Providing a Design for Change for PfC - Case Study Example

Pledge for Cotton Case Study Student’s name: Course: Tutor’s Name: Date: Executive summary This report provides a design for change for PfC, a company whose capable CEO left abruptly and left its management in the hands of two of her inexperienced children. As a result, the business had experienced a downtrend in its business fortunes, relationship with employees, suppliers, and even buyers. The report suggests that a more competent leader should take the place of the CEO twin duo, and that Gail (the former CEO) should be persuaded to take up a consultant position for the company. While in that position, she can also plan for succession in the business. The report further recommends a design team to take up the roles of designing garments for sale by PfC as opposed to holding one person responsible for the same. It also recommends a more consultative approach to be used by PfC in order to minimise change resistance from stakeholders. The report recognises that the CEO duo might refuse to give up their post in which case they would need to be trained on leadership or an advisory team appointed to work with them; brainstorming problems may arise in the design team in which case team members would need to be trained on effective team-work strategies; Gail may refuse to take up the consultant offer, and an equally competent consultant may need to be hired; and covert and overt change resistance may occur among stakeholders, in which case problem-solving meeting and open-working strategies would have to be adopted. The changes defined in the report fit into the transformational change model, which reshapes business processes and strategies, and often results in a work culture shift. In conclusion, the report reiterates the importance of the proposed design and indicates that if implemented, it (the design) could help PfC gain the confidence of employees, suppliers, stockists and eventually, the consumer market, and consequently, the company could become profitable once again. Table of Contents Introduction Change is a difficult; it requires an organisation to leave its current state, and get into a future state that involves embracing organised and structured processes (Nickols, 2010). Like most organisations, any changes at PfC may be met with resistance, hence indicating the need for effective change management. When Gail and Benito left PfC at the hands of their twins Franco and Maria, without having trained them on how to properly run the business, no change management was evident. Change management is important for companies such as PfC because according to Project Management Institute (PMI) (2013), change management is “a comprehensive, cyclic and structured approach for transitioning individuals, groups and organisations from a current state to a future state with intended business benefits” (p. 6). In other words, if no change management is present, the organisation, groups or individuals would not transition properly from the current to a desired state. Unfortunately, all the roles that Gail had, and which are identified by Appelbaum and Paese (2006), Evans (2012), Khurana (2001) and Kaplan, Klebanov and Sorenson (2010) as roles that every leader should undertake, were lacking in her twin successors. This report argues that Gail is best positioned to act as a consultant for the CEO duo because: they now recognise the important role she played in the firm; Gail is best placed to inform (or re-orient) the CEO duo about the aims and objectives of the firm; Gail had networks and connections, who would gladly work with PfC if they feel that she is once again helping in the decision-making process of the firm; and left abruptly without having planned (and trained her successors) for leadership succession, Gail (somehow) has a responsibility to different stakeholders (especially those in Bangladesh) to ensure that their lives are not interrupted. The aim of this report is to suggest a way forward, through which the CEO team at PfC can have a clear vision for the firm and form effective strategies through which the dwindling fortunes of the business can be recovered. The scope of the report covers the options available to the CEO team, and borrows from an extensive list of literature in proposing changes that would once again make PfC a successful business. The report is divided into sections which include a design for change; an analysis of change where anticipated problems are highlighted and recommendations that would enhance the success rate of the proposed changes are provided; and a conclusion section which reiterates the key points raised in the report. Design for change From the PfC narrative as indicated in the case study, it is obvious the CEO duo failed in coming up with effective strategies, and further failed in engaging employees and other stakeholders when effecting their new changes. As Hiatt and Creasey (n.d) note, gone are the days when CEOs would issue decrees for change and employees would unquestionably put them into effect. Today, employees will question, shout back, and if unsatisfied, start looking for coping mechanisms, which would include quitting their jobs or giving a lacklustre performance at work. With the foregoing in mind, the design for change herein will involve a consultant (ideally Gail for reasons indicated in the introductory segment), the CEO duo, the management team at PfC and other stakeholders including suppliers. Inclusion of all stakeholders in the design phase is underscored by Anderson and Anderson’s (2010, p. 23) observation that “achieving business outcomes requires committed stakeholders, which usually requires a change process that has high stakeholder engagement from the very start”. Notably, if a business designs its future without engaging stakeholders, it is likely to face resistance from those who feel they were not consulted. Further support for the foregoing point is offered by Passmore (1994, p. 20), who indicates that “responding to change must be an organisational act, not just an individual one”. To start with, the new design will encourage the CEO duo to take a back seat, and pave way for a competent leader to implement a vision. The vision for PfC should be: to once again become a preferred apparel maker producing stylish but affordable clothes, and to have good relations with employees, suppliers and stockists who sell its merchandise. Already, the duo had retracted to management hence leaving a leadership vacuum in the company. According to Robbins (2014), CEOs have four main duties namely: setting business vision and strategy, building culture, team building (i.e. leading the team), and capital allocation. As is evident from the case study, the CEO duo is neither competent, nor skilled enough to carry out the four identified duties. Resoluteness, a character trait evident in the twin duo, is defined as being overconfident in a manner that makes CEOs unresponsive to concerns raised by employees and other stakeholders (Bolton et al. 2009). It is possible that the duo could stay at PfC and acquire leadership skill; in the meantime however, it is recommendable for them to take a back seat and be content with being part owners of the company. The new CEO should have skills that Kotter (2012) describes as essential in leadership. They include: being a change leader, recognising and confronting false urgency and complacency, winning the hearts and minds of people working for and with him/her, leading than commanding – i.e. showing by example what one wants done, and celebrating and appreciating the contribution of others. The new CEO should then work with the consultant (ideally Gail), and together, they should develop ways through which to realise the PfC’s vision identified above, build a business culture (it would be recommendable to revert to the culture that worked when Gail was the CEO), build business teams (e.g. among employees, with suppliers, and/or with shop outlets), and determine how capital will be allocated. The need to identify prevailing market needs in order to make clothing designs that fit into the likes and preferences of the consumer market should also be a priority area for the company. The foregoing could be done through a strategic market analysis, which according to Jain (2013, p. 23) identifies marketing inputs such as environmental shifts, market dynamics and competitive analysis needed to understand “emerging happenings in the marketplace.” To avoid being overwhelmed by the CEO responsibilities like the twin duo had, the new CEO should be made to understand that unlike Gail, he/she is not expected to handle all the responsibilities of the position; indeed, a CEO can delegate some of the non-core duties (Council on Foundations 2006). The new CEO will also need to work on incorporating business ethics at PfC. As the Business Roundtable Institute for Corporate Ethics (2007, p.5) notes, embedding ethics into business “is a very basic way of adding value to people’s lives”. Additionally, doing so links the business’s interests with those of its stakeholders. PfC could start by reviving its relationship with the Bangladesh supplier and recommitting to sponsor the projects it had withdrawn from. Additionally, choosing to use organic cotton as opposed to cotton grown using pesticides would also enhance its business ethics. Instead of a single person being responsible for coming up with the inspiration for designs (as Gail used to), the responsibility should be given to a team made up of several members. By doing this, more brainstorming would occur within the creative team, and the visits to fashion shows across the world would not be a preserve of one person only. Brainstorming in the creative industry such as fashion design is necessitated by social, environmental and emotional factors (Shih, Venolia & Olson 2012; Sotoriva et al. 2012). When designing creative art for the mass market therefore, a single creative mind is barely sufficient to cater for diverse tastes and preferences. The foregoing idea is supported by Wang, Fussell and Cosley (2012, p. 1), who argue that with brainstorming “designers propose designs of products with improved functions or appearance.” Ideally, the creative team at PfC should be made up of open-minded, curious and attentive people, who should be willing to take risks, adopt new ideas and try out new concepts. With a new design idea, the new CEO (in consultation with the consultant and the marketing department) will need to invest in marketing not only to potential garment buyers, but also to good employees (especially considering that the company had lost some experienced designers). As Jones and Recardo (2013, p. xvi) indicate, change should: “be strategic and sustainable...; serve a meaningful purpose...; be balanced...; be integrated into an overall, aligned solution...; be viewed as a continuous learning cycle...; and be about people.” The suggested change design is intended to be about people, transformational, sustainable, and provide solutions to the current problems facing PfC. To engage employees and stakeholders in the change process, PfC would need to hold regular consultative meetings where the opinions and perceptions of different stakeholders are sought. According to PMI (2013), such meeting would be critical in order to assess the support/resistance to change among stakeholder groups; ensure the vision and values of the company among stakeholder groups is clear; create understanding about the interdependent and individual roles that different stakeholder groups have towards the change initiative; and build alignment between attitudes held by stakeholders and the goals and objectives of the company. Analysis of design for change The proposed new design fits within the transformational change description, since it will reshape PfC’s business strategies and replace existing business processes. According to the Queensland Government (2014, n.pag), transformational changes are usually undertaken when “businesses recognise that they need to overhaul the way they do business.” The changes at PfC (i.e. appointing a new CEO, getting a design team, getting a consultant, and engaging stakeholders during the change process) represent a complete change from what the business was used to during Gail’s tenure, and with the twin duo. The above design is pegged on the assumption that Gail would be willing to take up a consultant role in the company. There is a probability that she would turn the offer away, in which case, PfC would need to convince her some more. Specifically, the need for careful succession planning at PfC should be one of the reasons that Gail should be given an opportunity to re-join the company if only as a consultant. Every business owner needs to have a succession plan that has goals, determines how well to meet those goals, and one that can be effectively implemented (Clifford 2008; Thompson 2006). Goal-setting in the succession planning for PfC should include Gail’s own goals (e.g. providing her children with a secure future), management needs (e.g. ensuring that PfC produces clothing designs that are fashionable and affordable while giving back to the society) and other goals (e.g. upholding environment friendly practices in its supply chain). Should Gail still refuse to take up the offer, another consultant can be duly briefed about PfC’s history, its current situation, the need for a new business strategy and the need for succession planning. There is also the possibility that the twin duo would refuse to give way for a new CEO and insist on sitting at the helm of the organisational leadership. Should the foregoing happen, the twins would need training to acquire the skills and competencies needed to run the company. As Care, Phelan and Useem (2013) indicate, the qualities of a CEO can be developed with time, training, practice and willpower. Alternatively, the consultant would recommend that the twins work with a team of advisors who understand the business and its challenges. An important thing for the consultant to underscore when working with the twins is the link between the firm’s profitability and their wealth. According to Zajac (2006, p. 217), “the importance of CEOs perceptions of the linkage between their personal wealth and the firm wealth” cannot be downplayed especially in family businesses. Planning the future of PfC, should as suggested by Reynolds (2014) should be approached with an analytical mindset taking into consideration the emotions, business imperatives and involvement of family members in the business. By putting in place a team responsible for coming up with and implementing new design ideas, there is a possibility that brainstorming among them would become a problem area rather than a source of ideas. To resolve such a scenario, the consultant would need to emphasise the need for proper communication, accommodation, honesty and patience among group members (Fischer 2005; Paulus & Brown 2007; Setlock, Fuseel & Neuwirth 2004). Finally, engaging stakeholders in the change process may be time consuming, and alignment may not be attained in good time. Additionally resistance to change might occur (PMI 2013). To remedy such a situation, PMI (2013) recommends deeper engagement with stakeholders in order to clarify the vision, goals, and how the change will benefit them. Where the resistance is overt, PMI (2013) recommends problem-solving meetings to be held with the stakeholders. In covert resistance however, working openly with stakeholders and allowing problem issues to surface (during which time they would be addressed) is recommended. Conclusion In this report, the absence of clear succession planning by Gail has been identified as the main unmaking of PfC. That aside, the future direction that the company takes should involve revamping its leadership by consultatively convincing the twin duo to take a back seat in leadership. A competent CEO who possesses the skills needed to strategise for the company and make decisions that unite stakeholders for the benefit of the business should be appointed. He/she could make his/her presence felt by interacting with different stakeholders, responding appropriately to unexpected events, and enhancing how different stakeholders perceive him/her. The report has further identified the need for a new CEO to consult with different stakeholders when effecting change in order to avoid resistance to proposed changes. Additionally, the report notes that engaging stakeholders during changes makes them more committed to a cause initiated by the firm, hence increasing the chances of success for a company. In the event that the twins would refuse to vacate their CEO positions for a more competent leader, the report argues that a consultant can devise a plan to equip them with the necessary leadership skills. Alternatively, the report suggests that an advisory team can be set up to provide the duo with the advice needed to lead the company successfully. This report has also indicated the need to form a design team responsible for coming up with design inspirations and implementing them. Although the report identifies the risk of non-compromise in brainstorming in such a team, it has recommended a consultant to work with the team to ensure that each team member is accommodative, respectful, patient and honest towards others. Overall, this report details what it considers the best cause of action for PfC. The report has given emphasis to the need for PfC to have a CEO who can envision a good future for the company, and devise effective strategies to ensure that such a future is realised. The report has also indicated the need to have a design team as opposed to having a single person handling all design inspirations; the need to engage with stakeholders during the change process; and the need to have a consultant who would ideally advise the CEO on diverse business issues. Possible shortcomings to the foregoing recommendations include the possibilities that: the twin duo may insist on retaining their CEO positions, the consultant (Gail) may turn down the offer, and brainstorming may become an issue in the design team. To counter such shortcomings, the report suggests that the CEO duo could be trained on effective leadership or could work with an advisory tem; another competent consultant could be hired in the place of Gail; and the design team could be taught about effective team work. Possible benefits of implementing the proposed design include the point that PfC could once again gain the confidence of employees, suppliers, stockists and eventually, the consumer market, and consequently, it would be profitable once again. References Anderson, D & Anderson, L A 2010, Beyond change management: how to achieve breakthrough results through conscious change leadership, John Wiley & Sons, London. Appelbaum, L & Paese, M 2006, ‘What senior leaders do: the nine roles of strategic leadership,’ White Paper, pp. 1-9. Bolton, P, Brunnermeier, M & Veldkamp, L 2008, ‘Leadership, coordination and mission-driven management,’ Working Paper, Columbia University. Business Roundtable Institute for Corporate Ethics 2007, “Shaping tomorrow’s business leaders: principles and practices for a model business ethics program,’ pp. 1-19. 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