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MAKING THE TOUGH TEAM CALL (A)
Gudrun Dammermann-Priess was stunned after this latest round of project presentations.
In the nine years since the international management program (IMP) began, she never had a project so bad that she considered not allowing it to go forward. With only six weeks until the final project deliverable in mid-May 2000—a 15-minute presentation in front of 100 top executives at Continental A.G., including the chief executive officer (CEO) and at least four other members of the Vorstand—the software team project was a potential embarrassment in a very high-stakes environment.
The CEO’s concluding remarks from the previous year’s IMP–1999 echoed in her ears.
“I would like all my top managers to take notice. If only your presentations were as good as those we have seen this afternoon.” The IMP program had risen substantially in stature and useful strategic output over the last several years, and the risks of presenting a poor project were, for Dammermann, acutely felt.
Literally from the very first module of IMP–2000 in November 1999, when teams were put together and matched to mentors and projects, the three members of this project were in complete disagreement about almost every aspect of the project and its development. They disagreed on what the mentor wanted them to accomplish and how they might begin to approach answering the key questions. Furthermore, even though there were some personal interest overlaps, the styles of two team members mixed like oil and water. Despite repeated conversations and interventions by the facilitators to help the team gain momentum, the team floundered, and its work languished. It was painfully obvious to Dammermann that the team had made very little progress in the last several months.
The decision about just what to do weighed heavily on her mind. If the team went ahead and presented the poor project in May, Dammermann’s credibility as the director of the training program and her oversight of the project work could be negatively affected. Ending the project now meant that the senior line-manager, who had paid (German deutsche marks) DEM35,000 for this investigation, had wasted his time and his money. Adding to the complexity, one of the project mentors was a senior executive at TEVES, the newly acquired subsidiary of Continental, and this was Conti-Teves’ first project in the program.
This case was prepared by Associate Professor Lynn A. Isabella, Darden Graduate School of Business
Administration. It was written as a basis for class discussion rather than to illustrate effective or ineffective handling of an administrative situation. Copyright © 2000 by the University of Virginia Darden School Foundation,
Charlottesville, VA. All rights reserved. To order copies, send an e-mail to sales@dardenbusinesspublishing.com.
No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of the Darden School Foundation. Rev. 5/02. ◊

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But, if she were to intervene with the team, what would she do? Realistically, there were only six weeks remaining, and the team was not functioning well at all; one of the members would be traveling for his regular job assignment for three of those weeks, and another team member would not even be in Germany. The remaining German team member seemed less than engaged in IMP and the project.
Dammermann knew that she needed to deal with the situation immediately. But how?
The decision she would make had implications not only for the software team but also for the five other projects this year and any future projects in upcoming years.

Continental A.G.
We make individual mobility a whole lot safer and more comfortable. As manufacturer of components, modules, and systems, we are the backbone of the global automotive industry. We establish international standards and help automakers make good on the promises they’ve made with respect to their products. Our Tire, ContiTech, and Automotive Systems product areas pool their high-tech potential. This broad synergistic approach provides the basis for technically and economically attractive solutions. Our goal is the development and production of promising systems in the areas of brake technology, vehicle dynamics control, tires, and energy management.
—Stephan Kessel, Chairman of the Executive Committee, 2000
Continental A.G. had undergone a significant transformation since its humble 1871 beginnings in Hanover, Germany, as a joint stock company manufacturing soft rubber products, rubberized fabrics, and solid tires for carriages and bicycles. Its earliest history was crammed with technology successes and tire firsts (for example: the first German company to manufacture pneumatic tires for bicycles [1892]; world’s first tire with patterned tread [1904]; inventor of the detachable rim for saloon cars [1908]; and processed first synthetic test tires from vulcanized specimens of synthetic rubber [1909]). As the company evolved, Continental prided itself on its
German heritage, its technological expertise, and its standing as a member of the Lower Saxony community. See the company’s Web site for a complete history at www.conti-online.com.
Through a series of acquisitions, Continental began to build a platform for global expansion in traditional and new markets outside Germany. In 1979, with the takeover of the
European tire operations of Uniroyal, Inc., USA, and four production plants in Belgium,
Germany, France, and Great Britain, Continental gained a wider base in Europe. In 1985, it took over tire operations of the Austrian company Semperit and acquired General Tire Inc. of Akron,
Ohio, just two years later, giving Continental four plants in the United States, two in Mexico, and participation in South America, Africa, and Asia.

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The takeover in 1989–90 of National Tire Service Ltd (NTS). NTS—the second-largest tire dealer network in the United Kingdom—gave Continental 400 outlets, which subsequently grew to about 3,000 retail and franchise outlets in Europe. Continental and the Portuguese company, Mabor, set up a joint venture for the production of tires in Lousado/Oporto, Portugal, in 1993, and with the takeover in 1992 of Nivis Tire, the Swedish tire manufacturer, with its
Gislaved and Viking brands, Continental had a global tire portfolio.
The largest acquisition to date, however, came in 1998 when Continental bought ITT
Automotive Brake and Chassis unit from ITT Industries, Inc., USA, for (U.S. dollars) $1.93 billion. This globally recognized auto industry partner for brakes and chassis management systems had more than 10,000 employees, many headquartered in Frankfurt, Germany. The new unit, which included 23 plants, research centers and test tracks, was integrated into the
Continental Automotive Systems Group as Continental-Teves.
Thus, by 1999, Continental A.G. was a global systems supplier to the automotive industry and the number-four player in automotive tires. The then-current Continental organization consisted of Continental passenger tires, Continental commercial tires, Continental
General Tire (the North American operations), and Continental-Teves Automotive Systems. It also operated a highly profitable division, ContiTech, which housed a conglomeration of 21 smaller businesses, with products loosely tied to rubber and rubber technology. (See Exhibit 1 for recent financial data.)

International Management Program
The International Management Program (IMP) was designed for high-potential managers.
The intent was to challenge those individuals with strategic projects of importance to the corporation and to observe how they handled themselves and the project itself. Sponsored and guided by a senior line-manager (the mentor) with a burning strategic problem or question (the project), participants worked in cross-functional and cross-national teams to provide answers and advice. For many participants, the program provided their first business cross-cultural experience—Germans with non-Germans, and vice versa, an opportunity to work in English (the corporate business language, but the native language for only a few participants), and a platform for broader general management skills and corporate exposure.
Participants were carefully selected and screened from nominations by their bosses and human resource staff. Being chosen to participate was a great honor. The program had been in existence long enough to produce a string of success stories. One past participant now sat on the
Vorstand, the German equivalent of the board of directors, and quite a few former participants, because of their senior management status, now mentored projects themselves. One participant every several years was chosen to be an assistant to the CEO, which was a fast-track position for heading up a business unit. For those participants who rose to the challenge, IMP could be their ticket into higher management.

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IMP had the reputation of being tough. The program required participants to devote seven months, in addition to their regular jobs, to their project. Participants were intentionally matched with projects outside their area of experience, expertise, or influence. This strategy allowed participants to learn about other parts of the corporation and to gain exposure to different executives and their ideas. Every six to eight weeks over the seven-month period, participants gathered for weeklong intensive modules. During those modules, they received content input of value to their project and got hands-on coaching and consultation by the facilitators to move the project forward.
One standing expectation of any project was the need to collect “1,000 pieces of data.” In between formal modules, participants were expected to: advance their project through interviews with Continental’s managers and/or outside customers, design and distribute questionnaires, read and decipher company reports, construct spreadsheets, formulate recommendations and implementation strategies—whatever it took to fully answer the question posed by the mentor.
There were also regular meetings with mentors and the expectation that each participant would keep his or her direct supervisor apprised of the progress. The program ended with a final presentation, attended by the CEO, other board members, mentors, and selected senior executives, and a written report, which was posted on the company’s Web site and available on
CD-ROM.
The strategic project was at the core of IMP. Projects represented demanding business or strategic issues for the company as a whole or for individual business units. Mentors of the projects agreed to pay DEM35,000, which contributed to the financial base to run IMP, in addition to all the direct expenses of the team members. Dammermann estimated that on average the expenses charged back to the mentor were DEM30,000 per project. Lodging, meals, and travel for participants during the week-long modules were to be covered by participants’ home departments. Five off-site modules, including travel, and room and board, were not insignificant expenses. Strategic projects were much like consulting projects. Most projects were rarely scoped out cleanly by the mentors. In fact, much of a team’s work over the course of the first several months was to specifically identify what question(s) were to be addressed by the project and balancing what the mentor said he or she wanted with what the mentor actually needed. In a number of cases, part of the team’s work was to convince its mentor(s) that the scope of the project needed to be altered or expanded.
A team of facilitators, headed by Dammermann, oversaw the projects, teams, and specific content of the program. Facilitators offered business expertise to the teams, company knowledge or an outsider perspective, as well as individual and team coaching. As the head of IMP,
Dammermann had responsibility for the program and the projects, but no direct authority over the projects, the mentors, or the participants.
In 1997, the lead internal sponsor, Gudrun Dammermann, invited two faculty members from a leading Eastern business school to work as cofacilitators in IMP. It was hoped that the

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academics would bring business-content expertise, classroom facilitation skills, and an international business perspective to an already strong program design. Working together, the academic facilitators and Continental consultants crafted a tightly constructed just-in-time (JIT) program, integrating content inputs with where the project would be in its evolution.
Continental had every reason to feel proud of its work. The program now attracted much more strategic and complex problems, and the results offered the company significant opportunities. For example, just recently ContiTech and Otis Elevator, a subsidiary of United
Technologies, announced an alliance that brought the most significant technological innovation to the elevator industry in 150 years. That alliance began as the lifting-belt project, in which three IMP–1997 participants explored how to utilize Conti’s conveyor belt technology vertically instead of horizontally. As part of their IMP project, the lifting-belt team explored market feasibility, assessed potential partners, and made the initial contacts with Otis. The market potential for Continental as a result of the project-turned-alliance was a new $300 million business. Up through 1999, all projects were connected to Continental A.G. in Hanover. With the acquisition of Teves from ITT and the desire to more fully integrate Teves, IMP–2000 included two projects from the Teves side of the business. Having not been members of the Conti organization until recently, Teves managers were unfamiliar with the IMP and the benefits the program could offer. Dammermann had worked very hard to convince top managers at Teves that sponsoring an IMP project was a valuable activity. Dammermann was well aware that the quality of any deliverable on a Conti-Teves project would most likely have post-acquisition implications. Given that the acquisition was only 18 months old, the companies and managers were still finding their optimal working relationships and synergies.

IMP–2000
Module 1
Module 1 was held in Hamlin, Germany, the week of November 13. In this first module, participants got to know each other and to learn more about the IMP process and project expectations. The six projects for this year’s IMP were introduced and the teams of participants formed by the facilitation team (two internal Conti facilitators and two outside academics).
Mentors arrived mid-week to personally describe the projects, meet their project teams, and allow the teams to meet them and discuss the project. By the end of the week, teams were expected to have a written contract with their mentor on some broad project deliverables. Input sessions focused on identifying and refining the key question(s) and subquestions each project would answer.

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The software project
The title of this project, as crafted by the mentors, was “Software: Product or Service.”
The project mentors, two senior managers in the automotive systems side of the business, had in mind a project that explored this notion: Was the pricing of the software embedded in brake systems possibly an independent standalone product or was it essentially a service that went with the hardware? See Exhibit 2, which lays out the questions to be tackled and the outcomes outlined by the mentors at the project’s beginning.
The question for the software project was a challenging one indeed. As automobiles and automotive systems became more complex, electronics, which were governed by software, played an increasingly important role. What the customer saw as a brake system was much more than the metal hardware. Sophisticated software was integral to brake-system operation. Industry estimates suggested that by 2020, 40% of the car would be electronics, and software would be the integrating core.
These IMP–2000 participants were assigned to the project.
Klaus Meier: Meier was a German engineer (age 38) with a PhD, married with one child.
He came to Continental in January of 1998, as the marketing manager for a Czech subsidiary.
His project work involved managing a staff of 12 people, finalizing projects totaling $40 million, and conducting negotiations with Eastern European stakeholders. In addition, he was associated with a key project in a newly created division of Continental in Hanover. Before Continental,
Meier had worked most recently with a consulting group that specialized in training materials.
Werner Winkel: Winkel was a German attorney (age 32), single, specializing in alliances and partnerships. He joined Continental’s legal department, located in the main headquarter building in Hanover, in January 1996, most often working solo and without direct reports. He had full negotiating responsibility for several key multimillion-dollar projects of the company.
After receiving his law degree in 1991 from a law school in the United States, Winkel worked for several German companies as a negotiator, as well as for a large New York City law firm.
John Caldwell: Caldwell was an American-born accountant (age 28), and single. He received his accounting degree from a college in southwest Virginia. He had worked for
Continental’s U.S. operations since September 1994, as a financial analyst, project manager, and most recently, an accounting manager in Conti’s Charlotte facility. IMP represented his first international trip and first to corporate headquarters. Before Continental, Caldwell worked as a restaurant manager.
Key Module 1 interactions
The project did not get off to the smoothest start. The following interactions were indicative of the team’s initial encounters.

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•

Just after the teams were announced and the projects assigned, Winkel approached one of the facilitators to say that he was completely dissatisfied with his team and wanted another team or project. While his arguments were heard, he was told that changing projects and teams was not possible.

•

Meier and Winkel were at odds over the project direction and question. Meier wanted to take the idea into the future; Winkel wanted to literally answer the questions proposed by the mentor. Caldwell acted as a mediator, yet agreed more closely with Winkel’s way of thinking. •

Winkel announced he had a three-week vacation scheduled in Thailand, a piece of information not even known to Dammermann. Because of that holiday, Winkel doubted that he could put any energy into the project until February. Winkel’s two teammates were not happy.

•

Toward the end of the module, each team was asked to discuss its individual answers to three questions. Those questions and each team’s response are depicted in Exhibit 3.

•

Winkel did not attend the historic tour of Hamlin with the rest of IMP, citing a need to catch up on his sleep. Facilitators did notice that he fell asleep during class on most mornings. He also spent most of his break time reading his tourist books on Thailand.

•

After meeting with their mentors, the software team classified their project as “highly unstructured.” In working with their mentor, Caldwell commented that they had no problem communicating. “Our mentor is an inventor; he doesn’t have a structured background.” •

Teams ended the module with a brief presentation containing their current understanding of what their project was about. The software team stated that their key question was how to achieve maximum profit with chassis-control software. Their subquestion was a detailed followup.
Module 2

Module 2 was held December 16–18 in Frankfurt, Germany. This short module concentrated on priming projects for the necessary data-gathering efforts. Input sessions focused on refining the key questions and subquestions, and linking those to the kinds of data needed.
Data-gathering techniques were explained and each team received individualized consultation on the data-gathering techniques of relevance to their project. The teams were asked to begin the process of storyboarding the logic behind their final projects.
Key Module 2 interactions
•

The initial status presentation of the project looked very similar to where the project was at the end of Module 1.

•

The team did not sit with one another, and they did not interact outside their group meetings. Caldwell has been the only team member to present so far. In fact, Caldwell

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seems to be the only team member who interacts with the larger IMP group during social times. •

The team assignment was to storyboard the final presentation; the team repeated information the mentor gave them.

•

The team asked several of the facilitators to help them. One facilitator spent an hour with the group trying to surface their differences and get them moving positively. They appeared stuck in their way of thinking, and no one individual wanted to give in, change, or approach the situation from another’s point of view. Each wanted certainty that the direction taken would be fruitful and not a waste of time. Winkel did not share that view.

•

At the end of the module, teams were asked to rate themselves on a 1–3 scale (3 being a great team). The software team gave themselves a 1. When asked to visually demonstrate the team’s dynamics, Caldwell stood at the front of the room, Winkel sat in his chair, and
Meier stood at the back of the room, striking a nose-in-the-air pose.
Module 3

Module 3 was conducted from February 6–10, 2000, in Charlottesville, Virginia. Input in this module focused on the strategy, marketing, and financial basics that participants might utilize for their projects, as well as their future career development. An additional resource of this module was the archival data research made possible at the university library. For a number of participants, this module represented a first trip to the United States.
Key Module 3 interactions
•

The team had several conversations with facilitators about what to search for in the library databases. They expressed frustration regarding what companies to benchmark or where to look. Because there did not seem to be any directly similar companies or situations, generalizing posed problems for the team. The facilitating team provided suggestions. One facilitator even conducted some sample searches.

•

The team met with a marketing faculty member who told it, “you have a really interesting and extremely difficult problem. If I can help, let me know.” Caldwell followed up on that offer, but scheduling even a brief phone conference proved impossible.

•

While the other five project teams were working well together and engaging in sport and other outside activities, this team split apart at every opportunity. Rarely were they seen talking to each other. Rarely were they seen mixing with other participants, with the exception of Caldwell, who remained quite social with other participants.
Module 4

Module 4 was held from March 28–31 in Stadtoldendorf, Germany. This module focused on change and change-implementation processes. It was expected that, by this point in the project process, most, if not all, data had been collected and preliminary conclusions reached.

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Therefore, formulating recommendations and implementation strategies became a major module component. Key Module 4 interactions
•

The software team was the first to present the status of its project at the beginning of the module. Caldwell discussed several interviews they had. Informal chatter among other participants suggested the team was not very far along. It was common knowledge that the team was having problems. Their loud arguments did not go unnoticed over the last two modules. The facilitation team noted that the presentation was identical to that given in Module 3.

•

Caldwell shared with the facilitators some of the work he had done since Module 3, talking to managers at Texas Instruments and Teves (Auburn Hills) about software issues. He had also made a benchmarking contact at SAP.

•

The team got ready for the Killer Questions exercise, in which other teams asked questions with the express purpose of finding the holes and weaknesses in the project.

What Now?
The software team had just finished (or rather, endured) the Killer Questions exercise. It was apparent to all (facilitators and other participants) that this project was in serious trouble.
After the participants left the room to continue to work on their projects before lunch, the facilitating team huddled with Dammermann to discuss the situation. Clearly something needed to be done, and soon.
But, what were the options? And how would any of those options be executed? While the facilitating team had different viewpoints on the next steps, all agreed that whatever they decided, it needed to be done quickly and decisively!

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-10Exhibit 1
MAKING THE TOUGH TEAM CALL

Continental A.G.: Recent Financial Performance and Company Statistics
Amounts in millions of euros (EUR)

1995

1996

1997

1998

1999

Sales

5,242.0

5,333.1

5,719.4

6,743.2

9,132.2

Earnings before interest and taxes

198.2

268.0

320.4

380.3

511.3

Net income

79.4

98.4

164.5

138.2

234.7

Dividend

24.0

29.0

41.0

47.0

58.81

Cash flow

378.2

416.5

490.9

567.0

849.7

Debt ratio

2.7

2.0

0.6

3.4

2.0

Capital expenditure on property, plant, and equipment

302.3

282.0

282.6

416.3

581.5

Depreciation, amortization, & write-downs2 282.6

311.5

306.8

395.7

576.5

Shareholders’ equity

866.9

951.2

1,381.8

1,329.1

1,760.6

Equity ratio in percentage

25.3

27.8

35.3

19.6

23.8

Employees at year-end3

47,918

44,767

44,797

62,357

62,155

Share price (high)

12.0

14.6

26.0

31.9

27.0

Share price (low)

9.6

10.4

14.1

16.8

18.0

1

Subject to the approval of the shareholders at the annual shareholders’ meeting on May 19, 2000.
Excluding write-downs of investments
3
Excluding trainees
2

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-11Exhibit 1 (continued)

EBIT by Division in % of sales
Automotive Systems thereof Teves before goodwill
Passenger Car Tires (EUR)
Commercial Vehicle Tires (EUR)
Continental General Tire
ContiTech
Consolidated EBIT

1998
−0.8
5.5
10.1
6.5
5.1
4.6
5.6

1999
2.3
6.3
10.6
5.4
4.9
7.6
5.6

ROCE by Division in %
Continental Automotive Systems thereof Teves before goodwill
Passenger Car Tires (EUR)
Commercial Vehicle Tires (EUR)
Continental General Tire
ContiTech
Consolidated ROCE

1998
−0.2
3.8
16.1
8.6
5.9
9.8
5.6

1999
2.7
17.7
17.7
7.2
5.7
15.7
6.9

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Exhibit 2
MAKING THE TOUGH TEAM CALL
Project Description: IMP–2000

SOFTWARE: PRODUCT OR SERVICE?
Target: To develop a business concept for selling software
1. Which problems/issues have to be tackled?
•

Why software costs money?

•

Portion of software products in passenger cars (development over time and future prognosis) •

Substitution of hardware by software

•

Car-wide system approach

•

Risk analysis

•

How Continental Teves is affected by the technology trends

•

Which dependencies exist for an automotive supplier

•

Customer sights and interests

•

How to earn money with software products

2. Outcome
•

Strategies for the marketing of Continental Teves Software products

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-13Exhibit 3
MAKING THE TOUGH TEAM CALL
Initial Questions to Participants

What do I personally want to work on during IMP?

What skills and abilities do I bring to
IMP?

Meier
To work on a challenging project with a focus on business. • Preferably no Hanover issues. •

•

Experience working in
(and with other people from) other cultures— apart from various educational skills.

•

•

If people do not do their necessary homework before the teamwork starts.

•

•
•
•
•

What drives me crazy about working with other people?

Winkel
A business project that requires me to work on a problem outside of my current field of experience.

•
•
•

Logical thinking, experience with projects/joint ventures.
I like to discuss with/convince people.
I like to bring things forward and act.
People not listening to arguments. People dominating a process. Being interrupted when talking/arguing. •
•
•
•
•

Caldwell
I want to expand my vision. I need to open my mind and explore different ways to solve problems. I want to take advantage of the opportunity to network with others. Strong ability to communicate with others.
To perform different roles within a team.
My drive and commitment assures my full devotion.
Unproductive meetings.
Team members not contributing.