The Jared Gordan sat across from his VP of sales, Stan Simpson, in disbelief. “Let me make sure I understand,” said Jared. “You’ve accepted a job with Hank’s division starting next week? ” “I’m sorry,” said Stan, unable to look Jared in the eye. “ I just couldn’t pass up this chance. Hank Dodge has offered to make me regional VP of marketing and sales for his division. ” Jared felt his jaw lock. Hank hadn’t said a word to him about offering Stan a position. Since when was it okay for a division president to poach from another division without so much as a telephone call?
Despite his anger, Jared was determined to maintain his cool in front of Stan. “Have you already said yes to Hank? ” asked Jared, hoping that maybe he could talk Stan out of his decision. “Yes,” Stan said quietly. Then he added, “But the new person you bring in can call me anytime with questions. I’d be happy to help with the transition. You’ve been a great boss—a really great boss—and I appreciate everything you’ve done for me. ” Jared thanked Stan for his offer as he walked with him toward the office door.
It was an offer he had heard before, but that didn’t make it any less sincere. The Last Straw Jared Gordan was the president of the Industrial Products Division of Compunext Corporation, a $2. 5 billion company that made electronic components. His division focused mostly on components used in machinery and in process controls for major manufacturing firms. The division was one of the company’s smallest, representing only about 15% of Compunext’s sales. When Jared joined Industrial Products four years ago, it had been in bad shape.
For three straight years, income had been declining and ROE had been in the 3% to 5% range. Jared was brought in to turn around the division, and he did just that. Jared began his turnaround efforts by conducting customer and competitor analyses that allowed his team to pare the division’s products by half and retain only the most profitable items. With the help of a consulting firm, he also rearranged the operations of the division’s six plants, successfully reducing costs while increasing productivity.
At the same time, he approved a $12. 5 million investment in new technologies to enhance product quality. Even though Jared drove these initiatives, he encouraged people at all levels to contribute ideas, and he was quick to share credit. He used every opportunity he could to publicize the division’s successes both internally and externally. Twice a year, for example, Industrial Products hosted a small awards ceremony recognizing its employees’ outstanding contributions.
Externally, he made sure that the accomplishments of his employees were acknowledged in companywide newsletters. These efforts paid off. Under Jared’s leadership, Industrial Products’ sales and profits had increased 50%. Moreover, analysts were starting to include the division’s results in their future forecasts. This was a dramatic shift from five years earlier, when the analysts were suggesting that Compunext should sell the division. Jared knew that his job was far from over. The division was still a second-tier player in the industry.
Nonetheless, he was confident that in a few more years, Industrial Products could achieve the goals corporate had set for it. After that, Jared wasn’t sure what he’d do. Maybe he’d look for another turnaround challenge. He was still getting regular calls from headhunters. Or maybe he’d stay at Compunext for the long haul. But now Stan Simpson, whom Jared had recruited two years earlier, was joining the Telecommunications Division, which accounted for more than a third of the company’s sales. It was the most profitable and fastest-growing division in the Compunext portfolio.
