For 75 years, the Williams Machine Tool Company had provided quality products to its clients, becoming the third largest U.S.
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based machine tool company by 1980. The company was highly profitable and had an extremely low employee turnover rate. Pay and benefits were excellent. Between 1970 and 1980, the company’s profits soared to record levels. The company’s success was due to one product line of standard manufacturing machine to ols. Williams spent most of its time and effort looking for ways to improve its bread
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and
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butter product line rather than to develop new products. The product line was so successful that companies were willing to modify their production lines around these machine tools rather than asking Williams for major modifications to the machine tools. By 1980, Williams Company was extremely complacent, expecting this phenomenal success with one product line to continue for 20 to 25 more years. The recession of 1979
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forced management to realign their thinking. Cutbacks in production had decreased the demand for the standard machine tools. More and more customers were asking for either major modifications to the standard machine tools or a completely new product de sign. The marketplace was changing and senior management recognized that a new strategic focus was necessary. However, lower
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level management and the work force, especially engineering, were strongly resisting a change. The employees, many of them with ove r 20 years of employment at Williams Company, refused to recognize the need for this change in the belief that the glory days of yore would return at the end of the recession.
By 1985, the recession had been over for at least two years yet Williams Company had no new product lines. Revenue was down, sales for the standard product (with and without modifications) were