SWISS GUARD CONSULTING INC.

In the summer of 2000, Patricia Lim was appointed as managing partner of Swiss Guard Consulting Inc. (SGCI), a 70-year-old Swiss-Filipino management services firm. Although this would have been ordinary news for another company, the fact that she was only 38 years old was big news for SGCI. All the other partners and senior managers in the company had an average age of 55. Her appointment was an example of organizational innovation in itself. One of the first things on her agenda was the introduction of new programs for SGCI. She had compiled a list of innovations that she saw in other multinational companies during her stint as a consultant. She would present the new programs at the next board meeting, but she first showed them to Mr. Paqui Gonzaga, the Human Resources Director. Patricia asked, So, what do you think? Mr. Gonzaga answered, Well, I think that these are all very good but I dont know how well the Board of Directors will take to these. She replied, But those have proven to be successful in other firmswhy cant they work here? Paqui clarified, I did not say these programs will not work. I said they would get serious opposition. This company does not like things not invented here. She thanked him for his comments but she was still very insistent on presenting her innovations during the meeting. On her way home that day, Patricia spent some time thinking about what Mr. Gonzaga said. She knew that presenting her new programs to the board would not be as easy as she thought. History of the Company Swiss Guard Consulting Inc. was founded in 1930 by two Swiss and two Filipino consultants. The company was named after the Popes bodyguards, who were taken from

Benjamin S. Sandoval, Assistant Professor, University of the Philippines, prepared this case study as a basis for class discussion. The case is not designed to illustrate effective or ineffective handling of managerial situations. The Commission on Higher Education supported the writing of this case study. The University of the Philippines College of Business Administration prohibits any form of reproduction or transmittal without its written permission. Copyright 2001 by the University of the Philippines College of Business Administration 64

the Catholic cantons of Switzerland, thus, the corporate motto of Excellence through Faith and Commitment. SGCI is one of the leading business advisory firms in the country with an outstanding reputation for world-class work. It currently employs 50 partners (45 senior partners and five junior partners) and 2,000 employees. Its clients range from small chicken farms to giant telecom companies. Its culture is very patriarchal and its organizational structure is hierarchical. It takes employees an average of 15 years to reach junior partner but there are no guarantees. The office hours are intense with consultants logging in almost 12 hours a day and the pay starts out low but balloons when one becomes a partner. The employee turnover rate is high because most people join the company to get trained and then move to a better-paying job. Background of Patricia Lim Patricia Lim has always been an excellent performer. She graduated summa cum laude from the University of the Philippines with a degree in Business Administration and Accounting. She joined the company as a junior auditor in 1988. SGCI sent her in 1994 to Columbia University where she graduated with an MBA degree. She has also been sent to work in affiliate offices in Paris, Bern, Jakarta, New York and Tokyo. In 1998, she made junior partnermaking her the youngest ever to hold the position. Last December 1999, she was asked by a big manufacturing company to be president. Jose Florendo, the present managing partner and the remaining founding partner quickly offered her the job of managing partner once he stepped down. She could not say no to this once-in-a-lifetime offer. Mr. Florendo resigned in January 2000 but he still holds the position of chairman. Patricias promotion was viewed by a majority of the partners as more of a public relations stunt (having a young lady as managing partner) and a message from Mr. Florendo that he still calls the shots. However, none of them could dispute that Patricia was qualified for the job. Patricia Lims Concerns In her 12 years at SGCI, Patricia observed the following areas for improvement within the company: 1. There was too much if it aint broke dont fix it thinking. 2. The employee turnover rate was increasingly high and lower-level managers were in low spirits.

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3. The corporate culture was too stiff and formalit was turning off new graduates. 4. Corporate communication went only in one directiondown. 5. The company did not recognize employees who went over and beyond the call of duty.

These were of great concern to her because the external environment was very dynamic. There were new technology consulting firms who were offering prospective managers equity stakes and a more empowered work setting. Technological innovation was the culprit and it was changing the consulting game. She did not believe SGCI was adapting to the changing times at all. Patricia Lims Proposal In her proposal, Patricia outlined a list of the different programs that would make SGCIs culture a more innovative one. She was planning to present all the programs below for immediate implementation: A. Profit Sharing Since the company was not listed on the Philippine Stock Exchange and it could not give stock options, Patricia wanted another way to financially motivate SGCI employees. Currently, it was only the partners who participated in the corporate profit sharing program. She wanted to expand the coverage of the program to regular employees. Although she did not come up with specific numbers, she would propose a scheme that would entail the distribution of 1520 percent of pre-tax profits. B. Dialogue In order to provide more top management inputs to the yearly budgets, Patricia is proposing a dialogue program. This would initially be applied to all direct reports to the managing partner. It starts at the beginning of the year with a meeting where partners will discuss the budgeted profit for the incoming year. The external and internal forces that have an impact on the business are also discussed and behavioral competencies such as teamwork, leadership, and results orientation are agreed upon. The main output of the meeting will be an agreement of quantitative (revenue targets, receivables levels, etc.) and qualitative (behavioral competencies to be developed) targets for the incoming year.

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At midyear, a one-on-one review will be undertaken; a final review will also be undertaken at the end of the year. The results of the dialogue will be used in decisions on salary increases, reassignments, and promotions. C. Casual Day Everyone would be given the option to wear casual clothing every Friday. The only exception would be when an employee is on client call. This new rule would also restrict employees from wearing shorts, sleeveless shirts, or any other outlandish attire. D. Bayanihan Awards This program is named after the Filipino tradition of helping others. It aims to recognize employees who have gone beyond the call of duty in doing their work. It would be decided upon by a committee and it will be given annually. The recipient would receive a cash prize and his/her picture will be placed in a separate bulletin board to be named The SGCI Bayanihan Awardees Hall of Fame. She is proposing an annual budget of P250,000. E. Reverse Mentoring The objective of this program is to make senior partners and managers more technology literate. This would entail a senior partner or manager teaming up with a junior associate twice a month to be taught about the Internet, Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) tools, and other computer software and hardware applications. The topics would be dependent upon the competencies the senior partner or manager needs to develop. F. Other Innovative Training Seminars Patricia also thought of programming innovative training seminars for all employees to widen the personal and professional competencies of everyone at SGCI. She is proposing to get the Philippine Internet computer Society (PICS) to conduct a three-day seminar on the Internet and e-Business, Anthony Pangilingan to talk on Mind Mapping, Prof. Mark Sandoval to conduct a seminar on Shakespeare and Management, and The Knowledge Institute to discuss Knowledge Management. She is proposing an increase in the training budget from P1million to P3 million a year.

Patricia indicated in her proposal that these programs were successfully implemented by outstanding companies like S. C. Johnson Wax, PHINMA, and General Electric. She also added that there was saw no logical reason for these not to work at SGCI.
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Board of Directors Meeting Two weeks later, Patricia presented her new programs to the board of directors. After her presentation, there was a long silence in the room. Mr. Jose Florendo broke the silence by saying, These programs seem to make sense, but I believe I speak for everyone here when I ask how you can quantify the benefits of implementing all these different programs. How can you also justify the additional work-hours and millions you want us to commit every year?

Study Questions 1. How would you respond to the question of Jose Florendo? 2. If you were to assume the role of an outside Human Resources Management consultant, what advice would you give Patricia Lim? What would you have done differently?

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