Strengths and Weaknesses in Chase's Leadership Towards Sustainable Zipcar Business

Case Study, Quantic MBA Program

1. Executive Summary

This report provides a leadership-oriented evaluation on the challenges faced by Robin Chase, co-founder of a car sharing start-up company known as Zipcar, through the early stage networking and learning towards pricing modelling and operations, until the discrepancy discovered in revenue [1]. The traits of Chase’s leadership were analyzed based on five-factor personality model. The facts of revenue miscalculation and pricing model strategy were reasoned and discussed. During the different stage of start-up company development, the situational approach to leadership was applied also to identify leadership strategy dynamically. To support her idea of making people’s life more convenient in an environmental friendly manner, a leadership strategy has been developed in Chase’s position to help her addressing the big challenge faced at that moment.

Additionally, the described early stage contexts were in the beginning of 21th century, and the case provided by MIT Sloan was published in 2014. Nowadays Zipcar is one of the leading company in the car sharing industry with globalized market shares, thus the pricing strategy proposed can also be validated with the current pricing model [2] (in 2020), which gives a reflection on what could be an appropriate leadership for the development of Zipcar leading to a sustainable business.

2. Traits of Leadership

Robin Chase, grown up in a diversified culture background in Middle East with stints in Swaziland and Washington DC, her natural personality is characterized by the influence from parents and living cultures as respectful, flexible, passionate and self-confident. These has positive effects on success leadership according to the trait approach theory by J.W. Fleenor, and do have a significant impact on the Zipcar business throughout the development. During the networking and learning phase (Figure 1), she was very proactive on consulting friends, experts and established business owners, and seeking help from investors. The emerging idea of car sharing came to reality was driven by her intrinsic enthusiasm and persistency. Later on, when she facing the doubt and criticism of car-sharing concept, her high-level self-confidence and boldness brought her to the realization stage instead of convincing herself and others. She was doing great as single person leading herself to the goal.

After the incorporation of Zipcar in Jan 2000, she started team-up with friends and family members being experts, also hiring generalists and mangers in her own philosophy. During that she behaved in a manner of autonomous leadership according to culturally endorsed implicit leadership theory (CLT), which gave both Chase and her team members chance to relate each other to the role in the stranger phase (leader-member exchange theory). The bright side of her leadership allows individualized role consideration for each member on their own expertise. However, the dark side of the autonomous leadership made her a huge loss of investor commitment by firing a specialist upper-manager using the position power.

In Oct 2000, she faced the big challenge of miscalculated revenue with her pricing model after 3 months of operation. With the standard of established situational approach to leadership theory, she wasn’t very successful in leadership. In the directive phase, she was lack of supervision for the team members and surprised by Larry’s behaviors, due to her lack of directive knowledge. Also for many tasks she just did on her own without assigning tasks to colleagues and being supportive. Even after the alarm bells of miscalculated pricing model, the team wasn’t doing anything else to solve the issues under Chase’s leadership in a mature leader-member partnership phase. The developed team norms were the constrain which limited the voice out. Emotionally, she got angry after listening to team member’s opinions on price raising, which is completely against emotional healing and participative leadership. Instead, she endorsed the self-protective leadership by blaming others who has helped her previously. In summary, her capacity to influence others in a good manner was not enough to achieve the common goals of Zipcar success, and it harmed the leadership power to deal with the miscalculated revenue crisis.

3. Leading to Miscalculation

There are few evidences revealed the reason behind the miscalculation of revenue. Robin Chase was not an expert in GRE math even though second tries she was able to be admitted to MIT Sloan. She started attacking the pricing challenge with pricing models used by Communnauto and others as a starting point. However, the detailed math and number manipulation were not verified by any expert. In the end, she took the suggestion from advisors at Harvard and make her own guess boldly. Besides, she didn’t have insights into daily and hourly usage of shared cars, also underestimated the variable costs due to maintenances and fuels, which led to a too optimistic conclusion of estimated revenue.

Nowadays, the pricing model was simplified a lot compared with original plan, which provides better customer experience and easier revenue estimation and calculation. This could reflect decision-making by leaders.

4. Strategy in Chase's Shoes

I would appreciate Chase’s proactive approach before the establish of Zipcar team, in order to efficiently make decisions and get investments. When the team is formally established, I would suggest Chase take the participative and team-oriented leadership to gain much expertise in different fields and feedbacks on how to manage things better. In the stranger phase of team build-up, individualized consideration need to be emphasized and team member supervision should be more directive. Later in the acquaintance phase, team develops toward organic functionalized system, intensively coaching and supporting might need for different team members. And the leadership culture should be professional, conceptualizing and emotional healing. Facing the challenge such as overestimated revenue, Chase should stay calm and trust the team member to develop a more mature partnership. She should collect the opinions from colleagues then make the decision to tackle the challenge. Moreover, such professional work should be appointed to expert in pricing modeling in the team instead of doing on her own.

There is no global applicable leadership to everything in anytime, even with the same team members, the function of leadership is varying according to events, people and situations. The strengths of Chase’s leadership such as extraversion, conscientiousness, humane-awareness etc. should be maintained, whereas the weakness of her leadership including autonomous, non-team-oriented should be suppressed in order to achieve a common goal of successful and sustainable Zipcar business in the future.

5. References

[1] Cate Reavis, Deborah Ancona. Robin Chase, Zipcar and an Inconvenient Discovery. MIT Sloan School of Management. Case Study. 2014. [2] Robin Chase. “Zipcar membership plans”. https://www.zipcar.com/pricing (accessed Apr 12, 2020).