ART’s Peter Vyas

ART’s Peter Vyas; Instruction Read the case before write Task:              Assume that you were invited to advice to ART’s Peter Vyas.  What recommendations would you submit to him, and why? Process:          Before writing your recommendations you may want to address the following issues: 1.   As Peter Vyas, how would you handle the expenditure request for the re-launch of the mini water oxidation system? 2.   As Cynthia Jackson, would you approve the expenditure request if Vyas sends it up to you? 3.   How effective has Vyas been as front-line manager at ART? How effective has Jackson been as an ART division vice president? 4.   How has Vyas managed the global challenges this project involved? 5.   How has ART been able to foster innovation and an entrepreneurial environment in the context of a large corporate entity? Policies:         You are NOT allowed to use or consult any other information source in reference to this case.  You should do it all by yourself without any assistance whatsoever. You should clearly state in your report's cover page that you comply with these two conditions. ________________________________________________________________________________________________________________ HBS Professor Christopher A. Bartlett and Heather Beckham prepared this case solely as a basis for class discussion and not as an endorsement, a source of primary data, or an illustration of effective or ineffective management. Th is case, though based on real events, is fictionalized, and any resemblance to actual persons or entities is coincidental. Ther e are occasional references to actual companies in the narratio n. Copyright © 2010 President and Fellows of Harvard College. To orde r copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business Publishing, Boston, MA 02163, or go to h ttp://www.hbsp.harvard.edu. This publication may not be digitize d, photocopied, or otherwise reproduced, posted, or transmitte d, without the permission of Harvard Business School. CHRISTOPHER A. BARTLETT HEATHER BECKHAM Applied Research Technologies, Inc.: Global Innovation’s Challenges On June 5, 2006, Peter Vyas paced his office as he grappled with a request for $2 million to re- launch a mini water-oxidation product. Despite two fa ilures to bring this product to market over the past three years, his team was confiden t this latest iteration was a winner. For Vyas, general manager of the Filtration Unit of Applied Research Technologies (ART), the request presented a major challenge. He recognized th at his team had worked tirelessly to make this project a reality and strongly believed they were now headed in the right direction. But he also understood that the Filtration Unit’s track record of failure during this product’s development had hurt its credibility. If he supported the proposal, he knew he would be putting on the line not only his own personal credibility but al so that of the entire unit. Due to the project's size, final approval would be made by Vyas’s boss, Cynthia Jackson—the newly appointed vice president of ART’s Water Management Division. Jackson was acutely aware of the mounting losses in the Filtration Unit, and sh e had already devoted a significant amount of time trying to get them back on track. She had confided to one of her colleagues: When I took on this assignment, I was told my first task was to “fix” the Filtration Unit. The unit only had one revenue-generating product line and had failed to bring a profitable new product to market in five years. It was clear that I was expected to either turn it around or shut it down. I’m trying to protect them and ensure they get su pport, but my initial feeling is if they are to survive, they must become much more disciplined. They seem to be making progress on that front, but in all honesty, I sometimes wonder if it is time to cut our losses and initiate a harvest strategy for the unit. 4168 FEBRUARY 19, 2010 For the exclusive use of M. Yu, 2014. This document is authorized for use only by Mengchao Yu in MGT 691-57 taught by DR. JOSEPH GANITSKY, at University of Miami from October 2014 to December 2014. 4168 | Applied Research Technologies, Inc.: Global Innovation’s Challenges 2 BRIEFCASES | HARVARD BUSINESS SCHOOL Applied Research Te chnologies, Inc. ART was one of the technology world’s emerging giants. The company had grown through the merger and acquisition of numerous technology-bas ed industrial companies, acquired in the LBO buyout waves of the 1980s and 1990s. By 2006, ART consisted of a portfoli o of about 60 business units, each of which operated as a profit center. Total corporate revenue was $11 billion in 2006. 1 Major divisions in the corporation included Healthcare (medical diagnostic equipment), Indust rial Automation (robotics), Energy (extraction, conversion, and transportation solutions for the oil and gas industry—including the Water Management Division), and HVAC (Heating Vent ilation and Air Conditioning, including climate control solutions for residential, co mmercial, and industrial markets). Exhibit 1 shows the organization structur e of the company. The company’s success had been built on its innova tive and entrepreneurial culture, coupled with a decentralized management philosophy. ART’s vision statement, proudly disp layed in almost every office and cubicle, stated: “We aim to change the world through innovation, and to grow our place in it through entrepreneurship." Culture and Practices ART was dedicated to supporting innovation not only with funding (the company’s R&D spending was double the rate for U.S. industrial comp anies), but also in its practices, several of which were deeply embedded in the company's culture. ART encouraged employees to spend a half day each week “experimenting, brainstorming, and thinki ng outside the box.” It was a practice that the company’s visionary founder and current CEO, Da vid Hall, referred to as “tinker time.” He explained the concept: Innovation and entrepreneurship are the twin en gines driving this company. It's the reason we've ingrained "tinker time" in our culture...I expect all our managers, and particularly those on the front line, to create, promote, and back promising ideas. But we understand that when you go for the big leap, you won't always clear th e bar. So there is no shame in failure when you are stretching for big objectives. Around he re we routinely celebrate what we call "worthy attempts"—even when they are unsuccessful. Knowledge sharing and dissemination was anothe r key part of ART’s business philosophy, and despite the high level of decentralization and profit accountability, technology and human capital were both widely shared among divisions. For exam ple, experts in one division routinely served as advisors on project committees for other division s, and it was not uncommon for employees to go “on loan” to help another unit with a promising product idea or technology. The company also moved quickly to bring products to market. If an idea showed promise, funding was usually available for small “beta batch” productions, which often allowed market testing to achieve what was called “proof of concep t” within ART. Once an innovation was proven, significant investment was quickly put behind it. Objectives and Priorities To infuse discipline into its decentralized organization, ART’s top management set highly aggressive performance objectives and tied executive compensation tightly to them. In 2006, as in 1 Of that total, Water Management Division sales were $560 million and Filtration Unit sales were $38 million For the exclusive use of M. Yu, 2014. This document is authorized for use only by Mengchao Yu in MGT 691-57 taught by DR. JOSEPH GANITSKY, at University of Miami from October 2014 to December 2014. 12. My question to youHow can YOU become a peaceful warrior? PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET AN AMAZING DISCOUNT :)