ctv

Turning Around Cote Construction Company
By Cynthia Ingols, Professor of Practice
School of Business, Simmons University, Boston, MA
Gene Deszca, Professor Emeritus
Lazaridis School of Business and Economics, Wilfrid Laurier University, Waterloo, Ontario, CA
Tupper F. Cawsey, Professor Emeritus
Wilfrid Laurier University, Waterloo, Ontario, CA

647

Introduction
When Liam Cote decided to help his cousin Felix Cote turn around his business, he had no idea that
things were as bad as they were. Liam knew that the bank’s loan was coming due and the company
could not pay it. However, Liam was shocked at the number of other problematic issues there were at
Cote Construction. In his mind, the company’s business model was straightforward: renting out
specialized heavy construction equipment, either with or without operators, to a relatively easily
defined set of customers, that is contractors who needed such equipment. Liam believed that the
business had solid prospects that could sustain a solid return on investment. However, it certainly
was not doing so now. Perhaps the strategy was clear, mused Liam, but things were a mess!
Nevertheless, three weeks earlier, Liam and Felix had signed papers at their local bank and at their
lawyer’s office. Based on Liam’s reputation as a successful entrepreneur and his willingness to make
a significant investment to improve liquidity, the bank agreed to renegotiate the operating loan and
line of credit. This would provide the company with the breathing space needed to execute a
turnaround. At their lawyer’s office Felix authorized Liam to take on the role of CEO, while Felix
became Head of Equipment and Operations.
After they signed the various papers, Liam and Felix enjoyed lunch together and then returned to the
workplace to set up Liam’s office. Since Liam was optimistic—and wanted—Felix to be an active
partner with him in the areas that Felix found compelling, Liam took the office down the hall from
Felix. While the office was slightly smaller, Liam wanted to send a signal that Felix was still an
important partner in Cote Construction. About 4 p.m., Liam went to look for Felix and learned that he
had left the offices an hour earlier with no word about where he was going or if he would return for the
day. Alice Williams, the bookkeeper, said that Felix had stayed in the office later than he usually did
and she did not expect that he would return that afternoon.
Liam found the supply room and searched for wall-sized flip chart paper to put up on his office wall. At
the top of the paper, he wrote, “Problems at Cote Construction.” His first entry was “Felix left the office
about 3 pm without communicating to anyone where he was going or what he intended to do.” Liam
decided that he would give himself three weeks to diagnose what was wrong at Cote Construction
and that he would write down every problem on the flip-chart paper in his office. He debated with
himself about how he should manage the flip-chart papers: keep them up for all who entered his
office to see; or, take them out each night in private as he added to the list. Liam was still ambivalent
as he closed and locked his door at 7 p.m.

648

Background
Felix founded the company in 2003. He had grown it steadily through the first five years, but the
Great Recession of 2008 had dramatically slowed construction in the area and Felix’s business had
been hit hard. In fact, a key competitor went bankrupt. By 2011-2012 the economy and area
businesses had largely recovered, and business at Cote Construction began to boom. From 2013 to
2016 there was unprecedented growth in the area and Cote Construction grew dramatically, too. Staff
levels more than doubled during the three years to 57 employees. Fifteen employees worked in the
office area, handling administrative, sales, and accounting/finance functions. The remainder were in
the repair shop, in the yard, or on the road, dealing with maintenance and delivery of equipment.
In the past year, however, sales had begun a modest decline. Other financial indicators showed
worrying trends. Margins had gone down by almost 30%, and cash flow was negative. For two years,
operating expenses had risen significantly. While Liam wasn’t sure why, he thought that equipment
purchases had led to higher interest charges and that labor costs had risen dramatically. It was as if
Felix and his fellow managers had lost their capacity to manage the company’s business and its
cycles.
For the previous six months things had gone from difficult to worse. The company’s bank loan was
coming due. Felix had varied his management approach from requesting to pleading and finally to
avoiding issues at work. Because Felix was impossible to find to make decisions or ask questions,
employees referred to him as Waldo, after the character in the children’s book, Where’s Waldo?
When Felix turned over decision-making authority and power to Liam, he agreed to focus on what he
knew best: the equipment and operations. He had grown up with a love for heavy equipment, and
family members said that the only reason that he was in business was so that he had newer and
bigger toys to play with. He had specialized knowledge about which equipment was suitable for which
jobs and, prior to the past couple of years, had been adept at developing relationships with customers
that generated repeat business. However, the agreement and Liam’s arrival did not reverse Felix’s
disappearing act. To his direct reports he seemed depressed and distant, with little appetite for
assuming a more active operational role in the business.

649

Diagnosing and articulating the problems
As Liam began to investigate the problems at Cote Construction, he was shaken to find a culture of
permissiveness and waste. As he walked through the parts and maintenance areas, he found parts,
tools, and equipment scattered about. Grease on the floor made walking a risky proposition. Pizza
boxes, pop cans, and bottles were littered around. He thought he smelled liquor on some employees.
He observed lateness and absenteeism were problems. No one seemed to be doing anything about
these matters. Part of the problem was a tight labor market: supervisors were afraid if they
reprimanded employees that they would walk.
The housekeeping within the administrative office area was somewhat better than in other parts of the
operation, but it still left much to be desired. Some employees smoked in work areas despite nosmoking rules. Dishes often sat in the sink of the small kitchen area and it was only when left-over
foods began to smell did someone in the office begin the task of throwing away old foods.
While Liam noted problems to address on the flip-chart papers in his office, he took immediate action
when necessary. One day, for example, Liam smelled alcohol on the breath of an employee who
appeared to be under the influence. He fired him on the spot. On another day Liam entered the
workspace of people with dogs and asked, “Are these employees or pets?” The next day the
employees—but not the dogs—came to work.
After reviewing sales information, Liam also found himself wondering about the source of orders.
Most came from brokers rather than directly from customers. Taking into account their fee, he
determined that Cote Construction was losing money by relying on brokers. Liam phoned one of their
customers who regularly leased their equipment through a broker. After chatting and thanking the
customer for doing business with Cote, Liam asked the customer why they did not place orders
directly. The customer responded, “Because you never called us before!” Before he ended the
conversation, he had a $50,000 work order placed directly. When Liam relayed this conversation and
its results to the sales staff, they were at first defensive. Further conversation assured Liam that the
sales staff wanted to make money, but they seemed unsure as to how they should change their sales
approach.
During his third week, Liam noticed that certain pieces of equipment that had been in for repair in
week one were still inoperable. He asked, “Why?” He was told that the maintenance supervisor was
in a dispute with the field service foreman and sales staff over the allocation of repair and
maintenance charges, and as a result, needed repairs had not been undertaken. The argument had
been going on for more than a month, and he was told this was not the first time. This resulted, Liam
noted, in lost rental sales. He blew up and called an urgent meeting of those involved. He ordered the
equipment to be repaired immediately and stated that this was no way to resolve conflict. When Liam
went back to his office, he added “unclear lines of authority” to his list of issues on the flip charts.
The accounting and finance area had difficulty providing the performance data that Liam requested.
When he asked them to calculate the profit margin for each piece of equipment, the initial response
was “Why do you want that?” After he explained his rationale to them, they began pulling together the
information. But, employees in other departments saw the new cost reporting requirements as more
paperwork that might get in the way of sales and servicing.
When Liam began to explore equipment repair invoices, he noted that many expensive repairs had
been done on-site at their clients’ premises. Much of the work looked routine but was made much
more expensive because of the location and because the company had to negotiate with clients over
operational losses incurred while the machine was down. Liam wondered why the equipment hadn’t
been serviced prior to leaving the shop. When he inquired, he learned that there was no formal
preventive maintenance program in place. Back in his office Liam added more problems to his flip
chart list:
1. No formal preventive maintenance system
2. Questionable inventory management system; missing parts in some areas and excess inventory
in others; and a significant volume of obsolete parts that were held in inventory
3. Missing tools and equipment, including some big-ticket items, such as a $35,000 loader and a
$25,000 compressor

650

4. Sales relationships not actively managed; clients not phoned in a timely manner; customer
complaints not acted upon until threats were invoked
5. Logistics, scheduling, customer delivery and pickups, and on-site servicing of equipment not
handled well. Customers complained about downtime and their inability to predict when tasks
would be accomplished
6. Lags between order fulfillment and client billing; slow payment of accounts payable
7. Poor relations with suppliers of parts and equipment, due in part to slow payment;
disagreements over terms and conditions; and lack of supplier responsiveness to emergency
requests
In an inspection of the operations Liam found seven new tires and rims stashed behind a building.
When he checked purchasing invoices, he learned that nine had been bought the week before. On
further investigation, he was told that no new tires had been counted on any equipment. Liam could
not locate the missing two tires and rims, worth more than $2,000 each. It was a low point for Liam as
he concluded that employees might be stealing from Cote Construction.
However, Liam thought that many members of the firm wanted to do a good job. That was the sense
that he got as he visited departments, talked with individuals one-on-one, and heard about their
frustrations. Still, he did have a few concerns. Some employees resented that others seemed to
come and go as they wished. He had listened to one customer complaint about late delivery of
equipment and learned that the person delivering the machinery had stopped for three hours on
route. The driver’s excuse was lunch and engine problems that had miraculously resolved
themselves. Employees’ morale was in the toilet, but turnover had yet to become a problem.

651

How to begin the turnaround
As Liam sat in his office, he stared at the flip-chart sheets on his walls. During his first week, he had
put up the sheets and began listing every issue or problem that he or others identified. After three
weeks, there were now more than two dozen items. With this substantial list, Liam thought that he
had a handle on the magnitude of the problems at Cote Construction. What he needed to do now was
come up with a plan to address them. To begin, he had a number of decisions to make:
What problems should he tackle first? Which were operational and which were organizational?
What timeline should he establish?
How should he consider the people in the company? What should he ask them? How should he
approach them to solicit their ideas for the turnaround?
How should he deal with Felix? Should he allow him to continue as head of Equipment and
Operations? Should he sideline Felix and formally reduce his authority at Cote Construction?
Would it, in fact, be a relief to employees to know that Felix no longer played a role in the
company?

652

Turning Around Cote Construction Company Case Study
Read the “Turning Around Cote Construction Company” found at the end of Chapter 9
and follow these steps before answering the case study questions. In order to answer the
case study questions you will apply the Change Path Model from Chapter 9 to the Cote
Construction Company case.
A case study is a puzzle to be solved, so before reading and answering the specific
questions, develop your proposed solution by following these five steps:
1. Read the case study to identify the key issues and underlying issues. These issues
are the principles and concepts of the course module, which apply to the situation
described in the case study.
2. Record the facts from the case study which are relevant to the principles and
concepts of the module. The case may have extraneous information not relevant
to the current module. Your ability to differentiate between relevant and irrelevant
information is an important aspect of case analysis, as it will inform the focus of
your answers.
3. Describe in some detail the actions that would address or correct the situation.
4. Consider how you would support your solution with examples from experience or
current real-life examples or cases from textbooks.
5. Complete this initial analysis and then read the discussion questions. Typically,
you will already have the answers to the questions but with a broader
consideration. At this point, you can add the details and/or analytical tools
required to solve the case.
Case Study Questions:
1. What problems should he tackle first? Which were operational and which were
organizational? What timeline should he establish?
2. How should he consider the people in the company? What should he ask them?
How should he approach them to solicit their ideas for the turnaround?
3. How should he deal with Felix? Should he allow him to continue as head of
Equipment and Operations? Should he sideline Felix and formally reduce his
authority at Cote Construction? Would it, in fact, be a relief to employees to know
that Felix no longer played a role in the company?
Your well-written paper should meet the following requirements:
•
•
•
•

Be 6-8 pages in length, which does not include the title and reference pages,
which are never a part of the content minimum requirements.
Use Saudi Electronic University academic writing standards and APA style
guidelines.
Support your submission with course material concepts, principles, and theories
from the textbook and at least four scholarly, peer-reviewed journal articles.
It is strongly encouraged that you submit all assignments into the Turnitin
Originality Check prior to submitting it to your instructor for grading. If you are

•

unsure how to submit an assignment into the Originality Check tool, review
the Turnitin Originality Check – Student Guide for step-by-step instructions.
Review the grading rubric to see how you will be graded for this assignment.

530 CT
Module 13: Project Management
Project Management
Projects are unique, one-time operations designed to accomplish a set of objectives in a limited time
frame (Stevenson, 2021).
1. Give three examples of unethical conduct involving project management as well as the ethical
principle each one violates.
2. Analyze the potential long-term consequences of unethical project management practices on an
organization’s reputation, stakeholder trust, and future business opportunities.
Directions:
•

Your assignment is required to be four to five pages in length, which does not include the title
page and reference pages, which are never a part of the content minimum requirements.

•

Support your submission with course material concepts, principles, and theories from the
textbook and at least three scholarly, peer-reviewed journal articles. Use the Saudi Digital Library
to find your resources.

•

Formatted according to APA 7th edition and Saudi Electronic University writing standards.

•

It is strongly encouraged that you submit all assignments into Turnitin prior to submitting them
to your instructor for grading. If you are unsure how to submit an assignment into the Originality
Check tool, review the Turnitin – Student Guide for step-by-step instructions.

Review the grading rubric to see how you will be graded for this assignment.

Purchase answer to see full
attachment