Leading Culture Change at Seagram

Issues

Seagram’s senior management’s greatest business challenge has been maintaining an image of who they are to both the world and to employees. Much of this challenge is due to a lack of effective communication as a culture. Additionally, the company has been structured in a hierarchical fashion. This configuration has not allowed for a culture that is innovative, cooperative, communicative, and customer focused.

Issue Analysis

So far Seagram has quickly and commendably executed their cultural change. Since 1992, when operating income growth experienced significant sobriety, Bronfman and executives have successfully reinvented their image, not only culturally; but have expanded globally, stimulated the excitement and enthusiasm of hundreds of employees throughout Seagram through their reengineering efforts, and have developed a strategy to improve behavior and business processes by listening and responding to employees through vehicles such as focus groups.

Additionally, Bronfman has increased the innovative efforts of his departments by virtue of his actions to identify the true needs of customers via examination best practices of other companies. This process took almost nine months to adequately achieve. Over the course of this examination, Bronfman’s efforts must have inspired senior executives and other employees innovate and become more collaborate in many departments.

One of the most pivotal steps Bronfman has taken to gain the trust and support for developing an underlying set of values has been involving his constituents in the process of developing the values in focus groups. This intimate setting allowed employees who represented all businesses, all functions, at all levels, to have a voice on whether or not creating a set of values was important in improving the day-to-day work environment. Not only did management ask for their opinions, but they went a step further to involve individuals by inviting them to make suggestions about how to introduce and communicate the values. As an employee this communicates that their opinions are valued, and that leaders want to develop qualities worthy of promotion in the company. Employees may take this principle of “focusing on what the person is becoming” and then apply it to their customers.

Bronfman has provided senior and general management a great mentor and exemplar of how to lead. He has especially demonstrated this in how to act in uncertain and unfavorable circumstances. The 1990’s were full of setbacks and disappointments for Seagram as they faced increased taxes on liquor, a recession, increased regulation, etc. and yet the company is moving forward enthusiastically toward becoming the “best managed company and growing 15 percent. If a member of the senior management executives becomes Chief Executive Officer (CEO), they will know how to respond to competitive forces without having to read a description of duties written of what makes a successful CEO at Seagram.

Bronfman’s understanding of the root motive for effective implementation of the cultural differences was not completely accurate or effective. Often he would emphatically declare that values will be the primary stimulus in changing behavior. This is a fallacy. There is a better way. Rather than focus as much time and attention as they have creating a “corporate religion,” it seems that the focus of the corporation should be to continue moving the new organizational context forward. This context has been developed within the new business processes.

Developing new business processes will cause the change in attitudes and behaviors senior management wants to have as a driving force of affectivity.  As processes are more distinctly adopted with the departments of the company, new roles will be imposed, new responsibilities, and new relationships of communication will be direct results of placing and guiding people into the new organizational context.

Recommendations

The most time, cost, and emotionally effective decision executives can make moving forward is related to how management will adopt the cultures of various departments within the company. Leadership should advertise “The Seagram Values” to be used only as a measuring stick of how to act given department-related circumstances. The values should be used as a method of communication of what type of employees work within Seagram, but not as a measure of success.

The true measure of success will be in the growth of individual departments within the company. Each department will be expected to meet with their direct manager in order to determine how the values specifically apply to their department. Even more specifically, individuals will sit down with management to determine how the values relate to their distinct operational, day-to-day tactics within their role. Employees will be expected to provide a measurable goal that includes a date to achieve various objectives.

Management’s role in assisting success will not be through micromanaging the goals developed by individuals within their department, but will consistently create a climate of that empowers the team with resources that can help facilitate needed changes. Additionally, management will be expected to report the overall direction of the department as it relates to a company-wide objective, examples of how employees are implementing the values of the company within their sector of operations, and how individuals are going to grow within the company. This meeting will often result in higher management sharing other lessons of both success and failures of other various departments. Lastly, after discussing the needs of the division, it may be determined that specific employees need to be moved into another role within the department or into another area within Seagram in order to continue to stimulate a climate for change.

When employees are moved into new roles they will have opportunities to develop new competences and be provided with greater opportunities to innovate and grow into the future leadership of Seagram. This pattern interrupt will increase participation in Seagram’s vision to continue diversifying in their market segment and will better equip the individual to adapt to change in the future. This person should become a significantly greater asset to the company and in society as they increase their capability to adapt to a changing competitive environment. 

Marconi Case Study

written by Eddie Glines, Lance King, Masimba Ruwo

                For the Marconi case we will analyze the case reading against “The Ten Commandments of Implementing Change” in Jick and Peiperl.

The first commandment is to analyze the organization and its need for change. Part of this task is to understand how effective implementation will be based on the history of other changes. Marconi was somewhat unique in that they went through a very long period of control under a conservative to a fault managing director. By the time the shareholder had enough of the slow growth the company was near crisis resulting in a quick transition from little change over decades to many large changes quickly. Lord Simpson the new CEO “quickly set about restructuring”. These large and quick changes created a threatening environment for the employees as the case author describes the changes sent a clear message that “things would ‘not be the same again’” Given the past history of the company moving so slowly in the past, a better approach would have been to start small and simple with incremental success to bringing those skeptical of the change into the fold. The next CEO, Mike Parton continued to make this same mistake. However, he was in a corner with the financials of the company and needed to make the changes quickly to keep the company afloat. Even so these sweeping changes seemed to take place before he had extensive meetings to communicate and convert his top leaders to his vision for the company.

Indeed creating a shared vision and common direction is the second commandment for implementing change. Mike Parton took things out of order by creating an action plan and acting quickly without apparently providing his vision of where he was going. His short term action plan was described as selling non-core businesses, cut jobs, and use cash from these cuts to bring down the debt. All this he did within the first quarter of being CEO. Little wonder morale was after all these cuts. Had Parton explained his vision to employees at all levels in the company and the logic behind what he was doing, the ones left after all the cutting would have been more confident of what was happening and the future of the company. Indeed a survey was taken and 62% of the top managers had considered leaving the company. I believe if Parton would have explained his vision effectively before all the cuts, that number would be significantly lower.

Another source of dissatisfaction among employees had to have been the inability of the company to create a current identity with employees as evidence by the lack of integration of the systems and processes as described by Parton “We have many companies with different processes that are not integrated.” This is the third commandment of integration to separate from the past. I know from personal experience being in a company for the last seven years that has been acquired, and then acquired several other companies that when the systems are slow to integrate there is confusion, insecurity, and low moral as the result.

Another aspect Parton could have done better was in creating a sense of urgency, the fourth commandment. While it was not hard to see a real sense of urgency due to the cuts Parton was making, some middle managers still felt, “if they keep being quiet and go about their business…the world will forget and leave the company alone” Amidst the drastic cost cuts the managers still felt this way? They must have not understood the financial situation fully even in the face of what was going on around them. This was a result of not starting with the vision and converting them to urgency of implementing the vision in the first place.

Moving forward, Parton is going to have to use his leadership position to stir the company in a good direction. However, the position and the authority inherent with it are not going to be adequate. He is going to have to use his experience in senior managerial position and his understanding of finance matters to navigate the companies trying times. For the implementation of the change process, Marconi as a whole must rally behind its change visionary.

It is of utmost importance that the board of directors and any stakeholders of the company are onboard. This allows for the creation of swift communication channels and great teamwork. The strength of the management team formulating and executing the change procedures needs to be versatile enough to tackle the different barriers that might arise.  The negative reception of the change policies and the already existing low morale might be two crucial barriers.

During the conference Parton failed to convey a sense of importance of all goals to external stakeholders. One of the most important measures of Parton’s change success is going to be the increased value to shareholders and external investors. The general perception of Marconi, as a company, is a vital aspect of a successful transition.

Two very important areas that Parton succeeded with the Conference is getting out a general sense of what needs to be done and to prepare his counterparts of what was to come. In the future, this process is going to go through several microscopic analysis to guide the changes. The first is the creation of a document that acts as a mission statement. This document could outline the specific communication channels that employees will use to interact with senior management. One complain that was brought up during the conference was the accessibility of senior management. A document of this nature clears up any ambiguity that a general undocumented goal might possess. This can be followed by the dictation of boundaries. These boundaries will guide the day-to-day company activities: an example is a code of conduct. By providing boundaries Parton insures that the path each and every Marconi employee envisions of the goal is set within predetermined guidelines. This solidifies the importance of the goals and could also be a motivating factor. Progress can then be measured using a diagnostic system that provides metrics. This is a very complex part of the whole process. This is due to the underlining relationships that exist between internal success and external criticism. The company could potentially create a positive image by increasing overhead expenses, an action which would not be favorable with external critics of company performance. Finally, a system that allows the change to be monitored interactively becomes very important. The business in which Marconi operates in not a stagnant one therefore the inability of the company to regularly inspect its success metrics and reevaluate them accordingly is crucial.

The Marconi Way may be considered both a practical and a symbolic structure that it enables individuals toward the vision of the firm. It starts as a literal symbolic structure as it helps people identify the shared beliefs of the company. When put into practice, these added beliefs can become a collective driving force leading the company toward the standards and expectations. This shift of paradigm leads to a literal shift in attitudes and behaviors. However, the only way the actions of the Marconi people will once again illustrate the passion of individuals for customers, colleagues, communities, and the stakeholders experienced prior to the dotcom disruption, is if they adopt a similar methodology of defining the company. This evaluation can be similar to the initiative launched by John Mayo and Rob Meakin in 1999.

After identifying the most important departments that have struggled within the company, a list should be created of people who subscribe to the vision outlined by Parton. These people should then be enlisted to help re-establish The Marconi Way. And because some middle managers have chosen to keep quiet instead of surfacing department-related issues, an award system should be instituted. Not only will incentivizing management assist in ultimately improving profit margins, but it will also help to benefit the company as employees begin re-committing to individually help stimulate the values and culture of the company. Option plans have proven to be effective in the past, Incentives might begin with an option-plan that vests in five years and is correlated with a target to increase the value of the firm by twenty percent.

A similar incentive would be granted to remaining employees subject to a twenty percent increase in management selected metrics in various departments over a six month period. Though this is a short period of time, it may provide the stimulus the culture needs to thrive again in the competitive telecommunications industry.

These two sequential incentive-based structures would be most effectively implemented by micro-managing employee tasks until management felt shared beliefs, attitudes, and standards increase and are maintained for at least a quarter.

Parton’s effectiveness in his conference stated a clear and concise message, style, and intent to management—so much so that not a single person applauded when he finished speaking. His objective in delivering his address was to speak to individuals who wanted to make the most of their current situation.

The silence of his audience may have been due to a distinct recognition of the need to get back to the fundamental principles of what set the company apart from competition. Additionally, these leaders may have felt a sense of sorrow for their lack responsibility in being a change leader when it was needed most. Parton was brutally honest in his judgment of the current circumstances and knew that not all of his leadership would subscribe to the upcoming objectives. Parton outlined the vision of getting back to the basics with beautiful simplicity as he identified management’s need to build confidence in the employee’s perspective of the business model, processes, and culture. This will need to be executed from the ground up and will not be easy due to the disrupted confidence of a former enthusiastic, motivated, and ambitious Marconi team in mid-2000.

Of all the employees at Marconi, Parton’s management was impacted the most.   To supplement his objective description, he provided specific cues that are poignant, but that will need to be consistently addressed throughout the implementation of the strategy recently introduced; especially because Parton mentioned that leadership must be relentless on commitments. This must be a top down tactic applied on a day-to-day basis. It is recommended that the company is results-oriented in, not only establishing dates to fulfill various strategy tactics, but also in establishing what the specific roles employees are within various departments. Micromanaging may be needed for the first few months of getting fundamentals re-established as they pertain to the successful implementation of employee’s roles.  

As dramatic changes occurred within the telecommunications industry, many employees may have felt removed from the responsibility to reinforce the company vision tactics due to a lack in understanding of their role given the circumstances at hand. Therefore, in order to ensure that each employee becomes accountable for their fiduciary duty to make a difference in acting and not merely being acted upon, individuals must be aware of their focus, specific objective, and measurable goals. This awareness can be developed and reinforced by creating a document that outlines the said parameters. This document can be kept in a departmental file for management to utilize when an area within that sector of the organization is not in harmony with the vision of the company. A change leader may then meet with an employee and ensure they are acting according to their primary results areas. This form may also be used to award and incentive team members when they meet their measurable goals. This process has been proved to be effective by the Dave Ramsey Corporation.

Fuhrer (Adolf Hitler) Cast Study

Immediate Issues

 In most cases, self-interest surfaces when an individual is in the pursuit of an ideal objective. When on the path toward a particular vision, it is reasonable to desire to gain personal utility. However, when the function of a person’s mission becomes condemning to the purposes of other individuals, significant reevaluation should be considered. Adolf Hitler (Fuhrer) became an extremist in his vision to create an elite society of men and women who received direction under an aristocratic dictator.

Associated Issues

The costs in order to fulfill a vision should be things such as time, talent, and often monetary and other tactical supplementation. The Fuhrer’s Volk movement came at such a cost that led a man to elevate himself to a seemingly God-like stature when compared to those who followed his leadership. More importantly, as they moved closer to the objective of having an Aryan race, the cost became a people who were massacred by the millions.

Issues Analysis

Vision of the Fuhrer

The Fuhrer strongly believed that Germany, and others who consented, would become the most elite society to be known in history. In fact, he believed that every tactic executed toward the elite society was history in the making. Fuhrer demonstrated his conversion in how quickly the strategy was implemented. In fact, just two years (1935) after having been granted the Enabling Act, The German legal system was reorganized for supplementary power to the Nazi regime, concentration camps were established for thousands of the regime’s opponents, The German labor movement was dissolved, and civil rights were withdrawn from the Jews. The eventual outcome of the vision constructed for humanity was unrealistic and egocentric. What the Fuhrer was striving to achieve went against any organic process that human beings are designed to fulfill. People should not have to live in a constant state of fear and inequality no matter how different their background.

If the Volk would have become a reality, society would not live in reality. A healthy society does not consist of moving a nation forward only to build a leaders reputation. Instead, communities are organized in a manner that allows individuals to become empowered, as individuals, to act according to the God-given gifts and talents they were born to use. Additionally, as a person discovers various attributes being distilled upon their natures, a distinct realization may develop that motivates this person to utilize their abilities for the benefit of the society. Fuhrer’s desires were rooted upon a personal history deprived of experience lifting people within his circle of influence rather than only lifting his own mission to get gain. In addition to being a subscriber to many of Charles Darwin’s beliefs about survival of the fittest—a considerable amount of Fuhrers motive-for-action may have been largely obtained due to economic circumstances and the perceived need to out-survive others competing with seemingly unfair conditions.

Economic Conditions

The German society cried for a savior to rescue them in and from the series of disheartening events that had showered upon them. With little financial security in the economy came little self-esteem in the people. Germany was in a severely venerable state. Fuhrer had a gift of being able to sense the mood of an environment and upon doing so witness opportunity to stage a power he had been harboring since his adolescence.

Rise of Power

It has been said that “[Fehrer] was a man without roots, with neither home nor family; a man who admitted no loyalties, was bound by no traditions, and felt respect neither for God nor man.” This is a person who had lived a life insecurity and low self-esteem; someone who most likely felt a sense of value only when another’s value was being mocked and censored.  Analysts have said that throughout his career “Hitler showed himself prepared to seize any advantage that was to be gained by lying, cunning, treachery, and unscrupulousness.” Fehrer’s rise of power stemmed from a desire that may have been viewed being deeper than love—respect.

Fehrer’s rise in power may be identified as being most recognized in 1933, when Fehrer recognized that his political influence on the masses had graduated from what started as his Mein Kapf memoir written in prison, to a three-fold active platform toward anti-Semitism, anti-Bolshevism, and pan-Germanism. Building the master Aryan race was becoming a reality. A distinct contrast may be considered when evaluating the influence of Fehrer at this moment in his life.

Although Fehrer may have considered himself to be one of the greatest leaders the world had ever encountered; whether or not a being leader denotes that masses must be moved is arguable. It is true that masses may move due to an inherent need to satisfy insecurity or because they fear life consequences may result if they do not move. However, if a person arrives in a position of authority and guides the masses in a manner that does not lift and inspire, then a leader is not a leader but only a guide.

Leadership is a persuasive power that helps people register their potential to succeed. Indeed Fuhrer brought the renewal of full employment to Germans, and due to the deflation of the Versailles settlement German national self-esteem was restored, his leadership was not being activated. To have leadership is to have followers who want to become like you—who are constantly seeking to be close to the leader. When the leader is not around, people are actively striving to emulate and move the leaders cause forward, because by doing so they know they will develop more gifts, talents, and abilities that will stimulate their life’s enjoyment.

Unfortunately, those who followed Fehrer did so primarily because they feared what would happen if they did not. These were not people who talked highly of him and sought to emulate his admirable characteristics when he was not around; but instead, these were people who mocked and challenged Fuhrer. Though he was extremely charismatic and brilliant in being able to discover astoundingly simple solutions for challenges which appeared as being unsolvable, Fehrer’s intentions were that of stimulating his own self-interest of becoming more powerful. This rooted desire for power was masked by the Volk movement.

Effective Leadership

Fuhrer’s most effective quality in motivating German citizens was the mastery of his communicative abilities. Otto Strasser said that his extraordinary power as a speaker is attributed to his ability to “diagnose the ills from which his audience is suffering.” Fuhrer said that words are devises for manipulating emotion. He talked of how essential oratory skills were in penetrating the hearts of the hearers. This skill used to almost magnetize his audiences toward his various tactics in pursuit of Volk. Though the message of the Volk was artificially delivered into the hearts of the German people, this is not effective leadership. Audiences of Fuhrer were led based on the emotion of the words and not their context for personal power.

A modern example of effective leadership is in the late Sam Walton (Walton). There was nothing forceful or selfish about how he lead his team at Wal-Mart. Though he might not have had the oratory gifts of Fuhrer—when he spoke it was often to an individual or to employees at one of hundreds of Wal-Mart stores. Walton’s leadership was effective because the people knew he cared about what they were becoming. Walton mentioned often that he was grooming his team members to become merchants. In addition to Walton’s personal appearances to hundreds of his stores within a year, information about the company’s direction was always available for employees to further their understanding of the vision of Wal-Mart.

In contrast, Fuhrer was secretive in how information flowed to his constituents. His personal approach was to only reveal a little information, on a need-to-know basis, in order to stimulate action for the next strategy tactic. Also, instead of being among the people, Fuhrer lived in a secluded area in the Bavarian mountains. Effective leadership was not so much about what the people were becoming, but how the image of Volk was being portrayed and implemented. If leadership like Walton would have been actively applied to the followers of Volk, they would have known in their hearts that their actions were for a greater good. This goodness would have been seen in the eyes of Fuhrer as it was in Walton’s smile. Instead, Fuhrer’s influential demeanor and moral virtue only made the hearts of his closest allies sink into their boots with fear.