Leadership Change

Gene One was formed in 1996 with a gene altering technology that eliminated the need for pesticides in tomatoes and potatoes. With this new technology, farmers could keep costs low because they no longer needed to pay for pesticides to combat pests and disease. Consumers were happy because they preferred buying organic products without chemicals. This success enabled Gene One to grow to a $400 million company in a matter of eight years.

At the same time, Wall Street showed a growing interest in biotechnology with rising stock prices in this field. Don Ruiz, chief executive officer (CEO) at Gene One, and the board of directors know that to remain competitive, keep pace with the demands of the market and have conservative annual growth of 40 percent, Gene One needs an infusion of cash. They believe that the way to accomplish all of this is to take the company public. An initial public offering (IPO) will need to happen within the next three years. Many changes will have to be implemented for the IPO to succeed but the company needs IPO capital for development, advertisement, and marketing if it is to remain successful (Gene One Scenario, 2005).

Unfortunately, Don Ruiz recently has passed away leaving Gene One without its visionary leader. The board of directors is uncertain how to proceed. Without a strong CEO, they are not sure an IPO is such a good idea. As siblings of Don Ruiz, we need to work with the board of directors to determine the direction the company should take and the first order of action is to find Don’s replacement as CEO. The decision to promote from within or to hire an outsider will need to be made.

Several members of the management team may be able to take over the CEO position. The first is Michelle Houghton, chief financial officer (CFO): She came to Gene One as one of the first five employees recruited by Don. Michelle invested everything she had into Gene One so she has a strong sense of ownership and emotional attachment to the company....