MG345 Jake Smith at DigiCom Case study

Jake Smith at DigiCom

Jake Smith at DigiCom

Jake Smith shook his head as he stared at his laptop. He couldn‟t believe he was updating his resume – far sooner than he had anticipated. His boss and mentor had just been demoted by DigiCom (DC), his employer for the past three years, and he figured it was just a matter of time until he would be re-assigned or even fired.

Only eight months earlier, everything seemed so much brighter. Smith’s boss, Adam Crandle, had chosen him for what appeared to be a great opportunity – to become one of two company instructors for a Total Quality (TQ) program that was about to be launched at DC, the small telecommunications company where he worked. Smith was excited about the position, particularly the chance to apply some of the management theories he fervently believed in. He also saw the TQ program as a catalyst to setting DigiCom on a path toward much needed change.

MG345 Jake Smith at DigiCom

Founded in the mid-1980s, DC manufactured circuit boards for signal handling, which the company sold primarily to long-distance carriers. DigiCom was a medium-sized company and had few competitors in its niche, but the industry was starting to change. The company had grown steadily, particularly in the wake of increased competition in the long-distance market. With the telecommunications industry going through significant change, both the carriers and their suppliers stockpiled products, including the signal-handling equipment produced by DC. As

a result, DC’s sales had shot up to more than $120 million, its workforce was close to 1,000, and the future of the company appeared bright. Many people within the company felt that DC would

be a $250 million company within the next five years.

MG345 Jake Smith at DigiCom

Unfortunately, DC’s recent good fortunes were short-lived. Because of the earlier stockpiling, the industry’s sales were artificially depressed. In addition, for the first time DigiCom began to experience serious competition in its marketplace. As the company’s circuit boards became more of a commodity product, customers were increasingly basing their purchasing decisions on price and delivery time more than quality. Moreover, DC’s initial attempt at incorporating software into a computer system for signal handling was falling abysmally behind schedule. As a result, DC’s sales had tumbled to roughly $40 million, and the company trimmed its workforce to 800.

Other changes were in the air as well. DC’s CEO wanted to make changes in how DC operated. The TQ program, which was based on a highly acclaimed model, focused on (1) improving product quality and functionality, and (2) encouraging better management practices. Some people at DC, however, felt that the TQ program was really intended as a cost-cutting strategy and a way to further reduce the size of DC‟s workforce.

Smith Faces a Choice

Adam Crandle, DigiCom’s vice president of engineering, asked Smith to become one of the two site instructors for the TQ program. Smith looked to Crandle as a mentor, and the two men had similar ideas about the best way to manage people. Although DigiCom’s overall management style could be characterized as autocratic and largely unresponsive to employee concerns, both Smith and Crandle had been working within the engineering side of the business to encourage

MG345 Jake Smith at DigiCom

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