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274 THE OB SKILLS WORKBOOK
Monday morning I showed the report to Fred. He immediately recollected it and began to explain the situation to me.
MagRec had been under tremendous pressure and was growing rapidly at the time. “That year we had moved into a new 50,000 sq. ft. building and went from 50 or 60 employees to over 300. Our sales were increasing dramatically.” Fred was heading Purchasing at the time and every week the requirements for raw materials would change. “We’d started using B.O.A.s (Broad Order Agreements, used as annual purchasing contracts) guaranteeing us the right to increase our numbers by 100% each quarter. The goal was to maintain the numbers. If we had lost Partco then, it could have had a domino effect and we could have ended up having no customers left to worry about.”
Fred went on to explain that it had only been a short-term problem that was corrected within the year and no one ever knew it existed. He told me to forget it and to move the file into the back storage room. I conceded. I thought of all the possible hassles. The thing was ancient history anyway. Why should I be concerned about it? I wasn’t even here when it happened.
The next Friday Dinah asked me what I had found out. I told her Fred’s feelings on the matter and that I felt he had some pretty good arguments regarding the matter. Dinah became angry. She said I had changed since my promotion and that I was just as guilty as the crooks who’d cheated the customers by selling low-life heads as long-life heads.
I told her to calm down. The decision was made years ago. No one got hurt and the heads weren’t defective. They weren’t causing any errors.
I felt bad but figured there wasn’t much to do. The matter was
closed as far as I was concerned, so I returned to my afternoon chores. Little was I to know the matter was not really closed.
That night Fred called me at 10:00. He wanted me to come over to the office right away. I quickly changed, wondering what the emergency was. I walked into Fred’s office. The coffee was going. Charlie (Personnel Manager) was there.
Rich Grillo (V.P. Operations) was sitting on the far side of Fred’s conference table. I instinctively headed there for that was the designated smoking corner.
Ken (Director of Marketing) arrived 15 minutes later. We settled in. Fred began the meeting by thanking everyone for coming. He then told them about the discovery of the Partco file and filled them in on the background. The problem now was that Dinah had called Partco and gotten through to their new vice president, Tim Rand. Rand had called Fred at 8 P.M. at home and said he was personally taking the Red Eye to find out what this was all about. He would be here in the morning.
We spent a grueling night followed by an extremely tense few weeks. Partco had a team of people going through our tests, quality control, and manufacturing records. Our production slipped, and overall morale was affected.
Mr. Leed personally spent a week in California assuring Partco that this would never happen again. Though we weathered the storm, we had certain losses. We were never to be Partco’s sole source again. We still retained 60 percent of their business, but had to agree to lower prices. The price reduction had a severe impact. Although Partco never disclosed to anyone what the issues were (since both companies had blanket nondisclosure agreements), word got around that Partco
was paying a lower price. We were unable to explain to our other customers why Partco was paying this amount. Actually I felt the price word got out through Joe Byrne (an engineer who came to Partco from Systems Tech and told his colleagues back at Systems Tech that Partco really knew how to negotiate prices down). He was unaware, however, of the real issues. Faced with customers who perceived they were being treated unequitably, we experienced problems. Lowering prices meant incurring losses; not lowering them meant losing customers. The next two financial quarters saw sales dollars decline by 40 percent. As the sales manager, I felt pretty rotten presenting my figures to Fred.
With regard to Dinah, I now faced a monumental problem. The internal feeling was she should be avoided at all costs. Because of price erosions, we faced cutbacks. Employees blamed her for production layoffs. The internal friction kept mounting. Dinah’s ability to interface effectively with her colleagues and other departments plummeted to a point where normal functioning was impossible.
Fred called me into his office two months after the Partco episode and suggested that I fire Dinah. He told me that he was worried about results. Although he had nothing personally against her, he felt that she must go because she was seriously affecting my department’s overall performance. I defended Dinah by stating that the Partco matter would blow over and given time I could smooth things out. I pointed out Dinah’s accomplishments and stated I really wanted her to stay. Fred dropped the issue, but my problem persisted.