Case Analysis: Ethan Berman at RiskMetrics
After reading the Ethan Berman (A) case, submit a written analysis of no more than 1200 words that addresses the following questions:
1. What are the key organization and leadership challenges facing Ethan Berman?
2. If you were Berman, how would you handle the issue of the senior hire? Be specific about what you would do and how you would go about it.
3. How much does Berman influence others? How much should he change his style—if at all—as RiskMetrics continues to grow?
Ethan Berman is facing several key organization and leadership challenges. Berman is at a loss of how to manage the company, not only its strategic direction but also the role he should personally play, the hierarchy of the company, and how to structure the organization. At the forefront, Berman must decide upon the organization's strategic plan for the future.
RiskMetric's software has been considered the industry standard, but Berman acknowledges that change is a constant (Morris, 2000). The financial service industry standards can "become passé seemingly overnight" (Morris, 2000, p. 42). Currently, RiskMetrics is targeting medium-sized firms with its financial services, but this is a difficult market to increase profits. Berman must decide if RiskMetrics should team with an online brokerage service, or develop financial planning tools (like Quicken and Vanguard Navigator), or move into a retail advisory capacity (like Morningstar and Bloomberg) (Morris, 2000). He must also determine if the company will do an IPO within the next year.
Another key challenge Berman faces is determining the organization's structure. The company has doubled the number of personnel in the last year and is operating in three locations (Morris, 2000). However, Berman is still trying to manage the organization in the same way that he managed at Morgan. Berman is described as managing individuals, not groups. To be an effective leader, one must maximize the efforts of others, towards the achievement of a goal (Kruse, 2013), rather than simply seek consensus. In part, the challenge Berman faces here is the concept of a majority employee owned business. However, employees have expressed concerns, indicating that Berman needs to make more decisions to lead the organization more effectively. ...
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