BEM2020 Organisational Behaviour - Leadership Culture and Performance
Leadership, Culture And Performance Change at Meatpack
Context
MeatPack is a family-owned food-processing business based in Sydney, Australia. The company, which has over 27 years’ experience in meat products, fresh soups and prepared meals, has processing plants in New South Wales and Queensland. Its customers are the major retail chains and food-service companies in Australia and abroad. MeatPack is led by the founder and CEO, Derek Bison, who is the fourth generation of his family to work in the meat industry. In 2013, the company was performing well, with group sales of over AUD$300 million. One of the strategic goals MeatPack set in 2002 was to become a 1 billion dollar company by 2020. However, in order to meet these targets, the company is currently dealing with two major sets of changes: senior leadership changes and cultural and performance changes.
Senior leadership changes
Over the past two years, Bison has been keen to develop the leadership competencies of his senior strategy team. He feels that there are a number of ways in which his leaders could develop further and he recognises that he could have helped with this more in the past. He describes himself, for example, as ‘interfering, visionary, driven, competitive, obsessive, never satisfied and restless’. With a view to changing the mindset and behaviours of his senior strategy team, Bison started working with an executive coaching and senior leadership development company. A number of his team members said that they were gaining a lot of insights from this exposure. Initially, Bison was very enthusiastic about this, too, but in the past year he has stopped his own direct involvement in the coaching, although the senior strategy team continue to be involved.
Influenced by the activities of a respected business colleague and personal friend, Bison has introduced the Human Synergistics Circumplex to MeatPack. This outlines 12 behaviours into three colours: red (aggressive/defensive), green (passive/defensive) and blue (constructive). Bison found that the organisational culture of MeatPack was red and he recognised that it would need to switch to blue if his growth plans were to be realised. He understood that MeatPack would need to shift its structure from a hierarchical organisation to a more horizontal organisation, with front-line workers having greater responsibility and accountability for their performance (Stayer, 1990).
Underpinning this transition have been the following: a number of changes to the company’s human resources set-up; a company-wide leadership development program; and a coaching consultation for members of the senior strategy team. Bison feels that these have had a positive impact on members of his senior strategy team but confesses that he himself has struggled with this transition. He finds it difficult, for example, not to intervene, jump in or direct others when he feels that sufficient progress is not being made or when decisions are not being taken expediently.
There has generally been a positive dynamic in the senior strategy team, which is composed of the CEO, COO, CFO, head of People, head of Sales and head of Business Development. Bison has fostered an open dialogue with his team and it is clear that members are encouraged to speak frankly with him and each other, both on a one-on-one basis as well as during meetings. There has, however, been some uncertainty about the composition of the senior strategy team, with one attendee at a strategy meeting being unsure of whether he was officially part of the senior strategy team. This led to subsequent discussion among the group about the matter, as well as over whether another member, who was not present at this point, should be part of the team. There is also a separate senior leadership team, which includes all of the senior strategy team members above, plus the senior line managers. There has been some discussion about the exact purpose of both of these teams. Because Bison is one of the founders of the company and the current CEO, some members of the senior strategy team are a little reluctant to question his decisions, despite Bison actively encouraging an open dialogue. The CFO wonders whether the board should hold Bison more accountable and whether Bison should hold the senior strategy team more accountable. The COO expressed concern that MeatPack has lost some of its senior leaders within the past few years. This has caused some anxiety for the following reasons: they were direct reports to Bison; their personalities were in conflict; Bison had involvement in their area of operation; they were making a positive impact before they left; and relationships with some suppliers and customers have been lost as a result, causing business to move to a competitor.
The senior strategy team was about to embark upon some major structural changes— with the arrival of a new CEO of the soups and meals business at the end of 2013, and the existing COO of the meat division replacing Bison as the CEO of meat. Bison said that in the short term he saw himself moving to group CEO alongside these two CEOs. In the long term, he envisioned that he would move from group CEO to executive chairman, with both CEOs reporting to him. In his own words, ‘I’m not really a big people person and the people thing will go to the CEOs. I want CEOs to be CEOs.’
In five to 10 years, Bison’s vision is to move from executive chairman to chairman. When this was broached in one of the strategy meetings, there was some heated discussion about who would be reporting to whom in the new structure. For example, the CFO was concerned about whether benefits would be derived if MeatPack decentralised the functions of support teams such as Finance and IT. The head of Business Development asked how the new structure was different from the old structure, and it was debated what, if anything, the other employees should be told before the company’s annual meeting the following week. It was decided by an independent chair of the meeting that discussions would be paused and discussed further at a later date. Some members were clearly frustrated that the issue was not resolved during the meeting.
Cultural and performance changes
In the past two years, MeatPack has introduced an enterprise resource planning (ERP) initiative, which seeks to integrate multiple divisions of the company such as finance, production, investment and management. At the heart of this system is the desire to be more structured and efficient in ensuring that each line is hitting and exceeding its targets. Part of this system is also about encouraging managers to change their methods of communication. In the past, dominating, shouting and other aggressive forms of confrontation were quite common practice. There was a focus on making things happen instead of understanding how things worked and why they were not working. As with any results-driven organisation, this created a culture with a top-down environment for the managers, in which targets had to be reached.
Bison has been strongly influenced by his executive training at the Harvard Business School and one of his major goals at MeatPack has been to install a flatter structure across the organisation, which empowers managers and supervisors to take on greater responsibility and accountability. For example, he has encouraged line managers to take a more hands-on role in terms of the recruitment of personnel and performance appraisals. In general, there has been an overall drive to get people across the company to lead rather than manage (Kotter, 2001). The CFO and COO both feel that this has been a positive endeavour, but find that this is taking place ‘in pockets’, and that Bison could lead more by example with respect to the senior strategy team.
Bison’s aim across the organisation is for there to be six to eight people per report in order to ensure that managers and supervisors have the opportunity to lead and be more clearly accountable. He argues that if he was coming into the company now with no previous ties then he would remove certain people immediately, but he won’t do so because he and the team all know these people and there are established relationships and emotional ties, making such decisions significantly more difficult.
There is a strong sense of loyalty on the ‘floor’ and staff turnover is low in an industry that is known to have problems with retention because of the repetitiveness of the work. One interviewee remarked that given that the factory floor is cold and noisy, there is a certain type of person who can work in this environment. Staff are employed almost continuously on the production line, the work is physically demanding and standards are exacting. Despite a diverse array of cultural backgrounds, with employees from multiple countries, there have been few cross-cultural clashes.
The majority of the workforce has worked at MeatPack for between six and 10 years, with many others having been at the company for at least 15 years. While this is positive in terms of loyalty, it is also potentially challenging with regard to changing attitudes towards the proposed cultural changes. MeatPack is perceived internally as trustworthy and honest, and employees feel ‘safe’ because decisions seem to be made with the ‘best intentions of the company’. The company has developed quite a collegial and family atmosphere. While there are ‘serial complainers’, as one employee put it, most are happy in their positions.
Recruitment is often via word of mouth, with many employees coming from the same family group working at the factory. Employees who have moved from MeatPack’s competitors have commented on the company being more organised, methodical and collaborative in culture.
Bison has made a significant investment in his staff’s training, and employees with proven skills and a strong work ethic can move up the company chain quickly. The CFO, for example, started out as the assistant accountant, which indicates that there are good opportunities for talented individuals to develop within the company. Bison has invested in management and team leader development courses, with newly promoted shift leaders being put through a front-line management course. This aims to improve their leadership skills and enable them to better manage and lead their teams. The development of a line focus has created a culture of accountability for each position, which has allowed line staff to have a hand in developing the efficiency of the company front line, and this has made them feel a valued part of the team. One manager remarked that without his team he would not be in the job.
Since the start of the cultural change program, there has been a shift from managers ‘managing’ to ‘leading’ their teams. In particular, there has been a more systematic process of managers sitting down with employees and talking problems through. There have been some important cultural changes taking place as a result of managers being encouraged to take some time out to ‘step back’ and reflect on their ‘tool box’ to address certain situations. Bison has pushed for a focus on the ‘Rockefeller Habits’—created by Verne Harnish (2002) and based on the leadership and management principles applied by John D. Rockefeller, business magnate, philanthropist and co-founder of Standard Oil. There are three pillars to the Rockefeller habits: priorities, data and rhythm, and Bison has placed a strong emphasis on MeatPack’s strategic goals (priorities), performance feedback (data) and accountability (rhythm). Bison has also invested in the leadership training of his front-line and middle managers, whereby they have developed skills through an external provider on the life cycle of a leader, including attracting, hiring, developing, mentoring and appraising, as well as confronting and removing, where necessary. The feedback from senior managers has been that their managers have appreciated such level of investment in their development.
The managers are generally considered quite young, ‘fresh’, ‘open-minded’ and ‘close’. Some managers feel that although they are now much better at saying things without offending their teams, jobs are often left incomplete because what people say is different from what they do. There are 17 line managers who plan for the following day’s production and there is general concern that while it is good practice to codify this on a large whiteboard next to the factory floor, there are too many managers going over the data and not enough people on the lines to deliver the targets. The vision is that the targets, which are manually inserted on the whiteboard, will eventually be inserted electronically.
A major challenge with regard to reaching daily targets stems from the difference between the day and afternoon shifts. The day shift starts at 5:30 am and finishes at 2:30 pm; the afternoon shift starts at 2:30 pm and finishes at midnight. Bison has encouraged ‘huddles’ at the beginning of and between the shifts—at these, workers can discuss what the day shifts have done and what the afternoon shifts need to do. The cultural norms of the shifts are significantly different. The day shift is described as taking a ‘gung-ho’ approach, which leads to higher yields. This is partly explained by the day shift choosing the lines that make it ‘easier’ to hit their targets. The afternoon shift is under greater pressure because of specific cut-off times at 3 and 3:30 pm, when lorries arrive to pick up particular products for delivery to the supermarkets. In short, there are differences in priority—with the day shift focusing on maximising yields, and the afternoon shift on being ready for time- sensitive lorry pick-ups. In general, there is growing pressure for managers and workers to increase their line’s productivity. Despite this, yields have increased and there has not been any loss time injury (LTI) in the past year.
Discussion Questions
1. Should Bison be taking a more hands-off or a more hands-on approach to the business? Justify your response.
2. How far has the senior leadership change been effective? What else might senior leadership do to influence change more positively in the near future?
3. To what extent has MeatPack’s flatter structure helped create cultural and performance change? Have there been any barriers to the cultural change?
Answer
Introduction
MeatPack is a food-processing company located in Sydney in Australia. It’s a family-owned business with several processing plants in Queensland and New South Wales. It has dealt with the processing of meat products and fresh soups for over 27 years now. Its customers mostly include the food-service companies and the retail chains within Australia and in other countries. Derek Bison is the Chief Executive Director (CEO) of the MeatPack company being the 4th generation down the family line to lead the organization. The company has set various targets that have to be met to become successful and grow to greater heights. The significant changes that have been implemented include; cultural and performance shift as well as senior leadership changes. The paper, therefore, focusses on the effectiveness of these changes, barriers to the cultural change, as well as the best approach (either hands-on or hands-off) to carry out their business.
A Hands-off or hands-on approach in the business management
Managing and leading a company is a task that requires to be taken with seriousness. How a manager will lead the company will determine its failure or success in the long-run. Within an organization there are various employees of a different culture, therefore, there many disagreements that can arise, as such the manager has to find means through which he or she will resolve those issues. Otherwise, failure of addressing such matters will affect the working relationship of the employees and eventually the output will decrease (Algahtani, 2014). As a manager, you need to select the best style and approach of dealing with situations that arise within the organization. Currently, Bison employs the hands-on approach in dealing with the junior staff and leaders. For instance, he inspires the line managers in taking a hands-on approach, especially when hiring new personnel’s or when performing performance appraisals. I believe Bison need to keep on using a more hands-on approach in the management of the business has it involves direct interaction with the employees and day-to-day needs, activities, and operations of the organization.
Hands-on leaders work to connect the world of management and leadership through the creation of a vision as well as modeling behavior of the organization (Giessner and Wong, 2016). The manager, however, does not detach himself from daily operations of the company. He involves himself in the standard work that other employees are involved. Just like the way Bison engages himself in training the employees on the vital business skills, a hands-on-approach encourages managers to coach their team and invest heavily in their progress. According to the 21st VUCA (Volatility, Uncertainty, Complexity, and Ambiguity) business model, the Leader-Manager approach is usually preferred over the Manager-Leader approach (Nandram and Bindlish, 2017). A manager having leadership skills as the principal role in the management of business operations (leading rather than managing) can recognize future challenges that a company may face and hence make significant changes and shifts. In a hands-on approach, the manager interacts directly with the junior staff and takes part in the ongoing projects. Employee mentoring is crucial, and the line of communication from upwards or downwards is always open (Saleh and Watson, 2017). The employees can ask the manager and other top managers any question and get clarification immediately. Such kind of interaction is vital in creating a conducive environment for employees to work smoothly. The culture of the organization will be family-oriented making every worker to feel accommodated and hence increase their productivity (Ward, 2016).
If Bison keeps on using the hands-on approach in managing the MeatPark company, there is a guarantee they will reach their set target of 1 billion dollars by the year 2020. Due to this, the manager can obtain diverse ideas from the employees on how to run the company. The relationship between the employees and the manager is open such that they can tell him their problems, areas that need improvement, and what can be done for the company to be more productive. As a manager also, you get to have a deeper understanding of the business at large from all the corners (Samovar et al., 2015). It is easy as such for a hands-on manager to understand areas that need improvement in the organization and implement the appropriate techniques that can overcome those challenges. Since the employees more focused due to the manager’s active role in the participation of the daily activities, there are high chances for the continued growth of the company.
On the contrary, a hands-off manager leaves all the operations and running of the business in the hands of the employees and their team leaders. As such, he has limited command on the way the business activities are carried out. He has little knowledge on the ongoing operations of the business as well as the details. He is not much involved in the projects neither does he make much effort to ask employees to keep him in the loop (Nisbet, 2018). He also does not invest much time in listening to the employees or following the agreements made. Much of the work is left to the employees. Such kind of approach is risky as the manager may fail to foresee a threat and hence crumble the business as at once. Also, it’s only a few employees who will work under minimum supervision while the rest will not thereby affect the quality of their output. Therefore, Bison should keep on using the hands-on approach in carrying out the activities of the MeatPark company.
The effectiveness of the senior leadership changes at MeatPark company
Some of the leadership changes that Bison implemented in the organization is the development of leadership competencies, particularly for the senior strategy team. He also shifted the structure of the business from a hierarchical organization to a horizontal one, thereby giving the front-line workers and the rest a more responsibility and accountability regarding their performance (Williams, 2014). Other changes include; development program for the leaders, coaching consultation for every member of the senior strategy team, and change in the set-up of the company’s human resource department. These changes have been effective so far as Bison has seen tremendous changes and improvement in the company concerning productivity and growth. In particular, the senior strategy team experienced a positive dynamism through the changes introduced. The open dialogue fostered between the manager and other employees, for instance, has encouraged free conversation between the employees as well as with the manager (Williams, 2014). Through this, it is easier to understand the needs of the workers and come up with appropriate solutions.
However, despite the positive changes seen within the organization due to changes experienced with the senior leadership styles, there have been some shortcomings. For instance, the composition of the strategy team is not known, and this has brought about uncertainty within the team members. The members never understood whether they were indeed part of the team or not (Williams, 2014). The employees also have issues in determining the exact roles of the strategy team and those of the senior leadership team as well as the functions of Bison. Some of the senior strategy team, for instance, fear questions decisions made by Bison since he is the CEO of the company despite the freedom they have been given to question him of anything. They don’t understand who should hold another accountable; is it Bison holding the senior strategy team or the board holding Bison accountable. Such confusions affect smooth operations of the company as each member does not understand their role hence may leave some unattended (Jaques, 2017). The structural changes that the strategy team was to introduce in the company as well brought in a heated discussion concerning the position of the members. They did not understand whom they would be reporting to if Bison became a Chairman of the company instead of the Executive Chairman. Such changes, therefore, brought a lot of issues within the organization since they never understood their position and what they were supposed to do or respond to amongst the leaders (Núñez, 2016).
The manner in which the senior leadership at MeatPork can influence more positive change in the organization
The manner in which the senior leaders’ effect change in an organization will determine how other employees will take it. Otherwise, they might be met with a significant resistance that will bring huge differences affecting the operations of the business (Cameron and Green, 2015). This is what happened in MeatPack when the senior leadership tried to bring in a new structure of business management. Therefore, the senior leaders need to bring in new strategy on how to bring the proposed change to the organization. For instance, communication breakdown can help bridge the differences that arose within the MeatPack. Through this, the leaders should share all the information regarding the change and explain step-by-step how the change will be useful. For example, when CFO raised various concerns concerning the new structure in the annual general meeting, he was not answered satisfactorily, and this frustrated several members. However, if the senior leaders cared to explain the whole process slowly and clearly, the members could probably understand and hence cement any differences (Stayer, 2009).
In future Bison and other senior leaders should be willing to collaborate and coordinate with other employees in bringing a change within the company (Doppelt, 2017). When employees feel involved in bringing in their ideas, they will accept the change fast and also push for its implementation. Allowing workers to have input, listening to their needs, and solutions can play a huge role in bringing in a positive change. If the company takes in the issue of employee engagement earnestly, then there are assured of creating a positive change in the company in the future. Effective leadership means driving positive change in an organization. Senior leadership can only ensure their ideas are implemented, and the change is effective if they inspire the employees (Cummings and Worley, 2014). Bison has been employing the hands-on approach, and that’s what other leaders have to do. By working with the teams at a personal level allows one an opportunity to explain to them logically the significance of the change and hence they will embrace them. If the senior leadership of MeatPack can employ these tactics in bringing in the transition, there is a high chance of attaining a positive response from the staff. Eventually, the future of the company will bright since the workers will support the change and work towards achieving the best outcome for the business.
The extent to which the MeatPark flatter structure has helped in creating cultural and performance change
The Executive training that Bison got from Harvard Business School played a significant role in influencing him to implement a flatter structure within the organization. An organization culture refers to the shared practices and beliefs in a company (Hickman and Silva, 2018). Creating a positive culture within the organization that is inclusive of all the employees offers a feeling of fulfillment and enjoyment thereby improving employee productivity and performance. The flatter structure across the MeatPack company has given supervisors and managers powers of greater accountability and responsibility. Bison encourages his leaders such as the line managers to keep using the hands-on approach in carrying out the activities of the business such as in recruiting of personnel and offering performance appraisals (Nisbet, 2018). The flatter structure drives senior leadership to lead as compared to managing. Managers who apply Leader-Manager model in business obtains high turn-over concerning productivity and performance. Workers need to feel cared for, and their leaders are involved in their day-to-day activities. Usually, the diverse culture experienced in an organization with workers of different cultural background can affect the working relationship of the employees if not managed correctly (LeVine, 2018). However, at MeatPack the composition of the staff is from diverse cultural backgrounds with many coming from various countries.
Nevertheless, only a few cross-cultural clashes have been experienced, and this can be largely contributed to the flatter structure. Although the flatter structure has brought positive change in the company, it is essential for Bison and other senior leaders to implement the cultural changes slowly (Hartnell et al., 2016). Most of the workers have been in the company for a more extended period (10-15 years). Therefore, some may have some difficulties in adjusting to the cultural changes proposed. Its culture is accommodative, friendly, honest, trustworthy, and has created a family atmosphere. Even those that have moved to other companies, they still rank MeatPack as the most systematic, collaborative, and organized regarding their organizational culture.
Staff training has also been a critical area of cultural development for Bison. The training has enhanced the leadership skills of the senior leaders that have seen them lead and manage their teams better (Yap and Webber, 2015). It has also reinforced a culture of accountability where now managers embrace the culture of Leader-Manager as opposed to Manager-Leader. Together with the implementation of Rockefeller Habits model which emphasizes on priorities (strategic goals), rhythm (accountability), and data (performance feedback), the managers have appreciated this kind of investment, and the productivity of the managers and the company at large has gone up (Harnish, 2002). Introduction of huddles between the day and afternoon shifts also has seen an increase of productivity concerning yield output as well as eliminated the loss time injury (LTI).
Barriers to the cultural change
The cultural and performance change that Bison and the senior leadership were trying to implement in the organization was met with some challenges. First and foremost, Bison could not remove certain individuals from their positions since they had established such strong emotional ties and relationship with other members. Even though such members were not delivering, the past culture of the company prevented them from being fired (Mullins and Schoar, 2016). The attitudes of the people towards the cultural changes also varied since the company involves people of different cultural backgrounds. The junior staff is also worried that the involvement of too many managers in leading their teams leaves some duties unattended (Peng et al., 2016) What the managers say should tally with what they do. Differences experienced between the afternoon and day shifts due to their cultural norms brings a lot of pressure to the managers. However, despite these few barriers the cultural changes implemented in the MeatPack company, saw it increase its productivity.
Conclusion
For a successful organization, managers and other senior leaders need to lead the company effectively. Wrong decisions or strategies will lead to the collapse of the business in the long-run. Bison has understood the significance of this, and that’s why he chooses to use a more hands-on approach in the business administration. When managers get involved in the daily running of the business, there is a high chance of business success since they can understand areas that need to be improved. Bison proposed the implementation of senior leadership change as well as cultural and performance change through the establishment of the flatter structure. These changes have seen the MeatPack grow, increased productivity, and created a friendlier cultural relationship between all the workforce in the company.
References
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