Aegis Systems Corp.

By H. Irving Grousbeck, Jason Luther
2014 | Case No. E511 | Length 9 pgs.
It was March 2013 and one week after James Browder’s sixth board meeting as CEO of Aegis Systems Corp. (Aegis), a vendor management software provider based in Birmingham, Alabama. As Browder sat at his desk, pen and notepad before him, he reflected on his deteriorating relationships with Aegis’ outside directors and the events that had led to these circumstances: “I don’t understand. Aegis has consistently hit its financial projections. I’ve done nothing but grow the company. Where is this animosity coming from?” In each of the last four board meetings, Browder had clashed with his directors over topics ranging from building the organization’s sales team to adjusting Aegis’ fiscal reporting period. After the last meeting, during which one member requested the group switch from only quarterly meetings to quarterly meetings and regular interim conference calls, Browder decided to take action to resolve the issue. Soon afterwards, the CEO learned that Jeffrey Larston, one of Aegis’ investors and most respected board members, would be in Birmingham the following week on unrelated business. Browder called him and arranged to meet that Wednesday, seven days hence. This would not be Browder’s first difficult conversation while at Aegis. Since purchasing the company through his search fund in April 2012, Browder had systematically overhauled the company’s internal processes and transitioned staff members either into new roles or out of the organization. The sensitivity surrounding these actions required that Browder be scrupulous when talking with the employees he wished to retain. Specifically, Browder had needed to reposition the organization’s most effective staff member, the head of technical support, and demote Aegis’ lead—and at the time only—developer. The latter conversation had come with the risk of losing nearly all of the company’s technical institutional knowledge.

Learning Objective

The purpose of this case is to provide situational context for discussions on: managing legacy employees; hiring talent at various levels of an organization, including above current staff members; managing those who hold institutional knowledge and have a tremendous impact on the viability of a company; and navigating relationships with a board of directors.
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