Written Analysis and Communication A Report on NICE VENTURES

Submitted by Group 07 Harkirat Singh Muraleedharan R Nikhil Sharma O B Vishnu Ruban Rajendra Babu Mellam Tejinder Negi 2012PGP124 2012PGP213 2012PGP226 2012PGP236 2012PGP294 2012PGP403

PGP1 Section A 2012-14 On 19th March, 2013

LETTER OF TRANSMITTAL
A Report on Nice Ventures

19th March, 2013

Prof. Swatantra Faculty, Written Analysis and Communication Course IIM Indore

Dear Maam, We are enclosing a report of our understanding of the case on Nice Ventures as part of the Written Analysis and Communication course requirement. The case has been analysed as instructed and is being submitted for consideration.

Yours sincerely, Group 7 Section A PGP2012-14 IIM Indore

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Executive Summary
Nice Ventures is a small restaurant management company founded by Ramsey Smith in San Francisco, California. The company was a general partner of three fullservice restaurants Rose Pistola, Roses Caf, and Terzo with unique dining concepts for each. Laurie Thomas a Silicon Valley veteran who initially was an investor in Nice Ventures had taken over the CEO role later when the company had been through financial trouble due to various internal and environmental factors. Laurie Thomas through various bold cost cutting measures and implementation of new programs had kept the company alive and also gained confidence among the employees. The economic downturn in late 2008 had had considerable effect on the finances of the company which called for immediate cost cutting measures. The Tahoe offsite meeting arranged with the executives of the company by Thomas revealed the growing resentment among her employees about her management style which needs immediate attention as everyone needs to be on board to drive the company out of the financial crisis. Thomas is also confronted with the problem of choosing a new GM for Terzo after her attempts to promote Ben for a dual GM role and mentor Adam for the post backfired. Her decision to hire a new experienced GM from outside also dint workout as planned due to intentional miscommunication by Ben and also the interest shown by Sasha, an employee at Terzo for the GM post. Thomas had to take a decision about how to approach these problems in the most efficient way to regain the trust of her employees while pulling the company out of crisis. Our group recommended that Thomas should brainstorm with all her executives about the cost cutting measures to be taken to decide which cuts would cause the least damage and most benefit to the company. She should then hold a general body meeting of the company to announce the decisions while the managers take responsibility to ensure better communication among employees. Thomas should also have talk with Ben, Adam and Sasha regarding their future roles and a leadership program is proposed to both Adam and Sasha to better hone their managerial skills with respect to the organizational needs and also move back Ben to his GM role at Roses Caf while making him mentor Sasha and Adam.
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Table of Contents
Title Page Letter of Transmittal Executive Summary Introduction1 Problem Statement2 Analysis of Assumptions and Facts.2 List of Alternatives.3 Recommendation...4 Implementation4

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Introduction
Nice Ventures is a small restaurant management company founded by Ramsey Smith in San Francisco, California. As of March 2009, the company was a general partner of three full-service restaurants with unique dining concepts for each. Rose Pistola and Roses Caf were the established profitable ones while Terzo was launched in 2006. Nice Ventures has been through difficult financial situation because of some questionable contracts by the previous management and the recent economic downturn. Laurie Thomas, a Silicon Valley veteran who showed interest in Nice Ventures from its start and invested substantially in the venture took over from Ramsey Smith when things had been really tough for the company post 9/11. She made some bold decisions to keep the company running and maintain its reputation in the market. As things got better Thomas focused on building a fostering a great working culture which is very foreign to the restaurant business. She introduced some new programs to make the working environment more flexible and accountable. She also built up on some existing programs to boost the morale and learning of her employees. All this had resulted in extremely low management turnover which is a rarity in the industry. In the summer of 2008 Thomas faced the crisis of selecting a new GM at Terzo. She appointed Ben, GM of Roses Caf as an interim GM for Terzo. To make the transition smoother she offered the post of AGM to Adam, Terzos bartender who was great with customers and already familiar with the restaurant. Even after working with both of them directly for many hours Thomas saw no significant progress and decided to look for a fulltime floor manager at Terzo who is more experienced in the field and moved back Adam to his bartender position. She asked Executive Chef Doug Jackson, HR director Anthony Russo and Ben to take care of the recruitment process and update her about progress as she went out of town. But intentional miscommunication from Ben worsened the problems when she came back. Sasha, who worked as a server at Terzo with experience as GM at two other restaurants was interested in the opportunity and insisted on the post of GM. Ben did not think she was correct for the post and intentionally misled Thomas about the search process. Thomas expressed her disappointment to Ben for misleading her
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and breaking her trust and told him that necessary action would be taken. Thomas now had to make a critical decision of choosing the GM for Terzo while retaining both Ben and Adam who are very important for running Roses caf and Terzo respectively. As the economic situation worsened in late 2008 and sales at restaurants plunged in January 2009, Thomas decided to schedule a three day offsite meeting for her executive team at Lake Tahoe to boost the morale and discuss about the immediate challenges the business was facing. She insisted that everyone in the executive team be present for the offsite. On the second night of Tahoe a dinner conversation led to a three hour discussion on Thomass mana gement style and her critique. As it was a casual conversation most of the managers contributed and gave their opinion of how her lack of working experience in a restaurant causes her approach to problem solving intimidating. She tried to explain her actions and what she expects of them to solve the problems they are confronted with. Thomas after a discussion with her CFO decided that there should be cutbacks in order to survive the dire economic situation. Given the recent revelations from her executive team about her, Thomas had to now tread very carefully to regain their faith in her as a capable leader and also lead the company out of the financial crisis.

Problem Statement
How should Laurie Thomas a) Break the news of cutbacks to her employees considering their resentment about her management style and regain their with while driving the organization out of the financial crisis b) Deal with situation at Terzo to appoint a full time GM while taking necessary steps to regain Ben and Adam

Analysis of Assumptions and Facts

Laurie Thomas while getting involved with Nice Ventures on a temporary basis did not anticipate the seriousness of the problems the company was facing. She assumed that her experience in Silicon Valley as well as in re-launching and
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repackaging failing companies would be enough to drive Nice Ventures out of the crisis. Though some of her ideas of implementing Silicon Valley style culture were well received most of her executive team did not respond well to her expectations of a Silicon Valley manager. She failed to understand the culture of a restaurant business completely and thus led to resentment among her employees about her management style. Thomas believed that Ben would be able to handle the dual GM role with the same efficiency as he was handling the Roses Caf. She assumed that Ben would be able to mentor Adam for the role of AGM. She also thought that Adam was up for the task and he would be able to get a hold of the nuances in the probation period. All her assumptions were proven wrong and Ben even went to the extent of breaking her trust by misleading her about the hiring process. Thomas, when she planned for the offsite assumed that her managers were happy about her style of operations and was only considering discussing about the course of action due to economic downturn. She was caught completely by surprise when learnt what her executive team really thought about her way of doing things. She thought because she explained herself that she could expect better support for her proposals about budget cuts the next day.

List of Alternatives
For the problem of cost cutting measures to be taken up and the mode of delivery of the same: a) Thomas and her CFO could decide upon the cost cuts and inform the employees which would help the company financially but this would further increase resentment among Nice Ventures staff and increase the tension with the management b) Thomas could hold a meeting with her close aids and decide upon the budget cuts and ask them to deliver the news to the staff. This decision would also put Thomas in a bad light as she did not take into confidence all of her executive team and the distance between top management and the rest of the firm is bound to increase. c) Thomas could hold an executive meeting and brainstorm with them the various options where the cost cutting is possible and give the respective managers
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responsibility to discuss with their teams before finalizing the cuts. Thomas should hold a general body meeting with all the employees and announce the final cost cutting measures and the reasons for the same. This decision would help her regain both the trust of her employees and also help the company financially. For the problem of filling up the position of GM at Terzo: a) Thomas could interview Sasha personally and if found capable should appoint her as the GM of Terzo. This decision make Ben upset because his decision was not respected and Adam also might not feel comfortable reporting to his junior which could lead to either or both of them leaving the company b) Thomas should create a new intermediate position for Adam and Sasha and make train them for leadership roles by having them hold managerial posts at different restaurants of Nice Ventures. She should convey Ben that he would not be holding dual GM post anymore because of the mistrust shown by him. But he could be offered to mentor both Sasha and Ben while they do their rotational managerial posts across different restaurants of the company. These decisions we think would help groom the internal talent in the company and at the same time her commitment to values.

Recommendation
We recommend that Thomas should hold a meeting with all her executives and brainstorm about the proposed budget cuts. She should also create the new managerial positions for Sasha and Adam and also move back Ben to his GM post at Roses Caf.

Implementation
Thomas along with her HR manager Russo should visit Ramsey personally to get his guidance upon the way to break the tough news of cost cutting measures to the executives. Since Ramsey knows most of the senior staff well he could give his insights about the kind of resistance to expect and the way to deal with them. He would also be able to give his inputs about the places where cost cutting could be done with minimum damage.

Laurie Thomas and Anthony Russo should hold a meeting with their CFO and discuss upon the viability of options proposed by Ramsey in the current economic scenario and decide upon a range of options to put forward for discussion before calling the executives for meeting. Once the meeting is called a brief of the current economic downturn and its impact on the company should be explained in detail to set a stage for the cut backs discussion. Then she could give her inputs and ask the executives for their views and inputs to modify delete and add proposals for cut backs before finalizing the decisions. Once the decisions are finalized a general body meeting of all employees could be called upon and announce the decisions taken. The managers of respective groups assume the responsibility of communicating and clearing further doubts of the employees about the need of the hour so that no one could be left in dark. Thomas along with Russo should call in Adam and Sasha separately and talk about their aspirations in the company. Since both of them are looking for a bigger role and the post of GM could not be given to either of them under the circumstances. Thomas should inform them about the proposed leadership management program where they would be holding intermediate managerial positions and on a rotation basis work in different restaurants of the company to hone their managerial skills and be prepared for a bigger role. Based on their performance in this program further decision could be taken up. Thomas should hold a meeting with Ben to talk about his future role in the organization. She should express her disappointment about the intentional miscommunication by him and that he would have to face the consequences for breaking the policies. However she should do this in a subtle manner conveying at the same time how much the company values his services and extend him the role of mentorship for the leadership program instead of the dual GM posts. Thomas should also spend extra time on Terzo until the situation stabilizes and everyone gets settles in their role comfortably. These above measures we think would help Thomas address the issues Nice Ventures is facing and give a direction for better growth.