Case Study I | Merger of Five Independent Companies Into One

A diversified Multinational Company decided as a result of an Economic Value Add (EVA) exercise to merge all of its affiliates into one to save US $10M in operating expenses from a US $100M revenue stream. Mr. Gonzalez was hired to complete the merger by building a new HRIS to manage the new employment base. However, upon his joining the project he was asked to assess the whole organization and to provide a slate of candidates for the top 5 most senior positions for the new company from a pool of 25 executives. Even though Mr. Gonzalez had no previous experience with this type of project, he used the Prisoner Dilemma methodology to secure the required data points to select the best in class candidate for each role. Mr. Gonzalez interviewed the 25 executives and elicited the virtues and most importantly the shortcomings of each executive. He correlated the answers and presented a slate to the New Regional Director for his approval. Based on the 100% overlap against the Regional Director’s own slate Mr. Gonzalez won instant credibility and was able to go through the five levels of the organization in record time.

The Prisoner’s Dilemma indicates that the best outcome for the two criminals is to say nothing to the Police. However, when the Police offer the incentive of a reduced sentence usually one of the two actors agrees to cooperate first because he or she is not ultimately sure if the other person will really stay quiet. In this case, each executive wanted the top role, so each shared their virtues but communicated the shortfall of the other potential candidates with equal or more vehemence. The correlation of this cascade event produced valuable data as to whom was best qualified for each role and those who were least qualified.

Case Study II | Turnaround of a Pharmaceutical Company from First to Fifth Back to First​

Mr. Gonzalez asked to go to the Philippines to get his first full Head of HR Role in a very corrupt and belligerent Union environment. After learning from a very experienced Union Negotiator and decertifying the first Management Union, ever in the Philippines. Mr. Gonzalez had to focus his attention to rebuilding a corrupt business that started with the termination of all of his peers and the General Manager. This was done within three months of his arrival to the Philippines.  Mr. Gonzalez had to manage the operation for six months before the new GM arrived. After assessing the state of the business Mr. Gonzalez determined that the Company had sold 14 months of inventory (Loading the Trade) in each of the prior three years to obtain Maximum Bonus Payouts. His first business plan included the proposal not to sell the first month of the next fiscal year to allow the trade to absorb the excess inventory. This avoided the returns that had to be handled every year to correct the anomaly. Even though the Salesforce earned no commissions that December. Mr. Gonzalez used that month to establish a new selling process to include realistic targets per territory, taking into account the market impact of new store opening or closures, new Doctors or departing Doctors, new hospital openings or closures, etc. The new system also realigned the way commissions were measured and earned to provide greater weight to sales occurring the first weeks of the cycle instead of achieving target the last three days of the month and the last month of the year. This allowed the company to reduce the Distribution cost by over 75% and the Manufacturing Overtime cost by 100 %. In essence it made the organization more predictable and highly effective.

While this solution was initially not beneficial to the salesforce, and Mr. Gonzalez was hated. The Salesforce achieved its full year targets 6 week prior to the end of the fiscal year. Leaving for the end of the year only the question of; how big did they want their bonuses and commissions to be by continuing to sell more effectively in the marketplace? Within 10 ½ month a negative situation for some became a win-win to all. This shows that in a game actors might be willing to accept temporary losses in view of large potential gains.

Finally, for Mr. Gonzalez the game to win the soul of the Filipinos continued. After 12 months of doing everything in the management book and achieving business success, he was not yet accepted because people still believed he was there to fire them. One Friday evening, Mr. Gonzalez received an anguished call from a worker to tell him “The daughter of one of our sales associates needs a life-saving surgery now but we cannot find the product needed for her surgery because it is out-of-stock in Manila.”

Mr. Gonzalez directed the person to the distribution center to no avail. There was no product.

Then Mr. Gonzalez called the Pharma Plant but there was no production available.

As it was early Friday night, Mr. Gonzalez called the Head of QA, who was a high ranking member of Philippine’s society, and asked her to come back to the Plant and disburse one of the vials on hold for the FDA equivalent entity in Manila. As each production run required a one vial hold back for testing in case of any issues or on spot inspections at any time. A violation of this nature could cost her job and career and the Company a huge fine and embarrassment. How do you play a game where the two main actors stand to lose it all to the benefit of a third party? Easy answer CULTURE…The Philippines was a very impoverished nation in 1999, huge violence and a high rate of violent killings. But they loved their children.

Mr. Gonzalez weighted all the negative publicity and legal ramifications and put his head on the chopping block by writing a legal act to replace the vial of medicine indicating his decision to violate National FDA requirements to save the life of a child thus taking upon his shoulders the responsibility from the Head of QA and as a Company Senior Representative clearing the company of any wrong doing. On the middle of the night, Mr. Gonzalez was informed the operation had been a success and the child had been saved. He slept better that weekend.

On Monday, the Company had changed. What 12 months of worked had not produced, the events of Friday night had changed. He became the most beloved expatriate in the Company and by the time he left over 50 people accompanied him and his family to the airport crying for their departure. Mr. Gonzalez left the Philippines with the Company back at number 1 with a fantastic team that went on to take huge responsibilities across the Corporation including HQ.

Case Study III | Discovery of Lipitor the Biggest Blockbuster Drug in the Pharmaceutical Industry

After the Philippines, Mr. Gonzalez moved to pharma Research and Development. While this was a temporary demotion after being the youngest VP in the Company’s history at 26. The Company could not ensure his or his family safety in Manila. Mr. Gonzalez considered India but due to the age of his daughter the Company decided it was not the right post for him. The Company also had a problem with the Federal Government as it was under a conciliation agreement with the EEOC for discrimination. Obviously a successful Hispanic Scientist with GM experience was a gift to Ann Arbor, MI. But there was not a job in the site so he was given a group of 83 people to support. Interestingly enough, this group included the new CEO of Research and Development Dr. Ronnie Cresswell and his staff which included Dr. Pedro Cuatrecasas who had invented AZT and together went on to lead the team that invented Lipitor.

Dr. Cresswell was hired to execute the transformation of Warner-Lambert Inc. from a Consumer to a Pharma centric Company. The CEO of W-L, Mr. Joseph Williams, decided to reverse the resource balance from Consumer Marketing to Pharma R&D. This meant that the R&D budget grew from US $ 283 M to US $ 1.0 Billion and the Marketing Budget went from US $ 1.0 Billion to US $ 283 M. How do you effectively manage a resource surplus of +300 % vs. prior year in an all-white aging organization? In a scientific world made up of Asians and white American women…

The actors:

   1) The scientists and administrative staff in Ann Arbor (The vast majority)

   2) The new CEO and President of Research at Ann Arbor, MI

   3) The Company’s CEO in Morris Town, NJ

The stakes:

   1) Attain a better multiplier for the Company in case of a sale or an acquisition

   2) Joe William’s legacy

   3) Ronnie and Pedro’s reputation as great scientists and drug developers

The situation:

   1) The local team (the Majority) immediately did not like the new comers

   2) The company had not fired a person in the previous four years

   3) The HR and Finance functions wanted to uphold the status quo

I met with Ronnie as I was responsible for him and his staff. He had already started to have issues with the administration. He had a Collection of cars worth millions of Dollars and they wanted to apply the relocation policy, which would only pay to move one car. I knew the investment the Company had made to obtain him from his prior company and to move him from Europe to the US.

The Solution:

I spoke to Corporate HR and after explaining to them the importance of Ronnie to the Company, they did not change their mind he made a lot of money and therefore he should pay to move his collection of cars and where to have them in the US. However, I knew the CEO’s point of view and how the bureaucracy worked. I personally approved the expenses since he was my client and I had been a Corporate VP of the Company. This won me the support of Dr. Cresswell for all the changes that were to take place in the succeeding 12 months which included the hiring of 50 % women scientists and mostly Asian male scientists. The termination of non-performing minority employees. Training the aging white scientists to deal with women and Asians as the way of the future. The whole eco system around the R&D site in Ann Arbor changed from a mid-west set of strip malls to an international mall in a few years. The initial retention of Ronnie and Pedro resulted on them leading the team of scientists, we built and retained, to develop Lipitor the most successful product on the history of the Pharmaceutical industry.

Case Study IV | Developing a Relocation and Severance Package for all Employees in Brazil

After W-L, Inc. Mr. Gonzalez moved to PepsiCo in Rio de Janeiro Brazil. His first role was to lead the move of the Latin America HQ from Rio to South Florida. Mr. Gonzalez was in charge of taking care of every aspect of the move which included building policies to pay those moving and those staying. PepsiCo had a policy for traditional one-to-one moves but it did not have any policy for a massive move such as this. The 35 families in Rio were all paid as expatriates which meant they had free housing, free home leaves, Cost of Living Allowances, paid schooling, fully paid cars, travel in First Class everywhere, etc. As an American Company, PepsiCo did not pay expatriate benefits to executives in the US.

The Actors:                                               

1. The most successful Division CEO in PepsiCo at the time

2. 34 Executives used to being pampered by the Company in Brazil

3. 8 local employees mostly low level administrative staff

4. Corporate PepsiCo who established Policies across the Corporation

The Stakes:

The security situation in Brazil was critical. The prior vacation season had seen multiple house break in. The CFO of Citi Bank had been kidnap in Sao Paulo and returned safely after negotiators got his release.

The overhead cost of the office was extremely high due to the hyperinflationary environment in Brazil at the time.

 The extra time that it took to travel intra Latin America which required a trip to Miami to go to any of the Capitals in Latin America. The cost represented that each employee had a minimum travel cost that was 150 % of his/her annual base salary.

The Situation:

The Pepsi Cola Latin American Division was the best performing unit inside of the whole of PepsiCo. The Executives were all experts in their Franchise fields. Therefore, the Corporation was willing to flex on the treatment of this unique move.

The Solution:

Mr. Gonzalez built a relocation and severance package to convert all the expats into the American system and to treat the 8 administrative employees in Rio, they would lose their jobs. He presented the plan to the Head of HR and to the Division President. He got their approval but since it would impact the executives he was asked to present to the VPs for them to accept the conditions which will severely impact their income vs. getting a Green Card and eventual US citizenship if desired by them. He was asked not to make waves as this was very sensitive and the company did not want to lose these executives. He had this meeting in the Conference room of the Divisional CEO while the CEO worked in his office.

Mr. Gonzalez presented this very generous package for the Executives who would get a three-year transition payments on the housing and car cost, plus they would retain home leaves to their country of origin, but they would not have schooling privileges for their children, the Company will support obtaining visas for the maids, which was very important for the wives of the Executives. The terms were so good the Executives agreed in principle. However, when he presented the severance terms for the Brazilian associates an executive violently opposed it. After Mr. Gonzalez tried multiple ways to convince this executive, he lost his temper and answered to the executive that his point was “Immoral” because he was trying to take money from the administrative staff to give it back to the executives. This ended the meeting abruptly.

The shouts had been heard around the office. Mr. Gonzalez had to go and report to the Head of HR and to the Division CEO. He had been asked not to create waves and he had just done exactly that. This executive had responsibility for many people and was critical to the Corporation. The Head of HR did not know what to do. While he agreed that the executive had behaved badly, calling him “immoral” was going too far. Then the CEO called a face-to-face meeting to find out the results of the meeting.

The CEO already knew what had happened because the executive had gone to see him to complain about how he had been treated. The CEO who had heard the meeting from his office had told the executive he expected more from him as a senior person to the new guy, Mr. Gonzalez. He went further and demanded that the executive apologize to Mr. Gonzalez because he had gotten great conditions for the executives that went beyond what the Corporation would have done without him. Furthermore, his proposal for the administrative staff was very good and fair to recognize their loyalty and service to PepsiCo.

When Mr. Gonzalez and the Head of HR went into the CEO’s office, they were concern because of the gravity of this issue. However they were given the good news that the executive had to apologize not only to Mr. Gonzalez but to the staff that had heard the fight.

This is another example that in a game with multiplayer’s interests one must find a solution that maximizes benefits to all while minimizing the losses to all. This basis level of solution got Mr. Gonzalez the support of all Actors except one. However, that was enough to carry the day.

Case Study V | Taking Pepsi Cola to Leadership in Dominican Republic vs. Coca Cola

Mr. Gonzalez was given the additional responsibility to be the head of HR for North Latin America. He was given full personnel decisions to choose the best talent in Latin America to grow this region. After assigning the best people to key operating roles, including CFO and Market Managers, Mr. Gonzalez was asked by the Area Manager to help with the Dominican Republic.

The Actors:

1. The Division CEO, who wanted this underperforming u nit to catch up and surpass the other regions in Latin America

2. The Area Manager, who was an American who spoke no Spanish on his first international assignment and wanted to meet the expectations of the Division CEO

3. The Bottler in the Dominican Republic, who had been given Millions of Dollars to grow the market

4. The founder of the bottling Company, who saw his role as providing many jobs to the people as opposed to growing huge volume, and at the time was at the helm of the Company

5. The Pepsi Cola franchise managers who were trying to implement the changes

The Stakes:

At this time Pepsi trail Coca Cola around the world with the exception of Venezuela, Argentina and the Middle East. Any market gain was great news for the value of the PepsiCo stock.

The Situation:

Mr. Gonzalez was asked to visit the market to support the CFO and the Head of Technical Services to get the Bottler to move on the transformation of the country. Mr. Gonzalez arrived from Miami late at night to Santo Domingo. The franchise manager and the head of training pick him up at the airport for a late dinner and drinks, a typical market visit. Instead, Mr. Gonzalez asked if the Plant was operating at that time. They said yes, and Mr. Gonzalez asked to do a plant tour this was past 11:00 PM. Even though it was unorthodox, they took him there.

Mr. Gonzalez tour the plant, the warehouse and even went up to visit the small museum the founder had created where he still had the manual lines that allowed him to fill and cap the bottles one-by-one when he started the operations long ago. During this visit, Mr. Gonzalez observed that there were many people building pallets eight men at a time and the remaining 56 men stood by until these 8 got tired and then they would work one pallet at a time. Needless to say this process took all night to unload and load the trucks.

In addition, Mr. Gonzalez saw the 20,000 to 30,000 cases of new half-liter returnable glass they had received for the launch of Pepsi ½ liter presentation into the Dominican Republic market. Once he finished his tour he went to dinner with the PepsiCo people who complained bitterly about how slow the bottler was and how come they would not change the way they did business. At around 1:00 am, they headed to the hotel to drop Mr. Gonzalez off and found the main street close because it was the start of the week of Merengue. A major festivity in Santo Domingo that created a four or five day holiday weekend.

The Solution: 

After dinner, Mr. Gonzalez built his action Plan. He woke up early in the morning and went to the Plant to meet the founder, his son who was the general Manager, the Operations Director, who was the son-in-law of the founder, and the CFO who was the number one trusted employee in the Company with no relation to the family. The discussion started in a very congenial matter. Mr. Gonzalez new the Bottler wanted more money from PepsiCo, US $ 10 M to do market activities on top of the money already given. Mr. Gonzalez heard their demands and observed thru the morning as the General Manager was constantly asked to sign checks for US $10 to US $ 50,000.

After the break, Mr. Gonzalez took the floor and asked for the Organizational charts of the Company. To which the General Manager answered in Spanish we do not have “Organigramas we have Crucigramas” or literally translated we do not have org charts we have puzzle charts. To what Mr. Gonzalez followed with his observations of the extra people and wasted time in the distribution center. The founder was offended and indicated he had great pride at being one of the largest employers in the island. Then Mr. Gonzalez asked how long before they could launch the ½ Liter Pepsi presentation to which he was answered by the son-in-law that they 1) did not have capacity and 2) did not have shells to put the bottles into the market. They emphasize the need for the additional US $ 10 Million.

Taking all the Actors needs into account Mr. Gonzalez provided the following solution:

1. Use the four or five days holiday to bottle the 20,000-to-30,000 cases of product

2. Use the cardboard boxes the new bottles came into transport the Bottles to the market

3. Use the extra labor in the warehouse to pack the cardboard boxes manually 

4. Implement all these actions and then reduce the size of the Distribution team to generate funds to support the Market activities which combined with the new revenue will eliminate their need for Pepsi Cola funding.

5. If they did not do any of his recommendation. Mr. Gonzalez would recommend that PepsiCo cut all funding to the Bottler as he would not put any of his money in this market place.

Needless to say the founder was irate, the son-in-law did not know what to do, and Mr. Gonzalez’s Pepsi colleagues did not like the idea because they needed to stay behind to oversee this work. The CFO did not think we should threaten the Bottler, because he was also Dominican and they did not react well to threats.

However, the result was that the Bottles were filled taken to the market during the week of Merengue. PepsiCo surprised Coca Cola who took 18 months to introduce their own ½ liter package and as a result they lost their leadership in Dominican Republic. Another Blue win vs. Red.

Case Study VI | Acquire Market Leadership in Mexico City 63% vs. Coca Cola

Situation:

Based on the success Mr. Gonzalez experienced in Latin America. The Division CEO who was even hungrier for more successes. Promoted Mr. Gonzalez to Mexico the largest Pepsi Cola market out of the US. The market share was in the low 30s. He was given a limited book of talent and he had to secure external talent to achieve his Mission. However, Mr. Gonzalez created a team quickly to take over the market. On November 1993, Mr. Gonzalez moved to Mexico. His welcome was the 300 % devaluation that took place in Mexico on December 1993.

Actors:

1. Division CEO (Looking for more successes)

2. President of Mexico (newly hired executive from Colgate Palmolive)

3. PepsiCo Directors in Mexico all expatriates

4. Mexican Bottlers (who had invested Millions into new equipment and glass and truck fleet)

5. Mexican Consumer

Solution:

The first action was to launch the Pepsi Challenge. This happened concurrently with the devaluation. In addition, the New President of Pepsi Cola in Mexico had a strong relationship with the Vitro Group which got Pepsi Cola an exclusive on a new package called Plastic shield.

The Bottlers started to suffer the impact of the devaluation by August 1994 almost 8 months after it happened as their credits started to come due. By then the impact of the Pepsi Challenge and the exclusivity of the new Plastic Shield bottles in the country gave Pepsi Cola a + 60 % market share in Mexico City. Mr. Gonzalez worked with the Bottlers to reduce the negative impact of the financial crisis and inside of the Franchise Company. He reduced the benefits of the 5-or-6 expatriates whose cost had gone to represent over 50 % of the payroll of the country vs. the remaining 100 Mexican employees.

In addition, Mr. Gonzalez started a plan to replace all expats with local nationals to better represent the interest of the system. Through the economic crisis Mr. Gonzalez kept the Bottlers focus on the market and built strong relationships with the three largest Bottlers which allowed him to implement PepsiCo programs to grow volume. At the time of his departure, there were only 2 expats in Mexico. The costs were under control and Mr. Gonzalez had been promoted to the VP of HR Latin America.

Once again, Mr. Gonzalez played multiple game theory scenarios to benefit all Actors. The growth in share vs. Coca Cola gave the employees a major boost during the economic crisis. The volume growth made the Division CEO very happy and increased his prestige inside of PepsiCo resulting in his Promotion to COO of Pepsi Cola International Europe and Latin America. The Mexican Consumers benefited by a great product at a great price during a major economic crisis. The expats did not like Mr. Gonzalez but they were all relocated to bigger and better jobs in other markets. Eventually the local executives were also promoted to bigger and better jobs inside of PepsiCo.

Case Study VII | Implementation of Franchise University

Situation:

In 1997, after a significant worldwide correction to the Pepsi Cola business. Mr. Gonzalez was invited from Spain to join the Corporate HQ in Purchase, NY. The International business had finally defined a way to go forward to grow the franchise business. The idea was for Mr. Gonzalez to execute this plan around the world. The HQ had two senior executives developing a solution that called for Concentrate price increases worldwide. This solution was to be taken to the CEO of PepsiCo two days after it was presented to Mr. Gonzalez.

Actors:

1. The two executives who developed the solution

2. The CEO and President of Pepsi Cola International

3. The Head of Human Resources of Pepsi Cola International

4. The Executive Vice-President of Operations of Pepsi Cola International

5. A consultant from Accenture that was to aid Mr. Gonzalez on conceptualizing how to roll out the solution

6. The 100 Franchise Managers around the world who needed to implement the change

7. The Bottlers around the world

Solution:

Mr. Gonzalez is an Internationalist whom at this moment had lived and worked in four continents. He had confronted Labor Laws in multiple countries and worked closely with the Legal department in multiple countries around the world. Therefore, he immediately knew that the HQ’s proposed price increase of concentrate could not be executed without significant legal battles on every country around the world. This will be a huge distraction and a great cost to the Company. Based on his experience in the franchise and bottling businesses of the Company, Mr. Gonzalez knew that upsetting the Bottlers would produce the opposite results than those the CEO and President of Pepsi Cola International wanted.

He went into a fox hole with the Accenture consultant, and prepared a discussion document to present to the CEO that afternoon. He briefed his boss and told him what he thought about the impossibility to roll out the HQ’s plan. He did not like it but he understood what Mr. Gonzalez was saying. At the meeting with the CEO, Mr. Gonzalez put on the table the interests of all the Actors. And then he explained without passion why the proposal would not work. In addition he stress this was a time that we needed to improve the Bottlers’ profitability instead of just the Franchise Company’s. He used the model the two executives had developed where it was clear that the profit pool was skewed towards the franchise house 80/20 vs. the Bottler. He recommended a model where the Bottlers could increase their profitability thru better management of the Marketing spending. More Volume more profits for all.

The CEO of Pepsi Cola International agreed not to present the HQ’s proposal to the CEO of PepsiCo and gave Mr. Gonzalez two days for him to develop a new proposal to present to the 10 Business Unit Managers 4 weeks from that point. Mr. Gonzalez worked for 48 hours non-stop to develop the underpinning of Franchise University, a program that had been violently rejected a year earlier by the senior leaders of Pepsi Cola International.  

Mr. Gonzalez established criterion for success:

1. There was to be a sponsor from the 10 Business Unit Managers

2. The best leaders in the field would be made available to him to develop the curriculum and thetraining material

3. The Company will pay up the cost without challenges as there was no time to argue

4. There would be a pilot of the Program in four week in Barcelona Spain

5. For the first time in 100 years of PepsiCo, 8 weeks after Mr. Gonzalez visited New York, we brought together the 100 Franchise Managers from around the world in London for the first session of Franchise University

That year the Business Plans for every market were all completed by November 30, as opposed to May of the following year, a saving of six months that allowed the market to compete effectively with Coca Cola through the full year. The Company won 1 Point of share worldwide and continued to make share gains for 8 years in a row.

Once again, Mr. Gonzalez used the agendas of every Actor to achieve a better outcome that benefited everyone involved. The two executives went on to have great careers, one went to be the CFO of the winter Olympics in Utah and the other stayed in PepsiCo for years working with Mr. Gonzalez on many projects and today owns his own Company. The other senior executives went on to have great careers in PepsiCo. The use of Game Theory principles are also valid to recover a failed project to produce great outcomes. Even when there are Actors not directly involved on developing the Solution but if they benefit from it they will push the action forward.

Case Study VIII | Leading the Largest Foreign Investment into Cambridge, MA. US $ 4.0 Billion

Mr. Gonzalez joined Novartis on March of 2000 after + 9 years in PepsiCo. After a year in the Consumer Health Business, Dr. Dan Vasella asked Mr. Gonzalez to join him becoming the Head of Human Resources for Research and Development. As Dr. Vasella presented the offer, there is no better place to be at than where you are wanted, in this case Pharma which is the center of Novartis and R&D which is at the epicenter of the success of Pharma. In addition, Dr. Vasella asked Mr. Gonzalez to write his own economic offer for the role, option Mr. Gonzalez did not accept

Situation:

Dr. Vasella had hired McKinsey to perform an analysis that would guarantee Novartis would keep the top spot on Drug Discovery and Drug Development. Their recommendation was that the Company needed to move the R&D group to the US to either the West Coast, San Francisco or San Diego or the Boston area. This was more complex because Novartis needed to preserve its Swiss Tax status that gave the Company a 10 percentage point advantage to its US competitors.

Actors:

1. Dr. Dan Vasella

2. Board of Directors of Novartis A.G.

3. Head of Research

4. Head of Development

5. Head of Pharma

6. Head of HR Novartis

7. Head of HR Pharma

8. Every R&D department head that would have to relocate

9. President of Harvard

10. Major of Boston

11. President of MIT

12. City Manager Cambridge

13. Senator Ted Kennedy

14. Senator John Kerry

15. Swiss Government

16. US IRS

Solution:

Mr. Gonzalez had moved Novartis Consumer Health from the US to Switzerland so he had built a relationship with the head Tax lawyer for Novartis US, in NYC. So he resolved the Tax issues first.

Mr. Gonzalez was the head of HR for R&D. As such, he built the staffing plan to hire the 1400 scientists to staff the new Novartis Institute for Biomedical Research. The initial Plan called for 400 scientists but that would make Novartis me too in Boston. The staffing work was the same for 400 as it was for 1400 scientists so the only change was the amount of the investment from US $ 400 M to Us $ 4.0 Billion.

Once the project was determined there was no one executive in Novartis willing to take it on. Mr. Gonzalez knew this was a life changing project. He took into account the agenda of each Actor and determined he was the best player to undertake this challenge. He went to Dr. Vasella and offered to run the project. He became the COO for Research and started the project. He moved to Cambridge while his family stayed in Switzerland. He flew back and forth to Basel as needed and his family came once to visit him in Boston.

Mr. Gonzalez had built his staffing team in Basel and he used the remote team to scout the market to identify the talent to work in the new Institute yet to be built. At the same time he negotiated with the city and the State to get tax incentives to reduce the cost impact. On one of his trips back to Basel, he was informed the President of Harvard and the Major of Boston had come to Basel to get an answer as to why the Company was choosing Cambridge instead of Boston. The CEO Dan Vasella a Graduate of Harvard was not going to meet with them and it was up to Mr. Gonzalez to deal with this conflict which was a potential big staffing issue as Harvard was to be a major sourcing ground for the Company.

Mr. Gonzalez met with the two dignitaries and sent them back home without success as the project was already underway because Boston did not have as great a location as Cambridge did. Additionally the move to buy the Nekko Factory building a historical site in Cambridge would stop the expansion of a competitor Millennium which at the time was the largest Bio Company in the area. Boston did not offer any of these advantages and besides we were just across the river from Harvard and the major medical centers in the city.

This has been the largest game theory project Mr. Gonzalez has handled. He started by clearly identifying everyone’s agendas. He then constantly looked for the Nash Equilibrium for each step of the project. There were many steps:

1. Turning around the Board decision from US $ 400 M to US $ 4.0 Billion

2. Convincing Dr. Vasella to bet on him instead of bringing a new Mega Project Manager

3. Fighting the intra wars with the other HR Executives

4. Obtaining the support of the Head of Pharma, even though he would lose the Research Group and significantly change his job

5. Dealing with the President of Harvard and the Major of the City of Boston

6. Bringing Senator Ted Kennedy to the initial announcement of the US $ 4.0 Billion investment, the same day that the Catholic Church was accepting its role in the child abuse scandal in Boston

7. Obtaining a favorable ruling from the Swiss and US tax authorities to retain the Swiss Tax treatment over the compounds discovered which still takes place in Basel.

8. Relocating the key scientists from Basel to Cambridge and building the appropriate relocation packages to make these moves non-contentious and maximize the output of each executive and scientists.