Read the case entitled "John A. Clendin and Manning Xerox Multinational Development Center" in the electronic course pack. What have John Clendenin's Obiectives been at Xerox? Do you see similarities with yourselves on these objectives? Do you agree with his objectives? What obstacles did he confront in accomplishing these objectives? What interpersonal and Organizational strategies did he utilize to accomplish these objectives? What actions should Clendenin take now? Those who worked with John Clendenin in Xerox's building and saw him walking down the hall after lunch on March 16, 1989, would not have noticed anything unusual. Few would have guessed that Clendenin was weighing key decisions about his career and future at Xerox. Earlier that afternoon, his boss, Fred Hewitt, had just proposed to Clendenin a lateral move from head of Xerox's Multinational Development Center (MDC), responsible for enhancing Xerox's worldwide logistics and inventory management, to a staff support position on Hewitt's staff. Hewitt had also given Clendenin the option of remaining in his current job if he would make an additional two-year commitment to the MDC. Clendenin was impressed by the quality of Hewitt's other direct reports and by Hewitt's enthusiasm in describing the new position. He wondered, however, if Hewitt might also be sending him another message. Clendenin knew that the MDC's growth had created resentment among those who had not been as successful in getting additional resources for their organizations. He suspected that these people, and possibly others, might read his lateral shift into a staff position as a forced move off the fast track. On the other hand, they might come to the same conclusion if he remained for another two years at the MDC. Clendenin's Early Career at Xerox: John Clendenin first came to work at Xerox in 1983, after his first year at Harvard Business School. Clendenin spent the summer as a productivity consultant in the parts and supply area of Xerox U.S. Marketing Group (USMG). He showed how Xerox was over-packaging in distribution, an analysis which saved Xerox $300,000 a year. He also found that the company could save $2 million a year by having vendors ship directly to end users in Xerox rather than through central corporate warehouses. Building the MDC: While Clendenin had just been promoted, he was not allowed to transfer any of the rest of his staff from parts and supplies administration into the MDC: I got this little group, the MDC. I have no formal authority. It is me and four people. I just lost 40 people and $62 million of budget responsibility, but I went up a level. So here I am reporting to a vice president. Clendenin decided that to accomplish the MDC's new objectives he had to increase the group's size. When he asked Zixan about adding staff, he was told that he could do anything he wanted, as long as: any headcount you get is from one of your peers [on Zivan's staff). They have to go down one for you to go up one. You can spend as much money as you want, but you have to come up with a proposal that saves that same amount of money this fiscal year for Xerox U.S., and then I don't care how much you save for the rest of the world. The first meetings of these two committees occurred in the early part of 1986. Prior to these meetings, Clendenin spent time on the phone, coordinating schedules, and getting to know the secretaries of group members, as well as traveling to Europe and Japan to meet some key members in person. In his role as secretary to the multinational steering committee, he organized and set that group's agenda. One important result of these meetings was a list of 42 potential opportunities for productivity improvement. Each member of the working group was given primary responsibility for implementing a few of the items on this list. When members returned to their organizations with these agendas they realized that it was often easier to fund Clendenin to complete these projects than to find the manpower to do the projects on their own. Clendenin soon realized that he could also complete projects far more economically than the operating units. Instead of using the corporate-approved computer language, COBOL, the MSDC's logistics systems were developed in the programming language APL. The MDC could thus develop new applications more quickly, and less expensivelyallowing Clendenin to generate the financial surplus he needed to grow the MDC. If, for example, his line customers asked how much money the MDC would charge them to complete a project with the order network, Clendenin explained: I told them $400,000. But I needed $200,000 to do it. Now they thought $400,000 was a treat, since they were used to developing systems in COBOL. My greater productivity with APL allowed me to do it less expensively. It was not like I was lying to them. I needed to hire additional people to make the operation run smoother. And they asked, "What does this have to do with the order network?" I said, "I need to run the operation once this project is done." So they were always going to save more than the $400,000 and I grew the staff to where I thought it needed to go. For every $50,000 I charged over the systems needed I could add another staff person in a support area. And those support people generated more opportunities. The more opportunities I had the more systems people I could add. They were paying me a portion of the savings. But it was not always easy to get members of the multinational committees to agree to fund anything beyond computer systems development work. According to Fred Hewitt, a member of the multinational steering committee at the time: We did not want the MDC to do strategy or benchmarking. I am not saying that we were right to say that. But I am reporting that there was a great deal of animosity and friction generated whenever the MDC budget was raised. The MDC was doing things with our money that we would prefer to do ourselves. The members of the committees told Clendenin, "You and your MDC guys have no right spending my good money and going out and doing external benchmarking visits and writing reports and telling me and the people who work for me what you found out. If I am going to spend $20,000 on visits, I want it to be my people doing the visits." Given these concerns, Clendenin tried to maintain a delicate balance as he worked to grow the MDC. When formal meetings of the multinational committees occurred: I wanted to be a catalyst in the true sense, not part of the experiment. What had to happen was that Europe had to cooperate with the United States. I did not operationally control that. I did not own any people who did that. I had no inventory. Clendenin also tried to play his quiet behind-the-scenes role between formal meetings: It was like the prisoner's dilemma: For us to get our goals we needed everyone's cooperation. So when I set up the structures, I would use all of their names in vain. I would say, Chuck, Pete needs some help on this. And by the way he is really helping you out over here. And then I would go to Pete and say, Hey, Chuck is really helping you out over there. Maybe you should help him out. So I did those kinds of things back and forth to make the thing work. Staffing and Managing the MDC: Clendenin believed that the success of the multinational committees depended on the quality of the supporting staff work performed by the MDC. Consequently, much of his time was spent identifying and recruiting appropriate people to join his organization. This was not easy. The individuals Clendenin hired were generally those others the logistics and distribution organization were willing to let go. Consequently, the MDC developed a reputation, according to one MDC member, of being staffed by those undervalued by the rest of Xerox. Clendenin suspected, however, that these negative evaluations were not always reliable. He perceived that Xerox, like other corporations, is a close-knit society. Someone badmouths someone, and everyone else sticks together. They put you on the bad list, or they put you on the good-guy list. Clendenin developed a screening process of multiple interviews by various members of the MDC. While he listened to all interviewers of prospective job candidates, he reserved for himself the ultimate hiring decision. He believed that each person he brought into the MDC needed to have intelligence and the ability to be motivated, to be caring, involved, and a team player. Any MDC member could give someone else who had done something special a certificate of appreciation. These were displayed all over the MDC work area. Clendenin sponsored yearly MDC golf tournaments. A manager outside the MDC commented that at company picnics, MDC members stood out because of their matching hats. All documents featured a group logo with the MDC's motto, "The quality of your attitude is as important as the quality of your work." Clendenin supplemented the regular Xerox performance review process with an additional appraisal form he created to measure both employees' attitudes and their work results. He asked all his direct reports to fill out these forms for both their subordinates and each other. While they did not personally see the ratings given to them by their peers, he used the results as inputs into his own appraisals, and as a way of spotting potentially problematic relationships on the top team. Clendenin himself was involved in a wide array of community activities and he encouraged his staff to do the same. If an employee had to leave work early to coach the high school wrestling team, that was fine the same employee was willing to come into work at 5:00 a.m. to answer calls from Xerox's overseas subsidiaries. If Clendenin felt that an employee was under great stress, he would take him or her out for a long lunch. If individuals in the MDC did not meet Clendenin's expectations for performance, he first gave them a verbal reminder. If this did not have its intended effect, he sent them a note in green ink. As a last resort he sent a second note stamped with a Chinese dragon. According to Clendenin this meant, "do not pass go, do not collect $200, do not go home until you get this done." Clendenin described how he interacted with the members of the MDC: You must always appear extemporaneous, never rattled. What is important is the illusion, the presence, not information or facts. I do not have the answer to everything, but they have the confidence to believe me. Leadership involves the ability to create and manage tension, but be approachable. A Xerox manager who worked closely with the MDC saw it as quite diverse in its membership: it was composed of people with] systems backgrounds, planning backgrounds; people who were very competent; people who were, some might conclude, a lot of eccentrics banded together by an eccentric. There was synergy, the whole was stronger than a lot of the parts. Organizational Changes Affecting the MDC: As Xerox increasingly focused on the efficient use of corporate assets, the scope of the issues considered by the multinational logistics steering committee broadened. In 1986, CEO Kearns created a high-level Return on Assets task force chaired by the president of Xerox's Diversified Business Group, Frank Pipp. In 1987, when Zivan retired, Pipp took over as chair of the steering committee. He added representatives from corporate manufacturing to the committee and broadened its mission to improving the overall management of inventories throughout Xerox's operating units. Zivan's retirement also sparked a series of changes in reporting relationships for Clendenin and the MDC. As a multinational organization within a U.S. subsidiary, it was never quite clear who should take organizational responsibility for the MDC. From January 1987 to the spring of 1988, Clendenin reported to four different members of the steering committee from different parts of the U.S. Marketing Group. In the spring of 1988, with the assistance of Frank Pipp, he was able to have the MDC moved into the Corporate Information Management group. In the fall of 1988, Fred Hewitt replaced Pipp as committee chair. The MDC was transferred into Hewitt's organization on November 1, 1988. Hewitt also created three staff positions for managers who would work with him in developing strategies for improving the multinational management of logistics and assets. He proceeded to hand pick "one American to be the interface with Rank, one European to be my interface with the United States and Canada, and one person to interface with Development and Manufacturing." Over the next few months, Hewitt, his staff, and members of the MDC worked to define how the new logistics and asset management organization would operate. Hewitt decided that rather than fund the MDC with up to 50 separate agreements with managers throughout the operating units, he would negotiate his funding directly with Hicks, Magnin, and Rand. He also made it clear that the MDC needed to redefine its mission, "back to what it started to be all those years ago, which is an information systems and maintenance group. If it has a strategic role it's in developing information systems strategy to support the functional strategy." Hewitt and his direct reports would determine the functional strategy for multinational logistics and asset management. In keeping with this more modest objective for the MDC, Hewitt asked Clendenin to cut the group's budget back from a projected $4.3 million to $3 million. Clendenin developed a new budget and a new organization chart in a series of meetings with his staff. They also decided to reduce the MDC's headcount by three. Clendenin's Future: As part of their yearly management review Clendenin and Hewitt had considered some possible next steps in Clendenin's career. They had discussed potential jobs in either manufacturing or marketing, but had not agreed on a timetable for a possible move. Hewitt had mentioned Ken Blohm, a manager from the Corporate Information Management function, as a possible replacement for Clendenin. Blohm had a reputation as a tough but fair manager who was particularly skilled at getting computer systems completed on time and within budget. But Clendenin also remembered that the MDC's relations with Corporate Information Management had, at times, been strained. Clendenin had put forth the names of two of his direct reports, Tom Gunning and George Thomas, as other possible candidates for the job. But nothing had yet been decided. When Clendenin went to Hewitt's office on the afternoon of March 16, 1989, he had no idea there was a special agenda. He was thus unprepared when Hewitt offered him the option of becoming his fourth manager for multinational logistics optimization. Clendenin's responsibilities would include the management of relations with Fuji Xerox; China; the Pacific Basin countries; and Xerox's subsidiaries in Mexico, Central America, South America, the Middle East, and North Africa. He would also serve as the liaison with corporate functions such as information management and finance. Hewitt was particularly concerned that Clendenin work with the corporate finance group to ensure that the numbers for inventory levels that were coming out of the multinational logistics organizations matched those generated by Xerox's other financial systems. Finally, Hewitt wanted Clendenin to take responsibility for ensuring that quality and human resource management issues were appropriately handled throughout Xerox's worldwide logistics and asset management organizations. Clendenin considered how he should interpret this job offer. He also wondered what implications his decision would have for his future relationship with Hewitt, for his career at Xerox, as well as for the MDC and its people. Team Discussion Questions: 1. & 2.) Rate Clendenin as a senior manager. Give specific examples from the case to support your arguments regarding his management effectiveness of; a. one, various individual direct reports, b. and two, the various teams he manages. 3.) Regarding Clendenin's future (last case study section). Should he take the lateral move to become Hewitt's fourth manager for multinational logistics optimization, or stay in his current position for (at least) an additional two years. Back up your position with case study facts. 4.) Rate Clendenin's leadership of the Multinational Steering Committee specifically