Case Study – Specialty Medical Chemicals

October 1, 2009

Specialty Medical Chemicals CEO Carl Burke has some difficult choice ahead of him. Because he plans to divide the company into pharmaceuticals, biotech, and generics divisions he is going to have to perform a big shakeup in the marketing, development, and sales areas. Unless the current managers of manufacturing, development, and sales are placed in charge of one of the new divisions, there will be a need to move some people down the organizational ladder if they are going to stay with the company. With that in mind, it may be better to let some folks go rather than deal with angry managers who may throw up roadblocks rather than facilitate the restructuring efforts.

Based on their profiles, Michael and Roger seem like they have what it takes to help develop the new biotech and generics divisions. Roger appears to be a go-getter and someone who could be sold on the idea that this as a promotion—essentially making him a mini-ceo of his own division with control over sales, marketing and development. Because his focus is in sales, it seems like that he will need to be provided with a strong marketing and development team as he learns the ropes of those areas. As his profile indicates, Michael was promoted to a VP position after developing a new product that now accounts for 10 percent of sales. That experience could provide further benefit to the company by giving Michael the chance to head one of the new departments. As with Roger he will need support in the areas he is less familiar with—sales and marketing, but he too seems like he could be sold on the idea that this is a promotion and a chance to advance his career. For both Roger and Michael, this experience will be attractive because it will provide a chance to learn how to run three facets of a company. They may see this as a springboard to future promotion either to CEO once Carl leaves or to CEO at another company. For that reason, this change will probably be attractive to them.

Jack and Roberta, on the other hand, seem like good candidates to remain in their current positions.  They appear to be quite good at their jobs and keeping them in place will allow the restructured company to run smoothly. It does seem advisable that Carl take steps to give Roberta the push she needs so she can continue to develop professionally. She seems to have a strong skill set and with the right training might have a future beyond her current CFO position.

Craig and David, on the other hand, seem to be the weak links of the group. Craig does not seem like a great performer and thus seems ill suited to running one of the two new divisions. With David, the fact that his standard response to new ideas is to say it cannot be done is a big problem.  Although Craig could probably do one of the marketing jobs in one of the three divisions, based on his abilities and the fact that this would be a demotion, it might be best to force him out and bring in some new blood to handle marketing. David on the other hand, seems like the one person who really needs to go. You cannot have someone who is going to throw up roadblocks and be negative in a leadership position if you are going to pull off this type of restructuring. Interestingly, George the personnel rep sounds like he might be a possible candidate to fill David’s role as the administrative head, based on his solution oriented approach to problems and the fact that he likely has significant institutional knowledge that an outsider would lack if brought in to fill that role.

Based on this analysis it appears that a number of the positions in the restructured company can be filled from within. Carl will need to bring in someone to run the pharmaceuticals division, either by promoting from within or by searching outside the company and will need to file the sales, marketing, and development spots within each of the new units, but there is a strong core remaining from the previous regime, with two managers likely to thrive in new positions and two who are poised for continued success in their current jobs.

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