Read the mini case and then answer the questions at the end;

Marco Hernandez is president of Hernandez & Associates Inc., a full-service advertising agency with clients across North America. The company provides a variety of marketing services to support its diverse group of clients. Whether called on to generate a strategic plan, create interactive Web sites or put together a full-blown media campaign, the team at Hernandez & Associates prides itself on creative solutions to its clients' marketing challenges.

The firm was founded in 1990 with an emphasis in the real estate industry. It quickly expanded its client base to include health care, as well as food and consumer products. Like many small firms, the company grew quickly in the "high-flying" 1990s, but its administrative costs to obtain and serve businesses also skyrocketed. And, as with many businesses, the agency's business was greatly affected by the terrorist attacks of September 11, 2001, and the economic downturn that followed. Clients' shrinking budgets forced them to scale back their business with Hernandez & Associates, and staff cutbacks meant that clients needed more marketing support services as opposed to full-scale campaigns.

Hernandez & Associates now faced a challengeto adapt its business to focus on what the clients were asking for. Specifically, clients, with their reduced staffs, were looking for help responding to their customers' requests and looking for ways to make the most of their limited marketing budgets. Its small, cohesive staff of 20 employees needed to make some fast changes.

As president of Hernandez & Associates, Marco Hernandez knew his team was up for the challenge. He had worked hard to create an environment to support a successful teamhe recruited people who had solid agency experience, and he consistently communicated the firm's mission to his team. He made sure the team had all the resources it needed to succeed and constantly took stock of these resources. He had built his team as he built his business and knew the group would respond to his leadership. But where to start? Getting the team to under- stand that growth depended on a shift in how it served its clients was not difficulteach of the employees of the small firm had enough contact with the clients that they knew client needs were changing. But making significant changes to the status quo at Hernandez & Associates would be difficult. Group roles had to changecreative folks had to think about how to increase a client's phone inquiries and Web site visits; account people needed a better understanding of the client's desire for more agency leadership. And everyone needed a better sense of the costs involved. The company as a whole required a more integrated approach to serving clients if they hoped to survive. Marco needed a plan.

Like many leaders, Marco has a team in place and does not have the luxury of building a new team to adapt to the changing business environment his firm now faces.

1. Use the TLM to help Marco diagnose the problems faced by the firm and identify leverage points for change.

a. Consider the major functions of the TLM input, process, and output. Where do most of the firm's challenges fall?

b. What are the team's goals for outputs?

2. Identify potential resources for Marco and his team in implementing a strategy to change the way they do business at Hernandez & Associates.