Business 11th Edition by William Pride,Robert Hughes ,Jack Kapoor

Exercise 1

DocuSign Changes Its Decision-Making to Cope with Crisis
What happens to decision making when a fast-growing company suddenly faces a crisis that could cloud its financial future? This happened to DocuSign, Inc., a Seattle-based provider of fully automated electronic signature services. The company offers software products that allow companies to transmit documents online and gather e-signatures quickly, cost-effectively, and securely. DocuSign's customers include companies in the financial services, e-commerce, mortgage, real estate, travel, and insurance industries. Since its founding in 2003, the firm has executed more than 58 million electronic signatures using desktop computers, laptops, cell phones, and other mobile devices.
Not long ago, however, DocuSign's executives faced a big problem. Many of its major customers at that time were mortgage lenders and college loan companies, which relied heavily on its e-signature services to speed the loan-approval process for their customers. However, poor economic conditions and increased regulation threatened to slow or even shut down these companies' spending, imperiling DocuSign's rapid growth and its revenue stream. "We were faced with large market shifts in two of our top segments," said the CEO, "both out of our control, and both within a 60-day period."
Instead of closeting themselves in a conference room to work out a solution to the crisis, top managers called a town-hall style meeting of the entire company. Gathering their 40 employees together, they described the new market conditions they faced, outlined what the situation meant for DocuSign, and asked everyone for input to help devise solutions to the problem. "We went straight to the people that deal with these customers on a daily basis, and that's our employees," the CEO remembers.
This approach to shared decision making, implemented during a time of crisis, was effective in helping the company fend off the threats to its growth and pursue promising business opportunities. The firm began holding monthly company-wide meetings in which employees brainstormed new ways to assess the effect of changing market conditions. Top management also created smaller groups of employees and gave them responsibility for specific tasks such as bringing new products to market.
During the next year, as employees rose to the challenge of shared responsibility for decision making, the company was able to identify and start relationships with a number of lucrative new clients. It created a new marketing program to focus potential customers' attention on the environmental benefits of shifting to paperless transactions and e-signatures instead of printing mountains of paper contracts and agreements. The marketing program also emphasized the cost benefits of completing transactions electronically rather than relying on expensive overnight delivery of legal documents when signatures were required.
As a result of this change in decision making, the company came out of the crisis with a secure enough financial future to obtain more than $12 million in additional venture capital, enabling it to continue its growth. Just as important, since the crisis was averted, employees have continued to take an active role in formulating and guiding DocuSign's business strategy. "You empower these people by telling them the truth and being open and honest with them," the CEO says. However, he goes on to say, "We don't always want to get into a situation where our employees think that our senior management team doesn't have any input or doesn't have options. There's a balance there." 9 For more information about the company, go to http://www.docusign.com.
How closely did DocuSign's top managers follow the steps in management decision making as outlined in the chapter? Explain your answer.