CASE

Lawrence Weinbach—from Unisys Corporation to Yankee Hill Capital Management

This is a case about a rising-star leader who flew for a while, but fell. Unisys Corporation has been in business for more than 130 years. Unisys contributed to the computer revolution with the first commercial large-scale system, its 29,000-pound UNIVAC computer back in 1951. As you know, the mainframe computer business gradually declined as smaller computers and PCs took over. Like IBM, Unisys had to change its business focus. Larry Weinbach took over as CEO of Unisys with the strategy of steering the company away from mainframes and toward services, and de-emphasizing commodity PCs.59 Lawrence Weinbach understands the importance of good communications. In fact, he won the Excellence in Communication Leadership (EXCEL) Award. The EXCEL Award is the highest honor the International Association of Business Communicators (IABC) gives to nonmembers, usually to CEOs of major companies. Weinbach’s communications strategy was credited as a principal factor in his success in boosting employee morale and productivity while at the same time generating a financial turnaround. Here are some of the communications methods Weinbach used to transform Unisys from primarily a computer company to a full-service IT company. A major challenge was to change the culture through communications. Within three or four days after taking over as CEO, Weinbach sent a letter to customers and shareholders introducing himself and telling them that if they had any questions or concerns, to write to him and he would personally respond to them. Weinbach also hired a vice president of corporate communications, who reported directly to him. As an outsider, Weinbach realized that the employees had lost some confidence in the company and themselves. To regain their confidence, he went on the road and talked to 12,000 employees, asking them to send him ideas to improve Unisys. Within six weeks, Weinbach received 4,500 e-mails, and he answered about 2,000 of them himself before the task became too difficult for him. He then developed “Ask Larry” on the intranet in order to respond to more generic questions, and he followed this with a monthly newsletter to all employees so that employees could feel like they were a part of what was going on in the company. Weinbach transformed Unisys from a hierarchical flow of information to a more decentralized flow of authority and communications, in which the person with the information needed could be contacted. Having been in the service business, Weinbach knew that the key to success was first, getting people motivated and then ensuring that they were willing to follow where he wanted the company to go; that is, to follow his vision. Weinbach believed the vision had to be simple. The vision of Unisys is illustrated through its “threelegged stool,” which focuses on customers, employees, and reputation. All three values are equally important and each is represented by a leg; if any one is missing,

the stool (Unisys) falls. In fact, all employees were given a three-legged-stool pin to remind them of the Unisys vision. Weinbach always wore the pin, and if anyone asked him what his vision for the company was, he just pointed to the pin. Unisys managed to sign up Compaq Computer, HewlettPackard (HP), and Dell Computer to resell its breakthrough server, called the ES7000. However, a few years later they stopped selling it to focus on their own designs, and Unisys was struggling to make the leap from being a computer company to an e-business services company. Unisys was not competing effectively with IBM and HP IT services. It was losing money again, and Unisys replaced Weinbach with a new CEO; its current CEO is Joseph McGrath, who plans to step down at the end of 2008.60 Unisys is still in the Fortune 500 (number 400 in 2007).61 Rather than look for another job as CEO, Weinbach decided to start a business with his son Peter Weinbach—- Yankee Hill (YH) Capital Management, with offices in Connecticut and New York. YH is a service industry specialists advisory and investment firm. Go to the Internet: To learn more about Larry Weinbach and YH, visit their Web site (http://www.yankeehillcapital. com), and to learn more about Unisys Corporation, visit its Web site (http://www. unisys.com). Support your answers to the following questions with specific information from the case and text or with other information you get from the Web or other sources.

1. Which major topic of this chapter (communication, feedback, coaching, conflict) was Weinbach’s primary focus as he took over as CEO of Unisys?

2. Which communication method did CEO Weinbach use within his first few days, with customers and shareholders, and then with employees? Which method of communication did he primarily use with all three groups?

3. Was Weinbach’s communication focus on sending or receiving messages?

4. How would you assess Weinbach’s use of feedback?

5. Did Weinbach use coaching? If yes, how?

6. Using Exhibit 6.3 on page 202, “Coaching Guidelines,” did Weinbach use each of the ten guidelines as a new CEO at Unisys? Be sure to explain your answers.

7. Did Weinbach use criticism or coaching feedback when he took over as CEO?

8. Which conflict management style did Weinbach use as CEO?

9. Weinbach got off to a good start, so what do you think led to his downfall?

10. What advice would you give to others to improve their communication skills? To come up with an answer, you may want to think about a person you know who is a very effective communicator. What makes that person successful?

CUMULATIVE CASE QUESTIONS

11. Which level of analysis and leadership paradigm are presented in this case, and did Weinbach use the management or leadership paradigm (Chapter 1)?

12. What do the Pygmalion effect and job satisfaction have to do with this case (Chapter 2)?

13. What role did Weinbach’s leadership behavior and ability to motivate employees play in the Unisys turnaround (Chapter 3)?

14. Which one of the contingency leadership theories do you think Weinbach used as CEO (Chapter 5)?

 CAS E EX E R C IS E AN D RO LE -P LAY Preparation: An important part of getting ideas for improving Unisys comes from asking customers questions and then listening to them. Your role is an executive at Unisys. List some questions that you would ask customers to get ideas for improvement. In-Class Groups: Break into groups of four to six members, and develop a list of questions to ask customers to get ideas for improving Unisys. Select a spokesperson to record the questions and then ask them of a customer in front of the class. Role-Play: One person (representing him- or herself or a group) asks question of a customer to get ideas for improving Unisys.