Page 90 - DMGT520_ORGANIZATION_CHANGE_AND_DEVELOPMENT

Unit 6: Components of OD – Operational and Maintenance

Notes
The looming debacle….
As the second round of funding was received, and Gold Smith was looking at growing the
organisation as an enterprise solutions provider, the stock market started declining and
people began to talk about an impending global economic slowdown. The IT industry had
also started to feel the impact of the slowdown and there were job cuts across the sectors
as companies started cutting jobs in the US.
The Final Blow…
On the fateful day of September 10, 2001, the newly constituted board of Gold Smith
Consulting met in Hyderabad and looked at the new business plan. Everyone acknowledged
that the world was beset with the possibilities of a slowdown but they never thought that
it would hurt our prospects beyond a point. This belief was based on the positioning of
Gold Smith as ‘real’, their customer successes were beginning to convert themselves into
references and plans for geographic expansion promised to open new frontiers beyond
the United States, which was on the cusp of a slowdown. In the second round, they had
raised close to $15 million. This was coupled with strong cash flows from operations and
it was anticipated that the money would be good for at least 2 years. The board gave a
green signal to the growth plan.

On September 11, 2001, exactly 24 hours later, a plane just crashed in to the World Trade
Center. Some time later, the second plane hit the WTC building.
According to Vipin Bagchi, one of the co-founders of Gold Smith: “My horror was quickly
overtaken by panic as I remembered we had two Gold Smith Minds in the World Trade
Center who were working on a project from Franklin Templeton. I rushed back to the
office, called for an emergency meeting and had a video link activated with the New
Jersey Office.
James Hawkins and Chetan Jain were in the second tower when the first plane hit. We
knew that the events of September 11th had changed the world forever. But to begin with,
we had to locate James Hawkins and Chetan Jain.”

After a long search, they knew that the two had escaped as the Towers collapsed. But the
customer whom they were working with, Rod Wotton of Franklin Templeton Fiduciary
Trust, died in the terrorist attack.
All new business came to a halt. The world had not prepared for anything like this since
World War II. Worse still, most people in the current generation were not trained to
handle anything of this magnitude.
Keeping the boat afloat in Turbulent Times …..
In good times, overhead happens quickly and innocently and it crops up all over the place.
At the same time, people become soft on performance issues. For example, if a new sales
person takes more than six months to bring in the first order, one could justify it with a
dozen reasons. If there is another person completely out of synch with the job requirements
of her function, you tend to over process the matter at the cost of the organisation. Everyone
loses sight of the fact that we are spending investors’ money and worse, we lose sight of
the fact that ultimately, we pass on our inefficiencies to the customer through higher cost.
September 11th was followed by rapid lay offs all around.

Although, Gold Smith did not do a layoff it was clear that they had to let go of people on
whom they had been soft on performance issues. Gold Smith had to shut down satellite
locations in three places where results had not come even after nine to twelve months of
operation.
Contd...

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