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Heather Adams
Bob Ciccolella
Kevin Lamparter
Borey Pek
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Fact Pattern
Erik Petersen, an MBA graduate from Dartmouth College, was hired seven months earlier as the
General Manager of Green Mountain Cellular Telephone (GMCT) in Hanover, New Hampshire.
Peterson had a B.S. in electrical engineering from MIT and was an officer in the U.S. Army
Signal Corps. His interest in the cellular field had grown for the last several years. When hired by
Jenkins, the founder of the CelluComm, Peterson thought he would be working directly with
Jenkins. However, he would instead be reporting to Hardy, the Director of Budgets and Plans.
Like Peterson, Hardy had no experience in the start-up project or the cellular field.
Considered to be profitable, GMCT was one of three pre-operating systems being built by
CelluComm and expected to serve about 400,000 people. GMCT was in the construction phase
for one and half years before Peterson started and was still in the start-up stage. GMCT was to
operate 21 cell sites; 16 sites were anticipated to be ready by the turn-on date and five others in
the eight months following. By March, GMCT was one month behind target and its turn-on-date
had been revised from February 1st to April 1st.
When he arrived to Hanover, Peterson convinced the corporate office to terminate the contract
with the construction subcontractor due to poor performance. He then hired a new subcontractor,
Granite State Construction Company based in New Hampshire, which was led by Smiley
DiCicco. At this time, Peterson determined there were significant interpersonal relationship
issues among his staff, including between himself, Hardy and Andrews, the chief engineers.
When he first started Peterson knew that Andrews was not capable of leading a start-up project
such as GMCT. Andrews could not manage the equipment inventory and had conflicts with other
staff members including Jones, the supervisor of radio engineering, and Miczek, Peterson’s
assistant. After failing to have Andrews reassigned to another project, Peterson started to coach
him personally. However, Andrews seemed to not improve and became somewhat resentful.
To smooth the operation, Peterson promoted Miczek and hired more key personnel. However,
the hiring and salary compensation did not go well, as corporate would not honor Peterson’s
compensations offerings. At one point Peterson had to reconcile the salary conflict between
Burns and Jones when Jones found out that Burns made much more money than him. To ease the
tension between himself and Andrews, Peterson decided to hire a construction coordinator.
During this time, Peterson had implemented a participative leadership approach by organizing
weekly meetings in which all employees attended to build trust and eliminate misunderstandings.
Peterson needed to build good relationships with the local government by offering free phone
equipment to the police, fire and emergency service operations. However, this initiative was
turned down by Hardy for financial reasons. In addition, Peterson also was challenged by the
Corporate decision to change the equipment specifications and back-up systems. Although it was
understood that the change was to adapt to emerging technology, it put a lot of pressure on the
GMCT team in regards to the turn-on target date.
In March, the new Vice President Dash Harper was hired and Chip Knight was appointed
Director of Pre-Operating Systems. Hardy had become Harper’s assistant. In the next two
weeks, Knight would visit the GMCT project to learn of the issues facing the project first hand.
This is an opportunity for Peterson to build a stronger relationship with his new boss.
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B. Analysis
Key problems that Peterson tried to manage
Since his assuming of the position at GMCT, Peterson had been managing several critical
problems impacting his performance and the progress of the GMCT’s pre-operating system.
Essentially, Peterson was trying to create and manage trust among his team. He understood the
frustration among the team as he was new to the position. When there was a change in
leadership, a culture tended to change as well. In this case, the team viewed the change in
leadership as the change in culture and they had to try to rebuild their trust with the new
manager and new team members. Peterson spread himself out too thin trying to adjust and build
relationships with employees, specifically with Andrews. Peterson was unable to quell the office
infighting that caused the delays in schedule and was unable to penetrate the corporate
bureaucracy to allow him to hire, fire and negotiate with his local leaders.
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The underlying causes of the problems
Reporting structure with Hardy
A formal reporting structure is an important factor in making the communication flow smoothly
and enabling productive relationship. From the beginning, the reporting structure was not formal.
Peterson was assigned to report to Hardy, who had no experience in the industry and had
different incentive than Peterson’s. Hardy, hence, could not make effective decisions and provide
guidance to Peterson and became the barrier between Jenkins and Peterson.
Peterson’s sour relationship with Andrews also stemmed from a lack of respect. Andrews did not
have respect for Peterson’s lack of experience in the industry. Meanwhile, Peterson didn’t respect
Andrews because he didn’t have a college degree. Furthermore, seeing Peterson as new to the
project, Andrews needed time to adjust to Peterson’s leadership style and demands.
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and phones and an emergency plan. This created confusion for the GMCT team and forced them
to make changes and redo what was done already and constantly revise their future plan.
Peterson even had a different vision than corporate, Hardy in particular. Peterson wanted to reach
a larger customer base by providing a free equipment incentive, while Hardy wanted to focus on
the high margin profit customers.
Peterson’s Effectiveness
Although challenged by a strained relationship with his supervisors and subordinates, Peterson
had made some good progress. His ability to convince corporate to change the subcontractors for
the project construction and hire local employees was a success.
His decision to hire Hanes as a construction coordinator to manage the construction process was
rational. This new position could help ease the tension between Peterson and Andrews and give
Peterson more time to concentrate on the strategy to meet the target date. Peterson also managed
to convince Burns to lower his salary to satisfy Jones. In addition, he coached Andrews on an
individual basis, empowering Andrews to lead weekly conference calls and encouraged him to
establish an inventory system. Furthermore, he fostered a culture of participation among his staff
by holding weekly meetings in which employees could discuss issues and share their concerns.
Peterson’s decision to order a mixture of the open-bay or closed pickups was considered
effective. This approach was a compromise to satisfy Burns and appease Andrews and ease their
already strained relationship.
C. Synthesis
As he had no experience in the start-up and in the industry, Peterson should consult Jenkins
about networking with those in the company who were in charge of this process before or join a
network or association of such professionals.
More importantly, Peterson needs to communicate more often with his staff about how the
success of this project would reflect on them. He needs to make sure they understand that they all
have a stake in this project. In order to do this he would need to create a culture of trust among
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all staff and encourage them to self-manage so that they could be intrinsically and extrinsically
motivated. This would make them feel valued and in turn create a high performance team.
He should also prepare a brief meeting between Knight and some local government officials to
show that the company cares about its customers. This would prove that Peterson had a good
relationship with the community. He should also prepare a long-term financial and operational
analysis with his proposal to provide the free equipment to local government. After all, most
companies must care and contribute to the success of the local community to be sustainable.
D. Generalization
This case highlights the challenges faced by a start-up project and a change in leadership. In the
early stage of the project, chaos could happen. The staff doesn’t have the same values and vision
as the leader. It would take time for the staff and leader to understand each other. Differing
values and vision among members will lead to strained relationships, which in turn will lead to
an unproductive work place, resentment among members and failure of the project.
E. Lessons learned
This case showcases a challenge in leadership change and failure. The change could bring
disruption to the workplace as it could create lack of respect and mistrust among members. The
leaders with weak leadership will create chaos. A leader that cannot create a culture that
promotes good working relationships and expresses values and vision clearly will not be
successful. Furthermore, the reporting structure should be set in such a way that all members
should have the same incentive and alignment in order for the team to work well together.
Finally, management should give start-ups maximum latitude and provide clear guidance, and
support. Start-ups need oversight, but not micromanagement. Leaders on the ground need the
authority to make decisions that affect the critical path, and corporate has to listen to their
requests and provide resources needed.
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Work cited
Allman, & Sonnenburg. (1993). Taking the Lead: Management Revolution. Telecourse Study Guide
Gabarro. (1987) The Development of Working Relationships. In J.W. Lorsch (Ed), Handbook of Organizational
Behavior, Chapter 12, 172-189; Prentice Hall.
Jick, (1987), Influence Tactics, Harvard Business School Publishing.
Probst, & Raisch. (2005).Organizational crisis: The logic of failure. Academy of Management Executive, 19, 1, 90-
105.