Case Study: Keeping Things Going
The Clayton Company has grown 115 percent in the past year and 600-plus percent in the past three years. A large portion of this growth is attributable to Jan Clayton's philosophy of hiring the best possible computer systems people and giving them the freedom they need to do their jobs. Most of Jan's personnel operate as part of work teams that analyze, design, and implement computer systems for clients. The process works as follows: First, the company will get a call from a potential client indicating that it needs to have a computer system installed or special software written for its operations. Jan will send over one of her people to talk to the client and analyze the situation. If it turns out that the Clayton Company has the expertise and personnel to handle the job, the client will be quoted a price. If this price is acceptable, a Clayton group will be assigned the project.
An example of a typical project is the client who called three weeks ago and wanted to purchase five personal computers for the firm's engineering staff. The company wanted these machines hooked up to the main computer. Additionally, the firm wanted its computer-aided design software to be modified so the engineers could see their computer-generated drawings in a variety of colors, not just in monochrome.
The Clayton group installed the entire system and modified the software in ten working days. Jan realizes that the growth of her enterprise will be determined by two factors. One is the creativity and ingenuity of her workforce. The other is the ability to attract talented personnel. "This business is heavily labor intensive," she explained. "If someone wants a computer system installation, that may take 100 labor hours. If I don't have the people to handle the project, I have to turn it down. My expansion is heavily dependent on hiring and training talented people. Additionally, I need more than just hard workers. I need creative people who can figure out new approaches to handling complex problems. If I can do these two things, I can stay a jump ahead of the competition. Otherwise, I won't be able to survive."
To try to achieve these key factors for success, Jan has initiated three changes. First, she has instituted a bonus system tied to sales; these bonuses are shared by all of the personnel. Second, she gives quarterly salary increases, with the greatest percentages going to employees who are most active in developing new programs and procedures for handling client problems. Third, she has retreats every six months in which the entire staff goes for a long weekend to a mountain area, where they spend three days discussing current work-related problems and ways to deal with them. Time is also devoted to social events and to working on developing an esprit de corps among the personnel.
1. In what phase of the venture life cycle is Jan's firm currently operating? Defend your answer. Compare and contrast the phases of the life cycles of firms. Identify at least one company within each phase and explain why you selected it.
2. How are Jan's actions helping to build an adaptive firm? Give three specific examples. Be sure to describe and define adaptive firm in your answer.
3. If Jan's firm continues to grow, what recommendations would you make for future action? What else should Jan be thinking about doing in order to keep things going along smoothly? Be specific in your answer. Assuming the role of a consultant, identify areas that Jan should be concerned about or keep a watchful eye on as she moves forward.