LEADING CHANGE AT PPF CORPORATION Rev. 2 June22 ————————————————- T. N: Even Bigger Change. A framework for getting started at changing the world (HBS 0-305-009) 1)What are the key challenges facing Stephen Oswald and his leadership team as he assumes the presidency of PPF Corporation? Stephen Oswald assumed accountability for the success of the PPF Corporation in tough economic conditions, following the 9/11 events, coupled with increasing competition in the North American market.
Fortunately, the independent distribution strategy proved to be successful and the PPF operations in China had been growing significantly. In terms of people issues, there were indications that management communications could be improved, the company was left without a CEO for nearly a year and a half, the changes in terms and conditions of employment did not bring the intended results, and there was a severe possibility of a union appearing. Many of the above-mentioned issues are trackable in the outcomes of the employee-satisfaction survey for that year.
We would like to highlight the key issues and attempt to provide possible explanations: PPF Employee-Satisfaction Report Item| Comments| Ethics: highest favorable and highest unfavorable score| This is an indication of staff fragmentation. Due to the fact that PPF is a unique company with a long history, many employees are loyal to it and trust the management. At the same time, the recent changes are likely to have affected many employees negatively (e. g. change in work hours, skill-based pay plan, etc. ), hence a perception that personal matters have not been handled in an ethical way. Management Communications| There is strong evidence confirmed by the case facts that senior leaders are not well-equipped to manage communication flows within the company effectively. Lowest favorable, 2nd highest unfavorable: poor communication is often the fastest way to employee disengagement and deterioration of trust. | Highest unfavorable: Ethics, Management Communications, Management Practices, Pay| These are the lowlights of the report calling for prompt rectification. While communication and pay often come up as lowest on most employee satisfaction eports, in this particular case, we believe they do deserve closer scrutiny. | Highest favorable: Ethics, EH&S, Customer| It is easiest to lead the change from your strengths, thus these positions should be leveraged. | 2)How would you prioritize them? The most important issue is organization level challenges, because even in a favorable economic condition, a poorly organized company might fail. Some of the challenges facing Oswald are: * downward trends of financial performance; * levels employee satisfaction and embeddedness; * risk of unionization; low range of product portfolio that limits competing with other companies. Secondly, Market and Distribution Channel related challenges (i. e. lack of understanding about end-user demand hinders to launch new products), and, thirdly, competition in the market, which is becoming increasingly globalized. 3)What actions would you suggest he take in the first 90 days and how would you obtain buy-in from the employees? Having analyzed the situation Oswald found himself in, we would like to offer the following suggestions, using the framework laid out in the technical note: Target| Item| Suggestion|
Policy| Compensation and benefits| Conduct a salary survey and benchmarking. Review the current skill-based pay plan, as it might be demotivating for many staff. | | Work hours| Engage staff on the business need and assess options of adjusting the existing rules to meet specific employee needs, if operationally feasible. | | | | Programs| “Anti-union” campaign| Engage employees on potential consequences of unionization and highlight the fact that it may on be beneficial on a personal level for most of them. Identify staff representatives and involve them in some of the decisions around work organization. | Product portfolio review| Set up a project team to analyze the situation and provide recommendations. | | Vision and strategy| Conduct a visioning session with the management team to identify priorities and long-term goals to ensure alignment. | | Ensure market share| Set up a project team to explore new market opportunities, ways of dealing with the competition and new distribution channels. | | | | People & Culture| Communications| Draft the communication plan for the company with regular general, department specific and personal communication events. Ensure senior management responsibility and involvement in each.
Provide necessary tool and support. Ensure consistent communication of the outcomes of the visioning/strategy session – creating “sense of urgency” is imperative to taking people along on the change journey. | | Ethics| Share success stories and reinforce the strong ethics culture. | | Leadership style| Being visible, walk the talk, lead by example, out the legacy impressions of inconsistent leadership. | | | | ——————————————– [ 1 ]. John P. Kotter. Leading Change: Why Transformation Efforts Fail. Harvard Business Review: March-April, 1995.