Johannes Linden Case

Dhwani Pandya – MBA 710 – Johannes Linden Case

Q1: How effective has Linden been in leading the GEC (Global Executive Committee)?

A 1: Johannes Linden, the director of Fluss washer and dryer division (FWD) headed the Global Executive Committee (GEC.) Other GEC members included four corporate officers and six regional directors (RDs.) When appointed as a leader of this global business, his intentions were to create and foster a more open, collaborative, yet aggressive culture.

Several points give credence to Linden as being a good leader of this global committee.  First, although the team was truly cross-cultural, in the first two years of its operations, the GEC members were quite comfortable with each other. Second, team members adopted different roles and provided advice based on their expertise in specific subjects. Third, there was a healthy competition and appropriate camaraderie between team members. As such, Linden successfully met his leadership intentions.

The GEC is similar to a football team, where members have their own role to play but also have to integrate their work with other team members. In such a diversified team environment, Linden demonstrates effective leadership behaviour by providing overall strategic direction, while giving RDs the latitude to pursue region-specific implementations. Additionally, he keeps all the GEC members up-to-date with strategic goals and shared values. He is vigilant and likes to keep his finger on the pulse of his organization. RDs characterize Linden’s GEC leadership as being very likeable, persuasive, and determined. He is polite yet firm. RDs know that Linden is very knowledgeable and has solutions for problems. These points demonstrate Linden’s competent leadership style.

Nonetheless, it is worth mentioning that some of Linden’s leadership traits may characterize him as being authoritative and stubborn. For example, he tries to convince the team to agree with his own ideas. Rather than making decisions at the GEC meeting, he makes them himself before coming to the meetings, and he is very determined to bring the team to an agreement on his decision. However, he changed this behaviour in the latest GEC meeting by agreeing not to change the targets because RDs did not agree. This demonstrated good team spirit.

The success of the FWD division in the recent years of economic downturn can be attributed to a well run GEC, created and fostered by Linden. Overall, I think Linden was a very effective leader.

Q2: What was Linden’s purpose in establishing the GEC, and to what extent has this purpose been fulfilled by the members of the GEC?

A2: After the company moved from a geographic to product-oriented structure, Johannes Linden was appointed Director of the Fluss Washer and Dryer (FWD) division. As such, he was responsible for running a global business that was divided into regional units. It was his job to maintain a global vision while still being responsive to local conditions. In 2006, given the growth of emerging economies, Linden executed the new FWD regional structure, increasing the number of geographical units from three to six.

The Fluss had a culture of decentralization and accountability. With the increase in regional units, Linden felt managing this business was too overwhelming of a task for just himself. As a result, he created the Global Executive Committee (GEC,) which consisted of himself, four corporate officers, and six Regional Directors (RDs). The purpose of the GEC was to provide for a forum to make strategic and major investment decisions. The GEC decided to meet three times a year in Basel with the intent to focus on operational matters and important initiatives and once a year at the regional headquarters to discuss long-term strategy. In addition, the GEC enabled RDs to learn from one another and about other parts of the company. Furthermore, it encouraged RDs to get involved in global strategy.

By the end of 2010, the GEC had been operational for three years. Under Linden’s leadership, the team had a good cohesiveness and routine. Linden kept everyone on the team abreast of the state of the business, status of financial targets, latest developments in washer and dryer products, and competitive and economic trends. The RDs shared updates and developments in their regional operations. Overall, the committee members fostered a sense of camaraderie as well as healthy competition. It is evident from these points, that GEC members helped fulfill Linden’s purpose of establishing the GEC.

However, some RDs and CHRO felt that Linden was an authoritative leader. He was determined to lead the team to wherever he wanted to go. In addition, Linden would make tough decisions by himself before the GEC meetings and would only talk about the decision at the meeting. He showed clearly at the GEC meetings that he was the strategist and could be stubborn at times. Because of his dictatorial leadership style, the RDs did not feel comfortable sharing ideas relating to global strategy at the GEC meetings.

In conclusion, apart from his somewhat dictatorial leadership style that led to little or no input from RDs related to global strategy, the GEC members fulfilled majority of the objectives behind establishing the GEC.

Q3: What challenges lie ahead for Linden and the GEC?

A3: Linden and the GEC have some near-term and longer-term challenges ahead of them. First, the reduced raw material costs were going to create an unanticipated savings of ten to fifteen percent. As a result, Linden suggested adjusting the targets and bonus structure. However, RDs showed displeasure in Linden’s proposed changes. As such, his immediate near-term challenge lies in motivating RDs to engage in difficult discussions of revisiting regional business targets and bonus basis. Second, the CFO showed that there would be a substantial surplus for the upcoming year even with the most conservative financial assumptions. Further, he proposed they put the surplus in an investment fund for the entire company, to which the RDs did not agree. Deciding on how to reinvest the surplus revenue is another near-term challenge ahead for Linden. Finally, because of Linden’s somewhat authoritative leadership style expressed by advocating his own point of view forcefully, some RDs felt uncomfortable sharing ideas about global strategy at the GEC meetings. In addition, the RDs seem to think and care about what is good for their specific region and not for the company as a whole. With this in mind, another near-term challenge is to get the GEC members to open up and think for the company instead of worrying about their own regions.