Erik Peterson

Leadership Case Analysis

October 21, 2010

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.

Interpersonal and organizational relationship with colleagues

Developing a strong network is critical for a manger in order to formulate and implement agenda
and to measure performance. Peterson had many issues with his supervisors and his
subordinates. From the beginning, the reporting structure was awkward. Peterson reported to
Hardy, who did not have experience in the cellular industry and often turned down or ignored
Peterson’s requests and initiatives. Peterson also had relationship issues with Green and Cantor
in the License Acquisition division. In addition, Peterson had difficult relationships with his
subordinates, particularly Andrews, the chief engineer of the GMCT. Furthermore, the
organizational structure hampered good communication. As time went on more layers and filters
were put in place at CelluCom; creating distance between Peterson and Jenkins, and fostered a
bureaucratic organization.

Dynamic and rivalry within the organization

When there is a rivalry within a team there is an erosion of trust, which hampers team members’
willingness to be open about problems. Lack of trust will shut down an open communication
flow. Peterson had to manage the dynamic and rivalry within his team at GMCT. There were
conflicts among Peterson’s staff such as between Andrews and Jones; Andrews and Burns and
Andrews and Miczek. Besides trying to manage and reconcile these conflicts, Peterson tried to
manage the operations as well. He needed to make sure the equipment ordered by GMCT would
arrive in a timely manner for the turn on target date. In addition, he needed to cope with the
changes in the corporate requirements for the equipment specification and back-up 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.

Relationship with external forces

Although Peterson was successful in building good relationships with the suppliers as evidenced
by numerous last minute orders that arrived on time, he had challenges in building relationships
with local communities and local government agencies such as utility, police, fire department
and others in the GMCT license areas as he sought to avoid backlash from local residents as they
were the GMCT’s potential customers.

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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.

Lack of respect and trust

Respect in an organization is an important factor in creating a productive workplace culture.
Lack of respect, which could be stemmed from the lack of competence and trust among parties,
will lead to difficult relationships. This could happen when there is a leadership change, which
could lead to an increasing risk of the organization failure. Without a solid core organizational
identity or value, members will have difficulty assimilating. The fact that Hardy and Peterson
did not have experience in the cellular industry might have played a role in the troubled
relationship. Although Peterson respected Hardy’s organizational ranking, Hardy did not respect
Peterson as he often was dismissive of Peterson’s ideas. Hardy’s and Peterson’s background and
responsibilities also attributed to the problem. Hardy, a financier, and Petersons, the project
manager, both had vastly different views and incentives for the project. Green also showed
disrespect for Peterson when visiting Fort Wayne system, which created tension among them.

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.

Weak organizational leadership

GMCT needed strong a leader with the courage and ability to make changes to get the project
back on schedule. Peterson needed to demonstrate strong leadership to gain the confidence of his
subordinates. He was unable to accomplish this. His overly participative leadership style led to a
lack of respect and resistance from members. The fact that Hardy could not fulfill the request of
Peterson to replace Andrews indicated the lack of courage on Hardy’s side and Peterson’s lack of
ability to make his case.

Relying on previous success

Often managers rely on past successes and ignore new challenges. In this case, Jenkins thought
this type of project was successful in the past but did not pay attention to the GMCT project. He
viewed this as an important and critical project for the expansion of the CelluComm and yet he
did not involve himself enough to impact its success, trusting Hardy to get the job done.

Lack of communication and clear vision

Having a clear vision is very important in directing, aligning and inspiring people. A vision that
is not clearly communicated among stakeholders will lead to confusing of direction, and will
impact the time to completion for the project. Throughout the time that Peterson had been with
the company, the direction of the company had been changed several times such as the
specification of the equipment and backup system were changed to accommodate digital signal

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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

Actions Peterson should take to turn the situation around

Despite some progress, Peterson still had a long way to go in order to turn the situation around.
First, he needs to find ways to engage Hardy and encourage him to make rational decisions. He
needs to make sure Hardy understands that his success in the project would also reflect on Hardy
as well. As he did not have authoritarian power over Hardy, Peterson should use some influence
tactics such as “reason”, “friendliness” and “assertiveness”. He should convince Hardy to
understand long-term financial gain from the success of the project by providing facts, data, and
written evidence to support his request to reassign Andrews and his ideas of providing free phone
equipment to local government in a forceful manner. As both were MBA graduates, Peterson
could create a friendly atmosphere using reference power with Hardy to accomplish this request.
Should the request not go through, Peterson should find a way to communicate directly with
Jenkins by asking for his opinions. In order to do this, Peterson should visit the Los Angeles
office more now that he had hired the construction coordinator.

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.

Peterson’s preparation for his two day meeting with Knight

Having a good plan is a step toward a success. In this case, Peterson would need to prepare a
logical plan that would need to be implemented. Some of the work he had done such as the
reorganization was a good step toward better implementation of the project. He would need to
prepare a cost analysis to use the local fire fighter tower jointly. This would not only save money,
but also could speed up the process to meet the turn-on target date. The new towers could be
built later on when the turn-on date was met.

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.

Agenda for the meeting

Peterson needs to show that progress had been made and the challenges ahead. He should
recommend a pause in changing the specification of the equipment and back-up system until the
turn on point was met. A change in the equipment and back-up system could be done with the
new towers built after the turn on date or could be done later. He also should ask Knight to set
up a clear communication channel in the future, so that expectations on both sides are clear. Very
often when a message is conveyed through different channels, it tends to lose its intent along the
way, especially when traveling through a channel that does not have expertise with the message.

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.