Written Analysis and Communication

A Report on

NICE VENTURES

Submitted by

Group 07

Harkirat Singh 2012PGP124

Muraleedharan R 2012PGP213

Nikhil Sharma 2012PGP226

O B Vishnu Ruban 2012PGP236

Rajendra Babu Mellam 2012PGP294

Tejinder Negi 2012PGP403

PGP1 – Section A

2012-14

On 19th March, 2013

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LETTER OF TRANSMITTAL

A Report on Nice Ventures

19th March, 2013

Prof. Swatantra

Faculty, Written Analysis and Communication Course

IIM Indore

Dear Ma’am,

We are enclosing a report of our understanding of the case on ‘Nice Ventures’ as

part of the Written Analysis and Communication course requirement.

The case has been analysed as instructed and is being submitted for consideration.

Yours sincerely,

Group 7

Section A

PGP2012-14

IIM Indore

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Executive Summary

Nice Ventures is a small restaurant management company founded by Ramsey

Smith in San Francisco, California. The company was a general partner of three full-

service restaurants Rose Pistola, Rose’s Café, and Terzo with unique dining

concepts for each. Laurie Thomas a Silicon Valley veteran who initially was an

investor in Nice Ventures had taken over the CEO role later when the company had

been through financial trouble due to various internal and environmental factors.

Laurie Thomas through various bold cost cutting measures and implementation of

new programs had kept the company alive and also gained confidence among the

employees.

The economic downturn in late 2008 had had considerable effect on the finances of

the company which called for immediate cost cutting measures. The Tahoe offsite

meeting arranged with the executives of the company by Thomas revealed the

growing resentment among her employees about her management style which

needs immediate attention as everyone needs to be on board to drive the company

out of the financial crisis. Thomas is also confronted with the problem of choosing a

new GM for Terzo after her attempts to promote Ben for a dual GM role and mentor

Adam for the post backfired. Her decision to hire a new experienced GM from

outside also dint workout as planned due to intentional miscommunication by Ben

and also the interest shown by Sasha, an employee at Terzo for the GM post.

Thomas had to take a decision about how to approach these problems in the most

efficient way to regain the trust of her employees while pulling the company out of

crisis.

Our group recommended that Thomas should brainstorm with all her executives

about the cost cutting measures to be taken to decide which cuts would cause the

least damage and most benefit to the company. She should then hold a general

body meeting of the company to announce the decisions while the managers take

responsibility to ensure better communication among employees. Thomas should

also have talk with Ben, Adam and Sasha regarding their future roles and a

leadership program is proposed to both Adam and Sasha to better hone their

managerial skills with respect to the organizational needs and also move back Ben

to his GM role at Rose’s Café while making him mentor Sasha and Adam.

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Table of Contents

Title Page

Letter of Transmittal

Executive Summary

Introduction………………………………………………………………………………1

Problem Statement………………………………………………………………………2

Analysis of Assumptions and Facts………………………………………………….2

List of Alternatives……………………………………………………………………….3

Recommendation………………………………………………………………………...4

Implementation……………………………………………………………………………4

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Introduction

Nice Ventures is a small restaurant management company founded by Ramsey

Smith in San Francisco, California. As of March 2009, the company was a general

partner of three full-service restaurants with unique dining concepts for each. Rose

Pistola and Rose’s Café were the established profitable ones while Terzo was

launched in 2006. Nice Ventures has been through difficult financial situation

because of some questionable contracts by the previous management and the

recent economic downturn.

Laurie Thomas, a Silicon Valley veteran who showed interest in Nice Ventures from

its start and invested substantially in the venture took over from Ramsey Smith when

things had been really tough for the company post 9/11. She made some bold

decisions to keep the company running and maintain its reputation in the market. As

things got better Thomas focused on building a fostering a great working culture

which is very foreign to the restaurant business. She introduced some new programs

to make the working environment more flexible and accountable. She also built up

on some existing programs to boost the morale and learning of her employees. All

this had resulted in extremely low management turnover which is a rarity in the

industry.

In the summer of 2008 Thomas faced the crisis of selecting a new GM at Terzo. She

appointed Ben, GM of Rose’s Café as an interim GM for Terzo. To make the

transition smoother she offered the post of AGM to Adam, Terzo’s bartender who

was great with customers and already familiar with the restaurant. Even after

working with both of them directly for many hours Thomas saw no significant

progress and decided to look for a fulltime floor manager at Terzo who is more

experienced in the field and moved back Adam to his bartender position. She asked

Executive Chef Doug Jackson, HR director Anthony Russo and Ben to take care of

the recruitment process and update her about progress as she went out of town. But

intentional miscommunication from Ben worsened the problems when she came

back. Sasha, who worked as a server at Terzo with experience as GM at two other

restaurants was interested in the opportunity and insisted on the post of GM. Ben did

not think she was correct for the post and intentionally misled Thomas about the

search process. Thomas expressed her disappointment to Ben for misleading her

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and breaking her trust and told him that necessary action would be taken. Thomas

now had to make a critical decision of choosing the GM for Terzo while retaining

both Ben and Adam who are very important for running Rose’s café and Terzo

respectively.

As the economic situation worsened in late 2008 and sales at restaurants plunged in

January 2009, Thomas decided to schedule a three day offsite meeting for her

executive team at Lake Tahoe to boost the morale and discuss about the immediate

challenges the business was facing. She insisted that everyone in the executive

team be present for the offsite. On the second night of Tahoe a dinner conversation

led to a three hour discussion on Thomas’s management style and her critique. As it

was a casual conversation most of the managers contributed and gave their opinion

of how her lack of working experience in a restaurant causes her approach to

problem solving intimidating. She tried to explain her actions and what she expects

of them to solve the problems they are confronted with.

Thomas after a discussion with her CFO decided that there should be cutbacks in

order to survive the dire economic situation. Given the recent revelations from her

executive team about her, Thomas had to now tread very carefully to regain their

faith in her as a capable leader and also lead the company out of the financial crisis.

Problem Statement

How should Laurie Thomas

a) Break the news of cutbacks to her employees considering their resentment about

her management style and regain their with while driving the organization out of the

financial crisis

b) Deal with situation at Terzo to appoint a full time GM while taking necessary steps

to regain Ben and Adam

Analysis of Assumptions and Facts

Laurie Thomas while getting involved with Nice Ventures on a temporary basis did

not anticipate the seriousness of the problems the company was facing. She

assumed that her experience in Silicon Valley as well as in re-launching and

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repackaging failing companies would be enough to drive Nice Ventures out of the

crisis. Though some of her ideas of implementing Silicon Valley style culture were

well received most of her executive team did not respond well to her expectations of

a Silicon Valley manager. She failed to understand the culture of a restaurant

business completely and thus led to resentment among her employees about her

management style.

Thomas believed that Ben would be able to handle the dual GM role with the same

efficiency as he was handling the Rose’s Café. She assumed that Ben would be able

to mentor Adam for the role of AGM. She also thought that Adam was up for the task

and he would be able to get a hold of the nuances in the probation period. All her

assumptions were proven wrong and Ben even went to the extent of breaking her

trust by misleading her about the hiring process.

Thomas, when she planned for the offsite assumed that her managers were happy

about her style of operations and was only considering discussing about the course

of action due to economic downturn. She was caught completely by surprise when

learnt what her executive team really thought about her way of doing things. She

thought because she explained herself that she could expect better support for her

proposals about budget cuts the next day.

List of Alternatives

For the problem of cost cutting measures to be taken up and the mode of delivery of

the same:

a) Thomas and her CFO could decide upon the cost cuts and inform the employees

which would help the company financially but this would further increase resentment

among Nice Venture’s staff and increase the tension with the management

b) Thomas could hold a meeting with her close aids and decide upon the budget cuts

and ask them to deliver the news to the staff. This decision would also put Thomas in

a bad light as she did not take into confidence all of her executive team and the

distance between top management and the rest of the firm is bound to increase.

c) Thomas could hold an executive meeting and brainstorm with them the various

options where the cost cutting is possible and give the respective managers

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responsibility to discuss with their teams before finalizing the cuts. Thomas should

hold a general body meeting with all the employees and announce the final cost

cutting measures and the reasons for the same. This decision would help her regain

both the trust of her employees and also help the company financially.

For the problem of filling up the position of GM at Terzo:

a) Thomas could interview Sasha personally and if found capable should appoint her

as the GM of Terzo. This decision make Ben upset because his decision was not

respected and Adam also might not feel comfortable reporting to his junior which

could lead to either or both of them leaving the company

b) Thomas should create a new intermediate position for Adam and Sasha and make

train them for leadership roles by having them hold managerial posts at different

restaurants of Nice Ventures. She should convey Ben that he would not be holding

dual GM post anymore because of the mistrust shown by him. But he could be

offered to mentor both Sasha and Ben while they do their rotational managerial posts

across different restaurants of the company. These decisions we think would help

groom the internal talent in the company and at the same time her commitment to

values.

Recommendation

We recommend that Thomas should hold a meeting with all her executives and

brainstorm about the proposed budget cuts. She should also create the new

managerial positions for Sasha and Adam and also move back Ben to his GM post

at Rose’s Café.

Implementation

Thomas along with her HR manager Russo should visit Ramsey personally to get his

guidance upon the way to break the tough news of cost cutting measures to the

executives. Since Ramsey knows most of the senior staff well he could give his

insights about the kind of resistance to expect and the way to deal with them. He

would also be able to give his inputs about the places where cost cutting could be

done with minimum damage.

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Laurie Thomas and Anthony Russo should hold a meeting with their CFO and

discuss upon the viability of options proposed by Ramsey in the current economic

scenario and decide upon a range of options to put forward for discussion before

calling the executives for meeting. Once the meeting is called a brief of the current

economic downturn and its impact on the company should be explained in detail to

set a stage for the cut backs discussion. Then she could give her inputs and ask the

executives for their views and inputs to modify delete and add proposals for cut

backs before finalizing the decisions. Once the decisions are finalized a general

body meeting of all employees could be called upon and announce the decisions

taken. The managers of respective groups assume the responsibility of

communicating and clearing further doubts of the employees about the need of the

hour so that no one could be left in dark.

Thomas along with Russo should call in Adam and Sasha separately and talk about

their aspirations in the company. Since both of them are looking for a bigger role and

the post of GM could not be given to either of them under the circumstances.

Thomas should inform them about the proposed leadership management program

where they would be holding intermediate managerial positions and on a rotation

basis work in different restaurants of the company to hone their managerial skills and

be prepared for a bigger role. Based on their performance in this program further

decision could be taken up. Thomas should hold a meeting with Ben to talk about his

future role in the organization. She should express her disappointment about the

intentional miscommunication by him and that he would have to face the

consequences for breaking the policies. However she should do this in a subtle

manner conveying at the same time how much the company values his services and

extend him the role of mentorship for the leadership program instead of the dual GM

posts. Thomas should also spend extra time on Terzo until the situation stabilizes

and everyone gets settles in their role comfortably.

These above measures we think would help Thomas address the issues Nice

Ventures is facing and give a direction for better growth.

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