C A S E S T U D Y

Linus Carver operates a successful one-man department.Where does that leave the rest of his staff?

WhenYourStarPerformerCon'tManage

by Gordon Adier

The day began well enough. I gotto the office at about 8 A.M., grabbeda cup of coffee, and sat down tothe latest issue of the RosensteinerInvestinfo Report on Nuf Fun, thesporting goods company where I'mCEO. It always gives me a kick toread the analysts' reports, and thisone was no exception. First tbeCompany Description: "Denver-based Nuf Fun is a widely diversifiedmanufacturer of branded leisureproducts catering to active sport-ing/recreational participation, in-cluding Alpine and cross-countryskiing, climbing, parasailing, andvarious water sports." Then the In-vestment Conclusion, wbich wasreal favorable. A sharp knock on myoffice door interrupted my reading,and the assistant director of theproduct development team. VerityHinde, came in.

"Morning, Verity," I said. "Didyou know that since 1991, our saleshave advanced at a compoundedgrowth rate of 17%? Net sales havemoved up from $218.7 million in1993 to $367.9 million by secondquarter 1996."

"Reading Rosensteiner again?"she said in a cool way. "With you,Vic, if it isn't strategy, it's figures.And now you're going to tell me thatearnings have gone up at a com-pounded rate of 24%. With any luck,you'll give me your diversity speech,too." She raised her chin at me andlaughed. "How does it go?" She satdown in one of the armchairs acrossfrom my desk and waved her arm atmy collection of miniature Nuf Funproducts in the glass case on thewall. "One of Nuf Fun's real big ad-vantages is its diversity-no one sin-gle product category accounts formore than 15% of overall sales."Pointing at each item, she went on:"Skis, snowboards, in-line skates,tents, backpacks, parachutes, deltagliders, and soon, fishing gear."

"I don't have a model of the newski yet. But the launch is set for thelast week in October."

"Vic," she said. "I didn't comehere to talk about sales or our highlyfragmented market or the new ski. Icame to talk about Carver. Again."

I rubbed my eyes. Linus Carver isthe head of the product development

group. Engineering, design, they allreport to him, I thought I knew whatHinde was going to say, so I said,"Whatever it is, shouldn't you takeit up with Carver first ?"

Hinde opened the writing case shebad brought witb her and fished outa fountain pen and a yellow legal padlittered with notes. "I've tried. Yes-terday I told him morale was sink-ing, and he just shrugged it off."

"Morale always sinks right afterproduct trials. It's the slump beforethe next big push."

"He said I was seeing ghosts.""Maybe you are.""I figured you'd say that, Vic."

She raised herself off the chair andwalked over to the window behindme, where she started tapping berpen on tbe glass. "I'm not seeingghosts, I'm seeing a product develop-ment team in trouble."

Gordon Adler is senior writer atIMD, the International Institute forManagement Development, in Lau-sanne, Switzerland. He is also anovelist and communications con-sultant and has managed an inter-national school.

22 DRAWING BY MICHAEL WinE

C A S E S T U D Y

"We've come up witb two newproduct lines this year."

She moved to where I could seeher. "We haven't come up with twonew lines. Carver bas."

"Tben bow do you explain tbe facttbat there are more than 275 ideas intbe new-product-idea file?"

She came back around the deskand sat down again. "All I know is,none of the designers feel tbat theycan go to Carver witb an idea - be-cause wben someone does, he im-mediately says to fill out all tbeforms in the procedure manual-"

I cut ber off. "You and everybodyelse in product development ap-proved tbat policy."

"You didn't let me finisb. Whileyou're filling out tbe forms, be'srusbing ahead and putting together apreliminary assessment of bis own.He revises the ideas, puts bis ownstamp on tbem, and by tbe time youcome back to him witb your report,be's tbree steps ahead and you justbave to go along witb it."

I had beard tbis before, but Itbougbt tbat Carver bad let up a bitin recent months. Apparently not. I

didn't know what to say, so I saidnotbing. Hinde sigbed, got up, andwalked to tbe door. As sbe was leav-ing, she left tbis sentence banging inthe air: "If something isn't doneabout Carver, your product develop-ment team is going to implode."

Carver's RiseI remembered tbe first time I saw

Carver, nearly five years ago on aSaturday in November 1992. I waslooking for a design engineer, and hisbackground was perfect. He was oneof those scholar-atblctcs: U.S. luniorNational Ski Team, varsity football,avid fly fisherman. Engineering de-gree from Cal Tech and an M.B.A.from Stanford. Before Nuf Fun, be'dbeen working for tbree years atTrekkers, a bardware company inSilicon Valley. But be'd casbed in bisstock options and bought a bouse inBoulder, a short drive from NufFun's beadquarters. Told xne if bewasn't going to be bome much, bisfamily sbould at least live in a niceplace. At the second interview, tbreedays later, I asked bim wben bewanted to start, and be said, "Now."

When Carver came on board, wewere baving some trouble witb ourSbeer ski line. There had been recordsnowfalls during the 1991-1992 skiseason, but our sales bad been slug-gisb. In tbe spring, we did some cus-tomer surveys and discovered thatpeople believed the Sbeer line wasonly for ski racers, cliff jumpers, andpowder bounds. In late May, Carvercame up with wbat became ourbest-selling Alpine skis, tbe SbeerComfort, a range of midlengtb, softerboards for tbe Texans wbo come upto spend a few hours on the slopesand a few hours in tbe bar. His pre-sentation was tbe best I'd ever seen:a solid product concept and tenpages of detailed analysis. In tendays, single-banded, be'd done thework of an entire developmentteam. He'd even gotten someone inmarketing to do a preliminary studyon target markets and pricing.

Over tbe next tbree years, justabout every new Nuf Fun product -sucb as our first in-line skates andour safety binding for water skis -bore Carver's initials. For our line of

continued on page 26

HARVARD BUSINESS REVIEW July-August 1997 23

*; T u D V

lightweight backpacks. Carver tookanatomy classes and talked withsports medicine guys to get the per-fect weight distribution over thehips without stressing the shoul-ders. He even loaded the prototypeswith 75-pound plates and hikedaround Estes Park for a couple ofdays. In 1994, the Comfort Trail wonOutside magazine's Product of theYear award.

Carver could work for 15 hourswithout a break, and the amazingthing was, he never missed a detail;not a single figure or calculation wasever wrong. One time, he went twodays straight without leaving the of-fice or sleeping. When he let slip thathe had seen a doctor about dizzinessand chest pains, I sent him and hisfamily for a week's R and R in thecompany condo on Dolphin Rey.Every morning he was away, I found

Wooden claimed that theother engineers v/ere

feeling discouragedbecause Carver vs as riding

roughshod over them.

a fax waiting for me, each filled withideas for what became the Sciiocco,our line of high performance wind-surfing boards.

In late 1993, there were grum-blings that Carver was tough towork with. Jim Wooden was still thehead of product development backthen, and Carver reported direcdy tohim. During the Nuf Fun Christmasweekend at Snowcrest Peak thatyear. Wooden caught up with me atthe hottom of the Devil's Drop triplechairlift, and all the way to the sum-mit he warned me to take a goodlook at what Carver's overzealous-ness was doing to the department.He claimed that the other engineerswere feeling discouraged becauseCarver was riding roughshod overthem. He said that two of them hadbeen out to talk to Boarding Sports,one of our higgest competitors.

One of my New Year's resolutionsin 1994 was to check out the climatein product development. I did some

walking around, and though moraledid seem a little low, it didn't seemany worse than it ever does in thewinter. In February, I brought inVerity Hinde at the same level asCarver. She had a solid design back-ground and a reputation as a realteam builder. Mainly, I was hopingthat she would perk up the place.

In April, Wooden spent one after-noon with Kate Clarke, our head ofhuman resources, and another withClarke and me, reiterating his con-cerns about morale. At Nuf Fun, theHR function is really more of anadministrative department than afull-fledged resource, so in May, onClarke's advice, I called People Mat-ters, a Denver HR consulting group,and set up a weeklong team-buildingworkshop. We did some role-playingand an exercise called Moccasins,in which we had to stand in each

other's shoes - literally -and vent our feelings.Wooden yelled at Carverfor about ten minutes,which wasn't at all likehim, and Hinde practi-cally took Carver's earsoff, but I saw them all inthe bar later, laughingover a few beers.

On the last day of theworkshop, we had to write a script ofa typical transaction at the office.Most of us made a few rough notesand had a good laugh. Carver had hislaptop and portable printer and puttogether a six-page story. The maincharacter was a manager namedJohn Pine who kept talking about re-lationships in the workplace duringa concept meeting. It took me mostof the next Monday to persuadeWooden to take hack his resignationand another two hours to convinceCarver that he'd stepped over theline. Things quieted down in the ear-ly summer, and I figured that wasthe end of it. I guess we see what wewant to see.

Failing with AlacrityThen we became involved in what

has now euphemistically come to becalled the "In-line Skate Wreck."We'd jumped into the in-line skatemarket in 1993 with a pair of genericskates: four wheels, a hinged shell, a

padded innersolc. Saks were withintarget. But in April 1994, our chiefcompetitor. Sierra Express, came outwith a five-wheel prototype that hada soft lining that molded to yourfeet - an idea their developers hadtaken from their own line of skiboots, [im Wooden thought that ifwe could get a five-wheeler out witha better set of bearings and a morecomfortable fit, we'd clear $5 mil-lion to $8 million in 1995.

I gave product development sixweeks to get ready for a launch. Inthree weeks, the team found super-light bearings and a titanium hous-ing, and used ski hoot buckles andinjection foam for a better fit. Theblading season was in full swing,and we didn't have time for muchtesting. Wooden gave me the greenlight for launch. Carver raised hell,saying, for once, that we were mov-ing too fast, but I figured he wasjust steamed because Wooden haddominated the design process. Car-ver had come up with his own de-sign, as usual, but this time Woodenhad overruled him. Hinde made a fewnoises as well, but 1 knew that sheadmired Carver's work, so I didn'tpay much attention. We got the newskates to market by early June - wecalled them Alacrity.

Early sales were strong. But hymid-July, distributors were calling inwith complaints. The Alacrity wasthe fastest skate on the market, hutthe rubber brake pads wore downmuch faster than those on competi-tors' skates. Even worse, the foamwe were injecting into the innerboots had heen designed for skiboots; in summer temperatures, theskates were just too hot to wear. Thewhole thing was a fiasco, and whenthe board saw the sales figures - andthe amount of money we had spentto get out of the whole thing and dodamage control - they pressured meinto letting Wooden go.

Carver was the obvious choice toreplace him. He already was the defacto head of the department. At ourfirst meeting in late August, I toldhim that I wanted to see us doublethe number of new-product ideas,from 75 a year to at least 150. He saidif we didn't hit 225,1 could fire him.I reminded him that the snowboard

26 HARVARD BUSINESS REVIEW July-August 1997

L_

market was heating up and that if hedidn't have our new boards out bylate October, I'd fire him, and if weever had a repeat of the Alacrity, I'dfire him twice. On the way out, hepicked up the lighted glohe I keep by

hired me becauseI do the vs ork of a vs hole

department/'' said Carver.

the door, put his right index fingeron Nepal, and said, "I won't say Itold you so about Alacrity. And as faras the half-pipes go, I'll get the bestpossible boards out by October 10,even if I have to carry them up MountEverest alone to test them."

Two weeks later, he brought inSteve Bellmer and Janet Falkan,two 20-something, hot-ticket design-ers. At hrainstorming meetings, Fal-kan even outtalked Carver. Hindeseemed restored by the new blood,and together, the four of them wereunbeatable. True to Carver's word,Nuf Fun's freestyle boards were inthe shops by October 8.

Before Christmas, Carver came upwith new product-development pol-icy, including a new vision for thedepartment and a set of formal pro-cedures (supported hy various forms)that broke down the product devel-opment process into seven definablesteps: idea, preliminary assessment,concept, development, testing, trial,and launch. He said he set up thepolicy so that everyone in the de-partment could learn from him-andfrom one another. For the first time,everyone in and out of product de-velopment understood how Nuf Funwas going to gather new ideas, pickthe best ones, and get them to mar-ket. It seemed like a great system.

Caution: Moguls AheadOf course, things are never com-

pletely hunky-dory in any business.Now and again, a junior engineer ordesigner griped that Carver wasn'tsetting clear goals or making hisexpectations clear. Hinde claimedthat the junior people were capable,just not as compulsive as Carver.Bellmer came by one afternoon and

said he was tired of working 70-hourweeks and not even getting a pat onthe back. At a product brainstorm-ing session I went to, Falkan juststared into her coffee cup as if shewere reading the grounds.

Around that t ime, Iread the theory that be-havior is a function ofpersonality and environ-ment. I came down onthe side of personalityand decided that Carvercould use some coaching.

Rate Clarke of human resourcesagreed. I planned to bring it up atCarver's next review.

The morning of the review. Carverbounded into my office and plunkeddown a stack of printouts on thedesk between us. They were coveredwith pencil and pen notations, ar-rows and crossed-out patches. Forthe first few minutes, he prowledaimlessly around my office. Then heleaned against the wall and restedhis hands on his thighs. "Toughday," he said. "I'm not in the shapeI used to he in."

I turned toward him and said, "Li-nus, you're the best I've ever seen,but I'm concerned that mayhe you'retrying to do too much yourself."

He took a hig gulp of air. "Vic,don't come at me with that HR gurustuff again."

"You won't do me any good riggedup to an ERG."

"This is a break-heart business.You say it yourself. Nuf Fun has gotto get its products outfaster than Sierra Ex-press and BoardingSports and all the oth-ers, and they've got tohe better." He glancedat his watch.

"You're right, Linus,hut that 's not thepoint here."

"What is the point?" he said. Hehad a flat, don't-con-me tone.

"The point is I'm getting worriedabout Bellmer and Falkan. They'reyour people, Linus."

He straightened. "This is a high-turnover husiness."

"Not so high that we also need tolose Verity Hinde."

"What are you talking about?"

"She's done a lot behind the cur-tains to keep the rest of your troupehappy, and I'm worried that she'sready to walk."

"Why worry about that? I've gotten heavy hitters in my recruitingfile." He waved his mechanical pen-cil at the calendar on my desk. "I canhave any one of them in here in tendays' time."

"Recruiting isn't going to make abetter team."

"Team. Team. Team. Team." Hecame over to my desk and set hishands flat on the blotter in front ofme, so close I could see the ropyveins. "Let's he honest. You hiredme because I do the work of a wholedepartment. And I have. And we'remaking money."

I said, "You can't be the LoneRanger forever." The problem was, Iknew he was right, and it came outsounding kind of unconvinced.

He stepped back and crossed hisarms. "Vic, when you brought me in,our earnings per share were hoveringaround $1.37. Now they're uparound $1.55, and in 18 months I'llhave them to $1.80. The Parabolicski is going to be a success - thetesters love it, the racers love it, Ilove it. I predict revenues of close to$25 million on it."

"What good will that do us ifyou're in intensive care and Hinde,Bellmer, and Falkan are history?"

He circled my desk and sat down."I work out so hard every day, I'llprobably die healthy. Hinde's okay.

I said, "You can't be theLone Ranger forever/'But it came out soundingkind of unconvinced.

And the others know that there's nobetter place in this industry thanNuf Fun. They're not leaving."

Carver leaned backward andcrossed his legs. I hunched forwardover my desk. "I just want to be sure,Linus," I said. "That's why I wantyou to get some coaching."

He practically lunged from thechair to the shelf and picked up my

HARVARD BUSINESS REVIEW July-August 1997 27

C A S E S T U D Y

copy of The Winning ExecutiveCoach and waved it in front of me."This is all hocus-pocus. You can'tchange people. I'm type A. Always.Ambitious. Adrenaline."

I had the feeling I was standing infront of an oncoming train. "Whatwould happen," I said, "if you dele-gated more, showed your peoplemore trust, stressed praise instead ofcriticism?"

"Simple. We wouldn't get twoproduct lines out this year or nextyear, either." He came so near Icould see the pores in his cheeks."You and the hoard and the stake-holders want new products. That'sthe name of the game." He sai: downagain and seemed to relax a little.

I counted to ten. "What I wdni isto see you giving more early support,building on other people's ideas-"

"And kissing our market positiongood-bye." He was drumming hisfingers on his thigh. "What do youthink the product development pro-cedures are all about? You know Iput them in place to help peoplelearn. Look, I've got to get off to ameeting. I'll do what you say, and I'llmeet with the coach. Is there any-thing else?"

I said no and escorted him to thedoor. He shook my hand and said,"I've got this great idea for a para-chute jumpsuit with a huilt-inheater. You'll have the details onyour desk Monday."

The bleating of my phone broughtme hack to the present. It wasBellmer. He seemed pretty ripped, soI just let him talk. He said he'd goneto Carver two weeks ago with anidea for in-line skating equipment-reflective knee and elbow pads, hel-mets, windbreakers with reflectingstripes - and Carver had just said,"Run with it." Bellmer was talkingso fast, the words were running to-gether, and it was giving me aheadache. He went on, saying that atthis week's new-product meeting.Carver had handed out plans for hisown version. I rubbed my templeswith my forefingers and tried to lis-ten. I told Bellmer maybe that wasgood because they had two versionsto discuss. That was when he said:"Discuss? We spent an hour dis-

cussing why my ideas weren't goingto fly, and then another hour agree-ing with Carver on how we were go-ing to develop and test his reflectingankle bands and wristbands." Iasked him if maybe he wasn't over-reacting a little, and then I heardthat clumsy plastic clatter of thephone hanging up.

Sitting here, I have this feeling I'mup against the wall. If you look atthe numbers, Nuf Fun is in greatshape; if you look at the products,the development department is ingreat shapej and if you look at the

people. Carver is in great shape.Without Carver, nothing will he ingreat shape. You know the old say-ing. If it ain't broke, don't fix it? Isanything really broken?

HBR's cases present common man-agerial dilemmas and offer concretesolutions from experts. As written,they are hypothetical, and thenames used are fictitious. We inviteyou to write to Case Suggestions,Harvard Business Review, 60 Har-vard Way. Boston. MA 02163, anddescribe the issues you would liketo see addressed.

What, If Anything, Does Vic Need to DoAbout Carver?

Four experts discuss ways of handling brilliant, difficult individualswitbin an organization.

VICTOR VROOM is John G. SearleProfessor of Organization and Man-agement and professor of psychol-ogy at the Yale School of Manage-ment in New Haven, Connecticut.

In real life, one is unlikely to findsuch extreme characters as Vic andLinus Carver. Vic is extraordinarilyinsensitive to what is happening inhis product development depart-ment, and Carver is a superman inall respects but one. The man doesn'teven need sleep! Having said that,however, the two do illustrate adilemma that is unfortunately quitecommon in one form or another in

How should 0 manager dealwith an employee who is botha tremendous asset and atremendous liability?

many companies: How should amanager deal with an employee whois hoth a tremendous asset and atremendous liability?

If I were Vic, I wouldn't give upquite yet. There are a few things hecan try to improve the situation. Tobegin, he should get some training inthe art of active listening. He woulddo well to read up on Carl Rogers'theories. (See, for example, Carl R.Rogers and FJ. Roethlisberger, "Bar-riers and Gateways to Communica-tion," HBR July-August 1952.) Thenhe should have a thoughtful conver-sation with Carver. Yes, they'vetalked in the past-even about Car-ver's management style-but in each

28 PORTRAITS BY CHUCK MORRIS

of tbose dialogues, Vic has givenadvice. He basn't listened. Carvertalks about being tired, and be's al-ready bad one possible heart attack.Tbose are indications tbat he ishurting, and tbey bave gone rightover Vic's bead.

Even tbougb Carver boasts aboutbeing able to hire heavy hitters, bemay be frustrated witb the peoplehe has around bim. He may not rel-ish the managerial role in wbicb behas been placed. He may, in fact,want to give up that role, but be maynot see a way to get out and stay atNuf Fun witbout losing face. Wbatkind of role would Carver like toplay? How does be see his careerplaying out? We don't know, becauseVic basn't truly tried to find out.

If Vic is able to find out wbereCarver stands, and if none of myspeculations prove true, Vic musttake a different tack. He needs tohave a second dialogue with Carverin which tbe two examine tbe factson whicb their inferences are basedand attempt to come up witb a mu-tually agreed-upon plan of action. Inthat conversation, Vic must play astronger role tban be bas in tbe past,letting Carver know tbat he expectscbange, not simple acquiescence."I'll do wbat you say, and I'll meetwitb tbe coacb" won't wasb if itisn't sincere. For tbis part of tbeprocess, I would recommend tbatVic read tbe work of Chris Argyris.It's time be was introduced to dou-ble-loop learning, walking down tbeladder of inference, and engaging inproductive inquiry - concepts thatcould serve him well. (See, for exam-pie, "Teaching Smart People How toLearn," HBR May-June 1991.)

Either or both of these dialoguescould lead to a solution. Tbe firstconversation may result in Carversaying, "Pay me what I'm worth,Vic, but I've bad it. I'm not a man-ager." Wbat sweet music tbat wouldbe to everyone's ears. Tbe secondmight lead to personal and profes-sional growtb for both of tbem.

I don't bave a lot of faith in Vic'sability to pull tbis off. He is incredi-bly insensitive. There were signswhen Jim Wooden was bead of prod-uct development tbat Carver wasn'ttbe managerial type, but Vic plowed

rigbt abead witb bis appointment.All along. Verity Hinde looked morelike a manager-she could bave capi-talized on Carver's talents, for wbichshe bas considerable respect. Andshe probably could bave kept tbepeace in the department.

In any case, Vic may come out oftbis all rigbt if be keeps one tbingclear: bis internal debate sbouldn'tfocus only on whether to fire Carveror to keep him as a one-man band.Tbe issues are never that black andwhite. Even in fiction.

JUNE ROKOFF is a director of Math-soft, based in Cambridge, Massa-chusetts, and of Desktop Data,based in Burlington, Massachusetts.She is a former senior vice presidentof Lotus Development Corporation.

Vic doesn't bave to do anytbingabout Carver-at least not rigbt now.So wbat if Carver's managementskills are weak-to-nonexistent andbis social skills are poor? In Carver,Vic bas a guru who meets most oftbe requirements of the perfect prod-uct-development leader. Ask anyCEO to describe tbe ideal candidatefor tbat position and you're likely tobear: "a visionary; a creative person;someone wbo understands botb tbebusiness and marketing; someonewitb a proven track record on ship-ping products; a passionate, driven,dedicated person wbo is able to meetdeadlines; someone wbo can recruittop talent." That's Carver all over.

Nuf Fun is in a great position. Itbas enviable sales growtb, leading-edge products, and a product devel-opment team that must be tbe envyof otber CEOs. If I were Vic - witbbis personality, bis outlook, and bisown sbortcomings - I would proba-bly sit tigbt.

Given Vic's management style,the current arrangement atNuf Fun is probably the onlyone that will work.

Even if Vic wanted to "do some-tbing" about Carver, cbances are becouldn't-at least not without doingsomething about himself first. Infact, tbe current arrangement at NufFun is probably tbe only one tbatwill work, given Vic's managementstyle. Tbis CEO is certainly bandsoff wben it comes to development.In tbe course of bis tenure, he hasnot developed a relationship withany of the otber members of tbeproduct development department.He doesn't know firstband whatmost of tbem are thinking; hedoesn't even know wbere tbeir tal-ents lie. He may even bave anotherCarver in tbe ranks, but he basn'ta clue. Vic can talk about tbe teamconcept, but be bimself doesn't pos-sess the skills to execute it success-fully. He doesn't even have a cobe-sive management team-witness bishuman resources manager, wbo isrelegated to an administrative role.

To his credit, Vic knows that tbeculture at Nuf Fun leaves a lot to bedesired. Wbat be doesn't seem to un-derstand, bowever, is tbat it is tbeCEO's job to set tbe corporate cul-ture and tben to live in tbat culture.If Vic were to commit himself tochanging tbe culture at Nuf Fun, bewould have a lot of work to do.

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C A S E S T U D Y

D First, to create a culture that is in-clusive, team oriented, and diverse,Vic would have to remove Carverfrom the pedestal on whicb be bim-self has placed bim.D Second, be would bave to get pro-fessional belp to learn bow to createand participate in tbe kind of cul-ture be wants tbe company to have."Walking around" once, as be did in1994, isn't going to cut it.D Third, he would have to assemblea strong management team and learnto work with it on issues and goalsinvolving people, just as he does onfinancial objectives and product de-velopment goals.D Fourtb, be would need a directorof buman resources wbo could belpguide the culture so that, for exam-ple, an action plan and new goals andprocesses - monitored on an ongoingbasis-would be developed followinga retreat sucb as tbe company's team-building worksbop.D Finally, he sbould ask Carver tochange. But be'd bave to stop givingCarver mixed signals - on tbe onehand, telling him to listen to bisteam, and on tbe other, threateningto fire him if his products are late.Despite bis faint protests, Vic is re-inforcing Carver's behavior.

In tbe new culture. Carver wouldhave to learn to delegate and to al-low products to be developed witbless of bis imprint. He would bave to

Carver's performance isnot infinitely sustainable.

Neither is his ability torecruit top talent.

learn bow to give credit to others -and the value of doing so. I don'tthink tbat change is beyond Carver,contrary to bis own opinion. But I dobelieve tbat tbe only way Vic couldpersuade Carver to change would beto sbow Carver tbat be bimself waschanging and that sucb cbangewould be better for tbe company.We've seen tbat Carver is highlymotivated by tbe success of tbe com-pany; that message of success is tbeone Vic would have to deliver. (Vic

migbt also consider finding a mentorfor Carver - someone wbo bas madethe transition from developer tomanager and understands the bene-fits of that move.)

A full-scale change of culture atNuf Fun would be a roller-coasterride for the company. Vic migbt beable to smooth the ride by puttingCarver in the role of chief designer,witb senior-level responsibility forproduct direction and leadership butno day-to-day responsibilities formanaging a department. But eventbat move migbt take a year or moreto work out. Vic would have to makesure tbat Carver believed be couldstill make a major contribution andtbat tbe company wouldn't stumblewitbout bim in bis current role.

Carver is an asset under any sce-nario. And if Vic does notbing, thecompany will probably continue togrow for three, five, even ten years-for as long as Carver stays bealtby.But a final word of caution: Carver'sperformance is not infinitely sus-tainable. Neither is his ability to re-cruit top talent. His bealtb may fail,and, as word of bis reputationspreads, bis power to draw talentedpeople to tbe company will erode.Moreover, Carver's output - twoproduct lines per year - may not al-ways be enougb to outpace the com-petition. So even if Vic chooses tbeeasy course, be must be aware tbat

tbe company's growtbwon't continue forever. Ifnotbing else, Vic needs toget to know the otherpeople in tbe product de-velopment department.Developers are usuallyloyal to a product or aperson but not to a com-pany. Vic needs to find

out wbat will keep bis otber talentedemployees engaged and work to gaintbeir loyalty.

Incidentally, it's time for one oftbose talented people - Hinde - toevaluate her career. She's not usingber team-building skills, and sbegets no credit for product develop-ment. It's clear tbat sbe does notbave Vic's ear; be's only humoringber. The longer she stays at Nuf Fun,tbe more ber value erodes. It's timeto move on.

DAVID OLSEN is president and chiefexecutive officer of Patagonia,basedin Ventura, California.

Vic is too concerned with short-term financial results. A team-based structure could helphim position the companyfor long-term success.

No company tbe size of Nuf Funcan afford to be dependent on anyone person. Sucb dependency putsthe company at risk, stunts tbe de-velopment of its people, and limitsthe creativity brought to design andmarketing opportunities.

Wbat if Nuf Fun were to loseCarver suddenly? Tbe companywould be in crisis. Wbo knows if theother designers would be able to riseto tbe occasion; the company's cul-ture bas not prepared tbem to do so.Vic has a bigger problem on bisbands tban he thinks. He sbould fo-cus bis angst - and his efforts - oncbanging tbe company's entire cul-ture to one tbat encourages innova-tion from every employee. Everyonein product development at Nuf Funneeds to bave the opportunity to runwitb bis or her own ideas-for betteror for worse. Only in that kind of aculture can a star like Carver existwitbout posing a serious threat tothe organization.

Of course, ending tbe dependenceon Carver and cbanging Nuf Fun's

32 HARVARD BUSINESS REVIEW July-August 1997

corporate culture is no easy task -particularly for a CEO wbo doesn'tyet understand tbe scope of tbe prob-lem. Vic knows that Nuf Fun needsa team-based culture. But despite hisstatements to tbe contrary, Vic doesnot believe in teams. He bired Car-ver to do "tbe work of a whole de-partment," and be does not see tbatbis talk about a team approach con-flicts witb bis reliance on Cai-ver.

I don't know wbo at Nuf Fun is go-ing to alert Vic to tbat conflict. But ifwe consider tbis bis wake-up call,bere's wbat be bas to do, in botbbroad and specific terms:D Place more emphasis on buildingthe company to be successful overtbe long term. Rigbt now, Vic is tooconcerned about sbort-term finan-cial results. A team-based structurecould help bim position tbe compa-ny for long-term success. I suggestthat Vic figure out wbat team reallymeans and start thinking about howNuf Fun would look if it really ranon team power.

D Work witb bis board of directors.If Vic and tbe directors don't supportthe team approacb, it will fail,n Balance Nuf Fun's demands forquality witb its speed in gettingproducts to market. The Alacrity fi-asco sbouldn't bave happened in thefirst place, but wben it did, Vicshould have been all over tbe processafterward, figuring out what wentwrong and assessing the steps thatled to tbe disaster. Again, Vic'sshortsightedness causes problemsfor bis organization. He bas donenotbing to prevent such a mistakefrom happening again.n Really listen to bis employees. Vicmust be willing to bear about andaddress any problems at Nuf Fun. Ashis conversation witb Hinde demon-strates, be basks in tbe company'sfinancial performance but ig.noresNuf Fun's deeper problems.n Position his buman resources de-partment to lead tbe transforma-tion to a team-based culture. A com-pany like Nuf Fun sbould not bavea human resources department thatserves little more than an admin-istrative function. Building a de-partment tbat can direct employeeeducation and development willstrengthen tbe organization.

DBase rewards and recognition onteamwork and development. For ex-ample, wben a product succeeds, therewards sbould go to everyone in-volved, including designers, engi-neers, and marketers-not simply totbe lead designer. New ideas maycome from individuals, but success-ful products - even Carver's-requirea group effort.DReassign Carver to a positioncalled senior design engineer, inde-pendent of tbe product developmentdepartment. Carver is too valuableto lose, but be is not a team player ora manager. To make such a move at-tractive, Vic can offer Carver a smallsupport staff and tbe autonomy todesign and develop bis own prod-ucts, subject to tbe approval of tbeCEO and tbe director of develop-ment. If Carver is unwilling to ac-cept the position, Vic must let bim

leave. Carver is brilliant, but he isnot more valuable tban tbe entireproduct development group.n Promote Hinde to director of prod-uct development. Tbe change willmake it clear that tbere is a newmanagement direction, a new struc-ture, and a new culture at Nuf Fun.Hinde's promotion will belp moraleamong the otber employees, espe-cially Steve Bellmer and Janet Fal-kan. Given ber reputation, it willalso send the message tbat team-work is now valued witbin a frame-work tbat allows individuals totbink creatively.

Nuf Fun is positioned to be verysuccessful for tbe next few years.Tbere's no better time for Vic tochange his thinking and for Nuf Funto cbange its structure. The level ofrisk is as low as it is going to get. Vicshould not wait.

DAVID H. BURNHAM is a partner inthe Burnham Rosen Group, a con-sulting firm based in Boston, Massa-chusetts, that specializes in leader-ship training, executive coaching,and business strategy.

As Hinde says {paraphrasing Vic),"One of Nuf Fun's real big advan-tages is its diversity - not one singleproduct category accounts for moretban 15 % of overall sales." Diversityis a prudent strategic principle. Vicshould apply it to his employees aswell. Rigbt now, be is at risk of re-ducing bis product developmentstaff to one: Carver. Hinde, Bellmer,and presumably Falkan - all people

Carver isn't a supermanwith a lifetime guarantee.He cannot and will notbe right all the time.

Carver himself admits are very tal-ented-are seriously unhappy. Keep-ing Carver just isn't wortb losingeveryone else.

Although Vic seems to know that,he is reluctant to admit it. His reti-cence will be bis downfall. Unless bemakes more tban a balfhearted at-tempt to get Carver to change, bewill have only bimself to blamewhen tbe company is in a sbamblessome years down the road.

In fact, Vic's lack of action is lay-ing tbe groundwork for just sucb adisaster. If things remain tbe same,most of bis talented engineers anddesigners are bkely to leave-perbapsto strengthen tbe competition. If

34 HARVARD BUSINESS REVIEW luly-August 1997

they stay, they will become increas-ingly disgruntled and unmotivated,soaking up time and resources butproducing little.

Carver isn't a superman with alifetime guarantee, either. Without

Vic has not beenpersuasive about his desire

to foster team^A^ork atNuf Fun; Carver knov^s his

heart isn't in it.

a supportive staff, his stream of ideaswill eventually dry up or lose rele-vance; he is already stealing ideasfrom his subordinates and market-ing them as his own. And he cannotand will not be right all the time.The question isn't, Will Carver'sjudgment eventually cause a productdevelopment failure? The questionsare. When will such a failure hap-pen? and How much will it cost NufFun? Of course, Carver may leaveNuf Fun before he causes that kindof disaster. He enjoys competing,and at Nuf Fun be has created (per-haps unconsciously) a situation inwhich he can compete with bis ownstaff. If bis staff leaves him. Carverwill become bored and begin to lookfor another place where he can com-pete internally as well as in the mar-ketplace. Either way, Nuf Fun loses.

Vic reports that his one plan todate-to persuade Carver to get someexecutive coaching-comes from hisunderstanding of a theory about be-havior being a function of person-ality and environment. So he hasdecided to work on Carver's person-ality. But Vic needs to deal with hothparts of the equation if there is to beany change in Carver's behavior.

Consider the environment fromCarver's point of view. How does heperceive Vic's expectations for bisbehavior, and what are his incen-tives? Right now, Carver believesthat Vic has only two expectations:that Carver's products win in themarketplace and that be keep tbenumber of new-product ideas highregardless of the process. Vic has notbeen persuasive about his desire to

foster teamwork; Carver knows thatVic's heart isn't in it. So the onlyclear incentives Carver has are disin-centives; Meet product deadlines orbe fired. Don't have a disaster likeAlacrity or he fired twice. If Vic ex-

pects Carver to changebis approach, Vic mustchange bis own behavioras well. He must set newexpectations and incen-tives as well as providecoaching for Carver toenable him to learn andunderstand tbe appropri-ate behaviors.

I would recommeadthat Vic do the following:DTell Carver - clearly and firmly-that he not only believes in team-work but also wants and expectsCarver to create an effective team.DTell Carver that his assumptionsare wrong. He cannot continue to bea one-man band, because businessresults will inevitably decline.n Let Carver know that tbe strategicrisks for Nuf Fun are too great for thecompany to be too dependent on anyone person. Let him know that it isirresponsible to insist on operatingthe way be does and that it would beirresponsible of Vic to tolerate tbecurrent situation any longer.DTry to make Carver understandthat building a team requires him torealize the goals of the process hehimself created. Product develop-ment cycles won't stall if he sticksto tbe process; rather,tbe process will en-sure steady, focuseddevelopment.DTell Carver that itwas both unacceptableand discouraging to"improve" BcUmcr'sidea. Let him knowtbat it must not hap-pen again, and ask himto accept responsibility for his be-havior and apologize to Bellmer.

Vic should offer Carver a compen-sation package in which 50% ofCarver's variable pay would be basedon the product development group'sresults and 50% on Carver's man-agement of the team. His perfor-mance on the latter should be mea-sured by the diversity of ideas

generated and accepted and by em-ployee satisfaction levels, wbicbshould be assessed through formalfeedback mechanisms.

If Carver does not agree to tbeseterms, Vic should ask for bis resigna-tion. The risks of keeping him with-out any change far outweigh those oflosing him.

If be agrees, then Vic, togetherwith Carver's new coach, sbouldcarefully plan an immediate meet-ing with the product developmentstaff. Following the principle thatpublic acknowledgment increasescommitment to change. Carvershould apologize to Bellmer and,with Vic, establish the new commit-ment to teamwork.

Vic must also announce that hewill be meeting with Carver and histeam every two weeks to reviewproduct development progress andprocesses. He should monitormorale for several months, until heis certain that Carver is establishedin his new behavior.

If team spirit basn't improved af-ter three months (and assuming thatbusiness results remain steady orimprove), Vic should replace Carverwith Hinde. Hinde may be able toemploy Carver in a "special assign-ment" in which he would assumesole responsihility for particularproduct-development tasks. Thatoption is fraught with risks, how-ever, not the least of which wouldbe that Carver might sabotage his

If the company's team spirithasn't improved afterthree months, Vic shouldmove to replace Carvervsrith Verity Hinde.

colleagues' work. Carver would haveto agree to keep away from over-all product development, and Vicwould need to reinforce that separa-tion. If Carver balked at that plan orfailed to abide by tbe new terms,then again, I would recommend thatVic let him go VReprint9740lTo order reprints, see the last page of this issue.

36 HARVARD BUSINESS REVIEW [uly-August 1997