Agiltron Case, Case Study Example

Executive Summary

Agiltron has some similarities in leadership between that of the previous CEO of Apple Corporation (Steve Jobs). Steve was an inspired leader / genius on the creative side but lacked business management skills. This may be the sign of a driven inspired leader but not necessarily representative of a good business manager that both needs to inspire others but equally motivate them to work together in a team as opposed to an isolated bunch of eccentric genius types. Jobs is driven more by creativity and innovation as opposed to that of financial or prudent business planning. Jobs was an unconventional leader not driven by textbook approaches to Management. Hence there is some degree of correlation between Jobs and Salerno. (McInerney, S. 2012)

In order to deal with the multi-faceted problems of Agiltron the following seem to be the main priority areas:

• Develop a business plan for the organization;
• Develop a strategic plan for the business with an emphasis on Finance, Sales and Marketing. A Balanced Scorecard approach would be an asset here;
• Develop a leadership style that is suitable for this business
• Build a Marketing and Sales Function
• Build a Finance Function
• Complete a Marketing Mix Analysis : get the right balance for the company
• Build a revenue model that is not 50% reliant upon Government Grants
• Develop a capital investment program in order to diversify funding and assist in future business growth

Introduction

Agiltron was founded as an innovative business focused upon products in optics and nano materials. The firm was staffed by Doctoral level (PhD) scientists who were focused upon creative and innovative new products for the market. The firm was heavily subsidised by government grants but many of the innovative products were unproven in the market place due to an absence of a sales and marketing function within the firm.

Analysis

| Marketing Issues – The firm had developed a patented anti-fog technology for NASA, however production had ceased after two unsuccessful funding phases. Agiltron had no clear marketing strategy and indeed no sales or marketing function within the firm. The firm was wholly focused upon innovation and research. They had no shortage of obtaining government grants for other innovative concepts but they failed in operating the firm as a profitable business. The CEO Dr. Salerno identified three future options:-

1. Do nothing on the anti-fog products, this in favour of another product venture;
2. Re-organise the company and improve business processes;
3. Raise additional capital and add a sales and marketing function to the business

| Historic problems – The firm had relied heavily upon organic growth and had no real strategic planning function. They particularly lacked a HRM strategy and failed to recognise the significance and importance of Finance, Sales and Marketing functions. Despite this in 2007 they achieved revenues of $17 million but 50% of this was attributed to Government grants and the remaining 50% from telecommunication products. There is clearly an issue with the Marketing Mix.

| Philosophy – The firm felt very at ease with the concept of ‘bootstrapping’ and that is building a company with little start-up capita.. Hence the firm linked its expansion plans to that of funding via government grants. They also relied heavily on acquisition of cheap equipment. This demonstrates a small company mentality that had prevailed in the firm and a lack of both leadership and business expertise in driving the company forward from a strategic vantage point.

| Business focus – This was centered upon engineering research and technical innovation. This created a flat organization with little emphasis on other key areas of the business like Finance, Sales and Marketing. The heavy reliance upon government grants defined the organization as being extremely vulnerable in the market place. The concept of a Balanced Scorecard approach would facilitate the planning process here. (Balanced Scorecard Institute, 2012)

| Decision Making – The firm lacked clear and decisive leadership from a strategic business perspective. This was reflected in the poor decision making process, the lack of strategic and business planning and the Board failure to deal with the immediacy of serious business issues. They continued to prevaricate and focused more upon long term growth issues that that of the short-term crisis points. In this sense the Board were committing the firm to a very uncertain future with the ultimate prospect of a failing business.

Conclusions

The problems associated with Agiltron focus around four main areas (1) Lack of strategic and business planning (2) Lack of clear leadership (3) Lack of key business function areas that include Finance, Sales and Marketing (4) Too heavy a reliance upon Government Grants in order to develop and grow the business. These are immediate points of concern if the business is to survive in the longer term.

References

Balanced Scorecard Institute. (2012, 2 10). Balanced Scorecard Basics. Retrieved from Balanced Scorecard Institute: http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/Default.aspx

McInerney, S. (2012, 2 10). Steve Jobs: an unconventional leader. Retrieved from Sydney Morning Herald : http://www.smh.com.au/executive-style/management/steve-jobs-an-unconventional-leader-20111007-1lcmo.html