Crisis Recovery of Cantor Fitzgerald - Assignment Example

HERE HERE YOUR HERE HERE Cantor Fitzgerald: Crisis Recovery I. of Problem and Change Effort (a) On September 11, 2011, Cantor Fitzgerald experienced a loss of 658 employees and managers at the World Trade Center disaster, which was roughly two-thirds of the business’ entire workforce. The loss of life created a significant crisis in terms of being able to continue business operations successfully. The business lost, on this day, most of its human capital and expertise that had managed financial operations which significantly detracted from its competitive advantages in financial services knowledge. The crisis had long-lasting impact on the organization as, prior to 2001, the business had no contingency plans in place for how to manage in the midst of disaster in terms of succession planning. The structural problems lasted for approximately two years while the business was forced to redevelop its internal political structure, while at the same time morale and motivation had long-lasting impact that is just now achieving reduction a decade later. (b) The strategy of the organization was typical of most financial services company and, in this case, the strategic position of Cantor Fitzgerald did not contribute to the crisis, except for not having an adequate disaster recovery plan in place. A minimal risk management philosophy was the only significant contributing factor after the organization lost most of its talent support in the disaster. (c) The organization was using a vertical organizational structure in which divisional managers reported directly to higher levels of authority and policy was disseminated from the executive levels to mid-tier managers and subordinates. This structure contributed to the crisis as when they lost the 658 employees, it left significant gaps in management leadership within multiple financial services divisions. If the business had been utilizing a matrix structure with multiple reporting and layers of management talent, the losses would not have affected operations so significantly. (d) The culture of the organization was typical of a financial services company with values associated with customer service excellence (CRM) and knowledge management. The culture contributed to the crisis as dedication to fulfillment of customer needs required a team effort with specialized, divisional expertise providing the services as a primary cultural and social norm. With such a reliance on team philosophy, the business had to, in the short-term, adjust to individual accomplishment and autonomy until gaps in leadership were closed through recruitment efforts in order to provide ongoing CRM outputs. (e) The core technology of the organization was routine, linkages to existing Wall Street infrastructure software to support habitual job function related to financial service provision. Fortunately, the technology did not contribute to the crisis due to its customary and habitual make-up. If the software had been non-routine, the complexity of software packages would have further burdened the organization after such a tremendous loss of human capital. (f) Research did not uncover the existing human resources systems prior to the crisis, however assumptions can be made according to its vertical structure and the rather mechanistic make-up of financial services activity. Since the disaster had significant psychological toll on employees, it can be assumed that an atypical HR system was not in place with transformational properties, thus contributing to demotivated and unsupported employee needs at the foundational level. (g) The change agent in this case was the Chief Executive Howard Lutnick who took a more visible role within the organization after the crisis in order to restructure and rebuild motivation. Recovery after the crisis involved not only restructuring and recruiting to fill gaps, it required a new focus on corporate social responsibility, thus Lutnick acted as a cultural change agent to build a new sense of purpose (vision), leading by example. (h) To contain the crisis, the organization needed to develop a more horizontal management structure to ensure that knowledge was not contained within a single human talent, but could be shared in the event of staffing losses. The organization also worked with external stakeholders (i.e. Wall Street investors) to instill confidence in the talent capabilities and longevity of Cantor Fitzgerald as a means to return to a position of market prominence. (i) The organization recovered by establishing a new succession planning strategy (Greengard, 2). This was necessary to not only fill significant management and talent gaps, but also to ensure that the organization could expand its market presence once the economy recovered after September 11, 2001. The cultural changes required to improve devastated motivation in employees was to establish a more horizontal structure that provided more emphasis on human resources in order to build human capital advantages. The culture was transformed from static CRM to that of corporate social responsibility for internal and external stakeholders. (j) Post-crisis discourse was utilized to the crisis, headed by the Chief Executive, to give employees a new sense of purpose and vision. It was a “resonating message, a narrative – a frame to engender support” for the new cultural development and business objectives to transform from CRM to CSR (Seeger, Ulmer, Novak, & Sellnow, 84). Establishing a monologic relationship with employees was a change from vertical executive segregation that once drove political structure. II. Evaluating Change Leadership (a) Change was, again, led by the Chief Executive in nearly all aspects of cultural and structural change. Lutnick needed to create a sense of urgency, which was obvious due to the tremendous loss of capital and management talent. The formation of a coalition devoted to CSR was required as well as a new vision regarding the change of political methodology and stakeholder focus. New lines of communication were established as well as removing obstacles (i.e. better succession planning). Finally, anchoring new CSR and HR methodology was accomplished through ongoing executive visibility and new discourse. (b) The only step missing, or lacking emphasis, was building on short-term wins. This speaks of continuous improvement, however the evidence suggests that Cantor Fitzgerald was far more focused on public relations, corporate social responsibility, and new succession models. The new goals established related to change were fundamental and large-scale rather than promoting a step-by-step series of objectives. III. Recommendations (a) The change from CRM to CSR was a success story that is highlighted by revenue gains recently accrued as a reward for operational and human resources improvements, as well as new stakeholder dialogue as a byproduct of CSR. Cantor Fitzgerald experienced 34 percent revenue growth in its BGC group in 2009 (Cantor Fitzgerald, 3). Cantor, the parent company, does not publicize its financial results as it is not publicly traded. Better stakeholder dialogue and public relations put this firm back into a recognized and social trusted market leader. (b) Cantor Fitzgerald, since the crisis occurred a decade ago, is in the process of refreezing. The business has recovered in terms of staff, structure and human motivation and has successfully completed the transitional stages of recovery. The business has found its place in terms of revenue growth, human capital development, and cultural change focused on CSR. There is little more than can be done at Cantor Fitzgerald as it has become a leader in corporate social responsibility that has brought more revenue growth and cultural stability. (c) The organization should conduct ongoing risk assessments and internal human resources audits in order to gauge whether CSR strategy maintains long-term opportunities or whether the business might have to reposition itself on the financial market. Otherwise, the re-establishment of vision and social purpose have created a more functional and people-centered management structure that has revolutionized the process of financial services delivery and human capital development. Works Cited Cantor Fitzgerald. “Howard Lutnick Comments: Cantor Fitzgerald, Financial Firm Devastated on 9/11, Survives and Thrives” (2011). Accessed November 11, 2011 at http://www.cantor.com/press_releases/Howard_Lutnick_Comments_Cantor_Fitzgerald_Financial_fir.html Greengard, Samuel. “Why Succession Planning can’t Wait – Disaster Response”. CBS Interactive. Accessed November 11, 2011 at http://findarticles.com/p/articles/mi_m0FXS/is_12_80/ai_81007535/ Seeger, M., R. Ulmer, J. Novak & T. Sellnow. “Post-crisis discourse and organizational change, failure and renewal, Journal of Organizational Change Management vol.18, iss.1 (2005). Read More