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Growing Pain Essay So by the end of 1992, Waterway had begun selling its own line of compact, inexpensive, high-impact plastic kayaks. Within one quarter, Maher had known that the move had been a smart one. Almost all of Waterway’s existing canoe customers— mostly wholesalers who then sold to liveries and sporting goods stores—had placed sizable kayak orders. A number of private-label entities had also inquired about Waterway, and Maher was considering producing privatelabel kayaks for those companies on a limited basis. For the most part, the staff had adjusted easily to the company’s faster pace. The expanded business hadn’t changed Waterway’s informal work style, and people seemed to appreciate that. Maher knew that most of his employees were avid outdoor types who viewed their jobs as a means to an end, and he respected that perspective. On days when the weather was particularly good, he knew that the building would be pretty empty by 4 P. M. But he also knew that his employees liked their jobs. Work was always completed on time, and people were outspoken with new ideas and with suggestions for improving current designs and processes. There was no mistaking the genuine camaraderie. Maher walked through the design room, stopping to talk with one of the two designers and to admire the latest drawings. Then he headed for the administrative suite. His thoughts returned to the company’s recent history. Until 1990, Waterway’s sales and revenues had increased with the market, and Maher hadn’t been motivated to push any harder. But when he had decided to venture into kayaking, he also had thought he should gear up marketing— get ready for the big trend if it came. Until then, there had never been a formal, structured marketing department at Waterway. He had thought it was time. That’s why he had hired Lee Carter. Carter had gotten her M. B. A. when she was 31. To do so, she had left a fast-track position in sales at Waterway’s major competitor in the canoe market to devote her full attention to her studies. Finch, who was something of a mentor for Carter, had told her that she would hit the ceiling too early in her career if she didn’t have the credentials to compete in her field. In her final term at business school, which had included a full course load plus a demanding internship with the Small Business Administration, Carter had interviewed ith Waterway. Finch had called to introduce her, but once Maher had met her and she had begun to outline the ways in which she could improve the company’s sales and marketing efforts, Maher had needed no other references. He had thought from the start that Carter might be the right person to nurture the company’s interest in the growing kayaking business and to run with it if the sp ort’s popularity really took off. When it had, he was proved right. True, the market was extremely favorable, but Carter had brought in more orders than even Maher had thought possible. Fortunately, the company had been able to keep up by contracting with other manufacturing companies for more product. Waterway had been extremely effective in keeping inventory in line with customer demand. Maher was impressed with Carter’s performance. From day one, she had been completely focused. She traveled constantly— worked so hard that she barely had time to get to know the staff. She came in on weekends to catch up with paperwork. Along with two of her direct reports, she had even missed the annual Waterway picnic; the three had been on the road, nailing down a large order. It was a dedication—a level of energy—that Maher had never seen before, and he liked what it said about his company. Back in his office, Maher found that he couldn’t concentrate on the product development report in front of him. That bit of conversation he had overheard outside Carter’s office was troubling. He certainly knew about the lucrative packages that were being offered in the sporting goods industry—even in Waterway’s niche. He’d even heard that some sales managers were commanding a quarter of a million dollars or more. He had read enough of the annual reports of his publicly traded competitors to know that larger organizations created all sorts of elaborate systems—supplemental retirement packages, golden handcuffs, stock options, deferred compensation arrangements— to hold on to their top performers. harvard business review †¢ july–august 1996 page 2 Growing Pains †¢Ã¢â‚¬ ¢ †¢HBR C AS E S TUDY â€Å"The business could stand to pay more,† Maher said, â€Å"but I want to avoid the habit of paying now for results down the road. † Maher wanted to recognize Carter’s contribution.