General Electric Co. ran into a problem with how it had planned to move drilling equipment from the U.S. to Alberta, Canada. The equipment, called an evaporator, is used to extract crude oil from the ground, and it spans almost double the length of a Space Shuttle Orbiter. The Wall Street Journal reported that \"GE lost an attempt to overrule a federal injunction preventing it from using a stretch of scenic Idaho highway to haul the giant piece of equipment.\" As you would expect, the company appealed the injunction. For now, however, the equipment is \"stuck near the Port of Wilma in Clarkson, Washington, without a way to get to its destination hundreds of miles away.\" \"Moving it takes tow trucksone pulling and another pushingwith 20 axles along multiple trailers stretching the load out to 250 feet. Interstate highways aren't an option, because the load can't get under the overpasses,\" according to the newspaper report. GE is very concerned about moving the equipment because failure to do so could cost the company about $75 million in sales, according to The Wall Street Journal. One option is to follow the lead of Imperial Oil. Two years ago the company encountered a similar problem, leading it to disassemble the equipment and then transport it along various interstate highways. Page 156 Transportation of the equipment is being challenged by the Nez Perce Tribe and conservation group Idaho Rivers United. These groups \"are concerned the giant convoys will change the national forest's character and infringe on tribal values,\" the Journal said. The holdup is a key issue for GE because the company has a strategy to grow revenue by focusing on its oil business. For example, \"the company has been building up its oil field services businesses for the past decade, and GE Chief Executive Jeff Immelt has invested to expand its offerings in unconventional fields like shale gas and the oil sands. \"GE's Resource Conservation Company International has delivered about 20 evaporators to oil sands projects since 2002 using different routes. This time it contracted a British Columbia firm to make the evaporator after getting the order from an undisclosed client in early 2012.\" The company did not take the transportation of the equipment lightly. Continues the report: \"It mapped out a transport route that follows 100 miles of U.S. Highway 12, which cuts through Idaho's National Forest along switchbacks up to the Bitterroot Range's Lolo Pass.\" The company also decided to travel only at night so that it would not disrupt travel on the highway. The plan was to drive 15 minutes and then pull over so that other vehicles could pass. The company also planned to have an ambulance follow the convoy so that it could take care of any emergencies that might occur along the highway. Part of GE's planning included a trial run over the same route. There were no incidents and the company received permits from the state highway patrol. This experience led the company to conclude that there would not be any problems with transporting the equipment. \"The fact that GE had the full support of Idaho's transportation Department gave us a very high degree of confidence,\" said William Heins, RCCI's operating chief. But despite 15 months of detailed planning, GE failed to get approval from the Nez Perce Tribe, which lives on the land around the scenic highway, or from the Forest Service, which has authority over the 100milelong stretch of highway. The Nez Perce Tribe and Idaho Rivers United objected and in August went to court, winning an injunction to stop the megaload shipments pending a review of how the traffic would impact the environment. \"GE tried to get the court to reconsider the injunction noting that the delay would be burdensome. Mr. Heins told the court the injunction could cost the company $3.6 million in damages from liquidated contracts, $5 million in increased transportation and equipment costs, and up to $75 million in potential lost revenue,\" reported The Wall Street Journal. \"The judge was not swayed by these arguments. The judge concluded that the company made 'an informed gamble,' and then declined to override the injunction.\" FOR DISCUSSION 1. Which of the fundamentals of planning did GE execute ineffectively? Explain your rationale. 2. 3. Which of the three types of goals were ineffectively managed by GE? Explain. 4. 5. State two SMART goals for GE based on the case. Given the political issues discussed in the case, how might GE ensure that these goals are attainable? Discuss. 6. 7. Using Figure 5.5, describe what GE could have done to improve the process of transporting the evaporator. Provide specific recommendations. 8. 9. What did you learn about planning based on this case? Explain. 10. HewlettPackard Is Counting on Organizational Change to Boost Revenue Growth Meg Whitman became CEO of HewlettPackard Co. in 2011. Since the time HP's revenue peaked in 2011 at $127 billion, it has dropped every subsequent year. On the positive side, the company had two consecutive quarters of growth in 2014. HP also is trying to rightsize and reduce costs by planning to lay off 16,000 employees. HP earlier decided to lay off 34,000 people, resulting in a total reduction of 50,000 employees.100 Whitman described the job cuts \"as an opportunity to streamline the company further and make it more nimble. An expected $1 billion in cost savings in fiscal 2016 would allow HP to invest in new technologies and skills to revive growth.\" Others, like UBS analyst Steven Milunovich, believe that these job cuts will erode employee morale and may lead to increased turnover. 101 \"But fixing the world's biggest tech companywith $120 billion in annual revenues and 330,000 employeesis a herculean task. Bloated by more than 70 acquisitions in the past 15 years, HP isn't just sprawling and stalled out; it may actually be running in reverse.\" 102 Whitman decided to change the organizational structure to fuel growth. She created two clusters of businesses. One focuses on corporate technology customers. This group, which sells servers, storage, and networking, delivered 43% of the company's overall operating profits according toForbes. Unfortunately, the software and services that accompany all this hardware have not been as successful. HP tried to build the software side of the business via acquisitions, which according toForbes have not been very successful. The magazine noted that \"when it comes to software acquisitions, Autonomy [HP's enterprise software company] was merely the most high profit misstep. All told, over the past decade HP squandered nearly $19 billion to buy myriad outfits that contribute only 7% to overall profit. The services unit, which staffs other companies' tech projects, is barely at breakeven.\"103 HP is currently \"looking for small to midsize acquisition candidates in cloud computing, security, and analytics software.\" 104 The second structural cluster sells printers, PCs, laptops, and mobile devices to people worldwide. This segment of the business contributed 29% of operating profits in 2013. The problem here is that the lucrative printer business is shrinking. Technology is simply moving more toward inkfree photo and document sharing, which benefits companies like Google, Facebook, and Dropbox. Strategically, HP also is trying to get back into the fastgrowing tablet market. The company attempted to gain entry in this market in 2011 with the TouchPad model, but it was a failure. Since February 2013, the company has introduced new models, and they are being well received in the market. In a similar vein, HP has created an overall vice president for design. This was done to create a strategic focus on product development. HP didn't stop at just a reorganization or a new tablet strategy, according to Forbes. A survey of the company's 20,000 salespeople revealed that employees rated the internal sales tools a mere \"7\" on a scale of 1 to 100. For example, it took HP as much as three weeks to prepare a sales quote, when competitors could do it in a matter of days. The company decided to upgrade its sales process by using new tools from Salesforce.com. Whitman also took to the road to reassure customers that HP was doing the \"right things.\" In the last year, she conducted \"305 oneonone meetings with customers or saleschannel partners, aides say, as well as another 42 roundtable chats with small groups\" around the world. It did not take Whitman long to realize that the organizational culture also needed to be changed to foster consistency between the company's strategies and culture. According to Forbes, she eliminated the barbed wire fence and locked gates that separated parking lots for the executives and the general employee population. \"We should enter the building the same way everyone else does,\" she said. She also decided to work from a cubicle, like most employees, instead of from a larger, more private location. She keeps a picture of her mother in her office. She also role models when she travels by staying at more modestly priced hotels.105 While HP is positive about the changes taking place, some analysts are more skeptical. Bill Shope, an analyst from Goldman Sachs, concluded that \"serial restructuring cannot solve HP's secular challenges, particularly following years of underinvestment.\" He forecasts that HP's revenue might fall to $107 billion in fiscal 2015.106 FOR DISCUSSION 1. Which of the supertrends are driving HP to change? 2. 3. Which of the forces for change are causing HP to undertake major organizational change? Explain. 4. 5. How might Meg Whitman have used Lewin's and Kotter's models of change to increase the probability of achieving positive organizational change? Provide specific recommendations. 6. 7. To what extent is HP following the four steps for fostering innovation? Explain. 8. 9. What advice would you give Whitman based on what you learned in this chapter? Be specific. 10. Steve Jobs's Personality & Attitudes Drove His Success This case is based on an interview of Steve Jobs by Walter Isaacson, the author of the 2011 bookSteve Jobs. His saga is the entrepreneurial creation myth writ large. Steve Jobs cofounded Apple in his parents' garage in 1976, was ousted in 1985, returned to rescue it from near bankruptcy in 1997, and by the time he died, in October 2011, had built it into the world's most valuable company. Along the way he helped to transform seven industries: personal computing, animated movies, music, phones, tablet computing, retail stores, and digital publishing.... When Jobs returned to Apple in 1997, it was producing an array of computers and peripherals, including a dozen different versions of the Macintosh. After a few weeks of product review sessions, he'd finally had enough. \"Stop!\" he shouted. \"This is crazy.\" He grabbed a Magic Marker, padded in his bare feet to a whiteboard, and drew a twobytwo grid. \"Here's what we need,\" he declared. Atop the two columns, he wrote \"Consumer\" and \"Pro.\" He labeled the two rows \"Desktop\" and \"Portable.\" Their job, he told his team members, was to focus on four great products, one for each quadrant. All other products should be canceled. There was a stunned silence. But by getting Apple to focus on making just four computers, he saved the company. \"Deciding what not to do is as important as deciding what to do,\" he told me. \"That's true for companies, and it's true for products.\" Page 371 After he righted the company, Jobs began taking his \"top 100\" people on a retreat each year. On the last day, he would stand in front of a whiteboard (he loved whiteboards, because they gave him complete control of a situation and they engendered focus) and ask, \"What are the 10 things we should be doing next?\" People would fight to get their suggestions on the list. Jobs would write them downand then cross off the ones he decreed dumb. After much jockeying, the group would come up with a list of 10. Then Jobs would slash the bottom seven and announce, \"We can only do three.\" Focus was ingrained in Jobs's personality and had been honed by his Zen training. He relentlessly filtered out what he considered distractions. Colleagues and family members would at times be exasperated as they tried to get him to deal with issues they considered important. But he would give a cold stare and refuse to shift his laserlike focus until he was ready.... Part of Jobs's compulsion to take responsibility for what he called \"the whole widget\" stemmed from his personality, which was very controlling. But it was also driven by his passion for perfection and making elegant products. He got hives, or worse, when contemplating the use of great Apple software on another company's uninspired hardware, and he was equally allergic to the thought that unapproved apps or content might pollute the perfection of an Apple device. It was an approach that did not always maximize shortterm profits, but in a world filled with junky devices, inscrutable error messages, and annoying interfaces, it led to astonishing products marked by delightful user experiences. Being in the Apple ecosystem could be as sublime as walking in one of the Zen gardens of Kyoto that Jobs loved, and neither experience was created by worshipping at the altar of openness or by letting a thousand flowers bloom. Sometimes it's nice to be in the hands of a control freak.... After the iPod became a huge success, Jobs spent little time relishing it. Instead he began to worry about what might endanger it. One possibility was that mobile phone makers would start adding music players to their handsets. So he cannibalized iPod sales by creating the iPhone. \"If we don't cannibalize ourselves, someone else will,\" he said. John Sculley, who ran Apple from 1983 to 1993, was a marketing and sales executive from Pepsi. He focused more on profit maximization than on product design after Jobs left, and Apple gradually declined. \"I have my own theory about why decline happens at companies,\" Jobs told me. They make some great products, but then the sales and marketing people take over the company, because they are the ones who can juice up the profits. \"When the sales guys run the company, the product guys don't matter so much, and a lot of them just turn off. It happened at Apple when Sculley came in, which was my fault, and it happened when Ballmer took over at Microsoft.\" When Jobs returned, he shifted Apple's focus back to making innovative products: the sprightly iMac, the PowerBook, and then the iPod, the iPhone, and the iPad. As he explained, \"My passion has been to build an enduring company where people were motivated to make great products. Everything else was secondary. Sure, it was great to make a profit, because that was what allowed you to make great products. But the products, not the profits, were the motivation. Sculley flipped these priorities to where the goal was to make money. It's a subtle difference, but it ends up meaning everythingthe people you hire, who gets promoted, what you discuss in meetings.\" Caring deeply about what customers want is much different from continually asking them what they want; it requires intuition and instinct about desires that have not yet been formed. \"Our task is to read things that are not yet on the page,\" Jobs explained. Instead of relying on market research, he honed his version of empathy, an intimate intuition about the desires of his customers. He developed his appreciation for intuitionfeelings that are based on accumulated experiential wisdomwhile he was studying Buddhism in India as a college dropout. \"The people in the Indian countryside don't use their intellect like we do; they use their intuition instead,\" he recalled. \"Intuition is a very powerful thingmore powerful than intellect, in my opinion.\" ... Jobs's (in)famous ability to push people to do the impossible was dubbed by colleagues his Reality Distortion Field, after an episode of Star Trek in which aliens create a convincing alternative reality through sheer mental force. An early example was when Jobs was on the night shift at Atari and pushed Steve Wozniak to create a game called Breakout. Woz said it would take months, but Jobs stared at him and insisted he could do it in four days. Woz knew that was impossible, but he ended up doing it. Those who did not know Jobs interpreted the Reality Distortion Field as a euphemism for bullying and lying. But those who worked with him admitted that the trait, infuriating as it might be, led them to perform extraordinary feats. Because Jobs felt that life's ordinary rules didn't apply to him, he could inspire his team to change the course of computer history with a small fraction of the resources that Xerox or IBM had. \"It was a selffulfilling distortion,\" recalls Debi Coleman, a member of the original Mac team who won an award one year for being the employee who best stood up to Jobs. \"You did the impossible because you didn't realize it was impossible.\" Page 372 One day Jobs marched into the cubicle of Larry Kenyon, the engineer who was working on the Macintosh operating system, and complained that it was taking too long to boot up. Kenyon started to explain why reducing the bootup time wasn't possible, but Jobs cut him off. \"If it would save a person's life, could you find a way to shave 10 seconds off the boot time?\" he asked. Kenyon allowed that he probably could. Jobs went to a whiteboard and showed that if five million people were using the Mac and it took 10 seconds extra to turn it on every day, that added up to 300 million or so hours a yearthe equivalent of at least 100 lifetimes a year. After a few weeks Kenyon had the machine booting up 28 seconds faster.... During the development of almost every product he ever created, Jobs at a certain point \"hit the pause button\" and went back to the drawing board because he felt it wasn't perfect. That happened even with the movie Toy Story. After Jeff Katzenberg and the team at Disney, which had bought the rights to the movie, pushed the Pixar team to make it edgier and darker, Jobs and the director, John Lasseter, finally stopped production and rewrote the story to make it friendlier. When he was about to launch Apple Stores, he and his store guru, Ron Johnson, suddenly decided to delay everything a few months so that the stores' layouts could be reorganized around activities and not just product categories.... Jobs was famously impatient, petulant, and tough with the people around him. But his treatment of people, though not laudable, emanated from his passion for perfection and his desire to work with only the best. It was his way of preventing what he called \"the bozo explosion,\" in which managers are so polite that mediocre people feel comfortable sticking around. \"I don't think I run roughshod over people,\" he said, \"but if something sucks, I tell people to their face. It's my job to be honest.\" When I pressed him on whether he could have gotten the same results while being nicer, he said perhaps so. \"But it's not who I am,\" he said. \"Maybe there's a better waya gentlemen's club where we all wear ties and speak in this Brahmin language and velvet code wordsbut I don't know that way, because I am middleclass from California.\" ... It's important to appreciate that Jobs's rudeness and roughness were accompanied by an ability to be inspirational. He infused Apple employees with an abiding passion to create groundbreaking products and a belief that they could accomplish what seemed impossible. And we have to judge him by the outcome. Jobs had a closeknit family, and so it was at Apple: His top players tended to stick around longer and be more loyal than those at other companies, including ones led by bosses who were kinder and gentler. CEOs who study Jobs and decide to emulate his roughness without understanding his ability to generate loyalty make a dangerous mistake. \"I've learned over the years that when you have really good people, you don't have to baby them,\" Jobs told me. \"By expecting them to do great things, you can get them to do great things. Ask any member of that Mac team. They will tell you it was worth the pain.\" Most of them do. \"He would shout at a meeting, 'You asshole, you never do anything right,'\" Debi Coleman recalls. \"Yet I consider myself the absolute luckiest person in the world to have worked with him.\" FOR DISCUSSION 1. How would you evaluate Jobs in terms of the Big Five personality dimensions? 2. 3. How would you evaluate Jobs in terms of the five traits important to organizational behavior? Explain. 4. 5. What were Jobs's attitudes about effective leadership? Use the three components of attitudes to explain. 6. 7. Do you believe that Jobs's personality and attitudes affected the workplace attitudes and behaviors of Apple employees? Explain. 8. 9. What factors were causing stress for Jobs? Explain. 10