Finally the GM of the Division intervened, took the marketing, win/loss and sales data and defined an aggressive development plan that involved outsourcing part of the development effort. Luckily Medford had an outsourcing division in India and also in the Ukraine which could easily handle the workload. The GM sided with marketing that unless at least a new product was out within a year, Medford would lose the bulk of their installed base that was paying maintenance on their existing applications. This installed base was 70% of total revenues for Medford on a yearly basis. For the Sales VP this was acceptable, yet he began losing sales people as commissions dropped. Part III - What Would You Have Done?

The costs of conflict not handled well can be easily cripple a company's ability to deliver value to customers and eventually force it to lose focus on what matters most (Chung-Yan, Moeller, 2010). Conflict over which platform to support at Medford also was leading to a war between Sales, Marketing and Engineering. The CTO had often said he was waiting to retire which further angered the Sales VP, who was on a comp plan where 40% of his salary was based on delivering new solutions to ERP customers on time. In response to this conflict which was more organizationally-based than just technology-driven, I'd give the CTO an early buy-out offer as he had often argued against any kind of technological change on behalf of customers. He had begun to create a toxic culture in the company that was making it every difficult for Medford to even consider SaaS as an alternative. I would replace him with one of the directors of engineering...

I'd also work with the Sales VP, marketing team and engineering to create a unified vision for the future of all Medford application on the SaaS platform. Creating consistency and cohesion through a unified vision can serve to accelerate the attainment of challenging objectives over time (Stevens, 2011). My focus would be on creating so much momentum around this pilot project of SaaS-based applications that everyone in the company would seek out an opportunity to contribute to its success. I'd also concentrate on the recognition and reward aspects as well, transforming the top contributors into champions for the program. The results of engineering on meeting or exceeding deadlines would be posted on the company intranet site, and would also be discussed by the CEO as being critical to the long-term growth of the company. In short, I'd work to transform the entire culture of Medford to make the change and resolution of the conflict as valuable as possible. Engineering would for the first time get a chance to be heroes too.
Reference

Chung-Yan, G., & Moeller, C.. (2010). The psychosocial costs of conflict management styles. International Journal of Conflict Management, 21(4), 382.

Liu, J., Chen, H., Chen, C., & Sheu, T.. (2011). Relationships among interpersonal conflict, requirements uncertainty, and software project performance. International Journal of Project Management, 29(5), 547.

Stevens, C.. (2011). Using Transformational Leadership to Guide an Organization's Success. Employment Relations…