A former colleague recruited Luke to join his new company as a director, leading a team of about 30 people. Luke was replacing Jill, who had been fired for failing to deliver on an important project. The team he was to lead suffered from low morale and a poor reputation in the company. Luke’s job was to rebuild both.

He quickly found that, although most of the team members were able and hard-working, Jill had never allowed them to be honest about their workload or deadlines. She agreed to any and all requests from other managers, even if there was no hope of meeting the deadline, and then let her team figure out how to muddle through. No wonder the team was demoralized and had a reputation for being unreliable.

Luke immediately explained to his team that they were to be open and honest both inside and outside the team. Though this approach sounds simple, it was a completely foreign concept to them. Some of them told him bluntly that he was sure to be fired within a few months.

His new approach was soon put to the test. A vice president from the customer service team told him that the company’s largest customer was going to be conducting an on-site audit. In Luke’s area, the customer would be particularly interested in seeing the dedicated computing equipment that was a key part of its contract with the company. As it turns out, there was no dedicated computing equipment. Nor were there any funds in the budget to buy the equipment. 

At first, the VP did not believe Luke because Jill had lied to him many times, promising that the equipment was there. To survive the audit from this important customer, the VP asked Luke to lie just this once and also to put fake labels on some of the machines to show the customer. But to do so would have violated Luke’s values and diminished his standing with his team. 

Questions:

1. What are the main arguments Luke is trying to counter? That is, what are the reasons and rationalizations he needs to address?

2. What is at stake for the key parties, including those with whom Luke disagrees?

3. What levers can Luke use to influence those with whom he disagrees?

4. What is Luke’s most powerful and persuasive response to the reasons and rationalizations he needs to address?