Deirdre s Story Vijay Govindarajan and Chris Trimble. This document may be copied and shared freely as long as the format is retained.

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1 Deirdre s Story Ch Deirdre s Story 1 My father Marcus informed me that he planned to retire. Then, he surprised me by asking me to lead the farm and take it in new directions. I couldn t say no. 2 I offered Bull a new position, chief operating officer, to try to keep him on the farm. 3 Marcus died. I was alone, in charge, and feeling the full weight of Windsor s legacy. 4 I reviewed a dismal income statement. Bull promised me he d work harder. Others offered some ideas for incremental improvements, but we needed something radical. 5 I scared the animals by discussing the prospect that McGillicuddy might buy us out. Then, I challenged them to come up with bold new ideas. I organized a Big Idea Hunt. 6 At the Big Idea Hunt, I chose Stella s luxury wool idea plus three others as finalists. 7 We decided that Stella was the winner. The farm would build a luxury wool business. Bull was resistant. After we celebrated, it dawned on me just how much work lay in front of us. 8 Bull and I chose Mav to run the luxury wool business, and he agreed. We considered choosing someone more experienced, but that would have meant taking them out of their existing critical roles. I told Mav to get things started by asking for volunteer help. McGillicuddy made a fair offer, but I declined. Luxury wool would have to succeed! 9 Mav s progress report was a disaster. There was no progress. I couldn t believe it. 10 Later, I realized that while everyone believed luxury wool was important, they all believed that the core business was even more important and more urgent. I chose to have Mav report to me, and told him that I would give him a Dedicated Team. 11 The animals were mad when I announced that Mav would have a Dedicated Team and the core business would have to find a way to keep up with three fewer animals. Some perceived that Mav was getting unfair special treatment. 12 Mav lobbied for combining yarn making operations and for combining sheep and alpaca care. It seemed to make imminent sense, so I said yes, over Rambo s objections. 13 We learned that it was impossible to combine yarn making operations, so I decided to invest in a separate alpaca yarn production line. 14 I was very worried about cash flow and started trying to arrange loans. I was nervous about Mav s proposal to hire Andrea from Peru, but went along.

2 15 Andrea had a positive impact. With luxury wool doing well, I stepped back a bit and let Mav run the show. Sheep and alpaca were fighting. I arranged for some help from a neighboring farm. Even so, I found I had to intervene to get everyone to recognize that both the core business and the new one had to succeed if the farm were to survive. 16 While pleased with the luxury wool s growing revenues, I was concerned about profitability. I asked for Einstein s help in analyzing the numbers, and he showed Mav and I how to manage the business as a disciplined experiment. 18 I faced a tough performance review of Mav. He missed his plan by a mile. Einstein suggesting that I try to assess whether Mav ran a disciplined experiment. 19 Times were tough, and at one point, the animals almost revolted. But Einstein and I persuaded the team to work hard for just a few more months and luxury wool made it to profitability. I was pleased to show McGillicuddy the door.

3 Bull s Story Ch Bull s Story 2 I expected to run the farm when Marcus retired, but he offered the job to Deirdre instead. Deirdre offered me a newly created role as chief operating officer. I promised to think about it. 4 Deirdre showed me a dismal income statement. I promised Deirdre that I d work harder and find ways to be more efficient. 5 Deirdre challenged us to come up with bold ideas for entirely new businesses. I thought that might be a distraction, but went along. 7 Deirdre thought Stella s idea was the best and announced that she would proceed to build a luxury wool business. I was very concerned about all that could go wrong. 8 Deirdre and I agreed that Mav should run the luxury wool business. I didn t want to give up someone even more critical to day-to-day operations. Later, at a farm wide meeting, I struggled uncharacteristically while trying to get the animals charged up about making the core business faster, stronger, and more efficient. They had been charged up about innovation, and they were demoralized by my back to business as usual message. 9 I couldn t believe it when Mav chose to break procedure and hire the alpaca on his own. Just where was this innovation thing taking us? I phoned McGillicuddy to discuss career options. 10 I was furious when Deirdre told me she was taking away three of my best people so that Mav could have a Dedicated Team. 11 But, ultimately I chose to stay with Deirdre, and to help her and to help the farm. I d do what I d always done: work as hard as I could keeping the core business in top condition. 15 The fights between the sheep and the alpaca became disruptive. To Mav s dismay, Rambo and I raised the possibility that perhaps the alpaca should go. 19 The luxury wool business continued to consume cash as it grew. It put a lot of pressure on everyone. But we finally made it!

4 Mav s Story Template Ch Mav s Story 3 I broke the news to Deirdre that her father Marcus had passed away. 8 Deirdre asked me to run the luxury wool business. It seemed risky, and I worried about what Deirdre would think of me if it failed, but I accepted the challenge. 9 I struggled to get luxury wool off the ground. It was much harder than I imagined it would be to get support. It was hard to get approval to hire the alpaca, hard to pay them properly, hard to get money to build a good website. Maisie, who had promised help, didn t find time for it. I asked Rambo for help, but that got me no further. Deirdre was furious when we reported our lack of progress. In anger, I tried to break some rules to hire a few alpaca without approvals. Bull caught me doing it. It was tense. 10 Deirdre let me pick a Dedicated Team to build the luxury wool business. I chose Maisie, Max, and Matt. 12 Everyone was giving me a hard time about my special treatment. Even Rambo made me send the newly arrived alpaca to live on the worst grazing land on the farm. And, he refused to share his yarn making equipment. 13 Deirdre insisted that we combine sheep and alpaca care. That worked. She also insisted that we combine yarn making. That did not work. With Stella s help, we figured out why. The processes and organizational models for commodity yarn production and luxury yarn production are incompatible. So, we decided to build a separate yarn production facility for luxury wool. 14 Our first big customer visit did not go well. I realized I needed more expertise on my team. Stella helped me recruit Andrea. 15 Deirdre and I decided to give Andrea more control, and the business really started to move forward. I was hiring more and more alpaca; we were getting great customer feedback. The growth strained the staff, however, and the tensions between the sheep and alpaca rose. The newfound success made the alpaca a bit cocky. There were nearfights. 16 Deirdre insisted that I work closely with Einstein to evaluate how the luxury wool business was doing and to manage the business as a disciplined experiment. 17 Einstein and I crafted a plan from a blank page and scheduled regular meetings to review progress. We made regular updates to the plan. We treated a new online marketing campaign as its own distinct experiment.

5 18 I was really sweating out my performance review. I was way behind plan. Deirdre let me off the hook sort of. She agreed that the numbers in the plan were too uncertain to be reasonable yardsticks for assessing my performance but, she lay out some tough alternative criteria. She d be assessing me on whether I ran a disciplined experiment. 19 I felt great about my performance review. But the other animals were mad at me because luxury wool still wasn t profitable, and that was making life on the farm hard for everyone. There was nearly a revolt, but Einstein saved the day in an emergency meeting. We made it to profitability a few months later.

6 The Stories of Stella, the Sheep, and the Alpaca Ch Stella s Story 6 I returned to the farm during the presentations for the Big Idea Hunt. I suggested an offthe-cuff idea to build a luxury wool business. Deirdre asked me to come up with a detailed plan, and later decided I had won the contest. 12 Deirdre asked me to help welcome the alpaca, and make sure that the sheep were comfortable with them. I prepared a big welcome celebration, but the sheep were intimidated and ran off. The alpaca struggled on the back forty, where they did not get enough food. I suggested to Deirdre that it would be a good idea to let the sheep and alpaca graze together. 13 I worked hard to get the sheep and the alpaca comfortable with each other. Eventually, they happily shared the same land. But, trying to combine yarn making was a disaster. I was able to contact an expert in Peru who disentangled the situation. There was no way to combine commodity and luxury yarn making because the processes and organizational models are very different. 15 I had to work hard to keep the sheep and alpaca from fighting. At one point I stooped to bribing the alpaca with cookies. Ch The Sheep s Story 6 Stella proposed that we build a luxury wool business by bringing alpaca to the farm. 11 The pressure to perform just kept going up and then Mav got his own Dedicated Team and that took resources away from the core business it seemed unfair. 12 The alpaca arrived. They are strange animals. We didn t warm to them immediately. 13 One day, the leaders of the farm decided that we should live with the alpaca, but none of us wanted to. Eventually Stella got us closer together, and eventually it worked. 15 The alpaca became unbearably arrogant as the luxury wool business started to grow, and there seemed to more of them each day. Ch The Alpaca s Story 12 We arrived on the farm. It was awkward. We went to live on the back forty. There really

7 wasn t enough food for us there. 13 One day, the leaders of the farm decided that we should live with the sheep, but none of us wanted to. Sheep are weird. Eventually Stella brought us closer together. 15 We really started to feel great as the business grew. But the farm got more and more crowded as more alpaca arrived. The sheep resented our success.

8 The Stories of Maisie and Andrea Ch Maisie s Story 2 I showed Deirdre and Bull my new hat, which Stella had sent me from Peru. Such soft wool! 6 In the Big Idea Hunt, I proposed a new magazine, Bovine Style. 14 I visited a prospective customer with Mav and Matt, but the customer didn t seem at all interested in my brochures with fashion designs. She was only interested in grades, colors, prices, and shipping times. Later, Mav replaced me with Andrea, an expert in luxury wool marketing from Peru. I was very upset. 18 Later, I proved myself an ace at social network marketing. I loved the job! Ch Andrea s Story 14 I had a lot of work to do from the moment I arrived. Windsor Farm did not understand luxury wool. I changed the pricing, the product line, and the sales model. Mav, Max, Matt, and Maisie were not comfortable, but it had to be done. 15 Mav formally gave me more control over more decisions. The luxury wool business began to grow. 17 Mav and I decided to put Maisie in charge of social network marketing.

9 The Stories of Rambo and Einstein Ch Rambo s Story 4 Deirdre stopped by, looking for ideas on how to improve the farm s operations. I suggested some improvements to our wool production scheduling. 5 Deirdre organized a Big Idea Hunt. My first reaction was that it would be a big distraction. We were plenty busy already! 8 I learned that Mav, as the leader of luxury wool, would be reporting to me, as leader of ovine operations. 9 Mav had trouble getting any help in getting the luxury wool business off the ground. I tried to help, but I wasn t any more effective than he was. 10 Deirdre decided that Mav should report directly to her, so that I could focus on the core business. 12 Mav wanted the alpaca to have some of the farm s best grazing land. I sent them to the back forty instead. Then, Mav wanted to use my yarn making equipment. But that would just cause interruptions and complications. 13 Deirdre insisted that we combine animal care operations. After some initial reluctance on the part of the sheep and the alpaca, that worked out fine. She also insisted that we combine yarn making operations. That was a disaster. Mav had to build his own yarn production shop. 15 As the farm became more crowded with new alpaca, the fights between the sheep and the alpaca became a big distraction. Bull and I wanted the alpaca to go. Deirdre rented some land on a neighboring farm to ease the situation. I insisted that the rent not come out of my budget. Ch Einstein s Story 6 In the big idea hunt, I proposed that the farm produce enormous eggs from genetically engineered chickens. 16 Deirdre asked me to help her review the numbers for luxury wool. I worked with Deirdre and Mav to manage the fledgling business as a disciplined experiment. 17 I worked with Mav to craft a plan from a blank page, to update it when we made changes, and to carefully test our assumptions.

10 18 I persuaded Deirdre to assess Mav s performance based on whether or not he ran a disciplined experiment. 19 I convinced the farm to give luxury wool just a few more months to get to profitability and it did.