Harvard Business Review

Harvard Business Publishing | For Educators | For Corporate Buyers | Visit Harvard Business School

HBR Case Study: The Gentleman’s “Three”

by Brian J. Hall and Andrew Wasynczuk

HBR’s fictionalized case studies present dilemmas faced by leaders in real companies and offer solutions from experts. This one is based on the HBS Case Study “Compensation and Performance Evaluation at Arrow Electronics” (case no. 800290), by Brian J. Hall and Carleen Madigan. It is available at hbr.org Between the inner and outer doors of Circale Corporation’s headquarters building, human resources VP Nils Ekdahl crossed paths with CFO Anita Fierst as he was leaving for lunch. “We need to make those cuts we talked about,” Fierst said briskly. She clearly wasn’t up for chitchat about her recent trip to Asia. “I was looking at our org chart on the plane last night,” she continued. “After those two new acquisitions, the duplication across departments is untenable. We need to start achieving synergies right away.” She paused while a group of employees passed, nodding hellos to both executives. Then she said, “I know Hal feels strongly about it.” It always irked Ekdahl when she spoke for the CEO like that. “He wants $20 million cut from the payroll in the next four months,” Fierst said. “Working on it,” Ekdahl replied. “But as you know, it’s not just about the numbers. It’s also about making sure we have the right people in the right positions.” “It is about the numbers,” she said. “I know in your department you like to take your time to get everything just right.” It was an unwarranted dig at both Ekdahl and his predecessor, Michael Milanese, who happened to be waiting for Ekdahl at their usual lunch spot in town. “But with all this duplication, you don’t have the luxury of identifying the perfect individual for every position.” A few more employees passed by. “Anyway,” she said. “More later.” Within 10 minutes, Ekdahl was recounting the exchange over soup and salad. “Don’t let her get...