Journal of Business Case Studies – May/June 2010 Volume 6, Number 3

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Gemini Systems: Managing

From The Middle In A High-Tech Company Timm L. Kainen, University of Massachusetts Lowell, USA

ABSTRACT

This business case study is designed for MBA courses in Organizational Behavior, Organization

Change and Negotiations. The case follows a young middle manager who has very little formal

authority as she attempts to implement a new project staffing system for engineers in a high-tech

matrix organization. As the company rapidly grows, she experiences significant resistance to

change from section leaders, program managers and engineers who have become accustomed to

competitive behavior in an environment rich with opportunities. However, as the company

experiences retrenchment during the economic downturn of 2009, the change resistance

continues, but within an environment where there is a paucity of projects. The case shows how

Sophie grows as a middle manager and learns the necessary skills to be successful at managing

change and “influencing without authority”.

Keywords: Middle-managers, Influence without authority, Managing scientists and engineers, Negotiating change,

Matrix organizations

CASE A

n an August afternoon, Sophie sat at her desk pondering her next move. Her first three years at Gemini

Systems had been very challenging, but also full of opportunities that she had wholeheartedly

embraced. She had made her share of mistakes as a “free agent” middle manager with no direct reports,

but she had established herself as someone who could get things done. As a Project Control Analyst, she had

successfully and consistently improved many parts of the system used to manage the staffing requirements of the

multiple projects in her division. Her tireless efforts had saved large cost over-runs for her division and earned her a

reputation as one who did not shrink from tough assignments or back down from disagreements.

In fact, her outstanding performance had earned her three battlefield promotions as she successfully

navigated her way through an endless series of conflicts with a wide variety of technical specialists, project leads,

bosses and other project control analysts. The roots of these conflicts over project funding and staffing were

embedded in the company‟s matrix structure and were the tacitly shared value system that made up its corporate

culture. She accepted this work environment as her management reality and knew full well that it would not be

restructured to accommodate the new ideas she was planning to implement. She would have to push the

collaboration envelope if she wanted the usual protagonists to work within the parameters of her new and more

integrated system for tracking and managing the overall staffing requirements of the collective projects.

BACKGROUND

Gemini Systems began as a small independent software development company working on U.S.

government defense contracts. In 2004, it was acquired by Scorpio Inc., a large defense contractor that was

expanding its software systems capabilities. Gemini had been an attractive acquisition primarily because of its

talented engineers. As such, the Gemini team of engineers and their support staff were allowed to operate as an

autonomous group within Scorpio Inc. The only difference was that the Gemini CEO would report to top

management at Scorpio.

O

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Scorpio quickly began to funnel more projects to Gemini and it rapidly grew to 400 employees who were

spread throughout three different locations within the United States. This larger talent pool also allowed Gemini to

take on larger and more complex projects. However, success came with a price. The old system for staffing, funding

and monitoring projects became increasingly difficult to maintain. Since these processes were built for the original

smaller organization, they were becoming outdated in the newly expanded company. Additionally, while Gemini

still operated independently, Scorpio‟s more bureaucratic reporting procedures were beginning to make new

demands on how the Gemini group reported its financial numbers as well as other project data. Gemini realized it

would need to adapt and change its current operation if it was going to be able to operate successfully and compete

in this new world of million dollar projects.

Division A, the largest of the three divisions within Gemini, was having the most difficulty in making

adjustments. This group had a history of being the most successful division within the Gemini group. It had rapidly

doubled in size to about 120 people within the last few years. As such, it felt more entitled to handle projects in its

own way.

As shown in Exhibit 1, Division A was comprised of Directorate 1, Directorate 2, and Directorate 3. Each

directorate represented a certain technological expertise and worked to solve customers‟ problems in that field. The

engineers in each division would be assigned to the division that was their best fit based on their individual technical

skills and knowledge. Furthermore, each of the three directorates was further broken into two individual sections

which further segmented the engineers according to their technological expertise. Each section would have a section

leader and then a number of engineers that reported to them. The company organization chart was a matrix structure

where the engineers were assigned to projects within their own directorate, as well as the other directorates as

projects had certain technological needs arise. As such, they had two bosses – their functional section leader and the

manager of the project to which they were assigned.

Exhibit 1: Division “A” Organization Chart

SW Engineer 1

SW Engineer 2

Test Engineer 1

Test Engineer 2

Algorithms Engineer 1

Algorithms Engineer 2

Section 1

Division A

Directorate 1 Directorate 2 Directorate 3

SW Engineer 1

SW Engineer 2

Test Engineer 1

Test Engineer 2

Algorithms Engineer 1

Algorithms Engineer 2

Section 2

SW Engineer 1

SW Engineer 2

Test Engineer 1

Test Engineer 2

Algorithms Engineer 1

Algorithms Engineer 2

Section 1

SW Engineer 1

SW Engineer 2

Test Engineer 1

Test Engineer 2

Algorithms Engineer 1

Algorithms Engineer 2

Section 2

SW Engineer 1

SW Engineer 2

Test Engineer 1

Test Engineer 2

Algorithms Engineer 1

Algorithms Engineer 2

Section 1

SW Engineer 1

SW Engineer 2

Test Engineer 1

Test Engineer 2

Algorithms Engineer 1

Algorithms Engineer 2

Section 2

Sophie, PCA Kristin, PCA Lauren, PCA

PCA’s

Admin Assistants

BUSOps

SW Engineer 1

SW Engineer 2

Test Engineer 1

Test Engineer 2

Algorithms Engineer 1

Algorithms Engineer 2

Section 1

SW Engineer 1

SW Engineer 2

Test Engineer 1

Test Engineer 2

Algorithms Engineer 1

Algorithms Engineer 2

Section 1

Division ADivision A

Directorate 1Directorate 1 Directorate 2Directorate 2 Directorate 3Directorate 3

SW Engineer 1

SW Engineer 2

Test Engineer 1

Test Engineer 2

Algorithms Engineer 1

Algorithms Engineer 2

Section 2

SW Engineer 1

SW Engineer 2

Test Engineer 1

Test Engineer 2

Algorithms Engineer 1

Algorithms Engineer 2

Section 2

SW Engineer 1

SW Engineer 2

Test Engineer 1

Test Engineer 2

Algorithms Engineer 1

Algorithms Engineer 2

Section 1

SW Engineer 1

SW Engineer 2

Test Engineer 1

Test Engineer 2

Algorithms Engineer 1

Algorithms Engineer 2

Section 1

SW Engineer 1

SW Engineer 2

Test Engineer 1

Test Engineer 2

Algorithms Engineer 1

Algorithms Engineer 2

Section 2

SW Engineer 1

SW Engineer 2

Test Engineer 1

Test Engineer 2

Algorithms Engineer 1

Algorithms Engineer 2

Section 2

SW Engineer 1

SW Engineer 2

Test Engineer 1

Test Engineer 2

Algorithms Engineer 1

Algorithms Engineer 2

Section 1

SW Engineer 1

SW Engineer 2

Test Engineer 1

Test Engineer 2

Algorithms Engineer 1

Algorithms Engineer 2

Section 1

SW Engineer 1

SW Engineer 2

Test Engineer 1

Test Engineer 2

Algorithms Engineer 1

Algorithms Engineer 2

Section 2

SW Engineer 1

SW Engineer 2

Test Engineer 1

Test Engineer 2

Algorithms Engineer 1

Algorithms Engineer 2

Section 2

Sophie, PCA Kristin, PCA Lauren, PCA

PCA’s

Admin Assistants

BUSOps

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THE BUSINESS OPERATIONS GROUP

Sophie was part of the Business Operations Group which was a staff support unit for the technical

directors, section leaders and project managers (PM‟s) in the three Directorates. The BOG assigned technical

specialists and engineers to the various projects and monitored project costs, and performance efficiencies against

pre-established parameters. By providing financial information to both PM‟s and the section leads within the matrix

organization, they were a critical part of the control system for both the Gemini group and Scorpio Inc. Within each

of the three directorates, one person from the business operation group specifically worked on that directorate‟s

projects. This person was called a project control analyst (PCA). Within Division A, there were three PCA‟s:

Sophie who was responsible for Directorate 1, Kristin who was responsible for Directorate 2, and Lauren who was

responsible for Directorate 3.

Each PCA used an excel tool called the “staffing planner”. It contained a tab for each project where the

staffing plan could be mapped out and expenses tracked. This was useful to not only report data back to the

customer, but also to make sure that any given project was not over or under spending. At the front of each work

book, there was a rollup sheet which linked to the multiple excel pages and illustrated the allocations for each staff

member per month so that the PCA could see the project to which each member was allocated and whether the

project was over or under staffed. Since Division A was a matrix organization, it was not unusual for various

engineers to be assigned to multiple projects in multiple directorates. This forced the PCA to have an additional tab

on the excel worksheet entitled „other directorate‟ where these concurrent assignments could be logged. This extra

tab was needed to confirm that all of the available financial and human resources were being used to maximize

profit and assigned to the appropriate projects to maximize efficiency.

At the end of every month, each PCA would have a meeting with their individual directorate, which

included the directorate manager and the section leads, in order to update the staffing plans for their projects and

allocate staff members based on the different project needs. The PCA would then look at the rollup page to make

sure there were no staffing conflicts for the month ahead. Changes to the staffing plans would often affect other

PCA‟s projects within the division. In order to ensure that all changes were accurately captured, the PCA‟s had to

constantly communicate with each other. This way the PCA‟s could verify that the changes were acceptable and

reported to the PM in charge of the project. This process began during the last two weeks of the month and had to

be completed before the month was up in order for the staff members to know what they would be working on in a

timely manner. The process was not particularly well organized because each PCA worked individually until it was

time to combine and rectify all of the information at the month:

End of the Month Sequence

1. Last week of the month, work with PM‟s to update projects to spend out correctly and request any additional staff that they needed

2. Meet with directorates to go over staffing conflicts that arose from the new staffing requests 3. Send any updates that were made to a separate workbook to the PCA responsible 4. If meetings already happened and a PCA sends additional changes, then meet with their directorate to

discuss again and resolve if necessary

Communication was essential because while the section leads were responsible for staffing the engineers in

their section, the PM‟s were responsible for staffing their own projects. It was the PM‟s job to have all staffing

requests in before the staffing meeting. It was during the meeting that the section leads would make the call as to

which staffing requests from the PM‟s were to be accepted. After the meeting, any changes that were made or

requests that were rejected needed to be communicated back to the PM‟s so they could go back to the drawing board

if necessary. If a PM absolutely needed a certain engineer and could not get him or her, it was taken up to their

section lead to work it out with the appropriate parties. If the section leads could not work it out, it was then the

directorate manager‟s say as to where the engineer would be staffed. If the conflict could not be resolved at that

level, then it was the Division A manager who would step in and make the final call depending on the priorities of

the division. The hope was that the conflict would not have to escalate to the division manager, but lately with the

lack of communication, this was happening more frequently.

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Whatever projects Gemini worked on, it did so as an outside contractor. As such, it billed customers by the

labor hours for all employees working on any given project within a prescribed timeframe. Having all the financial

information and staffing allocations rolled up at the end of the month for each division was critical. Upper

management and the CEO needed an accurate accounting of all division activity to get a complete picture of how

each division was tracking against its goals. In addition to measuring overall efficiency, this data allowed

management to assess needs for additional hiring and determine if they had enough funded backlog to cover the cost

of maintaining the current staff. It also allowed for the estimation of how much additional work they may be able to

take on as new business.

SOPHIE’S BACKGROUND

Sophie started at Gemini as an administrative assistant shortly after graduating from college. Her father, a

chief engineer at Scorpio, had learned of the job opening. During her first year, Sophie put in long hours, learned

how the systems operated and took on extra responsibilities where ever she could find them. Toward the end of that

year, she learned of an opening within her division for a PCA. There were two PCA‟s within the division, one for

each directorate, and now one of them was leaving the company and would need to be replaced. Sophie, knowing

she had the skills for the job, went to her boss, Sam, and told him of her interest in the position, citing the fact that

she had already learned how the systems operated during the last year. She also argued that promoting her would set

a good precedent and establish a career path for other motivated administrative assistants within the company. This

last point was important since Gemini had traditionally been concerned with only the engineers‟ career paths. Sophie

argued that establishing a career path for employees in the Business Operations Group that lead to a PM role would

give them incentive to work harder and be a source of home-grown talent for the company. Sam agreed that she had

the capability to do the job and he could see the potential long-term benefits to the company. He decided to

recommend her for the promotion which would begin at the start of the following fiscal year.

When it came time for Sophie‟s promotion, it turned out that Division A was re-organizing from two

divisions into three. In addition to Sophie‟s promotion, Kristin, a five-year veteran administrative assistant in the

division, would also be getting promoted. Even though Sophie had actively pursued the job opening, Kristin was

upset about the promotion because she had seniority within the company. Sam, the assistant division manager and

head of the business operations group, did not want to hurt Kristin‟s feelings, so he decided to establish two jobs.

The establishment of two positions, as opposed to one, would also fit the new organization structure with one PCA

for each of the three new directorates.

As the youngest and newest member of the business operations group, Sophie was eager to prove her worth

to the company and start working her way up the corporate ladder. She had started at Gemini a couple of years after

the acquisition, but before Scorpio‟s corporate bureaucracy had overtaken the Gemini way of doing things. As the

two companies grew, she began to see even more potential career growth opportunities.

THE NEW STAFFING PROCESS

Along with the new division structure, a new process for tracking projects and recording staffing

allocations was also under development. A new software package for managing and planning the staffing of

projects was in the development process and Sophie was put in charge of its testing. Sophie was chosen to head the

roll-out of the new software to her division. Even though she was the newest PC, she had the best grasp of how the

excel spreadsheets and databases worked. Sophie successfully implemented the new workbook and process into

Directorate 1. She followed up by training the other two divisional PCA‟s (Lauren and Kristin) to use the new

staffing system. Throughout the year, Sophie proved herself as a PCA and gained the trust of the director, section

leads and PM‟s by providing on time and accurate data. She also showed her ability to dig down and analyze what

was going on with projects and what they would need to spend out properly.

Sophie‟s long-term goal when joining Gemini was to eventually become a PM for the company and to do

so by going back to school for her MBA. Keeping her aspirations of PM in mind while at her PCA position, Sophie

approached other PM‟s within the group who were overwhelmed with work and offered to help offload some of

their work. At the end of the year when Sophie went in for her annual review with Sam, she had taken on a number

of additional duties and tasks that a PCA normally did not do. She was hoping this extra activity would help prove

her worth to the company and further develop her career path, which it did.

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During their evaluation meeting, she and Sam formulated a new career growth path for her. It went from

PCA to Deputy PM (DPM), and eventually on to PM. They agreed to allow Sophie to be the DPM on one or two

smaller projects. As DPM, Sophie would now do all the internal PM-type roles of keeping the project on task,

ensuring that milestones and deliverables were met. The only difference between her position as Deputy PM and the

PM on the project is that the main PM would still continue to be the customer point of contact. Gemini‟s staffing

pay scale and titles were different from those at Scorpio, so there was no title within the organizational matrix which

fit this new position for Sophie; so instead, she was given a promotion from PCA II to PCA III.

THE NEW STAFFING PROCESS DEVELOPS NEW ISSUES

Sophie had been a PCA within Division A for about a year when the issues with the staffing process started

to become an apparent problem for the company. The staffing allocation process was initially handling the needs of

the division, but as Division A grew in size and more contracts were awarded, it became increasingly difficult for

the PCA‟s to communicate with one another. At the end of each month, the PM‟s and the Section Leads would

communicate staffing updates to each of the three PCA‟s. Often times, these updates would affect more then one

directorate, so it was the PCA‟s job to communicate with the other PCA who was being affected.

This often did not happen and the staffing updates were not getting captured accurately. As a result, the

projects started to suffer. PM‟s were losing employees that were critical to their projects because needs were not

getting recognized by the Section Leaders whose main concern was to have all of the engineers in their group staffed

at 100%. The right employees were not working on the right projects because PM‟s did not realize that they needed

to request the PCA‟s to assign them. Projects started to be over or under spent and the division overhead was taking

a huge hit due to the miscommunication.

After all staffing inputs had been recorded in the staffing planners, the PCA‟s would then meet with the

section leaders to de-conflict any of their staff who were over or under 100% allocated. Instead of having one

meeting with the section leads, there had to be multiple meetings because the section leaders did not have a grasp on

all of the projects in Directorate A‟s needs. The PCA‟s were not able to help either because they also were not

aware of the status of projects in other divisions, so this resulted in the section leads having to scramble to find

coverage and then meet again once they had an answer. Also, this lack of knowledge caused the section leads to just

add staff to projects to make sure they were covered with no regard for whether or not the project budget could

support them. The meetings were often chaotic with the section leads arguing their projects‟ needs without listening

to what the other projects needed. Instead of compromising for the better of the division, they did not care if other

projects suffered.

The process was so manual that every time a change was made to a staffing allocation, the project page

itself had to be re-created, the rollup page updated, and then (if the project was in another directorate) that tab had to

be updated and the other PCA notified. One misstep and a request for a staff member could fall through the cracks

or an update could go un-captured by one of the PCA‟s. By the end of the month, there would still be a number of

conflicts unresolved and the engineers that were impacted would still not know what projects they should be

working on. It became increasingly difficult for the PCA‟s to get the PM‟s and section leads to make staffing

decisions in a timely fashion. This started to have a negative impact on the whole division.

It was not clear whether the section leads and PM‟s understood the importance of the staffing allocation

exercise, or that they did not want to understand. They kept neglecting their homework and did not seem to

understand the needs of the projects. This problem started to become painfully present to Greg, the Division A

manager, who saw the division‟s overhead budget numbers diminishing much too quickly and projects starting to

fall behind schedule. If Division A was going to continue to grow and expand in order to assist Gemini in reaching

its overall goal of 20% growth, then better management of the projects within this division was essential. If the

current level of project management performance remained unchanged, it would be impossible for Gemini to

compete for multimillion dollar contracts against large powerhouse companies, such as Raytheon and Northrop

Grumman. Looking to solve the management and staffing allocation problems that were impeding the divisions‟

growth, Greg looked to the business operations group manager to set a new precedent in how better management of

the staffing allocations could be achieved.

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TAKING OVER DIVISIONAL STAFFING ALLOCATION

Around the time of her promotion to PCA II, Sophie started to take on the responsibility of combining the

three staffing workbooks and updating the staffing line in order to calculate projected future internal sales

throughout the year based upon staffing allocations. This projected future data would then be matched against the

funding to give upper management a better picture of how the company was doing financially. The analysis allowed

upper management to see how much funding was allocated to cover the existing staff, the time period, and whether

there were any discrepancies between the projected numbers and the actual monthly numbers. Sophie was getting

settled with her new assignments when she started to notice a problem with engineers who were not allocated on her

projects, yet they were charging hours to her projects. When she brought this to the attention of the PM‟s, she found

out they were actually tasking them, but the updates to the staffing planner never made it to Sophie‟s desk. She also

began to notice that some engineers who were assigned to her projects were not actually charging those projects, but

charging hours to the division‟s overhead account…or to a completely different project. Again, when this was

brought up to the PM‟s, it came as a surprise to them.

Sophie went to her boss, Sam, with her findings in the hope that they could come up with an improvement

to better capture the planned data more accurately. The timing of Sophie‟s diagnosis could not have been more

perfect. Earlier that week, the division manager had expressed, to Sophie‟s boss, his concerns about the overhead

margins and poor tracking on projects. The division manager felt as though Division A needed to develop a better

system of staffing and communicating between multiple PM‟s.

Sophie explained to Sam her process of going through the staffing allocation exercise with Directorate 1

each month and that at the end of each month, her directorate was the only one who was able to allocate all staff at

100%, on time. Sophie still struggled with getting accurate and timely data from Lauren and Kristin (the PCA‟s in

Directorates 1 and 2), which made the overall process less effective. Sam was impressed with how Sophie was able

to tackle the staffing issues within Directorate 1 and felt that if the other directorates could do it the same way, then

the issues could be resolved.

The problem was that Lauren and Kristin were not really getting the job done within their respective

Directorates and did not seem to have the ability to do so. Seeking a resolution, Sophie‟s boss asked her if she

would be interested in taking over control of staffing for the entire Division A. He wanted her to develop a process

similar to the one she had created for her own directorate and make it work effectively for the whole division.

Sophie knew this was a huge responsibility but also a great opportunity as it presented her with her first real shot at a

management position. Her new responsibilities included the implementation of her new project staffing design. Her

performance on this task could either enhance or hurt her career path at Gemini. After analyzing the pros and cons

of the position, Sophie felt very confident in her ability to perform this task and was eager to prove herself. This

new opportunity was a great starting point and Sophie hoped that it would open more doors along the way to

reaching her project management goal.

FIRST STEPS

The following month, Sophie was going to take over staffing allocation for the entire division. Looking for

guidance, Sophie decided to set up a meeting with Jacky, a senior member of the business operations group, who

was responsible for the way the workbooks were currently staffed. Sophie voiced her concerns with regard to the

current way of rolling up the staffing, which she believed was leaving room for errors because the allocations were

being done manually. Sophie felt that if she was going to be doing the staffing for the entire division, it did not

make sense for her to go into each workbook individually and update each and every change that was made on the

overall summary page. After discussing the current issues, Jacky mentioned that he could develop an access

database that, at the push of a button, could read each of the three staffing workbooks, pulling out all staff and their

allocations across Division A at one time. Combining all the manual steps on the workbook into one Access project

would definitely allow all changes to staffing allocation to be captured in the summary page, which would then

show any conflicts within the division.