Growing Pain
www.hbr.org
H B R CAS E ST U D Y
AND
COMMENTARY
Should Maher give his star performer star rewards—or risk her leaving?
Six commentators offer expert advice.
Growing Pains by Robert D. Nicoson
•
Reprint 96408
Waterway’s CEO is rethinking his compensation policies. Maybe he should be rethinking his business strategy.
H B R CAS E ST U D Y
Growing Pains by Robert D. Nicoson
COPYRIGHT © 1996 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
“I’m challenged and motivated where I am, and I like the company. You know that. But I’ve got to say I’m interested in the opportunity you’re describing because of the money and the equity position. For those reasons alone, it’s tough to pass by. Let me think about it some more and call you in the morning. Thanks, Les.” That was the extent of the conversation Cyrus Maher, CEO of Waterway Industries, overheard when he came around the corner just outside of Lee Carter’s office. She must have been talking with Les Finch, Maher thought. Here’s trouble. Of course, it didn’t necessarily mean anything, Maher told himself as he passed the office, waving to Carter. Finch, a well-connected marketing consultant, had been the matchmaker between Carter and Waterway Industries to begin with. With the company in the fourth quarter of its best year ever, he certainly
wouldn’t be encouraging her to leave. Would he? Maher got a cup of coffee in the company’s first floor kitchenette and deliberately took the long way back to his office, through the design room. As always, the atmosphere was upbeat, but these days he also thought he could detect a sense of purpose that had never before been a part of Waterway’s organization. Founded in 1963 in Lake Placid, New York, Waterway had started out as a small, highquality canoe maker. Over the years, it had built a good reputation all through the Northeast and had acquired a base of customers in the Pacific Northwest as well. By 1982, Waterway was comfortably ensconced in the
H B R CAS E ST U D Y
AND
COMMENTARY
Should Maher give his star performer star rewards—or risk her leaving?
Six commentators offer expert advice.
Growing Pains by Robert D. Nicoson
•
Reprint 96408
Waterway’s CEO is rethinking his compensation policies. Maybe he should be rethinking his business strategy.
H B R CAS E ST U D Y
Growing Pains by Robert D. Nicoson
COPYRIGHT © 1996 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.
“I’m challenged and motivated where I am, and I like the company. You know that. But I’ve got to say I’m interested in the opportunity you’re describing because of the money and the equity position. For those reasons alone, it’s tough to pass by. Let me think about it some more and call you in the morning. Thanks, Les.” That was the extent of the conversation Cyrus Maher, CEO of Waterway Industries, overheard when he came around the corner just outside of Lee Carter’s office. She must have been talking with Les Finch, Maher thought. Here’s trouble. Of course, it didn’t necessarily mean anything, Maher told himself as he passed the office, waving to Carter. Finch, a well-connected marketing consultant, had been the matchmaker between Carter and Waterway Industries to begin with. With the company in the fourth quarter of its best year ever, he certainly
wouldn’t be encouraging her to leave. Would he? Maher got a cup of coffee in the company’s first floor kitchenette and deliberately took the long way back to his office, through the design room. As always, the atmosphere was upbeat, but these days he also thought he could detect a sense of purpose that had never before been a part of Waterway’s organization. Founded in 1963 in Lake Placid, New York, Waterway had started out as a small, highquality canoe maker. Over the years, it had built a good reputation all through the Northeast and had acquired a base of customers in the Pacific Northwest as well. By 1982, Waterway was comfortably ensconced in the