1.1 Take the same salary as the current director for one year. Circulate the information that although you are taking a cut to come to Resitronic, you are confident that you can make a difference. Build in pay incentive bonuses for the following years if the subsidiary succeeds. Paula Smith has just been offered the opportunity of a lifetime. The chairman of the board of Resitronic Company has called to ask her to take the job as director of the troubled audio equipment manufacturing subsidiary. The first question Smith asked was: ‘Will the board give me the autonomy to turn this company around?’ The answer was yes.

Resitronic’s problems were so severe that the board was desperate for change and ready to give Smith whatever it took to save the company.

Smith knows that cost cutting is the first place she needs to focus. Labour expenses are too high, and product quality and production times are below industry standards. She sees that labour and management at Resitronic are two armed camps, but she needs cooperation at all levels to achieve a turnaround. Smith is energised.

She knows she finally has the autonomy to try out her theories about an empowered workforce. Smith knows she must ask managers and workers to take a serious pay cut, with the promise of incentives to share in any improvements they might make. She also knows that everyone will be looking at her own salary as an indication of whether she walks her talk.