John Smithers at Sigtek
It was a few days before Christmas, and a light snow had covered the New England town where John Smithers lived with his wife and two young children. But instead of planning surprises and wrapping presents, Smithers was working on his resume. He had already warned his wife that within weeks he expected to be fired by Sigtek, his employer of three years. His boss and mentor had just been demoted to what appeared to be an extraneous position. He figured it was just a matter of time until his job was taken, too.
Eight months earlier, things had looked very different. Smithers's boss, Andrew Cross, had selected him for what appeared to be a challenging and potentially rewarding opportunity: to become one of two site instructors for a Total Quality program soon to be launched at Sigtek, the small telecommunications company where he worked. Not only was Smithers excited at the chance to apply some of the management tenets he believed in so fervently, he also felt that this program could be the key to setting Sigtek on a path toward much needed change.
Founded 25 years earlier by three Western Electric veterans, Sigtek manufactured printed circuit boards for signal handling which it sold primarily to AT&T and other long-distance carriers. Sigtek was bought 10 years ago by a large technology company which had maintained a hands-off management style, and left Sigtek to its own devices. Sigtek was relatively small and it had faced few competitors in its niche. The company had grown steadily, particularly following the breakup of AT&T and the subsequent opening up of the long-distance market to other competitors. With the telecommunications industry in turmoil, both the carriers and the suppliers that served them had stockpiled products, including the signal-handling equipment that Sigtek made. As a result, Sigtek's sales had shot up to more than $60 million, its workforce topped 1,000, and prospects seemed very bright. Many within the company predicted that Sigtek would be a $100 million company within five years.
Unfortunately, Sigtek's growth spurt was short-lived. Because of the earlier stockpiling, the industry's sales the following year were artificially depressed. Moreover, for the first time, Sigtek began to face serious competition in its marketplace. As the company's printed circuit boards became more of a commodity product, customers began to base their buying decisions less on quality and more on price and delivery time. Moreover, the company's first attempt to incorporate software into a computer system for signal handling was falling abysmally behind schedule. As a result, Sigtek's sales had tumbled to about $40 million, and it had trimmed its workforce to 800.
Other changes were in the air. Sigtek had been bought by another company a year earlier. But unlike its former corporate parent, its new owner, Telwork, a $500 million European Research Associate Susan Rosegrant prepared this case under the supervision of Professor Todd lick as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. It was revised by Professor John Gabarro. Copyright © 1990 by the President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means-electronic, mechanical, photocopying, recording, or otherwise-without the permission of Harvard Business School.
telecommunications company, made it clear that it planned to influence how its new subsidiary operated. In November of that year, Telwork began formulating a Total Quality program, based on a highly acclaimed model,...