Success Stories in Implementing Requisite Organization

Speaker A The first time we used it without Elliot was in 1991, when I was at maxwell technologies out in California. And and this was after the environment was a tough business environment. Maxwell was a high technology firm that focused on high energy physics. And we supported the work of then the defense nuclear agency. Now it's the defense threat reduction agency. And we had just gone through the ending of the cold war, and we had just gone through the fight in Iraq. And the budgets came down, and they didn't come down slowly, they came down precipitously. And so the company felt a quick loss of profits and of revenue. And we went from almost 100 million down to about 75. And one of the members of the board, general don starry, knew both steve and I and knew that we had done work with Elliot. And he said, as a board member, he went to the chairman and said, listen, these two guys know something about this complexity work. They know something about organizations, and I want us to look at the company through that lens. And so what we did was we brought steve in, and it was a very painful time because it's a small at that time, it had been a growth company, and the stock had gone from the 30s down into four, a significant drop. The profits were negative, and the revenue growth was not healthy. So we were in an environment that required some drastic reductions, and it wasn't the kind of reductions that you could get from just cutting staff, because technology companies really aren't very heavy in the staff side. So what we had to do is we had to redesign the work and refocus the efforts of the company into not just growth areas, but recapturing business. And so steve came in and interviewed all of the workforce down to, I'd say level three, from level three to level seven. And we ended up redesigning the company. We focused it around the output of work, and we redesigned the marketing function, we redesigned the finance function, we redesigned the operational structures inside the company and the reporting relationships. And it was very painful, and we had to let some people go, especially at the senior management level. And we instituted I'd say we brought in a new company, and we did turn it around. And a couple of years later, we brought in a new CEO. And by 96, so sort of five years into it, we were back. We were the number one performing stock on the nasdaq, and the stock went from four to 60. So it was a remarkable turnaround. And being driven by don starry, and based on the work that steve had done, we looked at the working relationships and how people reported, and what had grown up was this environment know, I report to you, and you report to somebody, and created these nice little bureaucracies that protected the financial community from everybody Else. And we didn't have the right kind of structure to do business with the government, to expand the marketplace. We didn't have the right kind of structure. Take the defense technologies into the commercial marketplace. So it was, I'd say, a pretty interesting story.