Michael Redard, Vice President of Finance and Administration for CSI, was commenting on his company’s performance measurement and incentive systems. Mike was confident that his company’s systems were working effectively, but he also knew that the systems would have to evolve significantly over time as the company grew and matured.
COMPANY HISTORY AND STRATEGY
CSI was founded in Santa Barbara, California in 1996 by Steve Golden and Bill Anderson. Steve, who had a Ph.D. in Material Sciences, developed a new coating formulation and proprietary manufacturing processes that produced CSI converters with better performance and substantially lower prices than competing products. CSI converters are used to reduce the pollution caused by the combustion engines. Bill, formerly the CEO of a publicly held company, had over 30 years of experience as a senior executive. He became the CEO of CSI shortly after raising seed money to finance the first few years of operation.
Exhibit 1 presents a timeline of the company’s early history. CSI’s first patents were issued in 1999 and its first sales were recorded as CSI started producing converters for stationary engines. These early sales proved that the technology was viable. But CSI’s managers’ immediate goal was to supply converters to the huge automotive sector that spent over $7 billion (estimate for 2001) on CSI converters, primarily because of tightening worldwide emissions regulations.
CSI’s technological advantage was mainly due