Management Mini-Cases: Ethics – Technology


Iffy Ethics

Sally’s Big Idea was to develop a classification scheme that could be used to assess a segment of a business’s health. She applied for, and received, domestic and international patents for a very broad definition of the utility of her classification scheme. “I spent a couple of years researching and assembling this information, spent $50,000 on patents, and now it’s payback time,” Sally told me. Her big idea was for me to help her by contacting major corporations, demanding licensing fees for something that was probably already a part of their internal processes.

Sally had absolutely no intention of building a business herself from her work, but purely to extort (my word, not hers) licensing fees from the top 500 global companies. She promised me a healthy fee for my efforts. “I’ll never have to work again for the rest of my life,” she boasted.

 The regrettable part is that what Sally had developed was pretty good. But she was absolutely determined not to sell her intellectual property to someone who would grow a business out of it. That wouldn’t support her and her young family for the rest of their lives, she said. Her Big Idea was a steady stream of hefty licensing fees from large companies that couldn’t afford the bad publicity attendant with refusing to pay a tiny company what was, in her mind, justly due.

I’ve lost track of Sally in the 20 or so years since I had declined her offer. Searches of her name and company have produced…nothing. Knowledge Branches:

  • Management. Function: Ethics
  • Management. Sector: Information
  • Management. Soft Skills: Entrepreneurship; Personal Attributes; Philosophy

Client Custom Report Discovered to Be Search and Replace Template

Beware the boilerplate client report template. The dangers of simply substituting client names and new dates are real, as a major consulting firm and two of its big corporate clients discovered some years ago.

One client report bore the name of a different company; the CEO who received the erroneous report called the CEO of the mistakenly-named company. It turns out that both CEOs contracted with the consulting firm within a short time of each other. The two CEOs agreed to get together to compare notes.

Indeed, the hefty reports were nearly identical, with only a few minor revisions. Surprisingly (to me, anyway), the two CEOs laughed off the clerical error and were quoted as saying their high-priced report was worth it, even though each expected to receive a customized report specific to their respective company’s situation.

A respected name and a long history of providing valuable business insights apparently saved the firm’s bacon. As an entrepreneur, you may not be so lucky.

  • Management. Function: Ethics
  • Management. Sector: Public Administration


Long Days, Hard Work Pays off for Seminar, Expo Event

An overseas trade commission decided to host a week-long seminar series and exposition to re-position the country’s image and reputation in a new direction. We worked closely with local and home country staff on planning and marketing the multiple events that would take place, with members of a university team to design and promote the seminar series, and with local and overseas companies that were exhibiting and speaking. Our on-site time attending to numerous details extended to 12-14 hour days throughout the week’s run. Daily attendance exceeded expectations and both participants and guests reported favorable impressions on later follow-up inquiries. Knowledge Branches:

  • Management. Functions: Globalization, Marketing
  • Management. Sector: Professional Services

Turnaround for Discouraged Trade Show Exhibitor

A small manufacturer’s booth at a very large industrial trade show had very few visitors during the first 2 of the show’s 4days, even though competing manufacturers of similar size and comparable booth location were crowded much of the time. We stopped by and began talking with the owner. It was his second year of exhibiting at this particular trade show, and his experience last year was about the same. He had pretty much made up his mind that this show was not a good investment and would not be returning next year.

After some discussion, we learned that he had done no advance promotion, even to his existing customers. Although his product could be easily demonstrated, his booth consisted of photographs on the back wall and some literature on the front table…the same as the previous year. During most of the show he sat on a folding chair in a back corner, browsing through a newspaper or trade journal. Nor did he intend to walk the show to see what his competitors were doing. He did intend to mail brochures to the few leads he received at the show, and then follow up those leads by telephone.

We made some simple suggestions to try in the next 2 days: bring several models of his product to the show (he was local) and create a simple demonstration; remove the chair and reading material, run the demonstration on the front table, while actively looking out for qualified buyers as they walked past the booth; get people involved in the demonstration and ask a few questions to evaluate their needs and buying potential. Results: inquiries tripled, even though the last day was shorter and had fewer attendees. The delighted owner asked us to help him assess the quality of the inquiries he received and to help him plan for the next year’s event. The following year was a complete turnaround, establishing the company as an emerging player in its product line. Knowledge Branches:

  • Management. Functions: Marketing, Strategy Development
  • Management. Sector: Manufacturing
  • Management. Soft Skills: Communication

Money Management

Capital Equipment, Residual Value Assessment

A large leasing company was concerned about the validity of its residual value calculations for a new type of capital equipment in the transportation industry. Misjudging the direction of the industry could seriously impair the company’s ability to sell or re-lease this equipment once the lease contracts expired.

We were asked to calculate selected cost ratios and project future cost ratios based on estimates of factors such as equipment life (a function of design and utilization), domestic market acceptance, improvement in design or materials used, and stability of market share among the few producers. We also estimated projected demand for the used equipment in selected developing countries. The leases have not yet expired on this equipment; trends to-date indicate that our projections and recommendations were on target. Knowledge Branches:

  • Management. Function: Money Management
  • Management. Sector: Real Estate – Leasing


Project Management for Emerging Markets

Awhile back we were asked to prepare a series of lectures on American project management practices for several groups of construction engineers from a newly-industrializing country. Their government knew it was important for these engineers to understand basic concepts on managing major infrastructure projects, even though they eventually would contract out this work. Because English was a second (or third) language for every one of the attendees, we provided them with workbooks that had an abundance of simple illustrations, simple captions and lots of white space. This allowed the attendees to take notes directly into the notebooks, in their own language. We were careful to speak slowly, using plenty of gestures to make sure our spoken words were clear, and assured them that asking questions during the presentations was welcome and not at all rude.

The attendees appreciated our extra efforts to communicate effectively with them and our encouragement in not hesitating to ask questions. They presented a framed photo of the group, touchingly enhanced with each of their signatures in their native script on the glass. Knowledge Branches:

  • Management. Functions: Globalization; Operations
  • Management. Sector: Construction
  • Management. Soft Skills: Communication; People

Business Process Engineering

A professional group in Europe asked us to prepare an overview of the advantages and drawbacks of American business process reengineering (BPR) practices. They heard the horror stories of vast numbers of people downsized out of jobs and wanted to know if layoffs and expensive automation was all that reengineering offered. What we found was that some well-known, household-name companies, offer employees high job security along with extensive training programs to encourage a broader background and upward mobility. There are also scores of smaller companies who have creatively avoided layoffs (e.g. temporarily assigning employees to jobs with other local firms who need the extra people) or slashed training costs (e.g. sharing expenses with other firms, even competitors). Knowledge Branches:

  • Management. Function: Operations
  • Management. Sector: Professional Services
  • Management. Soft Skills: Philosophy

New Products

Repurposing Military Technology for Civilian Products

Many small and medium-size engineering firms spent the ’70s and ’80s winning and fulfilling government contracts for developing state-of-the-art missile guidance systems, advanced materials for nose cones, precision mechanisms and assemblies for ground vehicles, and on, and on, and on. We were getting calls even before the cold war was over from companies looking to find civilian uses for their splendid radar systems, ceramic and composite materials, and precision gear production methods, among others.

The challenge: identify commercial products, and services too, that could take advantage of the core competencies developed by these companies, compliments of taxpayer dollars . . . at a market price.

The process: start with the features of those technologies, then list as many benefits of those features that you can think of. Next, list requirements or problems across diverse industries (include both consumer and industrial) that either the specific features or their relevant benefits might address. By this time, you should have at least 3 or 4 product or service areas to begin investigating further. If you come up with more than a dozen, rank them by your estimate of their market potential and start with the top 3-5 to research simultaneously. The rationale for exploring several markets at once is that you could wind up focusing too much on your product (which is what government contracting is frequently all about) rather than on your potential customers.

We use a similar process for companies with excellent core competencies in specific production processes … that were also experiencing disappearing markets for their current products. Knowledge Branches:

  • Management. Function: New Products
  • Management. Sector: Services, Except Public Administration

Leading-Edge Technology Is NOT Why Most Customers Buy

We don’t write business plans (other than our own). Rather, we help you develop and write your own plan. And, it’s not always a full-scale Business Plan that’s right for you. Here’s an example:

A high-tech product marketing and sales executive for a large firm decided to establish his own service business in a very different, but very leading-edge industry. As happens with many “early adopters” of high tech, he soon fell in love with purchasing and learning to use the nifty (and expensive) advanced products required to provide the service. Customers? “They’re everywhere. They just have to learn that a paradigm shift has taken place, and they’ll have to come around.”

After about a year, many thousands of dollars of equipment, and well into six figures of foregone pay and perks, he came to realize that “they’re not coming around.” “HELP! I need a business plan,” he said. We asked, “what is your sales approach?” “Leading-edge,” he replied.

After learning what we could about the emerging industry, we believed that he was probably right about the paradigm shift and he could be among the earliest players. Problem was — and is — that customers don’t care about shifts or tech, they care about bottom line. We helped him re-focus his attention from developing a formal plan, complete with market guestimates, pro-forma financials, the works, toward drafting and experimenting with a sales approach using hard-numbers and intangible customer benefits with side-by-side “traditional way vs. new way” comparisons. Results: decent sales over the short term, buying him credibility and time to plan a viable, long-term strategy. Knowledge Branches:

  • Management. Functions: New Products; Strategy Development
  • Management. Sector: Professional Services
  • Management. Soft Skills: Entrepreneurship


Meeting New Regulations by Refocusing R&D

California had passed new legislation imposing stringent environmental requirements to be met a number of years in the future. Soon after this legislation passed and other states began drafting similar proposals, we received a request to review these requirements from a market perspective. We were also to evaluate how the focus of R&D activities at large American companies and at large private and federal laboratories might change (there had been several alternative technologies under development, but the legislation appeared to eliminate all but a single technology).

Formulation of major policies and programs in the United States is done through government agencies and laboratories, large trade organizations, and companies. We identified the major organizations, discussing their background, relationships, and their involvement in setting relevant policies and regulations. To assess the research situation, we reviewed the status of all published R&D programs and sub-programs underway in each of the alternative technologies, surveyed major players at trade shows and by telephone, and compiled a set of perceived advantages and disadvantages of each technology and its specific applications. Lastly, we researched and surveyed consumer and special interest groups. Our conclusion then: because of serious inconsistencies in estimating the legislation’s benefits to the environment, the legislation would likely be modified before the due date. Knowledge Branches:

  • Management. Functions: Legal, other Admin; R&D
  • Management. Sectors: Public Administration; RELEVANT ACROSS SECTORS


ISO 9001 Product Technologies Repurposed for New Markets

The markets for an ISO 9001 contract manufacturing company’s products were slowly but surely fading, as new products using entirely different technologies replaced the existing ones. In a few years, the value of their hard-won efforts in designing and perfecting their precision manufacturing process would all but disappear. Company management believed their processes would find applications in other markets that demanded their abilities to hold to very tight tolerances and to formulate compounds to exact physical property specifications.

An overview survey of products in newer, fast-growing markets revealed a number of components which could be fabricated, and functionally improved, by the company’s process know-how. An added benefit to potential customers is that the company had long experience in working with technologically-sophisticated customers from prototype through production.

We selected two key markets to investigate in greater detail; in conducting personal interviews, we uncovered technology gaps which the manufacturer had the ability to address; we were able to make direct introductions of several prospective customers to the manufacturer (and the rest, as they say, is history). Knowledge Branches:

  • Management. Function: New Products; Technology
  • Management. Sector: Manufacturing