Can the Returning CEO Turnaround the Crisis at Hammerhead?
Hammerhead Systems (HS) evolved from the incubator stage inside a venture capitalist (VC) firm. HS was founded in 2002 as a data-switching firm with a niche in the telecommunications (telecom) industry. With the promise of quick success, the co-founders secured startup funding from VCs and hired industry savvy management and talented engineers, without company success. After 16 months from starting HS, CEO/co-founder Keil was replaced because the Board of Directors believed a different type of CEO was needed. As the initial product moved toward the production stage under the second President/CEO, the telecom industry trends changed. A third CEO was hired in 2004; however, he was unable to increase the customer base and sustain strategic partnerships. In 2008, this CEO resigned and HS Board brought back Keil as President/CEO of Hammerhead Systems to recoup the $100 million VC investment spent by the prior two CEOs and reverse the downward direction.
- Develop realistic options to meet the management challenges inherent in running a small startup business in a rapidly changing telecom industry.
- Analyze the external environment of HS in order to evaluate current conditions and formulate appropriate strategies and implementation plans.
- Evaluate the role of available internal resources to change HS business fortunes.
- Integrate appropriate models and concepts across disciplines to analyze company data and make reasonable management selection recommendations.
This decision case was designed for senior level undergraduate and MBA level courses that focus on entrepreneurship and management challenges in startup firms. The inter-relatedness of issues in this case requires students to draw upon prior knowledge of: concepts and models in entrepreneurship, management, organizational change, and leadership and to a lesser extent, strategy and marketing.