Tuesday, March 9, 2010


A CASE STUDY: Scorpion Cybernetics

As the conference call came to a close, Kyle Tanner rose from the table with an overwhelming sense of dread. This was it, he knew with certainty—the singular moment when history would record another nail being driven into the metaphoric coffin of Scorpion Cybernetics, Inc. The first blow, fourteen months ago, was horrific enough; this one was just more insulting than it was painful. And everyone at the mahogany table seemed know it. Kyle studied the stoic faces of his fellow executives, and he knew that, while no one said a word, most of them were feeling the same way.

“Well, that was bullshit,” remarked Dr. Sergio Ferranini. The slender, grey-haired gentleman lifted the glasses from his face and began to intently rub his eyes. “Did they honestly think we were going to go for that? Scorpion NSS1 is too important to this company. They cannot be asking us to give it up.” He turned to others still seated at the table. “I am wrong here?”

“No, you are not wrong.” The director of operations, Lana Reynolds, quickly spoke to assuage any doubts from the founder and CEO of Scorpion Cybernetics. “There’s no blood in the water, Sergio. We don’t need to give into these sharks.”

“That’s right,” Dr. Ferranini replied, while casually sitting back with a smile. “We are not dead yet—not even close to it.”

“So what else can we do, sir?” another person asked the leader of this company.

The question was sincere and simple enough, but it still provoked a moment of intense silence. Everyone was looking to Dr. Ferranini for an answer, but there was not one. Instead, he seemed to be pondering, his face expressionless and his eyes fixed on a blank note pad before him.

“We go back to work. That’s what we do,” Lana Reynolds assertively interjected her own suggestion. And with that, rather unsurprisingly, came an approving nod from Dr. Ferranini.

From his own vantage point, Kyle could not believe what he was hearing or that this was happening. Scorpion Cybernetics was a company destined to lead the way into a new age for neurotechnology, but with one fateful call, it was now, instead, on the cusps of its demise. This company of the future was being undone by the same type of managerial missteps that hobbled any number of notable companies of the past. Surely, though, Kyle reasoned, the other leaders of this enterprise were collectively intelligent enough to understand that. “So, why the hell are we doing this?” he asked himself, as he exited the conference room and returned to the confines of his office. “Why the hell are we going to let pride destroy this company, after everything it took to build it?”

Indeed, much had gone into building Scorpion Cybernetics, Inc. For nearly a decade, Dr. Sergio Ferranini and a small team of software wonks had been working with biologists from universities around the world to develop a fusion between the brain and neurological system of a human body, at one end, and strains of non-organic nano-receptors and sensors, at the other, all linked to a tiny computer array embedded into the spine of its host. The doctor had theorized that the first step to building a cybernetic infrastructure would have necessitated such a symbiosis between the human body and the technology, and unlike other scientists in this nascent field of study, he and his team had focused almost exclusively on the development of complex software tools. The ultimate result of their efforts had been the Scorpion Neurological Symbiotic Systems, Version 1—or the Scorpion NSS1, as it came to be known—an operating system that had allowed for a virtually seamless interface between flesh and fiber optics. It had been an ingenious tool, deciphering neurological messages about voluntary and involuntary movements, and instantly completing the relay of those commands through the nanotechnology on the other end. The scientific community and the general public had celebrated Dr. Ferranini’s work, calling it the dawn of neurotechnology, and soon, the venture capitalists had come knocking, specifically Fountainbleau Capital and Davenport Heller & Co. Together with Dr. Ferranini at the helm, they had modeled America’s first commercial cybernetics enterprise.

Sergio Ferranino had always been a true scientist, to be sure, and though brash and determined, he could have never been mistaken for a businessman. Therefore, in order for Scorpion Cybernetics to work, it had needed seasoned professions in management, finance, law, and marketing. That fact had led the managing partner of Fountainbleau, Carissa Jenkins, to approach Kyle Tanner with the position of finance director three years ago. Though he had been initially skittish about the prospect working for the start-up venture, Kyle had found something intriguing about its business model. Here was a company that promised to mitigate paralysis, for example, by retrofitting the body with a non-organic nervous system, and it was also affording amputees new hope for normal lives with its light-weight extremities made of plastics and metallic alloys. At the time, Kyle had figured that, because Scorpion Cybernetics was years ahead of any competitors in this space, the prospects for market dominance had been huge, and that, if they could have stayed ahead of others, that market share would have guaranteed profitability sooner. The goal for the company, as this financier had articulated to Jenkins and, later, to Ferrarini, had been to keep margins relatively high, while stressing economies of scale in production and making aggressive pushes into new markets. And with that strategy accepted, Kyle had signed own as the director of finance, just one day before the operations director came aboard and three weeks before the Department of Veterans Affairs publicly expressed an interest in the new technology.

Scorpion Cybernetics had been an immediate success. After its venture-capital partners had agreed to a second round of funding, at $56 million, the company had grown its Woodlands, Texas-based operations to 65 employees. While much of its major manufacturing had been performed in Asia, Dr. Ferranini had instructed his domestic team to focus squarely on the interface development and computer systems. Any issues regarding the outsourced production had been left to the director of operations and her lieutenant, neither of whom had ever felt the need to report any matters of concern to the CEO. That had never seemed to be a problem to anyone, for as long as sales had continued to grow at 33% per annum, with eighty percent of sales derived from government program. And even the European markets had begun to open up, though not without some social resistance in places like Paris and Rome and Istanbul. Nevertheless, for Scorpion Cybernetics, everything had been exceedingly good—but then came June 4, 2017. On that morning, two sentences had changed Scorpion Cybernetics, forever.

It has been a bright Sunday morning in Miami, and according to all reports, flights had been moving into and out of the international airport without compunction. The Miami to JFK flight, piloted by Captain James Cooper, should have been no different. With 146 passengers on board, the plane had lifted into the skies over the city, promptly, at 9:30 EST, and the ATC team on duty had reported that the plane’s diagnostic-communications sensors had relayed no trouble. But surprisingly, within 1.8 minutes of flight, the plane had begun a steep jog to the left, while descending at a rapid speed. Before controllers could have even uttered a word, they had heard Capt. Cooper utter some very ominous ones. “Oh my god!” he cried out. “The arm isn’t working!” And with that, the plane had went down in the Pembroke Park community, destroying two city blocks of homes and retail space, before bursting into a huge fireball at Interstate 95. The initial reports had suggested that 180 people were killed in the crash.

Before that, no one at Scorpion Cybernetics had seemed moved by the fact that their products had gained such immediate social acceptance. Perhaps that had been because a large number of badly-wounded soldiers had begun to return from the nuclear assault on Kabul and the fall of Islamabad, and these cybernetic components had seemed to help so many of them return to everyday lives. Few had dared to make such denunciations, because they would have faced the wrath of the mainstream; the company, surprisingly enough, had expended very little of its own PR capital to defend its image. To illustrate that point, after a prominent evangelist had called Dr. Ferranini’s work “the irrefutable mark of the beast”, one U.S. senator from Colorado had replied, “That any man would say such words only attests to his ignorance. Too many men and women have served this country to be deprived of a normal life. The people at Scorpion are given that life back to them.” And so, as the Scorpion Cybernetics team had continued to hold their heads up high, they could not have been aware of the fact that Captain James Cooper had been among those deserving individuals.

Following weeks of investigation, the NTSB had announced that there was no evidence of a systems malfunction on the plane, itself, and that now its work had to shift to the pilot’s cybernetic right arm. Though officials had not openly stated it, they had suspected that, somehow, the host’s computer system had failed to respond to his commands. That could have also meant that the Scorpion NSS1 had crashed—something that had never before happened, Dr. Ferranini had begun to stress. Unfortunately, there had been no way to know for certain; too little of Capt. Cooper’s CPU had remained in order to perform a proper analysis. Nonetheless, a fickle public had come to its own conclusion—and not a good one for Scorpion Cybernetics.

Almost immediately following the NTSB announcement, the once-celebrated neurotechnology had now been casted negatively. Though no other tragic incidents have been ever reported, people had become truly suspicious, and had even taken to calling recipients of cybernetic components “the borg”. Reports of job discrimination had grown widespread, and in Anaheim, school children had attacked a young girl allegedly because of her cybernetic legs. So troubling had the developments become that Congressman David Sullenger of Kentucky, a powerful politician chairing the House Ways & Means Committee, had called for hearings on what he had dubbed “cybernetic dangers”, and he had summoned to the floor the representatives from the FDA, the Dept of Veteran’s Affairs, and even the CEO of the company, demanding to know what risks Americans faced. The entire process took three months, and at every turn, Dr. Ferranini stressed that, to his knowledge, the products were “perfectly infallible”. All the while, public sentiment had grown colder; sales of the company’s cybernetic components had plummeted, as government agencies and private insurers, alike, summarily had suspended any new payouts of the equipment. In short, very quickly, this had seemed to be the end for a pioneering, American company.

The venture capitalists from Fountainbleau and Davenport Heller, the two firms holding a 40% equity stake in Scorpion Cybernetics, had thought to move decisively. They had pressed Dr. Ferranini to hire a team of consultants to assess the prospects for the company, and after two months of study, this team had predicted that the sales lull would have substantially debilitated Scorpion Cybernetics, and that the fallout from the plane crash had had, quote, “no likely, near-term resolution”. Therefore, they had developed a strategy to revamp the company. “With sales as depressed as they are, and understanding that they will remain this way for the foreseeable future,” the lead consultant had begun his presentation, “Scorpion Cybernetics should consider jettisoning its manufacturing operations, and prime its efforts in research and development.” To illustrate their point, the consultant had pitched the prospects of a licensing deal with Bionix Industries, the Seattle-based division of a defense-contracting giant. Bionix had wanted access to the Scorpion NSS1 operating system, in order to build fully-armored, Web-integrated battle suits for American and British soldiers. And while the idea of this arrangement had been troublesome to Dr. Ferranini and a few others, Kyle Tanner and the VCs had loved it.

Looking back on all of these events, Kyle could do nothing more than sigh. He firmly believed that the consultants were correct, but others in leadership did not share his opinion. Dr. Ferranini, for example, simply did not want his dream to die, and he saw the Bionix deal as a perversion of that dream. The directors of operations and sales also had vested interests in maintaining the status quo for as long as they could, and so, they aligned themselves and prodded their leader to stand up to his financiers and the consultants. Indeed, from today’s three-hour conference call with the venture capitalists, a call wherein he had to deliver the worst quarterly numbers and the bleakest projections in the company’s existence, and wherein Dr. Ferrarini flatly rejected “any death sentence disguised as a deal”, Kyle knew that a civil war was about to be fought within Scorpion Cybernetics. Ironically enough, however, he did not expect it to begin so soon.

As Kyle walked passed his secretary, the young woman informed him of a call from Carissa Jenkins holding on Line #1. The weary CFO entered his office, took a seat at his desk, and answered the phone. “How can I help you, Carissa?”

“Well, this is about how we are going to help you, Kyle,” the tough, but feminine, caller from California explained. “Fountainbleau is concerned about this investment, and that’s the same from the guys at Davenport Heller. We are not eager to lose here—not like this. We’ve decided to take action.” With that, she instructed Kyle Tanner to listen. Within a week, the venture capitalists were going to call a meeting of the company’s board of directors, she went on to explain, and during this special meeting, they were going to force Dr. Ferrarini out as CEO. Along with this change, other key managers were going to be asked to resign, and the VCs were going to appoint a new leader to the company. “I want to know that you are going to stand with us, that you will vote your shares with us,” she said. “Can I have some indication of that now?”

Kyle Tanner sank into his ergonomic chair and paused for a moment. Though he felt that this was potentially the right move, he was stunned by the fact that it was about to happen so quickly. Then he looked around his office, and his eyes stop on a photograph of his father, a man who spend years as a career firefighter. It was then that this executive realized, perhaps for the first time, that uncommon action was necessary during times of challenge, times just like these. “Okay,” Kyle began with no further deliberation, “I’m in.”



1. Identify some of the mistakes made by the leaders of Scorpion Cybernetics.
2. Should Dr. Sergio Ferranini be removed as the chief executive of this company? If so, why? If not, where do you feel most of the blame resides for this company’s woes?
3. How should the company address the negative stigma being associated with its products?
4. What types of strategies would you deploy to turn around Scorpion Cybernetics?

Please post all of your answers in the comments section of this blog. Remember, there are no wrong answers; there are just your answers...Stay tuned for Part Two.

Case crafted by Gary C. Harrell. © 2009. All rights reserved; Axiom Strategy Advisors, LLC.


Shannon said...

This is a good exercise. So let me see if I can get the answers right.

One: the ops manager probably never reported that they had problems with the arms and legs, and nobody ever asked.

Two: I think she and the CEO should go just for that. The CEO also is too arrogant to match the change needs for this company.

Three: They don't need to try to get out a new message. The damage is done.

Four: They just need to do what the consultants said. Just develop the software for the military.

Mashoud said...

(1) Scorpion Cybernetics was drinking its own spiked Kool-Aid. That was probably because they were the first-to-market. But they were wrong to assume that new technologies do not fail. They also got too caught up in the glow of success; maybe growing by a third per year can cause you to mentally close up to the possibilities of failure. But that's no excuse. The operations director seems like a "yes" woman, and she was too afraid to have a balanced opinion about her company's products, especially when everyone else was so chipper.

(2) Are you kidding! This guy is not businessman! He even went before Congress upholding a safety record that no one wanted to hear about after 180 people died.

The worse thing a leader can do is not fall onto his own sword when he knows that he's been part of the problem.

(3) These people "expended little of their own PR capital" to improve their image. Even after the what happened in Europe? How arrogant!

They better get pictures of happy children, rays of sunshine, green pastures, and all that to start painting a better image.

They also need to change their name. It's too aggressive.

(4) They would do well to maybe look for an buyer. I do not even think a licensing agreement will serve them well.

Wayne Beasley said...

1. Domestic team was too focused on the interface development and computer systems to see that the quality control for their bread and butter products was not up to par. Director of Operations, Lana Reynolds, and her lieutenant obviously have a communications breakdown not to share their concerns with others in the company about the problems with the out-sourced products. Even though Dr. Ferranini may be a brilliant scientist, he should never have been Chairman & CEO. Let him do what he does best and hire a real manager to manage. The CFO was relying to heavily on one program. Having 80% of your sales come from one client spells the potential for disaster.

2. Dr Ferranini should step down as CEO. By doing this he will be able to take on a more encompassing role in the R & D of current and future products that the company is working on, which is where his expertise is to begin with. Lana Reynolds and her lieutenant should be replaced for failure to have proper Quality Control procedures in effect.

3. Although a vast amount of damage has been done, all is not lost. Scorpion Cybernetics needs to announce a partnership with the NTSB to look into the root cause, if any, played by their cybernetic arm. Hearing what the Captain said from the voice recorder sounds like a death toll to the cybernetic arm, however, with that being the only information, no one will know the full truth. Too much of the CPU was damaged to lay any real blame on Scorpion. The company needs to spend some PR money on a campaign on how many people their products have helped over the last decade. How many wounded soldiers hve returned from war and were able to have a normal life because of these devices? Invite the House Chariman of the Ways and Means Committee along with a group of reporters from the newsmedia to the headquarters to see how much R & D goes into each product. And for god's sake, show some little children who would be crippled or paralyzed if not for Scorpion Cybernetics. Everyone has a soft spot for handicapped kids!!

4.A proper business management team needs to be in place. Dr. Ferranini should be on the board of Directors, yes, but his main focus should be on scientific research. Some type of partnership with Bionix in reguards to the Scorpion NSS1 would be a good idea, maybe a limited time licensing agreement, as long as Scorpion keeps all rights, patents, etc. on the operating system. Stop outsourcing the manufacturing process. Having to pay American workers may decrease your profit margin, but it will help you in the long run. Americans like to buy things that have "Made in America" stamped on them. Branch out and don't let one contract hold the majority of your business. Find other partners (venture capitalists) who believe in the products and services you are providing and who are willing to wait a little longer for a long term touchdown instead of a short term fieldgoal.

JUS said...

(1) There were problems in many facets of this business, starting with the CEO, perhaps. But it did not end with him. Ferranini was a technologist or a scientist, but he was not a business professional. He probably worked in the research world for years before the got into this gig. I am stunned that neither he nor his benefactors recognized that fact. But that is Problem #1: a man not qualified to lead.

Problem #2: a lack of oversight. The operation person had to report to no one? Well, that probably because the CEO was too busy evangelizing their product and too distance to really care about production.

Problem #3: the heavy reliance on government contracts. This was something that the sales manager should have noticed. Somebody else said that Tanner should been held accountable for this one, too. I do not agree with that.

Problem #4: the lack of PR. It struck no one in this company that they needed to cultivate a good public image. That's really why they turned on the company. It was because people were never educated in a way to help them appreciate this life changing technology.

Problem #5: visionless consultants. I hope a licensing deal was not all they were proposing.

(2)Absolutely, Ferranini must go, if only make a statement to workers and the public that things were changing. The operations and sales leaders must go, too, as well as the marketing person.

(3)I agree with the earlier statement: changes the company's name. Bad things happen to good businesses, and every so often to get away from it, this is necessary. Remember RJR or Blackwater or ValueJet.

I would also start an active community for recipients where they can support on another.


mike carson said...

You need to leave this up for a few days. I am going to actually write my answers this week.

Digger in LV said...

I agree. Give me another day. I want to give my thoughts on this too. Can we share this with other people?

Anthony Lovecchio said...

1.) The lack of professionals in the finance, mgmt., law, and marketing. And, Failure to properly test cybernetic products resulting in human lives, and ultimately the downfall of a million dollar organization.

2.)I do believe that as CEO, more of the responsibility will fall in Dr. Sergio's hands. He should have been more responsible by taking preventive methods to avoid accidents. Although, it's not completely all his fault, he should've adjusted to previous mistakes he mad which resulted in the accident that occurred 14 months ago.

A. Lovecchio said...

Thats all i had time for.. I'll post the other 2 answers later

d. acosta said...

A: The CEO was not actively involved with the companies acquisitions. He should have been in R&D. The board should have never put him there. A CEO should only care about making money for his shareholders.

A: If their executive staff would have weighed their risk appropriately, then they should have been prepared for the tragedies listed and had action plans in place for them. POOR PLANNING. POOR RISK ANALYSIS.

A: Whenever a company innovates something, the risk analysis becomes more complex because it is a market that has never had any exposure.

A: Yes. He should have never been in that position. But, he should be an advisor on the board of directors since he has a passion for his work.

A: They should exploit the positive outcomes of their successes and relate to everyday lives. They should reorganize their company as they are planning; but, they should do so conservatively and cautiously. They should focus on admitting their faults within reason and empathize with the public. Would one of their executives have flown on a flight that they knew the pilot had their product within his biology? That is the question that they should ask themselves and develop an action plan to empathy. Mistakes will happen! Embrace them.

A: They should deploy an investigation to see if the pilot suffered anything that could have resulted from their product.

A: The first strategy would be to get with the FAA (Federal Aviation Administration) and collaborate to develop a disclosure system of any pilots that have had this cyber-bionic surgery. Secondly, they should get with the FED set up a national system for this and regulate certain business fields. They need to focus on empathizing with the public and reaching out to them since they are all potential customers.

d. acosta said...

A: See below on my opinion of strategy principles:

When we think about business management today we tend to think that we live in the most revolutionary of times. We’re right in thinking this but so too has every generation of business leaders that has preceded us. In 1668 Johann Goethe wrote “People of this age have a false sense of importance due to the vast amount of data available to them.

Distinction however should go not to those who merely have access to the data but rather to those who manage it’s advantageous use”.

Here are a few principles that successful companies have applied to ensure lasting success:

(1)Plan carefully: By studying the external environment firms identify what they might choose to do. By studying the internal environment companies determine what they can do. The goal of any strategic plan is to leverage unique competencies to take advantage of an opportunity in the external environment.

(2)Communicate the plan and keep it simple: Herman Boerhaave said “The Great Seal of Truth is Simplicity”. This is so true, great leaders speak in clear, simple and understandable terms so everybody knows exactly where the company is going and what will be required to get there.

(3)Exploit your current resources: In every growing company there is a strain on resources between the development of new assets vs. leveraging of existing assets. Companies that have enjoyed enduring success do not ignore the need to develop new asset categories but history tells us the most successful companies always focus on exploiting existing assets.

(4)Diversify your business portfolio: Outstanding companies are very adaptive in their approach to markets. They diversify their geographical markets, their suppliers and their customer base so they are not dependent upon one customer group or geographical area for all their profits.

(5)Learn from Mistakes: Making a mistake is pardonable; making the same mistake again is not. To ensure learning takes place great organizations develop and pass on stories from which future managers can draw clear objective lessons and apply them to current day problems.

(6)Change conservatively: Outstanding companies do not go through radical changes on a regular basis. They do go through them but only at selected moments and even then, they do so cautiously.

Cedrick said...

Damn. I was gonna say everything Acosta said but he beat me to it.

Nicolai Vicol said...

1. Identify some of the mistakes made by the leaders of Scorpion Cybernetics.

- There was no a solid reciprocal tie between chief executive officer and the director of operation (also her lieutenant), maybe not only between them. When we talk about this such of companies that run business of millions, companies that works in a neurotechnology and cybernetics domain, the things are complex and there is no place for mistakes. That’s a level that doesn’t allow any lacks of internal communication. (a little remark: something bad happened 14 months ago, did the top managers learn enough from it ? If you don’t hedge well and get hit once, take care, next one may mean a KO.)
- … it’s been said that 80% of sales derive from government program. It’s good, it means the company got a really stabile client. But, perhaps, that may be a sign of alert, maybe… the manage team should change this situation by attracting contracts from another sides and diversify more the clients.
- There were some marketing problems, as I understood they didn’t invest too much on building a positive image of the company and building solid public relations. Maybe, they should promote more their concepts, in base that they give the opportunity of a proper life to the people that are in need. (Or how about any charity programs, financing teen social organizations etc., there are so many ways to do things in this direction and so many ways to SHOW to the people that your company DID, …a little remark: if you have not enough funds to do 2x, do only x, and make the people believe that you did 2x. )
- Another strategic mistake, they did rely too much only on one product (NSS1), even Dr. Ferranini affirm that NSS1 “is too important to this company”. With this been said, fail of NSS1 actually mean …fail of whole Scorpion Cybernetics. (I know enough about cybernetics, ’cause I study it, one thing I can affirm, no matter how perfect a system pretend to be, it still keep the feature of FAIL, a scientist like Ferranini knew that, and he should be prepared. A little ironic remark, it’s one of Murphy’s laws: “Anything that can go wrong will go wrong.” )

2. Should Dr. Sergio Ferranini be removed as the chief executive of this company? If so, why? If not, where do you feel most of the blame resides for this company’s woes?

Judging by what’s been said about Dr. Ferranini, he is a real scientist, no doubt. The question is: Is he enough good to be the CEO, the prime leader of company? While a CEO must be focused mainly on how to make money and grow in business, our Dr. Ferranini is focused on his masterpiece (NSS1),maybe he could be the right man in research and development domain. (just an idea)
A rude example: you can be a perfect constructor of a super sport car, but it doesn’t mean you will be the best driver for it, that’s a fact.

Nicolai Vicol said...

3. How should the company address the negative stigma being associated with its products?

That will be really hard for sure, but perhaps not impossible.
One tricky move, may be this one: Scorpion Cybernetics put a part of blame on its manufactures from Asia that didn’t follow some standards (for example), and the company decide to move all its manufactures back to US. That’s kind of a naive move, but it may work if it’s “polished” well.
Also I want to mention that a rebranding is strictly necessary. And there is a lot of work with the public relations, with the mass-media and so on.
“…too little of Capt. Cooper’s CPU had remained in order to perform a proper analysis ” this fact may be one possible way of salvation, the company’s future depends so much on how the manage team turn to good account this fact.

I guess this is the most difficult question… due to the very difficult situation that the company is in.

4. What types of strategies would you deploy to turn around Scorpion Cybernetics?

If the “rebirth” after all the measures and actions that had been taken to redress is not expected, Scorpion Cybernetics, probably will be supposed to continue following the consultant team’s proposal. Wich means they will be supposed to go for that licensing deal with Bionix.
As any major actions that should be taken are these ones:
- It may seem strange to invest in this critical times, but they should invest more in research and development to find out the roots of problems , errors occurred in their products (NSS1), in order to eliminate them and not let it happen again , cause an eventual another fail mean the end of all ends for this company.
- Changes in organizational structure, wich includes the change of top managers team, beginning with their chairman Ferranini.
- Finding another partners, another venture capitalists that will have a proper attitude on Scorpion Cybernetics products.
- Engagement of a new team of consultants, maybe the deal with Bionix it’s not the best of what can happen finally.

P.S. Sorry for my low English skills, it still make me problems in understanding and expression. I hope I made myself clear and I could make my point on this case.

Greg Ledet said...

Let' see what I can come up here.

1. I think one of the main mistakes made was not addressing the plane accident and possible causes of the failure. A simple "if you don't properly take care of our product, there's a possibility of failure" and a slight suggestion that maybe he didn't take good care of his arm would have cleared a lot of BS. Maybe he had fallen hard at home and damaged the CPU in his spine? Also, rather than have 100% focus on all aspects of the company, it seems like they chose to work harder on one thing and let quality slip on something else. They had HORRIBLE communication too

2. Yes. The company was under his direction, and any mistakes made or lack of QA ultimately falls on him. Don't kick him out of the company completely, after all, he's the lead scientist. Put a businessperson in as CEO and make him CTO.

3. Heavy PR. Bring people in; war heroes, famous patients, families of people with small children that have the product; and push as hard as you can that this was an isolated incident. Not only was it the only time in history it's ever happened, they never proved what the problem was. If my evidence shows that it my product is perfectly infallible, make that evidence public and prove yourself to the people. There's another way too... Name change. A simple name change will do wonders for a company's reputation.

4. Bring manufacturing stateside. This will put everything close by and easy to keep track of. Better communication between OPS and the CEO. Learn that a 33% per annum growth isn't everything. Never sacrifice anything to meet some sort of growth goal. Growth will come as long as you're consistent. They were already years ahead of the competition. Being greedy is what hurt the company. I would create a college fun in the name of the pilot who crashed the plane to offer children of people who died in the accident to go to college. If something like this happens again in the future, be sure you get the first strike before anyone can damage you.

A Good Time said...

1. The most blaring mistake was committed by the director of operations and her lieutenant by not reporting problems with production. If an investigation brought about by the plane crash uncovers that there were known problems with production, the company will be crushed by lawsuits. Furthermore, criminal charges could be filed against individuals in the company.
Next, the majority of the board made the mistake of letting their pride get in the way of making a prudent business decision to get rid of its production arm.

2. Dr. Ferranini should be removed as CEO because, at the end of the day, he is the leader of the company. He should have known about the problems with production. Moreover, he should have made the correct the decision to save his company, not his pride. However, he should be allowed to remain on the board. That said, the director of operations, her lieutenant, and anyone else involved in withholding information on the production issues should be terminated.

3. The company should first and foremost hire a PR firm that specializes is crisis management. The campaign should align the malfunction with production issues, and drive the fact that Scorpion is now partnering with Bionix to produce the next generation neurotechnology.

4. One major strategy I would employ is to unleash a massive PR campaign that shows how many people Scorpion’s technology has helped. The public would see and hear so many success stories that one unsuccessful story won’t seem that bad anymore. Next, by partnering with Bionics, Scorpion will be able to focus on R&D. The company gained is success from its intellectual capital, and that will be how it regains its market share. Lastly, I would assemble the right people to manage the company – people that understand the business and the technology.

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