American Revolution and War for Independence
Nutrorim’s best-selling
sports supplement has
been recalled because
of a “new and improved”
ingredient. The company’s
CEO wonders: Why do the
decisions we make keep
coming back to haunt us?
HE COLD JANUARY SKY was just
dawning gray over Minneapolis as Don
Rifkin awoke. With every cell in his
body, he longed to put a pillow over his
head and sleep, but the alarm added in-
sult to injury. Slapping the off button
and pulling on his oversized Turkish
bathrobe, he stole from the bedroom
and quietly shut the door behind him,
leaving his wife to sleep. He padded
toward the kitchen and turned on the
coffeemaker.
Sitting down at the kitchen table, Don
sleepily clicked a few keys on his laptop
and began glancing through his favorite
stock chat. Scanning the list of senders,
he saw a red exclamation point next to
the name Stan with the headline “Bad
news!” When he read the message, Don
gasped:
Did anyone hear that Wally Cum-
mings just resigned from Dipensit?
Turns out he lied on his resume –
never received that PhD from U.C.
Berkeley as he’d claimed! The stock’s
gonna drop fast once this hits the
street.
Don felt slightly queasy. A year ear-
lier, his own company, Nutrorim, had
purchased a small stake in Dipensit.
“Sheesh, I didn’t exactly trust that guy,”
he grumbled.
He recalled how smoothly the whole
decision process had seemed to go when
Laurence Wiseman, the hard-driving
CFO of Nutrorim, had championed the
purchase of the Dipensit stock, insist-
ing that the small company might make
an excellent acquisition candidate in
the future. A subcommittee had been
formed to carefully review the purchase
decision. Don vaguely remembered that
the best-selling performance-enhancing
sports powder on the market.
The following year, when the new ver-
sion of ChargeUp had been in its final
stages of development, Don and R&D
head Steve Ford had dressed in white
coats and walked through the com-
pany’s huge lab, agleam with chrome
and white tile. They wended their way
Wiseman, Ford, and a group of others
tended to form strong opinions and
push them aggressively. And while Don
had his own opinions–and often voiced
them – he also worked hard to keep the
company’s decision-making processes
open and democratic, and made a point
of asking for input from as many people
as possible.
there had been a few murmurs of con-
cern–someone had even questioned the
credentials of Cummings, the start-up’s
CEO. But in the end, the subcommittee
seemed to have addressed the concerns,
and the senior team stood behind the
decision.
Don cinched his bathrobe tighter.
“For decisions with a certain amount of built-in
predictability…the process seems to work really well.
But if a decision involves clear winners and losers,
it stalls.”
During the past year, Nutrorim had suf-
fered from a spate of bad decisions. In
fact, that’s what today’s meeting was
about. A consultant, hired to review the
company’s decision-making processes,
was coming in that morning to present
the results of his individual interviews
with senior managers.
To Everyone’s Taste?
The previous spring, Nutrorim had been
at the top of its game. Founded in 1986
by an organic farmer and his wife, the
company had sold its products through
a network of individual distributors
before Don had joined as CEO in 1989.
Thanks to a series of testimonials of-
fered by doctors and personal trainers,
Nutrorim’s products had gained na-
tional attention. Then, following an en-
dorsement by a famous Olympic ath-
lete, sales of ChargeUp, the company’s
organic, performance-enhancing sup-
plement powder, had gone through the
roof. As a result, Nutrorim had hired
hundreds of new employees, expanded
its production facilities, and acquired
two vitamin firms. After going public in
1997, the company had expanded dis-
tribution of ChargeUp through exclu-
sive deals with nutrition stores and ath-
letic clubs, and by 2002, ChargeUp was
past stainless steel tables where techni-
cians milled seeds and blended the all-
organic ingredients that comprised Nu-
trorim’s various lines of vitamins and
nutritional supplements.
“Hey, Darlene, how are you?” Don
waved at a lab technician who was wear-
ing gloves, a hair bonnet, and a face
mask and pushing a trundle cart down
an aisle. Though she was recognizable
only by the walnut-rimmed glasses she
wore, she smiled –he could tell by the
wrinkles around her eyes – and said a
brief “Fine, boss, thanks.”
Don loved being in the lab. Though
he was a manager and not a scientist, he
was an increasingly enthusiastic student
of microbiology; every day, he learned
something new about the nutritional
benefits of Nutrorim’s products. He also
believed strongly in management by
walking around. From the start, he had
tried hard to foster a happy, participa-
tory, democratic culture at Nutrorim.
This had seemed relatively easy, since
most of the company’s employees hailed
from the Minneapolis area, where“Min-
nesota nice” was practically a state law.
It was also partly an act of defiance:
When Don was fresh out of business
school, he’d had a terrible run-in with
his boss, the dictatorial CEO of a retail
chain.
Of course, there were some excep-
tions to Minnesota nice, especially
among the more competitive, highly
analytical types in upper management.
Steve stopped at a table where a tech-
nician was mixing raspberry-colored
powder from two large canisters into
two beakers of water. “Hey, Jerri, mind
if Don does the blind taste test?” he
asked.
“Not at all, it would be an honor,”
Jerri replied, pouring some liquid from
a beaker into two cups.
“Shut your eyes,”said Steve. Don com-
plied, and Steve handed him one of the
cups.“Down the hatch.”
Sipping from the first cup, Don recog-
nized the familiar taste of ChargeUp.
It smelled like a combination of dried
raspberries, newly mowed grass, and
burnt toast.
“Here, take a sip of water before you
try the next one,” Steve offered. Don
drank some, then tried the second cup.
“So?” Steve inquired.
“No difference.” Don opened his eyes
and looked at Steve.
“That’s what we like to hear,” said
Steve. “The only real difference is that
the second cup is the one with Lipitrene
in it.”
“Ah,” said Don. Lipitrene, developed
in Nutrorim’s labs, was a new combina-
tion of organic oils and seeds that ap-
peared to enhance fat burning. Steve
wore his pride in the new ingredient like
a new father.
“We’ve finished with all the tests,
and now we’re gathering final input on
the taste,” Steve said, his eyes glinting.
“The handoff to marketing and sales
is already in gear.” He paused. “In fact,
I was invited to the product marketing
meeting at 2:00. Any chance you’ll be
there?”
“I’ll drop in,” Don replied,“at least for
a minute.”
•••
The meeting started out peaceably
enough. Cynthia Pollington, the prod-
uct marketing manager, presented three
final designs for the new ChargeUp can-
ister, all of which had “Now with Lip-
itrene”splayed across them in large, em-
bossed letters. She asked everyone in
the room for feedback. In the end, the
majority – including Steve and Don –
liked the label with the gold letters. But
when asked for her opinion, Nora Stern,
a former entrepreneur whose company
had been acquired by Nutrorim the pre-
vious year, was recalcitrant.
“Do I have to vote?” she asked.
“Well, we’d like your opinion, yes,”
said Cynthia.
“Okay, here it is,” Nora responded.
“I know this whole thing is already a
done deal, but I don’t understand why
there was this huge need to improve
ChargeUp. It’s selling very well as it is.
Why fix something that isn’t broken?”
Steve shot back,“Nora,you don’t know
what you’re talking about.” Everyone
stared at Steve; the silence was palpable.
DECISION MAKING
Don jumped in, feeling the need to re-
store peace. “Tell you what, Nora and
Steve. Let’s take this off-line, OK?”
The Recall
By late September, at the end of the first
quarter, sales of ChargeUp with Lip-
itrene had leapfrogged the standard
product by 20% in the test market of
greater Minneapolis. Plans for a state-
wide launch, followed by a national one,
were well under way. Don was pleased.
In an all-staff meeting, he asked Steve
and the ChargeUp team to stand and be
recognized.“You have all demonstrated
the kind of gung ho spirit that makes
Nutrorim a leader,” he noted, nodding
to Steve while the audience broke into
applause.
•••
The phone call came on October 5.“Mr.
Rifkin?” said a male voice.“My name is
Matthew Norton, and I’m an investiga-
tor with the Minnesota state depart-
ment of health. I’m calling because
we’ve been investigating 11 cases of gas-
trointestinal distress among people who
took your ChargeUp supplement with
Lipitrene.”
“What? Are you sure?”
“Unfortunately, yes,” the inspector
responded.“The affected parties are all
members of Syd’s Gyms, and they all
June Rotenberg looked increasingly
grim. When Don finished, she spoke up.
“I just checked my voice mail,” she said.
“It was Linda Dervis at KXAQ radio. One
of the people who got sick must have
contacted her.” She looked around the
room.“Guys, once this news hits, things
are going to go downhill quickly.”
Jerry Garber, the general counsel,
chimed in. “I think we have no choice
but to pull ChargeUp off the shelves,”
he said.“If we don’t, we could be facing
a class action lawsuit. Talk about PR
problems…”
“Why are we even considering a re-
call?”asked Ned Horst, who headed the
Sports Supplements division. “There’s
nothing wrong with the product.I should
know, because I’ve been using it since it
came out.”
“I suspect you’re right,” Jerry added.
“And a recall will cost us.”
“Well, thank God we haven’t ex-
panded distribution yet,” said Don.
“Recalls are expensive,”said June.“But
under the circumstances, I’m with Jerry.
Besides, think about the cost of not re-
calling a potentially bad product.”
“Damn it, people, there’s no way
ChargeUp is unsafe!” Steve exclaimed,
slamming his hand down on the confer-
ence table. “We put Lipitrene through
enough. The public always seems to re-
member how a crisis is handled more
than the crisis itself. People will remem-
ber only how long it takes us to act.”
Suddenly everyone began talking at
once. Steve took an increasingly en-
trenched position against June, who
tried to get him to see things from the
public’s perspective. Ned worried openly
about Nutrorim’s relationships with
Syd’s Gyms and other channel partners.
Jerry tried to remind everyone of fa-
mous recall cases – the Tylenol crisis
faced by Johnson & Johnson, Suzuki’s
recall of its 2002 and 2003 auto mod-
els–and noted how the companies dealt
with them.
The din in the room grew louder and
louder. Don, frustrated, whistled every-
one to attention.
“Look, we’re getting nowhere,” he
said. “The first question here is, What
are the criteria for making a recall deci-
sion? What lenses should we use to
reach such an important decision? We
need that kind of framework to come up
with an answer, and we need that an-
swer fast. You, you, and you,” he said,
pointing to June, Jerry, and Ned. “Go
find out as much relevant data as you
can, and pull together an analysis in the
next 24 hours. I’ll meet with you, and
recall using the product there between
September 25 and 29. The victims range
in age from 19 to 55.”
Don felt the blood drain from his face.
“Are you telling me that the product has
to be recalled?”
“It seems like everything is a matter of debate.”
Nora sighed. “Ever since I came here, I’ve been
in too many meetings about meetings.”
“I don’t have the authority–or the ev-
idence – to make you do that. So for the
time being, I’d simply like your cooper-
ation in conducting an investigation. I
understand that distribution is limited
to the Twin Cities area, is that correct?”
“Yes.”
“That’s fortunate. Meanwhile, you
may want to consider a voluntary re-
call,” he said just before hanging up.
Don asked his assistant to call an
emergency meeting with the heads of
PR, sales, R&D, Sports Supplements,
and legal.
As he described his discussion with
the inspector to the team, PR director
two full years of testing. We ran all kinds
of toxicity studies in animals and on
human volunteers. Then we did another
tier of clinical trials in humans.” He
looked hard at June.“If you need me to
defend ChargeUp to the health depart-
ment, the reporters, or anyone else, I
have about 500,000 pages of documen-
tation to show them.”
“Of course we all believe you, Steve,”
June replied tentatively, “but that kind
of response can look like defensiveness,
and it can backfire.” She looked plead-
ingly at Don. “I’ve already drafted a
press release saying we’ll fully cooperate
with any investigation, but that’s not
we’ll form a preliminary view. I’m call-
ing all the senior managers for an 8 am
meeting tomorrow. You can present our
findings, and we’ll take a vote.”
He looked hard at Steve, who was
scowling. “Steve, I want you out of the
discussion for the time being. You’re a
little too passionate about this, and I
need some cool analysis here. You can
speak your mind at tomorrow’s meeting.”
The following morning, after hearing
the analyses and prognoses, the major-
ity of senior managers quickly agreed
with the subcommittee’s view that re-
calling the product was the only choice.
Following the meeting, June issued a
press release announcing the decision.
The release included a quote from Don,
assuring the public that Nutrorim was
“doing everything possible to cooperate
with the investigation.”
Two weeks later, Don received an-
other call from Matthew Norton.“I have
good news,” he said. “It turns out that
the people who got sick picked up a bug
from the gym’s smoothie bar.”
Don gasped.“So that means Nutrorim
is exonerated?” he asked.
“Yes, and fully,” the inspector replied.
“We’ll send out a press release saying so
today.”
Calling All Volunteers
The boardroom was abuzz as Nutrorim’s
15 top managers settled into their seats.
The consultant sat quietly on Don’s
right, sipping coffee.
“Okay, let’s get started,” said Don.
“As you all know, we’re going to hear
this morning from Synergy Consulting
Group’s Gibson Bryer, who will present
his preliminary findings. But first, let me
review quickly why I, with the full sup-
port of the board, wanted this process
review.”
Don reported that the board had
been heartened by a recent analyst’s
report calling the series of unfortunate
events with ChargeUp a “fluke” for an
“otherwise solid firm that has a history
of making sound decisions.”Despite the
fact that the analyst had recommended
a “buy,” the board members were con-
cerned about the damage to the Charge-
Up brand and adamant about making
absolutely sure that this type of thing
would never happen again. To that end,
the board strongly recommended a top-
to-toe process review. Gibson, having
worked with two CEOs who sat on the
board, was the “obvious choice” for a
consultant.
Someone turned down the lights as
the first PowerPoint slide appeared
on the conference room screen.“I want
to thank each of you for allowing me to
speak with you during the past month,”
the consultant began. “My initial find-
ings show areas of agreement and dis-
agreement about the effectiveness of the
decision-making process at Nutrorim.”
He clicked to another slide. “You told
me that for decisions with a certain
amount of built-in predictability – deci-
sions like how to improve your distribu-
tion network, whether to alter your
print ads – the process seems to work
really well.”He clicked to the next slide.
“But if a decision involves clear winners
and losers, it stalls.”Click.“A preliminary
survey about the inner workings of the
process itself, however, reveals mixed re-
views.” Click.
“Some of you feel that this company
is too consensus driven and that things
don’t get done in a timely fashion.”Click.
“Others say that the decision-making
process is fine the way it is. Still others
get a bit frustrated at times, wishing
that the CEO would make definitive
calls more often.” Click. “Some say that
the company deals well with tough is-
sues; others say that conflict is too often
suppressed or swept under the rug and
that this causes resentment.” Click.
“Some feel that the culture of the com-
pany is democratic and inclusive; oth-
ers worry that the louder voices and
squeakier wheels dominate. Lights up,
please. I’m assuming many of you have
questions.”
Some hands went up, and Bryer spent
45 minutes methodically addressing the
concerns. Don looked at the clock and
then stood up to thank him.“It’s almost
time for us to end this meeting, but be-
fore we do, I need three volunteers for a
subcommittee,”he said.“The next phase
of our work with Gibson is to come up
with a better, more resilient decision-
making process that works well both in
calm times and in rough. Anyone?”
No one volunteered. Then Anne Han-
nah, who headed the vitamin division,
and Ned Horst tentatively raised their
hands. Don looked around the room
and gazed at Nora, the former entre-
preneur. “Nora, I’d like you on the
team,” he said. “Your perspective is al-
ways invaluable.”
Just Make a Decision!
“Hey, Nora,”Steve said sarcastically, wav-
ing to her as the meeting disbanded,
“congratulations for volunteering. Jolly
good show.”
Don, who was talking to another
manager, pretended not to hear. A few
minutes later, he walked to Nora’s office
and tapped on the door.“Got a second?”
he said, poking his head in the door.
Nora nodded, and Don perched on
the corner of her desk. “You don’t look
very pleased about this,” Don said
soothingly.
“Well, no,” Nora said, clearly peeved.
“I’m completely buried in this market-
ing launch at the moment, and I have
other fish to fry. And to be honest,” she
went on, “I’m pretty tired of all this
navel-gazing nonsense.”
“Well, I picked you because you seem
to hold back in the senior management
meetings,” Don replied, trying his best
to be gentle. “You know, the ChargeUp
problem presented us with a real oppor-
tunity to look at what’s broken. You
come from outside the company, and
you have clever, fresh ideas. I think you
are just the person to bring these issues
to the fore.”
“Look, Don, I appreciate that, and I
completely sympathize with what you’re
trying to do. But I come from a com-
pany where all decisions were made in
the room. I didn’t allow anyone to leave
until a call was made. Here, it seems
like everything is a matter of debate.”
She sighed. “You know, this consultant-
driven committee is just more evidence
of what’s wrong. Ever since I came here,
I’ve been in too many meetings about
meetings.”
She tightened her lips. “Maybe it’s
time for you to take a more dictatorial
approach to decision making.”
What’s the right decision-making
process for Nutrorim? •
DECISION MAKING
Christopher J. McCormick
is the president and CEO of
L.L.Bean in Freeport, Maine.
f I were to give points for good intentions,
then Don Rifkin would score pretty well.
He seems honest and genuinely interested in
doing the right thing. Both are laudable
attributes in a leader, but they go only so far.
Rifkin does not appear to have a problem
making decisions and, as evidenced by his
choice to launch the new and improved
ChargeUp, he appears to encourage creativ-
ity, innovation, and risk taking.
On the other hand, it seems that Rifkin has
created a culture devoid of candid inquiry,
where objective analysis and oversight take a
backseat to maintaining a “happy, participa-
tory, democratic culture.” As a consequence,
Rifkin now realizes that the outcomes of de-
cisions made in this kind of culture are lead-
ing to an unhealthy organizational dynamic,
paradoxically creating the type of corporate
culture he disdains.
Rifkin’s biggest problem is that he doesn’t
ask enough questions.I often say that my com-
pany’s greatest asset is its people, and that
this asset is at its best when engaged. Without
But how they utilize and play off the strengths
and skills of their in-house experts is key. This
ability to juggle skill sets includes knowing
how to leverage personalities so that each
team member is continually challenging
status-quo thinking and developing new
problem-solving techniques. For Rifkin in
particular, this skill also involves asking the
right questions of the people he relies on to
provide critical information. Granted, there is
an art to creating this type of engagement,
but it seems as though Rifkin doesn’t have
even the slightest idea how to initiate those
conversations.
A look back at how my organization re-
cently responded to a change in local labor
market conditions speaks to the value of this
interplay. As site work began on a new
L.L.Bean customer contact center, another
company announced its plans to locate an
even larger call center right next door. Be-
cause this development posed a reasonable
threat to our seasonal staffing needs, the
challenge I put forward to the organization
was “Is it too late to reconsider? What are
By asking the right questions of the experts
in his organization, Rifkin would put into
play healthy dynamics that would lead to
more cross-functional collaboration.
a culture of inquiry, engagement doesn’t hap-
pen. In addition to being a champion of inno-
vation, a CEO is responsible for constantly
assessing risk through questioning. Unfortu-
nately, Rifkin is not asking the types of ques-
tions that will create the environment of ac-
countability his organization needs to succeed.
By not probing the experts on his staff,
Rifkin has missed a huge opportunity to re-
shape the culture of his organization and es-
tablish himself as a strong leader. A stricter
mode of inquiry would have, among other
things, made the decision about whether to
recall ChargeUp much easier.
Of course, it must be understood that suc-
cessful top managers are rarely experts in
more than a few organizational disciplines.
our options, and what are the costs?” These
questions led to countless others that imme-
diately mobilized the entire company to con-
sider alternatives, despite the fact that ground
had already been broken. The result is that
we found a new location and started opera-
tions in the same amount of time and on bet-
ter terms than we had for the original project.
Rifkin’s challenge is complicated by the fact
that his decision-making process has led to a
reactionary culture characterized by consider-
able resentment and second-guessing on the
part of his management team.With a renewed
focus on inquiry, Rifkin would experience two
important benefits. First, he would create ac-
cess to the information he needs to make bet-
ter decisions.Second,he would set an example
for his own managers that speaks to the value
of diligence and personal accountability.
By asking people the right questions,
Rifkin would put into play healthy dynamics
that would lead to more cross-functional col-
laboration, greater acceptance of decisions,
and better business results in which his en-
tire team would feel more fully vested.
DECISION MAKING
ifkin wants to be a better leader than his
former boss and has strived to form a
corporate culture that takes into account
the “Minnesota niceness” of most of his em-
ployees. While these objectives are good
starting points, the lack of consistency in
The decision-making crisis at
Nutrorim is a blessing in disguise,
for it offers Rifkin a chance to
install irm management rules and
build trust within the company.
Rifkin’s approach to management and deci-
sion making undermines trust. It’s difficult
for teams to function well together when
there is so much inconsistency and volatility
at work.
Let’s start with Rifkin’s leadership style. In
the case of the bad stock purchase, he showed
poor judgment, a lack of professionalism, and
an inability to view facts objectively. In addi-
tion to not taking simple business precau-
tions by personally vetting Dipensit, Rifkin
demonstrated selective hearing that kept
him from absorbing dissent.
The picture is different in the case of the
recall. If you look at it from the perspective
of decision theory, Rifkin reacted in a rational
manner. Nutrorim faced two scenarios: Ei-
ther ChargeUp with Lipitrene would be found
all quality of decision making. Fortunately,
there are a few things he can do to improve
matters. First, he should demonstrate strong
leadership by setting firm management pro-
cess rules – especially for investment and
M&A decisions, product launches, and risk
management – that are easy to apply and
transparent to everyone.
M&A decisions, for example, should be
formed on the basis of precisely defined cri-
teria that cover everything from due dili-
gence, strategic and operational aspects of
the merger, and a clear exit strategy. Trans-
parent rules prevent management from
growing too bullish, practicing selective hear-
ing, and ignoring risks. They also go a long
way toward establishing trust, because peo-
ple know what to expect and what they’re
responsible for.
I would also recommend that Rifkin un-
dergo intensive coaching to help him de-
velop a consistent leadership style and learn
to take a more active role in managing his
team. Coaching could help Rifkin do a better
job of developing his people. For example,
it’s clear that Nora Stern is a hands-on man-
ager, rather than a talker, so Rifkin should
keep her on practical tasks – such as giving
her responsibility for a plant where she can
develop her skills–rather than force her onto
subcommittees. He should also let his man-
agers know what is expected of them, espe-
cially in terms of team behavior. He can
praise Steve Ford for his R&D expertise but
Hauke Moje (hauke_moje
@de.rolandberger.com) is
a partner at Roland Berger
Strategy Consultants in
Hamburg, Germany.
to be the cause of the customers’ illness, or it
would not. Likewise, Nutrorim had two op-
tions: Recall the product, or don’t. If the
product turned out to be faulty, keeping it on
the market would most likely have meant the
company’s demise, given the possibility of
a lawsuit. Management could not take that
risk, since the probability of the product
being faulty was obviously beyond a negligi-
ble level and there was no time for further in-
vestigation. Rifkin did a good job of hearing
people out and decisively following the sub-
committee’s recommendation to withdraw
the product immediately.
But Rifkin’s inconsistent approach to these
events undercuts his authority and the over-
make him understand that his is only one
viewpoint among many, and that he must
remain a team player even if he does not
agree with particular decisions.
As the Swiss novelist Max Frisch wrote,“A
crisis is a productive situation–you only have
to take away the flavor of catastrophe.” The
decision-making crisis at Nutrorim is a bless-
ing in disguise, for it offers Rifkin a chance to
install firm management rules. And Rifkin
can build trust within his management team
by setting an example and openly commu-
nicating his intentions and goals for the
company. In accomplishing both, he’s doing
what is necessary to improve the company’s
decision-making processes.
DECISION MAKING
“What’s the right decision-making process for
Nutrorim?” raises another question: “What’s the
right decision-making process for Don Rifkin?”
Ralph Biggadike (rb317@
columbia.edu) is a professor
of professional practice in
the management division of
Columbia Business School in
New York.
agree with Gibson Bryer that the current
decision-making process at Nutrorim
seems to work fine for decisions with some
built-in predictability but not for those with
clear winners and losers. Day-to-day opera-
tional and procedural issues are one thing;
important problems or strategic matters that
involve conflict or debate are quite another.
And when it comes to the latter, the process
at Nutrorim is broken.
The problems with the decision-making
process at Nutrorim stem primarily from
Rifkin’s aversion to conflict. He believes that
he keeps the process open and asks for input,
but he doesn’t realize that his approach to
building a friendly culture squelches dissent
and debate. He’s trying to build a “nice” cul-
ture by making it homogeneous, and that’s
causing trouble. Murmurs go unaddressed,
opinions are unbalanced, top managers feel
increasingly frustrated, and bad decisions are
the norm. Hence, the final question–“What’s
the right decision-making process for Nu-
trorim?”–raises another question:“What’s the
right decision-making process for Rifkin?”
It would help if Rifkin could view conflict
as an important source of energy and see
that it’s his responsibility to understand all
sides of an issue. To do this, he needs to ex-
plore his own issues first. If I were coaching
him, I would begin by asking him why he
hasn’t investigated the “murmurs” he’s over-
heard, and why he chooses to deal with con-
flict in private rather than in public. I might
ask,“How has the decision to take things off-
line helped you in the past? What are the
benefits and drawbacks of doing things this
way?” The difficulties he’s had with his man-
agers reflect his aversion to conflict. All lead-
ers face people like Steve Ford from time to
time. Commitment and passion are worth
encouraging in direct reports, but assertive-
ness and conviction can have their down-
sides. To become more comfortable dealing
with people who possess these qualities, par-
ticularly in group settings, Rifkin needs to
get away from his and others’ personal feel-
ings. In a group meeting, he could say, for ex-
ample,“We’ve heard a strong case for Y. Does
anyone else have data or experiences that
might suggest another approach?”
Rifkin should also take a good, hard look at
the way he selects members of his subcom-
mittees. In his desire to avoid disagreements,
he seems to seek out homogeneity. Public re-
lations and legal, for example, are corporate
kindred spirits, and leaving the head of R&D
out of a discussion on a product recall looks
a lot like deck stacking. If Rifkin wants a better
balance of views and, hence, better decisions,
he should choose members more carefully.
Nora Stern makes an important point
when she says that in her former company,
debate was held out in the open, and differ-
ences were worked out in the group. Follow-
ing this example would cut down on the frus-
tration among Rifkin’s managers, reduce
lobbying, and bring to light some key opin-
ions. I recommend that Rifkin use subgroups
to gather data, identify assumptions, and cre-
ate options. Each subgroup should report
regularly to the larger group, which can then
debate a given issue’s pros and cons. These
groups can be set up like teams of lawyers,
with one critical exception: Those individu-
als with the strongest opinions should argue
the case for the opposing side. This kind of
decision-making structure can go a long way
toward unearthing the opinions of all in-
volved, including those who feel left out, and
toward building the kind of balance Rifkin
needs to develop in his company.
I would stress to Rifkin that he has two pri-
mary responsibilities: to guide the decision-
making process so that all the data, opinions,
assumptions, and options are identified and
fairly discussed, and to make the final deci-
sions. It would also help if he explained the
reasoning behind his decisions to his direct
reports.
What’s the Right Decision-Making Process for Nutrorim? >> C A S E C O M M E N TA R Y
utrorim needs a serious reality check.
Nora Stern, as the outsider, is the voice
of reason when she notes that there is too
much navel-gazing at the company. Too
many people, including Rifkin, are operat-
ing on hunches and gut reactions that could
put the company at risk. Rifkin abdicates his
responsibility when he fails to sponsor a
learning organization that builds knowledge
as a competitive advantage. He needs to
show leadership and a willingness to make
decisions.
The stock purchase is a perfect case in
point. The CFO, Laurence Wiseman, may
have his talents, but it seems he pushed
through the decision to purchase stock in
Dipensit without exercising due diligence.
Investing in a company is like buying a
house: One makes the purchase decision
based on a combination of hard factors such
as price, condition, and school system, as
well as soft factors such as general impres-
sions, conversations with neighbors, and so
on. It is inexcusable that Rifkin allowed share-
holders’ money to be spent on a stake in
Rifkin can’t allow his team members to
create their own versions of reality. For exam-
ple, Ford, the R&D head with vested inter-
ests and a difficult personality, prevents
people from having candid conversations
when they are most needed – during times
of crisis. Rifkin needs to buckle down and
make it clear to Ford and everyone else that
they will be held accountable for their ac-
tions and their results and that no one gets to
steamroll others. Without this rule, the com-
pany can only react after the horse has left
the stable.
To ensure better decision making, Rifkin
should work hard to create a culture that re-
wards on the basis of unit performance as
well as individual contributions. He should
spend more time developing leaders – I like
to think of them as mini-CEOs – who have a
passion for results and understand how their
actions affect the company. Rifkin’s job is to
monitor his managers’ progress, motivate
them, and give them feedback. He should
make sure that results are openly celebrated
and that when failure occurs, everyone learns
Paul Domorski (pdomorski@
avaya.com) is the vice presi-
dent of service operations at
Avaya, a communications
network and service provider
in Basking Ridge, New Jersey.
The payoff for a lot of hard work and seemingly endless
preparation occurs when it’s time to make hard decisions.
Dipensit without having launched a thor-
ough investigation of the CEO’s background
when questions first arose. Rifkin and his
team should have delved into any rumors,
probed any allegations, studied the business
model, and fully understood any contractual
obligations.
The same fact-finding failure occurred
with the ChargeUp fiasco, which should have
been investigated immediately. Rifkin should
have dispatched a qualified team to Syd’s
Gyms to investigate the facts and interview
the people affected. Ford and his team should
have reviewed the allegations in light of ear-
lier toxicity studies and clinical trials to deter-
mine whether any of the alleged problems
had ever occurred during testing. Indeed, a
thorough investigation might have prevented
the crisis in the first place.
from it. Like members of a sports team, every
one of these individuals is accountable for
his or her own assignment. Without that
accountability, the team cannot win. In the
end, Rifkin should play the role of a quarter-
back and be the one calling all the plays.
Getting this role right sometimes leads to
tough discussions, but the results can be
outstanding.
Sometimes the answers to dilemmas will
be obvious; other times, more analysis will be
required. Either way, the teams at Nutrorim
must do a better job of getting at the heart of
problems. The payoff for a lot of hard work
and seemingly endless preparation occurs
when it’s time to make hard decisions.
.
American Revolution and War for Independence
Prepared by
Master’s Degree
student
Alexander Druzik
Scientific supervises
Senior Lecturer
V. Shimansky
Minsk 2014
Date: 2014-12-29; view: 775
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