Case 2 New Cio

The New CIO
BACKGROUND
Rose Industries was a manufacturer of electrical products for the home. A large
portion of its business base was devoted to the design, development, and manufac-
turing of specialized electronic components for public and private-sector clients.
Ralph Williams had been with Rose Industries for more than 45 years,
beginning in the mail room and working himself up to president and chief execu-
tive officer (CEO) of Rose. He was now beginning his tenth year as president
and CEO.
Rose Industries believed in inbreeding. All promotions were from within the
ranks. Rose often had trouble attracting talented people, especially people with
MBA degrees, because the company’s conservative policy dictated that all new
employees begin at the bottom of the company and work their way up. Every
senior manager at Rose had been with the company for at least 30 years. Rose
Industries discouraged employees from taking outside seminars and courses. If
you wanted to attend a conference or symposium, the policy was “Take vacation
and pay your own way.” There were several training programs available to the
workforce, but they were all taught by internal personnel and covered only the
skills needed to do each job more effectively or to become qualified for a promo-
tion to the next pay grade. Each employee was allowed a maximum of seven days
off a year to attend internal training programs.
59
60 PROJECT MANAGEMENT CASE STUDIES
The company did not have any tuition reimbursement policy. Numerous
colleges and universities in the surrounding area provided a variety of evening
programs leading to various certifications as well as undergraduate and graduate
degrees, but employees had to pay all expenses out of pocket. In order to satisfy
some of the needs of the employees at Rose Industries, many of the professional
societies in the surrounding area held conferences, symposiums, and professional
meetings on weekends rather than weekdays.
A TIME FOR CHANGE

By 2003, the ultraconservative nature of Rose Industries began to affect growth.
Rose was falling farther behind its competitors, and gross sales were declining
rather than increasing. Although Rose was considered a low-cost manufacturer,
it was losing business to some higher-priced competitors whose advertising cam-
paigns attacked Rose’s weak project management capability. For years, Rose
could not see any value in using project management and seemed to discourage
its personnel from becoming a Project Management Professional (PMP)®. Project
management was never identified as one of Rose’s strengths in its proposals dur-
ing competitive bidding. Rose did use a few templates when managing projects,
but no formal project management methodology existed.
Rose’s information systems were somewhat outdated. When software was
needed, especially for more sophisticated business requirements, Rose would
look for off-the-shelf products even though the products were not 100 percent
applicable to or did not satisfy all of the company’s needs. Rose did maintain an
Information Technology Department, which would create software for smaller
requirements, but no systems development methodology was used.
HIRING THE CIO

Ralph Williams, president and CEO of Rose Industries, understood quite well
the seriousness of the situation. The company must become good at project
management, improve its information system, and develop methodologies for
both project management and information systems. Mr. Williams decided to
break with tradition and hire a new chief information officer (CIO) from outside
the company.
After an extensive search and interviewing process, the company hired John
Green, a 20-year veteran with one of the largest IT consulting companies in the
world. There was no question about John’s credentials and what he could bring to
Rose Industries. The real issue was if and when he would be able to change the
culture to accept his new ideas. Rose Industries had had the same culture for dec-
ades, and getting the seasoned veterans at the company to accept change would be
difficult. John was told about the challenges before he was hired, and he felt that
he could adequately handle the situation.
The New CIO 61
A BULL IN A CHINA SHOP

During the first two weeks on the job, John interviewed personnel from all levels
of the organization to ascertain how difficult it would be to change the culture.
The situation was worse than he had been led to believe.
John knew from decades of experience in project management that there are
four characteristics of an effective project management culture: communications,
cooperation, teamwork, and trust. The interviews made it quite apparent that there
was no project management within the company and senior management had been
reluctant to initiate improvements. Communications were quite poor because of
the lack of a good information system. Cooperation and teamwork occurred only
if people felt that they could benefit personally. There was more mistrust than
trust. The building blocks for effective project management simply were not there.
John originally thought that he could make the necessary changes within two
years. Now, after the interviews, it looked like five years would be closer to the
truth. If this five-year time frame were allowed to happen, the health of Rose
Industries could significantly degrade during that time period.
John came up with a four-step approach for implementing change:
Step 1: Hire several PMP credential holders quickly.

Step 2: Create two project management offices (PMOs); one would function as an
IT PMO, and the other one would be a corporate or strategic PMO.
Step 3: The IT PMO would create an IT systems development methodology suit-
able for Rose Industries
Step 4: The corporate PMO would create an enterprise project management meth-
odology for all of Rose’s projects except the project in IT. The PMO would
also participate in the portfolio selection of projects, strategic planning for
project management, and project risk management activities.
John believed that this approach could accelerate the maturity in project man-
agement and some good practices could be in place in about two years. All he
needed now was buy-in from the executive staff for his plan.
PRESENTATION OF THE PLAN

At the next executive staff meeting, John presented his plan. The responses were
not what John had hoped for. The other executives in the room immediately
attacked step 1, arguing that they had no intention of hiring additional people.
John would have to get some of the existing labor pool personnel trained in pro-
ject management, and there would be limited funding available to do this.
When step 2 was addressed, the executives argued that creating two PMOs
would be the same as adding layers of management on top of the existing
62 PROJECT MANAGEMENT CASE STUDIES
organizational structure. They simply could not see the need or value in having
PMOs and viewed them as possible threats to their power and authority.
When step 3 was discussed, there were several questions as to why Rose
Industries had to develop its own systems development methodology when sev-
eral packages were commercially available. Some executives seemed to have no
idea what a systems development methodology was or why it was needed at all.
When step 4 was discussed, the executives became furious that John was recom-
mending that someone other than the executive levels of management participate
in the portfolio selection of projects, especially project managers who were not
even on a management career path ladder. The portfolio selection of projects was
obviously seen as a job done entirely by executives. Likewise, allowing anyone
other than executives to be involved in strategic planning and risk management
was as a serious threat to some executives who perceived that this could impact
their power, authority, and bonuses.
John now saw quite clearly what he was up against and that all of the execu-
tive support that he was led to believe would be forthcoming would not happen.
There was no way he could implement the necessary changes by himself, at least
not in a reasonable time period.
Within two weeks after the meeting, John turned in his resignation. John
believed that Rose Industries was doomed to failure, and John did not want his
reputation to be tarnished by working for a company that failed.
QUESTIONS
1. Why was it so difficult for Rose Industries to implement project management
prior to John Green coming on board?
2. Can inbreeding be detrimental to project management maturity?
3. Looking at Rose’s current level of project management maturity, which is not
much, how long might it take the company to see some reasonable project man-
agement maturity assuming John was not there?
4. Is it possible for an executive, or for anyone else for that matter, to determine the
true challenges of the job at hand during hiring interviews? What questions, if any,
should be asked?
5. How does one know during the job interview process if the promises made for
support will be kept?
6. Was John correct in his four components of a good project management culture?
7. Was he too optimistic with his four-step approach?
8. Why were the other executives threatened by his four-step approach?
9. If John had decided to remain with Rose Industries, how might he change his four-
step approach, given the responses by the other executives?
10. Was John correct in resigning from the company?
11. What is your prognosis on Rose’s chances of remaining in business?

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The New CIO

A TIME FOR CHANGE

HIRING THE CIO

A BULL IN A CHINA SHOP

Step 1: Hire several PMP credential holders quickly.

PRESENTATION OF THE PLAN

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