for the rest of the company. I guess that’s what set Bob off. He must have viewed it as an encroachment on his turf—his precious little Services Division.

I’ve come to believe that there are two types of people in business: the constructive and the destructive. Destructive people can succeed for a while if they’re smart and com- petent and energetic, but in the end they’ll do far more harm than good to an organization. I sensed from the start that Bob Dunn was a destructive person, and now I’m sure of it. He may be an important part of Concord Ma- chines’ past, but he’s certainly not part of its future. I don’t think Jay has any choice at this point but to let him go. I know I can’t stay if he stays.

Robert Dunn, Senior Vice President and General Manager, Services: I’m not making any excuses—what I did was totally unacceptable—but you have to understand I’d been under a heck of a lot of pressure. We were two weeks into the fourth quarter, the company was behind budget on both reve- nue and income, and so of course everyone was looking to Services to make up the shortfall. They still call Concord Machines a manufacturer, but it doesn’t make money on product sales anymore. All of our margin and most of our growth are coming from ser- vice contracts and spare parts sales—thanks to me and my people. Three years ago, when they put me in charge of the unit, we barely even had a services business; it was an after- thought. I cleaned the organization out and rebuilt it from scratch. I overhauled all our processes, brought in and trained a cracker- jack sales force, expanded successfully into

Europe and Asia. This year, Services will bring in nearly half of the company’s reve- nue and virtually all of its profit. Hell, Ser- vices is Concord Machines.

At the start of the quarter, Jay called me into his office and laid it on the line. He told me, first, that I was going to have to beat my revenue target and, second, that a hiring freeze had been put into effect and, third, that they were going to take a quarter million out of my marketing budget. So I was in a vise, as usual. But I didn’t whine about it. I just said, “Okay, I’ll get it done.” First thing I had to do was clear: rally the troops. I hopped on a plane, and I did the circuit—London, Paris, and Munich; then Taiwan and Sin- gapore; and around to Phoenix and Dallas. I got home, and before I’d even had a chance to kiss the wife, the guys in London call me back. A big client in Glasgow is wavering about signing a contract extension, and they need me to help clinch the deal. Fine. I take the next flight. Then, while I’m in Scotland, I get a hysterical message from my wife. Our son, Gregg, has been in a car accident. Everyone’s fine, but my car—a new Explorer—is totaled, and Gregg’s been arrested for driving under the influence and possession of alcohol as a minor. It’s a nightmare. When I finally get back, last Friday night, I have to deal with that. I’m the last person to use my personal life to make excuses for my job, but face it: Stress is stress. I’m human like everybody else.

Then comes the last straw. I get into the of- fice Monday morning at seven, and I’ve got an e-mail from Annette Innella—this woman that Jay brought in six months ago to be in charge of “knowledge management,” what- ever the hell that means—saying that she’s launching something called a Knowledge Pro- tocols Group. And, get this, she wants each department head to assign two of their “most talented lieutenants” (that’s a direct quote) to this KPG team. She says that they should be freed up enough from their operating duties to devote at least half their time to KPG. I nearly threw my computer through the win- dow. I mean, they’re squeezing my division to save the company’s butt, and then they throw this nonsense at us. Give me a break.

So when Annette came into the lunchroom with another of her high-priced consultants and gave me that patronizing little smile of

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Bob’s Meltdown•••HBR CASE STUDY

harvard business review • january 2002 page 3

hers, I just lost it. I mean, she knows nothing about this business. She’s a waste of space—a corporate black hole. I really have no idea why Jay hired her in the first place. It was a huge mistake. So, yeah, I’m sorry for blowing up; it was a truly stupid move. But I’m carry- ing this company on my back, and that has to count for something.

Nathan Singer, Senior Vice President, Human Resources: We have a set of values in this company that we spent a lot of time creating, and I take those values very seri- ously. One of our values is entitled “Respect.” This is what it says: “We value the unique and diverse talents of our coworkers, and we treat them at all times with respect and consid- eration.” Say whatever you want about Annette—I personally think she’s a breath of fresh air around here—but one thing is crys- tal clear. Bob Dunn acted in a way that was totally inconsistent with our company values. Screaming at a colleague in public and acting in a violent and threatening manner is out- side the bounds of acceptable workplace be- havior. If Bob is allowed to get away with this, it will undermine our values completely. I mean, who is going to take them seriously if he gets away with just a slap on the wrist?

Frankly, Bob Dunn has never taken this company’s culture seriously. He wasn’t on- board when we developed our mission and values, and I’d go so far as to say he treated the entire process with contempt. Of course, that’s typical for Bob. He runs Services like it’s his own private kingdom, like it’s separate from the rest of the company. He routinely ig- nores or even insults the other executives here, particularly those in corporate roles like myself. He hasn’t even returned my calls about this incident. He’s just not a team player, and as Jay has made clear on many oc- casions, everyone in this company is part of the team. I know Bob gets results, but results aren’t the only thing that matters. Bob’s a di- nosaur, when you get down to it, and though I’d like to give him the benefit of the doubt, it wouldn’t surprise me if one of the reasons he attacked Annette is because she’s a woman. I think he feels threatened.

Paula Chancellor, Graphics Specialist: I was sitting in the cafeteria eating a salad when Bob Dunn came in and sat down at my table. We all love Bob. He’s gruff and has a temper, but he’s a great guy. I mean, no other

big shot at this company would even think about sitting down and having lunch with me—I’m just the anonymous person who cranks out their PowerPoint slides. Bob, though, makes it a point to know your name and to always ask how you’re doing.

Anyway, I could tell he was in a bad mood that day. We said hi to each other, and then we just ate our lunches quietly. I was flipping through a magazine, kind of in my own world. Then all hell breaks loose. I hear Bob say, really loud, “You’ve got to be kidding me, right?” I look up, and at first I think he might be yelling at me—his face is bright red, he’s really steaming, and I’m thinking, “What the heck did I do?”—and then I realize he’s talk- ing to that new knowledge management per- son. Her name’s Annette, I think. There was a big memo about her when she joined.

Anyway, Annette—she’s with this other guy I’d never seen before, with these trendy little glasses—she stops and just glares at Bob. “Excuse me?” she says. “Are you talking to me?” She is just totally shocked.

“This knowledge group thing,” Bob says. “That has to be the stupidest idea I’ve ever heard in my life. It’s totally nuts. Do you have any clue what we do here? Have you looked at the numbers at all? You’re going to screw up my whole damn operation when we can least afford it. You know what? You don’t know the first thing about this company.” Then he gets up and basically throws his lunch tray at the garbage can. There’s food and trash all over the floor. He stomps out the door, and Annette’s just standing there, in complete disbelief. It was crazy. People have been talking about it ever since. Everybody’s wondering what Jay’s going to do.

Jay Nguyen, President and CEO: What a mess. Bob Dunn’s the best manager I have. Hands down, the best. He understands the business, he works tirelessly, and he gets his people to do unbelievable things. His people adore him, in fact—at least, those that have had the stamina to stick with him. This com- pany would fall apart in five minutes without Bob. I know it, and he knows it.

But screaming at a colleague in the cafete- ria? Throwing your tray? That’s too much. I don’t know where you draw the line, but that’s definitely over it. The ironic thing is, I was probably just as angry about Annette’s memo as Bob was. I hadn’t given her a green

So when Annette came into the lunchroom with another of her high- priced consultants and gave me that patronizing little smile of hers, I just lost it.

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Bob’s Meltdown•••HBR CASE STUDY

harvard business review • january 2002 page 4

Nicholas G. Carr is an executive ed- itor at HBR.

light on setting up that group; I had just said it looked like a promising idea. And even that was an exaggeration—the last thing we need right now is for people to take their eyes off the bottom line. Now I’m really in a box. If I ask Annette to postpone the initiative, it’ll look like I’m sanctioning Bob’s behavior. And that’s a message I can’t send. Heck, I’d probably end up getting sued or something.

I brought Annette in because I was con- vinced that the company needed some fresh thinking. And I’m still convinced that’s true. Our products are commodities at this point; we have to keep cutting manufacturing costs just to stay even. Bob’s unit is making all the money, but that’s eventually going to start flattening out, no matter how good a man- ager Bob is. We’ve got good people here, but we’re not capturing their ideas. We need new

products, new services, new strategies. I have my doubts about Annette—I’m not sure she fully understands the realities of the business we’re in. But I have no doubt about the need to tap into our people’s knowledge. No doubt at all.

I just don’t know what to do. In some ways,

I even feel I’m a little to blame here. I’ve been

pushing Bob relentlessly. He’s always seemed

to thrive on pressure—the more work you

give him, the more he wants. But maybe I

went too far. Everybody has a breaking point.

How should the CEO respond to his top manager’s tantrum? • Four commentators offer

Case CommentarySee expert advice.

What a mess. Bob Dunn’s the best manager I have. Hands down, the best. He understands the business, he works tirelessly, and he gets his people to do unbelievable things.

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page 5 harvard business review • january 2002

Bob’s Meltdown • HBR CASE STUDY

Case Commentary

by Nicole Gardner

How should the CEO respond to his top manager’s tantrum? The big problem at Concord Machines is not Bob Dunn’s behavior; it’s Jay Nguyen’s. Jay has clearly been struggling for some time with fun- damental issues about the company and its fu- ture. But, equally clear, he has failed to share his thoughts and concerns with the rest of his top management team. No wonder Bob blew his stack—he’s been put in an untenable posi- tion. His CEO is pushing him to focus relent- lessly on the near term even as other executives are being urged to look out toward the horizon.

So, while Jay deals with the immediate mess, he needs to do some deep—and fast— thinking about where he’s taking Concord Machines and what he wants from each member of his executive team. And then he needs to meet with the team and lay all his cards on the table. CEOs can’t have secret agendas.

As for the current situation, healing the wounds is going to take careful listening and straight talk. Jay needs to sit down with An- nette Innella, apologize for his own miscom- munication, and then let her speak her mind, no matter how long it takes. She needs to know that he empathizes with her and shares her shock and disappointment at Bob’s tan- trum. But once she’s had her say, Jay needs to deliver a hard message. Assuming that An- nette knew about the financial pressures fac- ing the company, her decision to suddenly launch an initiative that would distract the business units was unconscionable. And mak- ing it even worse was the fact that she used e- mail to deliver the message. In a company that reveres Bob Dunn because he connects person- ally with coworkers at all levels, delivering a sensitive announcement to colleagues over a computer screen is a cultural faux pas of the first order. Annette needs to understand that she made big errors.

It may be that Annette is, in fact, the wrong person for the job at hand. If Jay truly

has serious doubts about her capabilities, as he seems to, he’s going to have to bite the bullet and guide her toward a decision to be reassigned or to leave the company. It may be possible to have a B-list person manage an ef- fort that’s already up and running, but when it comes to spearheading a new, critical initia- tive, you need nothing less than top tier talent. Jay may need to cut his losses with Annette.

As for Bob, he already understands that he made a big mistake. Jay needs to reinforce that message with him and make it clear that Bob needs to apologize to Annette—in per- son. More important, though, Jay needs to tell Bob how valuable he is to the company. Bob is too important to be allowed to feel alienated by this incident—or even to be dis- tracted by it. And then Jay needs to change Bob’s marching orders. He needs Bob to dele- gate day-to-day decisions and firefights to his lieutenants; Bob cannot, and should not, con- tinue to do everything himself. (To free Bob up, Jay may have to cough up some money for new managerial talent.) And then Bob has to broaden his own perspective, to help Jay plot Concord Machines’ future. For all his success, Bob’s being wasted in his current role.

Finally, the company grapevine needs tend- ing. People are buzzing about this incident, and its resolution needs to be communicated through the ranks. As soon as Bob has talked with Annette, Jay should ask him to sit down with Paula Chancellor and tell her, first, that his behavior in the cafeteria was completely in- appropriate and, second, that he’s patched things up with Annette. Paula will quickly spread the word. It would also be helpful for Bob and Annette to be seen working together cordially from time to time. With luck, that will happen naturally.

Nicole Gardner is a vice president and the chief

human resources officer at Mercer Management

Consulting in Boston.

No wonder Bob blew his stack—he’s been put in an untenable position. CEOs can’t have secret agendas.

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harvard business review • january 2002 page 6

Bob’s Meltdown • HBR CASE STUDY

Case Commentary

by Victor Newman

How should the CEO respond to his top manager’s tantrum? Jay has already lost two days. He must now act very quickly to defuse the situation, and at every step of the way he must display the kind of behavior he wants his managers to emulate. Just as important as what he does is how he does it.

Jay’s first priority should be to sit down with Nathan Singer and review the potential risks the company faces should Annette bring legal action for assault or harassment. Contin- gency plans need to be put in place immedi- ately. Nathan should clear his schedule for review meetings with Jay at the beginning and end of each day until the problem is resolved.

Jay also must meet right away with Bob. He needs to explain to Bob the risks the com- pany faces as a result of his actions, and he needs to get Bob to take a weeklong emer- gency leave of absence to deal with his family problems, handing over the reins of Services to his second in command. During this week, Bob should have a full physical examination with the company doctor—and he should have no contact with Annette whatsoever. Jay needs to call Bob every day during his week off, expressing the company’s concern for his family’s and his own well-being. During these conversations, Jay himself needs to apologize for his own errors—for pushing Bob too hard and for failing to communicate clearly. That will help Bob become comfortable with the thought of apologizing to Annette.

Indeed, Jay’s overarching goal should be to create the conditions for a meeting between Annette and Bob in which they listen to each other’s point of view, develop empathy for each other, and renegotiate their relationship. A skilled counselor should be brought in to in- terview each of them and design the process for their reconciliation. At the same time, Jay should have Nathan develop severance pack- ages for Annette and Bob in case they are un- able to bridge their differences.

Jay also needs to do some soul-searching. What might he have done to avoid this situa- tion? At the very least, he should have had a

business continuity plan. That would have highlighted the risk of loading too much re- sponsibility for profit generation onto any one person. Such a plan would have forced Bob to develop an explicit delegation strategy for developing his subordinates. Bob is locked into the heady, self-reinforcing adrenaline cycle of expert power. He loves being the deus ex machina who flies in to save the day. This cycle needs to be broken. Bob’s busyness, not market conditions, may be the real con- straint on Services’ growth.

As for Annette, Jay should have given her a thorough orientation to the business, cover- ing the company’s entire value chain, and had her schedule meetings with all the VPs and senior VPs to discuss their roles and collect their views on knowledge management. Most important, Jay should have required Annette to formulate a detailed strategy for engaging and involving her peers before she took any action.

Launching headquarters-sponsored initia- tives is always dangerous. All such programs, I’ve learned, must be viewed and promoted in terms of business value. For people like Bob Dunn, “knowledge management” is a mean- ingless term; it makes sense only to the de- gree it can be shown to generate concrete value. If Annette’s efforts are going to bear fruit, she needs to provide answers—in clear, everyday language—to the three crucial ques- tions that every employee will immediately ask: Why are we doing this? What’s in it for me? What do I do now?

It’s ironic that Bob’s Services organization is in itself a good example of how knowledge, when well managed, can differentiate even a commodity. If only Annette had made that connection, Bob might have been her greatest ally.

Victor Newman is the head of the European Pfizer

Research University in Sandwich, England. He

speaks frequently on the subjects of organizational

learning and knowledge management.

Bob’s busyness, not market conditions, may be the real constraint on Services’ growth.

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page 7 harvard business review • january 2002

Bob’s Meltdown • HBR CASE STUDY

Case Commentary

by Kathleen Ligocki

How should the CEO respond to his top manager’s tantrum? Wouldn’t life be easier if people were perfect? And wouldn’t business be simpler if operating pressures were perfectly balanced with strate- gic considerations? Then again, how much less interesting a manager’s job would be!

Jay sowed the seeds for this confrontation himself. Obviously, he has not worked with his management team to develop integrated objectives and align priorities. Instead, he upped the pressure on Services, his one high- performing operating unit, and on Bob, its head, while unleashing Annette, an inexperi- enced VP, with a broad, strategic knowledge- management initiative. Each was blind to the other’s perspective. Neither treated the other with the respect and consideration core to the company’s values. Some kind of clash was inevitable.

Bob’s behavior in the cafeteria was clearly inappropriate; the most objective observer, Paula Chancellor, indicated that Bob insti- gated the confrontation. Since his blowup was public, he owes Annette a public apology— one appropriate forum would be a meeting of Jay’s direct reports. Bob’s overreaction might be better understood if he could share some of his personal life pressures. Most would sympathize.

Bob is a crusty, experienced, capable line manager who

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