David's arrival as the new Manager of Product Development turns into a media nightmare.

I went to work for Elemenco at a time when few had a clue that this was a company stalled under the weight of its own success. To most people, including most of our own managers and employees, Elemenco was one of the glamour names in electronics and computers. We were solid yet exciting, a demi-celebrity of a company experiencing merely a brief lull, so everybody believed, before we collected our energies and grew to dizzying new heights of performance and profit. Well, it was because of the lull that I was hired. As months passed, Elemenco's president, Reed Morrison, began to doubt that the marketing plan in place could make it go away. We had worked together before, and he thought I could help. I didn't know all of this when I arrived, but I brought some new ideas with me. This is how I got my chance to make a difference.

I arrived in mid-January at Elemenco's headquarters in Chicago. About a quarter past eight on a Thursday morning -- I had been with the company since Monday -- I was getting ready to go down to a meeting of all the regional sales managers when my phone rang. It was Gene Cherson, my new boss, telling me to come down to his office instead.

As I walked in, Gene was sitting, cigarette in hand, at his desk. Behind him was the city in winter shades of gray, from Jackson Boulevard on south. He was talking to Jim Woller, the national sales manager, who was standing with his back to me.

"So go ahead and start the meeting without us," Gene was telling Woller. "David and I will be down as soon as we're done here."

Woller walked past me and left without any comment.

"What's up?" I asked Gene.

"I just found out I have to do an interview this morning," he said. "The Journal is writing a story on us. Morrison can't meet with the reporter until later, if at all, and he wants me to talk to her. I'd like it if you would sit in."

Being the new kid on the block, I had hoped to get to the meeting early and talk to some of the sales managers before the presentations started, but obviously that would have to wait.

"Fine," I said. "I'll be glad to sit in if you want me to, but I really don't know what kind of contribution I can make."

"Why not? We need to talk about new products. You're manager of product development. Why can't you make a contribution?"

"Well, I've only been here three days," I said.

That seemed to ignite something in Gene.

"Hey, David, how much time do you need? A month? A year? What the hell is this? I've got news for you. This is a fast-moving business. I don't know what it was like at your last job, but around here you've got to be able to think on your feet."

This was a great start. Maybe he was mad at Morrison, and the anger was being vented at me. But I didn't deserve this.

"Gene, wait a minute," I told him. "I said I'd do the interview with you, no problem. I just believe in getting my facts down before I start making public statements. Now would you mind telling me why it's so important for me to be in on this?"

He was a huge man in every physical dimension -- height, width, and circumference. I stand about five feet ten, but Gene was half a head taller. He leaned forward, bringing his face down to my level, and said with forced calmness, "I want you here because we've got to give them some blue sky to look at."

Blue sky to look at? What did that mean?

"You know what I'm getting at?" Gene began to pace in front of the window, gesturing with his cigarette. "We're in a down cycle now, but I don't want the slump to be the focus of what's said about us. If this reporter starts harping about how sales are off and how we're losing share, I want to be able to say, 'Now, wait, let's look at the future!' Right? Are you with me? Let's aim their attention at the new products we've got coming."

"Okay, such as?"

That set him off again.

"Come on, David, wake up!" he said.

He stepped over to his desk and crushed out the cigarette in a big, amber ashtray already soiled with four or five butts.

"What do you think we ought to talk about? Don't you even know the products by now? We got to talk about the new 720 Network. We got to talk about the new 486 machine we've got coming. Plus PowerCase and we ought to get in a word about PowerSeat for the airlines. Let's talk about the new retail chain, too, and how...Well, no, let's not talk about that unless it comes up."

He yanked open the top drawer of the desk and took out a roll of antacids, peeled back the foil, and put a pair of the white tablets in his mouth. His face was flushed.

"What about the new tracking software for Apogee?" I asked. "Should we mention that?"

"Sure, that's fine," said Gene. "Now, look, the main points I want to get across are about our increased selling efficiency, the new leaner sales organization, and...well, you know, implanting entrepreneurial vision, selling systems solutions, aggressive marketing posture, and all that blah, blah, blah. Okay?"

I didn't say anything.

"Look, I'll do most of the talking, maybe even all of it. But, just in case, you be ready to throw in some optimistic words about new developments. And don't be afraid to hype it up a little."

Then he gave me a weak little smile.

"I'm sure it'll be fine," he said. "And don't mind it if I sounded a little honked off. You'll find I'm just an intense kind of guy. Okay?"

"Don't worry about it," I said. "How soon is the interview?"

"Any minute," Gene said. "Our PR guy just called. They're on their way now.

"Well, I'll just stick around then."

"You want some coffee?" he asked.

"No thanks."

He went out, mug in hand. I stood looking out his window -- his other window, the west one, which mostly offered a great view of the middle floors of the Sears Tower, plus my own reflection on the glass. Dark hair and dark eyes, dark suit, dark tie, white shirt, and white face. Pants a little tight from too many restaurants. The unexpected sight of myself gave me a sense of calm and confidence. I could handle this -- both Gene Cherson and the reporter. I'd handled worse.

We've got to give them some blue sky to look at. With lines like that, no wonder the company was in trouble. It crossed my mind that maybe coming to Elemenco had been a mistake.

Reed Morrison had been after me for a couple of years to come to Chicago. We had worked together back in the 1970s in California at IJK, my – our -- former employer. He'd been in charge of manufacturing and I had started as a product engineer. That was before my move to marketing. Anyway, Reed and I had developed a mutual respect. He had supported me in tackling some quality and design problems, and my team and I had turned out a line of winners.

Morrison went on to bigger challenges at Elemenco as head of operations. Time passed and one day I got a call from him just after he'd been named Elemenco's new president. He'd asked me then if I wanted to move, but I was comfortable so I'd turned him down. Two years went by. We met by accident at a trade show in Las Vegas, had dinner together, and he made the offer again. By then I thought I was ready for a change. So I flew to Chicago for a visit a month later and Gene interviewed me, but it was Morrison who really hired me (perhaps another reason for the friction with Gene). Well, that happened late in the fall; now it was winter and here I was.

Gene came back with his coffee, went behind his desk, and fired up another cigarette. It was cold and quiet, neither of us saying a word to each other. Then voices sounded from just outside in the hall, and knuckles tapped softly on the open door.

A young guy in a dark blue suit was the one knocking. Next to him was a woman in a well-tailored gray dress and jacket. Her hair, cut to "professional" length, was a richly colored blond, and she wore glasses with big, clear lenses, behind which were big, clear gray eyes. She was in her late twenties, I figured, maybe early thirties. In one hand, she carried a satchel-style leather briefcase, and over her shoulder, her purse.

Gene immediately snapped into enthusiasm and said in a booming voice, "Hello, Brian, come on in!"

Brian began the introductions.

"Lynne, this is Gene Cherson, our vice-president of marketing and sales. Gene, meet Lynne Welsey of the Journal."

Gene shook hands with her, then said, "And this is David Kepler. He's our new manager of product development and I've asked him to sit in with us. David, do you know Brian, our PR manager?"

I had seen him a couple of times in the hall, but we hadn't met. I shook hands with both Brian and the reporter.

At one end of Gene's office was some visitors furniture -- two armchairs, a coffee table, a sofa, lamps, and so on. We all sat down, Lynne and Brian on the sofa, Gene and I in the two armchairs next to it. Lynne took out a microcassette tape recorder and a yellow pad from her briefcase, and set the tape recorder on the coffee table.

We made some small talk about the weather while she was getting ready, then she looked up at Gene and said, "Let's make sure I have basics right. To start, Mr. Cherson, how would you define your business?"

Gene put a hand on his chin momentarily, as if pondering a reply, then said, "As you may know, Elemenco manufactures and markets electronic products, ranging from satellite dishes to cellular car phones to computer cable to software to...well, you name it. But I would define our business as selling systems solutions to the electronic communications needs of our customers."

Wow. Wasn't that smooth? And off he went in that direction, dispensing a speech that he might have given to a prospective customer. He was very good at it. He told her about Elemenco starting out in the 1950s making transistors and electronic circuitry, and about a couple of our "firsts" in the industry history book, about how all of that evolved into computers and data communications through the 1970s and into the 1980s.

And Lynne sat there, leaning forward, a pleasant look on her face, taking it in, pad on the top of her thigh, jotting a note now and then, and otherwise letting Gene's words flow passively into her tape recorder. No wedding ring, I noticed.

"So we really cover the spectrum," Gene said. "With annual sales of about a billion dollars, we're a mid-size giant of quality computer and electronic communications systems for everybody -- from single users to multinational corporations.

"How would you describe your overall marketing strategy?" Lynne asked. "Or, to pose that familiar question, where would you like to see your company in, say, five years?"

"Well, frankly, we're striving for market leadership," he said. "Our plan, in fact, is to become a department store, if you will, of computers and communications for the next decade and beyond."

He got up from his chair and began to stroll about the office as he talked, gesturing fluidly, as if his energy would not allow him to stay still. As I said, he was a huge man, well over six feet tall and a good twenty or thirty pounds overweight. Walking around, he dominated the room.

"...So our future will be characterized by maintaining the solid base we have built over the years and expansion into new areas of growth."

"Speaking of expansion," Lynne asked, "what about the purchase of that chain of retail computer outlets? How's that working out for you?"

"Just fine. It's a bold new direction for Elemenco," Gene said.

Bold? Come on, Gene.

"But don't those stores market computer systems for small businesses and home users? That's straying a bit from what you know, isn't it?" asked Lynne.

"Not really. It's still electronics, and that's our business," said Gene.

"Don't you find the needs of large corporate accounts differ considerably from those of smaller business, not to mention individual consumers?"

"Well, if we can satisfy the complex needs of a Fortune 500 customer, why can't we satisfy those of smaller customers as well?" said Gene. "In fact, if results match our optimism, we could grow strongly in the retail area. After all, what matters to all customers, be they large corporate accounts, small businesses, or individual consumers, is a quality product at a reasonable price. And that's what Elemenco is committed to providing in every market where we compete."

Lynne was still nodding, but I saw a downward twitch at the right corner of her mouth. She was getting skeptical, while Gene kept talking, trying to convince her.

"You see, no matter who they are, customers want value....

And he went on with some nice-sounding patter that glossed over the fact that the retail chain had gone from mediocrity to red ink at the end of last quarter. With every passing month, it was looking more and more like a big loser.

"So, getting back to your mainstay business," Lynne said, "tell me, what went wrong on the Northern Airline negotiation?"

She asked this in a casual tone, as if she were a friend who just wanted to know.

"What went wrong? I don't know that anything went wrong exactly," said Gene. "We were one of several suppliers considered for the contract."

"Insiders tell me it was worth $320 million over three years," she said. "Isn't it tough to miss the chance for that kind of business, assuming you want to grow?"

"Sure, it was one we would have liked to have had, but..."

"But it went to your largest competitor," she said.

"Largest in that product area, not our largest overall," he said.

"Regardless, the fact remains you didn't make the sale. It was a huge contract and it went to a competitor."

"True, but I don't feel too bad about that one. We were, after all, in the final running, and our technology really is superior –"

"Then it must have been heartbreaking," Lynne said, cutting him off. "I mean, knowing you're topnotch and still not getting the business. What could it be?"

"You'd have to ask the customer," Gene said.

"As a matter of fact, I did ask them, and they did indeed confirm that your technology was topnotch, your reputation for quality good, and all that. But my source there became vague when I asked him for a clear reason why they didn't go with you. He could only offer that his company's trust was stronger in your competitor, even though they weren't technically quite as good. Now how do you explain that?"

There was silence for a few seconds. Gene was looking pained and rather pale. As if retreating, he went behind his desk and took out his antacids again.

"If I may, Gene," I broke in, "I really don't think we can speak for our competition. Obviously, we don't know what was in their proposal or what they may have promised."

"And, anyway," Gene added, "who can say what goes through the mind of a customer when they make a buying decision?"

"That wasn't the only big contract you lost last year," responded Lynne. "Even before that was the National Motors contract, one of your oldest and best customers, lost to another competitor."

"Well, that happens. All I can say is you win some, you lose some," said Gene. "You know, we've had our successes, too." He rattled off half a dozen big-name companies for which we were doing business.

"Okay, but look at the last three years, Mr. Cherson. There has been no real growth in that time. Your reported third-quarter earnings were down considerably. And lately industry sources say that Elemenco has been losing share in almost every product category across the board. How much of a decline are we going to see in Elemenco's sales and income for the past year?"

This time Brian jumped to the rescue, saying that we couldn't comment on that because fourth-quarter earnings wouldn't be announced for another week or two. All the same, we were very much on the defensive. This was not going to be a friendly interview.

"But you have to be expecting a decline, don't you?" she persisted.

"Well, it's true that we've encountered some market softness," said Gene.

"But even in a soft market, many of your competitors don't seem to have had the problems you've had."

"Well, in all honesty, there were complicating factors for us," said Gene. "For instance, we've been undergoing a substantial reorganization of our marketing and sales operations and this may have been a factor."

But Lynne was not backing down. "Something doesn't add up here, Mr. Cherson. You're telling me that you covet a market leadership position, that you have all this excellent technology and great quality, and you're looking toward expansion into new areas, and yet the record shows otherwise. If your products and technology really are superior, and nobody I've talked to doubts that they aren't at least highly competitive, why isn't this being demonstrated in sales?"

Gene was in trouble. The glib corporate cliches were not working. She was asking exactly the kind of questions that neither Gene nor anyone else at Elemenco had been able to answer. I looked at Gene and actually began to feel sorry for him. Had Morrison, not wanting to take the blame, deliberately shifted the interview to Gene to put him on the spot? Gene's earlier confidence had evaporated. He rubbed the fingers of his left hand and forced a laugh.

"You sound like the board of directors," Gene said. "Seriously, though..."

Gene glanced at Brian and then at me, desperate for one of us to come to his aid. Brian looked down at the floor and said nothing, so I jumped in.

"Let's look at the bright side."

"You mean there is one?" asked Lynne.

"Of course there is," I said, wondering if I was lying. "No matter how you cut it, we have a lot going for us."

I started blathering about the advances in product development, like the 720 Network, and PowerSeat, "which we expect to introduce very -- well, sometime soon."

"What's PowerSeat?" she asked.

"PowerSeat has capabilities similar to our existing product, PowerCase --"

"Which are?"

"PowerCase is a briefcase with built-in fax, cellular telephone, and personal computer. Most of the circuitry is VLSI and built into the shell of the briefcase, which is made out of composite materials. It's lightweight, very strong, very powerful. We can show you a sample --"

"No, that's all right," she said. "A press release would be fine."

Brian made a note.

"And PowerSeat," I continued, "takes the same capabilities and builds them into a passenger seat on an airplane. At least, that's the concept."

"I see," she said.

"So with new technology and new products, we should achieve the market leadership position Gene was talking about."

"Wait a minute," said Lynne. "If the products you already have are so good, then why aren't they selling? And if you can't sell what you already have on the market, is it going to do you any good to introduce new products? Doesn't the problem of growth for your company pretty much rest on the doorstep of marketing and sales?"

I was about to respond -- try to, anyway -- when Gene stopped me.

"Okay," he said in a confessional tone, "I would say that any recent leveling off or decline -- if that's what the actual numbers for the year finally show -- was due largely to inefficiencies in our marketing and sales. There was a time, and it was not so long ago, when we had as many as four or five salespeople calling on the same customer. It was confusing to the customers, and it was not a cost-effective way for us to do business."

Lynne started scribbling.

"So we undertook a complete reorganization of marketing and sales operations. Last year, we consolidated offices and districts, trimmed the middle-management reporting tree, and introduced new systems, such as telemarketing, to help us generate leads in all our markets. As a result, we've gained some important cost and operational efficiencies."

Lynne was nodding. "And how do your salespeople feel about it?"

"Well, we did some things for them too," said Gene. "We introduced a brand-new compensation plan, which unifies the levels of pay and benefits all Elemenco salespeople receive. We also reoriented how the Elemenco salesperson will sell. Now all salespeople are responsible for selling all Elemenco products and services. This should create more professional challenges and opportunities for the salespeople, and enable greater sales effectiveness."

Gene took out a handkerchief from his back pocket and patted his brow. He was pacing by his desk now.

"So, to sum up, we have unified and improved a number of aspects of our marketing organization that may have been holding us back. We're working to develop an entrepreneurial vision throughout this new organization --"

"We call it Gene's Lean Mean Marketing Machine," said Brian.

"Really?" said Lynne, looking dubiously at Gene's enormous girth. "That's cute." She made a note on her pad.

"And," Gene continued, "we are now in a very aggressive posture for future growth through systems solutions and with our new marketing and sales organization."

Lynne frowned and said, "Still, Mr. Cherson, as I understand it your new organization has been in place for a while now, and it still doesn't seem to be producing results. How are you going to recover not only from some big contracts you've missed, but a general decline in sales that the industry analysts are expecting?"

"I really think it's just a question of time before we start hitting on all eight cylinders, so to speak. What you've been seeing, I think, is the, uh, aftermath of the...well, the confusion from the reorganization, which is now behind us. In the months ahead, I'm sure you'll see us fighting our way back."

"One of the things industry observers have been saying lately," said Lynne, "is that you've only been able to maintain what market share you do have by sharp discounting, and that a high proportion of your sales are volume for the sake of volume. What do you say to that?"

"I would say that, yes, some of our pricing is aggressive," Gene said. "In this day and age, it has to be, doesn't it? One of the other things we've done for our salespeople is to give them more leeway in making pricing decisions. That's just part of our commitment to compete in the electronics market with the highest efficiency."

Lynne was shaking her head. "Maybe I'm missing something, but I still don't get it. You keep talking about sales efficiency and yet how can you say that your new organization is more efficient if you're not producing more sales?"

A look of pure terror flashed over Gene s face. He didn't say anything at first, but began reaching for his tie. I wasn't sure if Gene wanted to loosen the tie or just straighten it. He seemed to be fighting for composure.

"Well, uh, we're more efficient because..."

He trailed off. His face became extremely distressed. And then I realized that his distress had nothing to do with her question.

"Gene, are you all right?" I asked.

Gene didn't answer. He was behind his desk now, reaching for his chair so that he could sit down. Instead he fell to the floor.

From the corner of my eye, I saw Lynne cover her mouth with her hands. Brian jumped to his feet but then stood there frozen. Then both their faces turned to me, as if I were in control, as if I had to do something. I rushed across the office and went behind the desk to where the big man was sprawled on the carpet, staring up.

"What's wrong with him?" asked Lynne.

I bent down over Gene, whose face was all twisted in panic and pain. I asked him a couple of questions and he couldn't even talk. His mouth kept opening, but he couldn't seem to get air.

"It looks like he's having a heart attack, I said.

I asked Brian and Lynne if either of them knew how to do CPR, because I didn't. Brian didn't either. Lynne said no, but she'd written a story about it once. Great. So, burying my own revulsion, I got down on my knees next to Cherson's head and gave him mouth-to-mouth.

I heard Brian behind me on the phone calling the paramedics as a throng of people gathered around. Feeling helpless, I watched Gene's skin take on a blue tinge. He was unconscious by now.

To Chapter 2

Back to Quadrant Solution
main page