Case Analysis:
Problem Statement:
Which candidate should Stephen Connor, the director of research at RSH, select from the given pool of prospective candidates to replace the position of Peter Thompson, the star semi-conductor analyst, who had submitted his resignation.
External Analysis:
Factors Factors as in the case Impact
Political
Institutional Investor(II) magazine ranking
Star ranked analysts have a better market recognition and earn significantly higher compensation than others. Firms that have “Star” senior analysts working for them had higher credibility in the market which increased the overall business opportunities.
Economic
The cyclical growth patterns in the semiconductor industry
The highest-profile personnel have been shuffling firms lately
The industry is presently going through a boom phase
The semiconductor business had been cyclical from the beginning, with constant rise and fall in growth patterns. There was a lot of unwillingness or/and abrupt changes in the senior level designations in the industry. The industry is presently going through a boom phase and so, there is a huge demand for prospective star performers and better investment opportunities.
Socio-Cultural
The industry average retirement age was approximately 45 to 50
The Analyst job profile required a lot of travelling and cordial relationship with sales team and clients.
Strong corporate culture in research divisions
The industry demanded that an analyst should be tech savvy and ready to travel. The need to maintain cordial relationship with clients and sales team required a younger or well-seasoned personnel. A strong corporate culture and support system in a firm was a competitive advantage in the industry.
Technological Tech intensive research and development
departments/firms/industry
Prompt and apt response to clients’
needs and queries through email and
other media.
Technical expertise
State-of-the-art technology for research, and dedicated technically proficient staff made the difference in the industry. Timely and appropriate query redressal of clients and sales teams using various technological media was of upmost importance in the industry.
Legal
High chances of law suits in
investment banking industry
Customer centric, highly competitive and research intensive industry was liable to many law suits. Employees have to be technically proficient and extra careful to avoid unwanted legal actions.
Environmental N.A N.A
Industry’s perspective SWOT Strength
Research intensive and usage of state-of-the-art technology
Presence of star rated analysts and prospective up-comers
Weakness
The highest-profile personnel have been shuffling firms lately
The industry average retirement age was approximately 45 to 50
Opportunity
The industry is presently going through a boom phase, so better growth opportunities
Threats
Cyclical economic growth patterns
RSH’s perspective SWOT: Strength
Iconic brand name, hence global reach
Follow a team oriented approach and encourage teamwork
Low turnover rate
‘Family-like’ working atmosphere
Good support staff
Numerous well-trained juniors and dedicated administrative staff
Known for women empowerment
Flexibility in employee travel scheduling
Dedicated to producing high quality research
Commitment to global work
Formal training programs, employee engagement and mentorship
Daily and regular team briefings
Weakness
Only one senior semiconductor analyst
No proper succession planning policies
Little support from top management for development-and-training programmes
Difference in point of view between John and Stephen
Opportunity
Big deal coming up with Power Chip
Company
The industry is presently going through a boom phase, so better growth opportunities for RSH
Consistently high rating in II magazine.
Threats
Competition from other established firms
Cyclical economic growth patterns
Strength
Star analyst
Incredibly intelligent
Superior analytical skills
Achiever-Go getter-proactive
Workaholic-precision work
In depth industry knowledge
Good stock-picker and writer
Weakness
Lone worker
Extremely competitive
Made others uncomfortable
Motivated by money
Shenanigans
Opportunity
II star rating gave him better career opportunities elsewhere
Access to top clients and upper management
Threats
People started distancing themselves from him
David Hughes’ perspective SWOT: Strength
Good credentials (High rank)
Highly recommended, ranked 2 in II
Well-seasoned
Razor-sharp mind
Punctual
Vast Industrial contacts and knowledge
Team player and an excellent mentor
Celebrity/Legend in Wall Street
Weakness
Aged
Travelling will be a problem
Not tech savvy
Relies heavily on assistants
Prefers family to work
Requires a contract guaranteeing compensation for at least 2 years
Opportunity
Might be able to attract more top notch clients
Mentoring junior analysts
Willing to take up work challenges
Threats
Stiff competition from other firm’s younger counterparts
Strength
Ranked 11th within 18 months of joining as per II.
Extremely intelligent
Pleasant young man
Maintains active travel schedules and replies promptly
Highly enthusiastic for research
Work experience in Sales department
Weakness
Uncanny native sense when it comes to stock-picking
Compensation centric working style
Opportunity
High chances of moving up the II ranking
Threats
At times cocky
History of jumping companies
Sonia Meetha’s perspective SWOT: Strength
Mentioned by II as an ‘Up-and-comer’
8th rank in II
In depth industry knowledge
Good communication skills
Tech-savvy and long term industry vision
Punctual
Weakness
Inexperienced when it comes to working with big firms
Opportunity
High chances of moving up the II ranking
Her use of financial models provides clients with better insight
Seeking a lucrative job offer
Threats
Mother of two small children, hence travelling might be a huge problem
Inflexibility of scheduling
Strength
Ranked 5th by II
Brilliant stock-picker
Highly enthusiastic for research
Congenial personality
Impressive quality of work
Weakness
Always eager to please
Opportunity
RSH Sales team can promote his product
Threats
Other employees might take advantage of his personality
Rina Shea’s perspective SWOT: Strength
Hard working
Strong interest for Semiconductor field
Three years work experience at RSH
Highly qualified
Business savvy
Weakness
Inexperienced in Senior analyst profile
Less preferred by Head of Sales and Trading director of research
Opportunity
Promotion opportunity
Fully up to date on Powerchip project
Threats
Suitable candidate filling up the Senior analyst post at RSH
Factors:
Organizational commitment and ability to work effectively with Sales force, traders and buy side helps to
effectively understand the client’s needs and work efficiently.
Willingness to work in teams and mentor junior analysts goes a long way in the growth of the firm.
Proactive mentality helps to take on additional projects.
Technical expertise helps to tap the industry growth sectors properly and attract prospective clients.
Industry knowledge is of upmost importance for picking stock and writing proper reports.
II rankings are the benchmarks that showcase the talent and worth of any analyst.
Client oriented approach and customer centric focus is a key to future growth opportunities.
Stock selection differentiates a true star analyst from the rest.
Willingness to travel and meeting up with clients, sales and buyer teams regularly was a part of the job.
Industry connections and c
ontacts have a big impact on the firm’s trading commission revenue.
Writing reports is an integral part of the job description.
Punctuality was a trait that Spencer truly valued, as the job profile required traveling and meeting up
with clients and sales and buyer teams regularly.
Key Factors
:
Critical Factors David Hughes Gerald Baum Sonia Meetha Seth Horkum Rina Shea
II Ranking 2 11 8 5
---Technical expertise Very High High High High Low
Organizational commitment Moderate Low High High High
Contacts in the Industry Very High High High High Low
Willingness to travel
Moderate High Low High Moderate
Willingness to work in teams
and guide junior analysts Moderate Low High Moderate High
Writing of Reports High High Very High High Moderate
Constraints
Shortage of time:
Stephen Connor is not given adequate time to select the right candidate for the post of Senior analyst. The upcoming Power chip proposal is an important project for RSH and thus there is not enough time to consider other options.
Compatibility with Sales team and other employees:
The new senior analyst should quickly jell with the Sales team and other employees to effectively function.
The highest-profile personnel have been shuffling firms lately in the industry:
The semiconductor business had been cyclical from the beginning, with constant rise and fall in growth patterns. There was a lot of unwillingness or/and abrupt changes in the senior level designations in the industry. There is thus a limited choice of prospective candidates for the post.
Options & Evaluation:
1. Selection of David Hughes:Adv.: Well-seasoned analyst and effective mentor. Vast domain knowledge and contacts will surely help RSH.
Dis-adv.: His age, doubtfulness to travel,
requirement of a two year guaranteed compensation
contract.
2. Selection of Gerald Baum:
Adv.: Has impressive professional traits and the technical fit for the analyst profile is high.
Dis-Adv.: Low dedication towards the former employer. Less interested in mentoring juniors and seems to be a tough boss to work under
3. Selection of Sonia Meetha:
Adv.: She is considered an up-and-coming analyst by II. Given the advanced R&D opportunities and contacts available at RSH, she can do wonders. Long term vision, in depth knowledge of the industry and ability to connect with clients,
Dis-Adv.: Flexibility in scheduling and travelling may be a huge problem owing to her children. Inexperienced in dealing with big clients and investment bankers.
4. Selection of Seth Horkum:
Adv.: RSH Sales team can promote his product and he has impressive professional and personal traits Dis-Adv.: His eagerness to please others attitude might lead to people taking advantage of him 5. Selection of Rina Shea:
Adv.: No time delay in onboarding. Already accustomed to RSH work habits and sales team.
Dis-Adv.: Not acceptable to certain members of top management. Fairly inexperienced to handle senior analyst post. 6. Try to bring back Peter Thompson by some means:
Adv.: Already established star analyst and familiar with RSH working environment.
Dis-Adv.: Might cause uneasiness to present employees. May have to pay a huge compensation.
7. Pull data from II rankings and Greenwich Associates and search for more prospective candidates:
Adv.: May have access to candidates with better credentials than those suggested by Triple S and Clifford Associates. Dis-Adv.: Shortage of time. Have to make a quick decision due to the upcoming proposal.
8. Request Triple S or Clifford Associates for more prospective candidates: Adv.: May have access to more candidates with better credentials.
Dis-Adv.: Shortage of time. Have to make a quick decision due to the upcoming proposal. 9. Bring over someone from one of the buy-side firms:
Adv.: Follow the same stocks as RSH analysts, perform detailed analyses, write internal reports and interact with portfolio managers regularly.
Dis-Adv.: No sales-skills and industry knowledge. Unacceptable to certain RSH senior analysts. 10. Selection of David Hughes as Senior analyst and Rena Shea as deputy Senior analyst:
Adv.: Using the excellent combination of Davis Hughes’ industrial expertise and reach with the assistance of Rena. Rena can effectively take care of the shortcomings that David may have like travelling and age related difficulties. In the long term, Rena is trained to takeover David’s position when he chooses to resign.
Recommendation
Keeping in mind the best interests of the firm and professional and personal traits required as per Stephen Connor, our Group suggests Option 10, using the excellent combination of Davis Hughes’ industrial expertise, reach ans razor sharp acumen with the assistance of Rina.
Rena can effectively take care of the shortcomings that David may have like travelling, technological approach and
age related difficulties. In the long term, Rina is trained to takeover David’s position when he chooses to resign. David and Rena will effectively be able to mentor junior analysts. David can guide and enable Rina to make the necessary stock pickings and report writings even if there is any Family urgency. This option would also enable Rina to enter and then climb up the II ratings. Thus in the long term, RSH would have two star analysts. This would enable better branding and growth opportunities.
On observing the above factor table, we can clearly see that the shortcomings of both the analysts are complementary. Making best use of both the analysts’ knowledge, contact, and influence can positively contribute to RSH’s long term growth. The long term benefits over weigh the cost factor of appointing two analysts.
Critical Factors David Hughes Rina Shea
II Ranking 2
---Technical expertise Very High Low
Organizational commitment Moderate High
Contacts in the Industry Very High Low
Willingness to travel
Moderate High
Willingness to work in teams and guide junior
analysts Moderate-High High
Writing of Reports High Moderate