The world of business is an environment where no friendly relations can be observed. It is a world of competition and the constant struggle for domination over the market. This struggle involves the development of companies, their product lines, and organizational structures; launching new products and trends to the market is also vital for the preservation or further development of a company’s position in the market. In all the above-enumerated aspects, it is also rather significant for a company to develop an effective leadership model and strategy. The effective and properly organized leadership structure of a company is the way to its success in the future of the business world. This paper will focus on the specific scenario of Gene One Company and will try to examine the leadership patterns practiced in the company, and the ones necessary to form a leadership strategy that would allow the company to stand the demands of the future.
To begin with, it is necessary to take a brief look at the context of the issue discussed. Gene One as a fast-growing and rather ambitious company has developed from a $2 million company to a $400 million one over the last 8 years:
In 1996, Gene One entered the biotech industry with groundbreaking gene technology that eradicated disease in tomatoes and potatoes. As a result, farmers no longer needed to use pesticides when growing these plants and consumers were pleased to buy homegrown products untainted by chemicals. The win-win situation helped Gene One grow to a $400 million company in just eight short years (Scenarion, 2005, p. 1).
However, the issue faced by the company under consideration goes far beyond these developmental achievements. According to the Scenario (2005), Gene One views going public as the only way of further developing its market positions and increasing its market share. Going public is the process associated inevitably with the IPO process. In other words, to transform from a private and closed company into an open and public one, Gene One will have to offer its stocks at the Wall Street stock exchanges which will lead to the complete change of the set of the company’s stockholders and of the whole organizational structure of the company as well. Moreover, such managers of the company as Greg Thoman, Chief Human Resources Officer, and Michelle Houghton, Chief Financial Officer are concerned with the HRM perspective of the transformation, and see the need of the strategy to inform employees about the coming change:
I haven’t even mentioned the internal problems that could arise. We need a plan for sharing this news with employees. Staffing will be a nightmare if people panic and start leaving the company because they have doubts that we can pull this off, or because they don’t want to be part of a publicly-traded company (Scenario, 2005, p. 6).
Further on, John Kirby, Executive Director Board Member, and Susan Wells, Executive Board Member, see the IPO development as a challenge that not all the current managers and Director Board members can take. Speaking with Don Ruiz, Chief Executive Officer, they stress the necessity of changing those incapable of going public for the new people who are ready to face new challenges. Among others, they see the firing of Charles Jones, Marketing Officer, and Teri Robertson, Chief Technology Officer, as the way to ensure the company’s success with IPO. Don Ruiz, being at a loss, looks for the effective and the least aggressive plan in relation to his employees. To work such a plan out he addresses Greg Thoman and the Leadership Team of the company to help him in his decisions. Accordingly, the following paragraphs present the plan that Don Ruiz might receive from the Leadership Team members based on their knowledge of leadership models and the effectiveness of their implementation in every particular situation.
To provide the theoretical support to the offered plan, it is necessary to consider the general picture of the leadership styles and models that are distinguished by scholars like Clark (2009). Thus, leadership styles are mainly divided into three large groups – Authoritarian or autocratic, Participative or democratic, Delegative or Free Reign (Clark, 2009). It is critically important to notice at once that the characteristic of a good and successful leader is the balanced combination of all the three models, while the failure of a leader might result from his or her sticking to only one or two of them (Clark, 2009).
For example, the authoritarian style “is used when leaders tell their employees what they want to be done and how they want it accomplished, without getting the advice of their followers” (Clark, 2009). Under such a style of leadership, the decisive power is concentrated in the leader’s arms, and joint strategy developing and problem-solving are not practiced in the company. The Gene One example of the autocratic leader is John Kirby, Executive Director Board Member, characterized as a person that “doesn’t take no for an answer” (Scenario, 2005, p. 2).
Further on, the democratic leadership style is the one under which people are not afraid to express their opinions and are sure that the senior management and the CEO will consider them in detail. However, the balance of the final decision power of a leader has been preserved: “This style involves the leader including one or more employees in the decision-making process (determining what to do and how to do it). However, the leader maintains the final decision-making authority” (Clark, 2009). Don Ruiz, Chief Executive Officer of Gene One is the brightest example of a democratic leader as he is not afraid to consult his colleagues and employees and sees the only way to find the best solution of the IPO issue in the joint decision making: “I’ve attached the Executive Summary from the Board meeting. I’d like you all to take a look at it before the meeting. Generally, it’s good to have a rep from our financial institution there, but I don’t know if I’ll be able to arrange it in time” (Scenario, 2005, p. 2).
Finally, delegation leadership is the model under which “the leader allows the employees to make the decisions. However, the leader is still responsible for the decisions that are made” (Clark, 2009). This model is mainly used when either a leader is unable to control the company, or the employees are rather knowledgeable and reliable which provides for the success of the company without the demand for the leader to know everything. An example of this style can also be Don Ruiz as his leadership model allows the members of the Director Board, who are his subordinates, to tell him whom to fire and with whom to replace the fired people. It is actually not a good sign for the company that finds itself on the edge of the drastic change of its structure and of its overall essence. As Gene One plans to implement IPO and become an open public company, it needs strong control over the activities of the employees and managers to assure their joint heading for the established aim – IPO.
Based on the leadership model considered, the plan of the changes needs by Gene One can be developed in the direction of assuring effective cooperation between the CEO, senior management, and the employees. According to Greg Thoman, for example, it is necessary to examine the leaders at all the company’s levels to assure their conformity to the demands of the new identity that Gene One will acquire:
For starters, we need to make sure our executive and Board compensation strategies are squeaky clean… Compensation for Board members is shifting from equity to cash, mainly because of new rules and high risk associated with the SOA. I also think we need to examine our top 50 executives to make sure we have the right leadership at our level and at the level below us. Wall Street and the SEC look long and hard at leadership (Scenario, 2005, p. 6).
The next step of the plan is the implementation of the democratic leadership strategy in the process of employee informing about the changes and challenges that the IPO process might bring. The use of the autocratic leadership style might result in the above-mentioned panic among the employees and their subsequent mass-resignation from the company as people commanded to do what they are not familiar with will inevitably consider this as pressure and protests against it. On the other hand, the delegative approach to this issue is not a way out either because it presupposes little centralized control over the actions of the company’s departments and separate employees which is not the strategy to use in the time of restructuring and change. Accordingly, “if you have the time and want to gain more commitment and motivation from your employees, then you should use the participative style” (Clark, 2009).
Further on, the successful implementation of IPO and becoming a public company will demand the technological progress of the company and the innovative decisions and products it launches to the market. The combination of the technologically innovative activities of Gene One with the benefit that IPO might bring to it can result in the further development of the company into an international market player. Moreover, by becoming a public company, Gene One will acquire more investment perspectives: “Public companies have more credibility than do private companies and can gain required capital for the growth of technologies, product, and marketing” (Scenario, 2005, p. 3).
So, the plan of the changes that Gene One wants to introduce to increase its market share, attractiveness for investments, and the overall company’s capital are rather comprehensive and potentially effective. It encompasses HRM, leadership strategy, and technological innovations as the major factors critical for the development of any company in today’s business world. According to Scenario (2005), “Developing new products, technologies and offering an IPO simultaneous will require focus and leadership” (p. 3), and the plan presented aims at focusing on the mentioned areas that are to be developed.
Clark, D. Leadership Styles. (2009). Web.
Evers, T. (2005). Gene One: A Lofty View of Business Reality. Business Insights Magazine.
Scenario. (2005). Gene One. Company Overview.