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Related Experiment Videos

When an executive defects.

A Sharma1, I F Kesner, K L Coleman

  • 1Silicon Graphics, Mountain View, CA, USA.

Harvard Business Review
|December 8, 1996
PubMed
Summary
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A senior manager’s departure to a competitor prompts a CEO to assess damage control strategies. This case study explores communication and legal options for protecting confidential information and mitigating competitive risks.

Area of Science:

  • Business Strategy
  • Human Resources Management
  • Competitive Intelligence

Background:

  • A key operations executive resigns from Kinsington Textiles, Inc. (KTI) to join a major competitor, Daltex.
  • The departing executive, Ned Carpenter, was instrumental in transforming KTI's operations and developing a new product.
  • His departure creates uncertainty regarding potential damage to KTI, including the risk of information and employee attrition.

Purpose of the Study:

  • To analyze the strategic implications of a senior executive's defection to a competitor.
  • To evaluate damage control measures for protecting confidential information and mitigating competitive threats.
  • To explore legal and HR strategies for managing executive departures and non-compete agreements.

Main Methods:

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  • Fictitious case study analysis.
  • Consultation with legal and HR experts.
  • Examination of communication strategies for employees and media.
  • Assessment of potential legal actions against the departing executive.

    • Main Results:

    • The case highlights the critical need for proactive measures to safeguard proprietary information.
    • Expert advice focuses on strategic communication, legal recourse, and HR policy adjustments.
    • The study underscores the importance of non-compete agreements and robust employee retention strategies.

    Conclusions:

    • Companies must have clear protocols for managing executive departures to a competitor.
    • Effective damage control involves a combination of legal, HR, and communication strategies.
    • Protecting intellectual property and maintaining a competitive edge requires ongoing vigilance and strategic planning.