HBS Concordia Casting Company Case Review

Now the big question: If you were Stuart McMillen what would your goals, plans, and priorities be for 2003?
In 2003, McMillen should look for new employment. Often times, one person can do a lot to begin change, a new leader with fresh ideas may need to move in to move the organization to even higher ground.
If he leaves at the height of his career, accomplishing CAPS, it will not be seen as a resignation, rather a move back to consulting. Other opportunities will abound to aid other organizations in transition.

TimeLine (Cont)
TImeLine (CONT)
2000- Huntington & Wells Consulting advised a distributed organization for CIS
Corporate data processing functions separated from operating divisions
Regional servers hooked to central hub to assist service clusters of operating divisions
Corporate staff refocuses only on:
Corporate systems development
Decision support
Long range planning
Policy setting
Communications
Corporate IT standards
Database management (DBM)
Business systems consulting as needed throughout corporation

TimeLine (Cont)
2000- Huntington and Wells proposed CIS Organization Structure to look like:

This system was not adopted as you will see below
Timeline (cont.)
2000- Concordia's vendor – Centronic Computers Inc. announced they have discontinued their line and would no longer support
Did offer to help transition Concordia to a vendor that still offered support
Vendor was on shaky footing however and may not have long term viability
Reinvigorated need for new CAPS as soon as possible
2001- Revenues reaches $2 billion.
2002- CCC had four major business segments.
Automotive (50% of CCC),
Machine Tools,
Precision Parts, and
Fluid Controls (combined 50%)

2002- Under McMillen, CIS has:
Constructed a $10.6 million wing centralizing all FWRCC CIS staff in one location
100+ staff members
80 in FWRCC
22 staff members were in Eastern Regional Computer Center (ERCC) in Hagerstown, MD
Replaced mainframe in ERCC with a LAN
Eventually will be part of expanded network under CAPS
Will serve all divisions of corporation with each division maintaining their own systems
Eventually 300 PC's will be connected into new system

TimeLine (Cont.)
TimeLine (Cont)
TimeLine (Cont.)
 ~1997- Stuart McMillen of Huntington and Wells consulting services was consulting CCC and the then Concordia's Corporate Information Services (CIS) Director Jim Butler
1997- CIS chooses Hewlett Packard (HP) with Widows running on a UNIX server to develop a new CAPS
Originally estimated to take 15 programmer years (underestimated as you will see later)
 1997- Management was not comfortable with a centralized data utility approach as Concordia was purposely decentralized allowing the acquired entities to remain self-managed and controlled.
1998- Jim Butler resigns
1998- Stuart McMillen was hired to replace previous Director/ CIO of CIS Jim Butler

TimeLine (cont)
1990's- Diversified by acquiring other businesses allowing them to remain autonomous profit centers.
1990's- Original CAPS required major overhaul
Software and hardware maintenance was difficult, time consuming, costly
Modern programmers hard to find as they had to learn a little used foreign programming language that was archaic
With acquisition of autonomous SBU's, the centralized system needed to be distributive yet all-encompassing and coordinated.
1995- Then Director Robert Sherman is promoted to Corporate VP and Treasurer- remains influential
1995- Jim Butler was hired by CCC to be the director of Corporate Information Services (CIS) charged with building a corporate wide Information System (IS)
Envisioned a single vendor centralized corporate data utility integrating several systems 

CAPS
The Rise of Stuart McMillen

By Nathan J. Kerr
Three Sections of presentation
The What
Timeline of events
Three Questions Posed
From Stuart McMillen's perspective, what were the key problems he faced as he developed the CIS organization from 1998-2002?
From the perspective to CIS's key customers and stakeholders what did Stuart McMillen do well? Where did he fall short?
Based on the information presented in the case how would you assess Stuart McMillen's performance?
The So-What
Three Questions Posed
What factors likely accounted for the repeated underestimation of the CAPS project? How could these be mitigated in the future?
The case notes that Stuart McMillen faced severe staffing challenges during his time with CIS? If you were in his shoes how would you have responded to those difficulties?
Evaluate the effectiveness of Stuart McMillan's communication with his peers and stakeholders? What would you recommend that he do differently?
The Now-What
Final Two Questions
CIS obviously was under tremendous pressure to deliver CAPS while keeping the business running. What strategies could he adopt to mitigate some of the pressure and potential risk?
Now the big question: If you were Stuart McMillen what would your goals, plans, and priorities be for 2003?
WHAT
"Those who don't know history are doomed to repeat it."
Edmund Burke

Concordia Casting Company is based out of Fort Wayne, IN and also has a network hub in Hagerstown, Maryland.
Began as a supplier of auto parts to the auto industry.

Timeline
Could run 16 batched reports
Order file reports
Order analysis
Customer allocation
Delay notices
Stock status
Stock usage
IN-process report
Shipment report
File balance
Account receivable
Physical inventory
Weekly inventory analysis
Forecasting
Product history
Marketing inventory
File maintenance
In house developed so software was original programming
Timeline (cont.)
2002- CAPS still has not been reformed to the new HP/ Windows/ Unix system
Estimates now are at 75 programmer years due to now having
420 on-line programs
750,000 lines of code
126 batch programs
350 user procedures
40% more functions added to original system
Deadline now set at late spring 2003

2002- Under McMillen, CIS has:

TimeLine (Cont)
Evaluate the effectiveness of Stuart McMillan's communication with his peers and stakeholders? What would you recommend that he do differently?
Without being on board and only reading what was given:
Be "pushy" without being off-putting. Motivation and passion is different than being rude.
One is contagious. One is off-putting
Be "pushy" when advocating for employees. This shows you care. Old saying says "No one cares how much you know until they know how much you care!"
Be careful with layers placed between the leader and the lower level employees.
If added layers are needed, be accessible. Leverage technology to do so.
Train subordinate managers in leadership. This will pay for itself in lower litigation and employee turnover.
Only hire the best leaders/ managers
Be honest about deadlines, goals, etc. with all levels of leadership (up, across, and down).

Timeline (cont.)
Based on the information presented in the case how would you assess Stuart McMillen's performance?

I believe the customer perspective is everything. Even if incorrect, perception drives results. Results drives productivity or decline.

So What

What factors likely accounted for the repeated underestimation of the CAPS project? How could these be mitigated in the future?
Over reliance on Huntington and Wells.
If they were wrong so many times, why are they still consulting?
Hire a broad range of consultants with differing estimates for better consensus in the future
Better communicate to non-technical business leaders:
the more add-ons, the longer and harder as well as more expensive the transition to new CAPS.
Estimates are only as accurate as the current situation at time of estimate
Although pay is important and should be increased, a work culture that crosses generational bounds
Better management training to lead and inspire change

The case notes that Stuart McMillen faced severe staffing challenges during his time with CIS? If you were in his shoes how would you have responded to those difficulties?
Advocate for better pay. Attempt to promote within when possible.
Advocate for better work climate
Studies show younger workers care as much or more about intangible perks than they do pay
Onetime costs such as better parking, gyms, break rooms etc. (Google is an example)
Can't change location such as Fort Wayne- but can make the work place enticing often cheaper than daily operations in expensive locales like Silicon Valley
Better command climate. Respect for older workers while catering to newer workers
Reassure old timers they are not coding themselves out of a job
Honesty and team building to embrace inevitable change
Now What

CIS obviously was under tremendous pressure to deliver CAPS while keeping the business running. What strategies could he adopt to mitigate some of the pressure and potential risk?
I think McMillen came in with a clear vision and did his part to revolutionize the culture at CIS.
One thing he may have done was too much in such a small period of time. However, the consolidation of employees in one wing was (in my opinion) a positive.
He could have better advocated for higher pay and perks in order to retain good employees for the future CAPS.
A robust cross training platform could have resulted in newer employees learning the older language while training older employees on newer languages.
Find the talent of each system and create teams developing future CAPS while retaining legacy CAPS.
Authorize whatever overtime necessary to deliver and transition CAPS NLT September 2003.
Cons:
The major system and focus of the CIS was the on-time and seamless delivery of new CAPS- failed to so far deliver
Although budget more than tripled for McMillen, Inability to retain employees and adequate staffing within budget confines.
Inability to lead cross generation teams or train lower managers to do the same
CIS is now perceived as slacking off attention to legacy CAPS system in favor of new one
This resulted in negative feedback from shop level seeing legacy CAPS suffer and higher leadership feeling new CAPS being ignored.
From Stuart McMillen's perspective, what were the key problems he faced as he developed the CIS organization from 1998-2002?

Continuous patchwork upgrades were further complicating legacy CAPS system
Had the system gone down one day, all production would cease.
The language was archaic and unknown to modern engineers
New generation of workers approach work ethic differently
Caused disconcertion with older workers from different generation
Felt entitled without paying their dues
Pay was not competitive and it took 90 new hires for 30 to stay longer term
Location in Fort Wayne was not Silicon Valley or the Big Apple
To mitigate, outside contractors were used at a higher price and lost time due to flying in and out
Underestimations by consultants converting old to new CAPS resulted in cost over-runs and a missed deadlines

Timeline
(cont.)
2002- Huntington and Wells believes CIS has expanded to where another layer of management needed between McMillen and seven direct reporting managers
They proposed the following structure for efficiency:

Their proposal was a three-tiered structure because
McMillen has too many direct reports limiting time to interact with corporate and divisional leadership
Needs more management to handle the increased size of department
Greater division between line and staff elements for longer term vision
TIMELINE (cont.)
2002- Instead McMillen went with a differing model still adding a layer between him and the seven managers:

Timeline (cont.)
This would help alleviate the following concerns:
Conversion project soaking up too much personnel causing tabling of other projects
No one left for:
Recruiting
Training
Performance evaluations
Career planning
Project planning
Project demand for new apps
E.g. newer supply chain management systems based on internet and XML tech instead of EDI systems
Dozens of programmer years of undeveloped systems in anticipation of 2003 onboarding of CAPS

From the perspective to CIS's key customers and stakeholders what did Stuart McMillen do well? Where did he fall short?

Pros of where Stuart McMillen did well
He was a brash leader with clear vision- marked difference than predecessor
Consolidated team in two locations- majority under new wing in Fort Wayne
Modernized business model for CIS
More command and control
Able to make due well enough with legacy system until new CAPS may one day come online
Helped grow overall business to operate 7 days per week with 30% increase in long term contracts

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