ProdCo Case Study
Organization Network Analysis session
Sarah E Austrin-Willis (Tuck School of Business) — Willilam J Boziuk (Tuck School of Business) — John R Maxwell (Tuck School of Business) — Denis Bourne (Magus Toolbox)
ProdCo Case Study
South Africa-based ProdCo produced a variety of manufactured parts for the automobile and other industries throughout Africa. ProdCo had 7,000 employees in divisions based in Kenya, Mozambique, Namibia and Zambia, and a headquarters based in South Africa.
Throughout ProdCo’s history, the firm grew organically by expanding its engineering, R&D and manufacturing practices. In more recent years ProdCo expanded through acquisition. The main driver for this break from tradition was an increase in demand for new products or variations on existing products from many of ProdCo’s customers. The company was not entirely able to meet this demand with its existing structures and workforce and its management believed it could fast-track growth by acquiring some smaller competitors based in surrounding African nations.
The product development process for the firm followed a standardized path. The Technology department oversaw R&D and safety in all of ProdCo’s departments. The company used the Laboratory for testing new materials and product designs. When a new product left development, it moved to the Pre-production unit for final testing of the product through a pilot production program. After a successful completion of this process, the product moved to manufacturing, which took place in several locations, including the headquarters in South Africa and satellite factories in Kenya, Mozambique, Namibia and Zambia.
Throughout the decades of organic growth, the traditional product development process worked smoothly. ProdCo earned a steady stream of healthy returns and delivered innovative products on schedule, delighting its clients. Yet in recent years, ProdCo had faced new challenges: new demand for increasingly differentiated products, rapid growth through acquisition, and new legislation in South Africa on employee safety and product liability. As a result, ProdCo encountered a growing number of schedule and cost overruns in getting products to market. With the magnitude of overruns increasing, ProdCo posted quarterly losses three times in a row for the first time and customers began leaving as complaints rose over product delivery delays.
It was suspected that the roots of these issues might lie outside the formal structures and processes and that understanding the informal networks formed by the employees of ProdCo might help illuminate the problems and their causes.
“The workshop enabled us to have the best conference we have had in years. I witnessed the effect of the ‘reality-based data’ as it was presented, and watched delegates’ ‘political agendas’ they had brought with them being discarded as the data appeared. In hindsight, I believe that the data was a great leveller, producing an environment in which the loudest voices no longer won the day.
That year’s conference was the most action-oriented one we have ever had, and much was accomplished without the hidden agendas that had bedevilled previous meetings. A lot of these decisions were concerned with how we would handle the high rate of change in the technology of the industries we served.
The management workshops not only identified the prime causes of our new product development difficulties, they also came up with a refreshingly simple and novel solution to the problem. Over and beyond which, they also gave me and my senior colleagues a concise set of actions needed to deal with some of the issues that we did not even know about before the workshops.”
Project sponsor.
