Jo Anne Heywood (A)

By Garth Saloner, Angie Strange, Alex Tauber, Amanda West
2005 | Case No. E204A

The vignette starts at the time Jo Anne Heywood was promoted to be the CEO of Converged Networks. This promotion was almost by coincidence. That is, Heywood had just been hired as the CTO of Converged Networks as the company prepared to raise its third round of financing. The Board, however, had quickly realized that it also needed a CEO to raise this round. Heywood was thus selected. Heywood and her team successfully closed a third round of financing. At the time Converged Networks Board was courting Heywood, it was also hiring a new Vice President of Sales, Dave Johnson. Heywood worried that Johnson may resent reporting to someone with no sales experience. As a result, Heywood felt she needed to manage Johnson carefully. Not long after assuming his role as VP of Sales and closing the third round of financing, Johnson shared with Heywood his concerns about selling the product. After each customer meeting, Johnson began dropping his initial forecasts by 10 – 20%. Johnson had steadily reduced the sales projections in the weeks leading up to the first quarterly Board meeting (since Heywood and Johnson joined Converged Networks). As they both prepared the materials for the upcoming meeting, Johnson suddenly admitted that his sales team would probably come in at 80% below his original projections. Heywood wondered how she should respond to Johnson and how she approach the upcoming conversation with the Board.

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