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    Leadership Skills - Managing Change

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    1. Do you think that Dick Spencer has incurred many personal costs in his career so far? What are they?

    2. Would you be willing to work as hard as Dick to be as successful as Dick? What is success to you?

    3. At the Modrow plant, describe Dick's style of managing. Was this style conducive to change?

    4. Do you think the Aluminum Siding Department incident was due to the fact Dick was not Canadian? What other reasons would exist for the group resisting Dick's efforts to change the Department's procedures?

    5. Do you think Dick's reputation hurt or helped him at the Modrow plant? How?

    After the usual banter when old friends meet for cocktails, the conversation between a couple of University professors and Dick Spencer, who was now a successful businessman,turned to Dick's life as a vice-president of a large manufacturing firm. "I've made a lot of mistakes, most of which I could live with, but this one series of incidents was so frustrating that I could have cried at the time," Dick said in response to a question. "I really have to laugh at how ridiculous it is now, but at the time I blew my cork." Spencer was plant manager of Modrow Company, a Canadian branch of the Tri-American Corporation. Tri-American was a major producer of primary aluminum with integrated operations ranging from the mining of bauxite through the processing to fabrication of aluminum into a variety of products. The company had also made and sold refractories and industrial chemicals. The parent company had wholly-owned subsidiaries in five separate United States locations and had foreign affiliates in fifteen different countries.
    Tri-American mined bauxite in the Jamaican West Indies and shipped the raw material by commercial vessels to two plants in Louisiana where it was processed into alumina. The alumina was then shipped to reduction plants in one of three locations for conversion into primary aluminum. Most of the primary aluminum was then moved to the companies' fabricating plants for further processing. Fabricated aluminum items included sheet, flat, coil, and corrugated products; siding; and roofing. Tri-American employed approximately 22,000 employees in the total organization. The company was governed by a board of directors which included the chairman, vice-chairman, president, and twelve vice-presidents. However, each of the subsidiaries and branches functioned as independent units. The board set general policy, which was then interpreted and applied by the various plant managers. In a sense, the various plants competed with one another as though they were independent companies. This decentralization in organizational structure increased the freedom and authority of the plant managers, but increased the pressure for profitability. The Modrow branch was located in a border town in Canada. The total work force in Modrow was 1,000. This Canadian subsidiary was primarily a fabricating unit. Its main products were foil and building products such as roofing and siding. Aluminum products were gaining in importance in architectural plans, and increased sales were predicted for this branch. Its location and its stable work force were the most important advantages it possessed.
    In anticipation of estimated increases in building product sales, Modrow had recently completed a modernization and expansion project. At the same time, their research and art departments combined talents in developing a series of twelve new patterns of siding which were being introduced to the market. Modernization and pattern development had been costly undertakings, but the expected return on investment made the project feasible. However, the plant manager, who was a Tri-American vice-president, had instituted a campaign to cut expenses wherever possible. In this introductory notice of the campaign, he emphasized that cost reduction would be the personal aim of every employee at Modrow. The plant manager of Modrow, Dick Spencer, was an American who had been transferred to this Canadian branch two years previously, after the start of the modernization plan. Dick had been with the Tri-American Company for fourteen years, and his progress within the organization was considered spectacular by those who knew him well. Dick had received a Master's degree in Business Administration from a well-known university at the age of twenty-two. Upon graduation he had accepted a job as salesman for Tri-American. During his first year as a salesman, he succeeded in landing a single, large contract which put him near the top of the sales-volume leaders. In discussing this phenomenal rise in the sales volume, several of his fellow salesmen concluded that his looks, charm, and ability on the golf course contributed as much to his success as his knowledge of the business or his ability to sell the products. The second year of his sales career, he continued to set a fast pace. Although his record set difficult goals for the other salesmen, he was considered a "regular guy" by them, and both he and they seemed to enjoy the few occasions when they socialized. However, by the end of the second year of constant traveling and selling, Dick began to experience some doubt about his future. His constant involvement in business affairs disrupted his marital life, and his wife divorced him during the second year with Tri-American. Dick resented her action at first, but gradually seemed to recognize that his career at present depended on his freedom to travel unencumbered. During that second year, he ranged far and wide in his sales territory, and successfully closed several large contracts. None of them was as large as his first year's major sale, but in total volume he again was well up near the top of salesmen for the year. Dick's name became well known in the corporate headquarters, and he was spoken of as "the boy to watch." Dick had met the president of Tri-American during his first year as a salesman at a company conference. After three days of golfing and socializing they developed a relaxed camraderie considered unusual by those who observed the developing friendship. Although their contacts were infrequent after the conference, their easy relationship seemed to blossom the few times they did meet. Dick's friends kidded him about his ability to make use of his new friendship to promote himself in the company, but Dick brushed aside their jibes and insisted that he'd make it on his own abilities, not someone's coattails. By the time he was twenty-five, Dick began to suspect that he did not look forward to a life as a salesman for the rest of his career. He talked about his unrest with his friends, and they suggested that he groom himself for sales manager. "You won't make the kind of money you're making from commissions," he was told, "but you will have a foot in the door from an administrative standpoint, and you won't have to travel quite as much as you do now." Dick took their suggestions lightly, and continued to sell the product, but was aware that he felt dissatisfied and did not seem to get the satisfaction out of his job that he had once enjoyed. By the end of his third year with the company Dick was convinced that he wanted a change in direction. As usual, he and the president spent quite a bit of time on the golf course during the annual company sales conference. After their match one day, the president kidded Dick about his game. The conversation drifted back to business, and the president, who seemed to be in a jovial mood, started to kid Dick about his sales ability. In a joking way, he implied that anyone could sell a product as good as Tri-American's, but that it took real "guts and know-how" to make the products. The conversation drifted to other things, but the remark stuck with Dick. Sometime later, Dick approached the president formally with a request for a transfer out of the sales division. The president was surprised and hesitant about this change in career direction for Dick. He recognized the superior sales ability that Dick seemed to possess, but was unsure that Dick was willing or able to assume responsibilities in any other division of the organization. Dick sensed the hesitancy, but continued to push his request. He later remarked that it seemed that the initial hesitancy of the president convinced Dick that he needed an opportunity to prove himself in a field other than sales. Dick was finally transferred back to the home office of the organization and indoctrinated into production and administrative roles in the company as a special assistant to the senior vice-president of production. As a special assistant, Dick was assigned several troubleshooting jobs. He acquitted himself well in this role, but in the process succeeded in gaining a reputation as a ruthless head hunter among the branches where he had performed a series of amputations. His reputation as an amiable, genial, easygoing guy from the sales department was the antithesis of the reputation of a cold, calculating head hunter which he earned in his troubleshooting role. The vice-president, who was Dick's boss, was aware of the reputation which Dick had earned but was pleased with the results that were obtained. The faltering departments that Dick had worked in seemed to bloom with new life and energy after Dick's recommended amputations. As a result, the vice-president began to sing Dick's praises, and the president began to accept Dick in his new role in the company. About three years after Dick's switch from sales, he was given an assignment as assistant plant manager of an English branch of the company. Dick, who had remarried, moved his wife and family to London, and they attempted to adapt to their new routine. The plant manager was English, as were most of the other employees. Dick and his family were accepted with reservations into the community life as well as into the plant life. The difference between British and American philosophy and performance within the plant was marked for Dick who was imbued with modern managerial concepts and methods. Dick's directives from headquarters were to update and upgrade performance in this branch. However, his power and authority were less than those of his superiors, so he constantly found himself in the position of having to soft pedal or withhold suggestions that he would have liked to make, or innovations that he would have liked to introduce. After a frustrating year and a half, Dick was suddenly made plant manager of an old British company which had just been purchased by Tri-American. He left his first English assignment with mixed feelings and moved from London to Birmingham. As the new plant manager, Dick operated much as he had in his troubleshooting job for the first couple of years of his change from sales to administration. Training and re-education programs were instituted for all supervisors and managers who survived the initial purge. Methods were studied and simplified or redesigned whenever possible, and new attention was directed toward production which better met the needs of the sales organization. A strong controller helped to straighten out the profit picture through stringent cost control; and by the end of the third year, the company showed a small profit for the first time in many years. Because he felt that this battle was won, Dick requested transfer back to the United States. The request was partially granted when nine months later he was awarded a junior vice-president title, and was made manager of a subsidiary Canadian plant, Modrow. Prior to Dick's appointment as plant manager at Modrow, extensive plans for plant expansion and improvement had been approved and started. Although he had not been in on the original discussions and plans, he inherited all the problems that accompany large-scale changes in any organization. Construction was slower in completion than originally planned, equipment arrived before the building was finished, employees were upset about the extent of change expected in their work routines with the installation of additional machinery, and, in general, morale was at a low ebb. Various versions of Dick's former activities had preceded him, and on his arrival he was viewed with dubious eyes. The first few months after his arrival were spent in a frenzy of catching up. This entailed constant conferences and meetings, volumes of reading of past reports, becoming acquainted with the civic leaders of the area, and a plethora of dispatches to and from the home office. Costs continued to climb unabated. By the end of his first year at Modrow, the building program had been completed, although behind schedule, the new equipment had been installed, and some revamping of cost procedures had been incorporated. The financial picture at this time showed a substantial loss, but since it had been budgeted as a loss, this was not surprising. All managers of the various divisions had worked closely with their supervisors and accountants in planning the budget for the following year, and Dick began to emphasize his personal interest in cost reduction. As he worked through his first year as plant manager, Dick developed the habit of strolling around the organization. He was apt to leave his office and appear anywhere on the plant floor, in the design offices, at the desk of a purchasing agent or accountant, in the plant cafeteria rather than the executive dining room, or wherever there was activity concerned with Modrow. During his strolls he looked, listened, and became acquainted. If he observed activities which he wanted to talk about, or heard remarks that gave him clues to future action, he did not reveal these at the time. Rather he had a nod, a wave, a smile, for the people near him, but a mental note to talk to his supervisors, managers, and fore-men in the future. At first his presence disturbed those who noted him coming and going, but after several exposures to him without any noticeable effect, the workers came to accept his presence and continue their usual activities. Supervisors, managers, and foremen, however, did not feel as comfortable when they saw him in the area. Their feelings were aptly expressed by the manager of the siding department one day when he was talking to one of his foremen: "I wish to hell he'd stay up in the front office where he belongs. Whoever heard of a plant manager who has time to wander around the plant all the time? Why doesn't he tend to his paper work and let us tend to our business?" "Don't let him get you down," joked the foreman. "Nothing ever comes of his visits. Maybe he's just lonesome and looking for a friend. You know how these Americans are." "Well, you may feel that nothing ever comes of his visits, but I don't. I've been called into his office three separate times within the last two months. The heat must really be on from the head office. You know these conferences we have every month where he reviews our financial progress, our building progress, our design progress, etc.? Well, we're not really progressing as fast as we should be. If you ask me we're in for continuing trouble." In recalling his first year at Modrow, Dick had felt constantly pressured and badgered. He always sensed that the Canadians he worked with resented his presence since he was brought in over the heads of the operating staff. At the same time he felt this subtle resistance from his Canadian work force, he believed that the president and his friends in the home office were constantly on the alert, waiting for Dick to prove himself or fall flat on his face. Because of the constant pressures and demands of the work, he had literally dumped his family into a new community and had withdrawn into the plant. In the process, he built up a wall of resistance toward the demands of his wife and children who, in turn, felt as though he was abandoning them. During the course of the conversation with his University friends, he began to recall a series of incidents that probably had resulted from the conflicting pressures. When describing some of these incidents, he continued to emphasize the fact that his attempt to be relaxed and casual had backfired. Laughingly, Dick said, "As you know, both human relations and accounting were my weakest subjects during the Master's program, and yet they are two fields I felt I needed the most at Modrow at this time." He described some of the cost procedures that he would have liked to incorporate. However, without the support and knowledge furnished by his former controller, he busied himself with details that were unnecessary. One day, as he describes it, he overheard a conversation between two of the accounting staff members with whom he had been working very closely. One of them commented to the other, "For a guy who's a vice-president, he sure spends a lot of time breathing down our necks. Why doesn't he simply tell us the kind of systems he would like to try, and let us do the experimenting and work out the budget?" Without commenting on the conversation he overheard, Dick then described himself as attempting to spend less time and be less directive in the accounting department.
    Another incident he described which apparently had real meaning for him was one in which he had called a staff conference with his top-level managers. They had been going "hammer and tongs" for better than an hour in his private office, and in the process of heated conversation had loosened ties, taken off coats, and really rolled up their sleeves.
    Dick himself had slipped out of his shoes. In the midst of this, his secretary reminded him of an appointment with public officials. Dick had rapidly finished up his conference with his managers, straightened his tie, donned his coat, and had wandered out into the main office in his stocking feet. Dick fully described several incidents when he had disappointed, frustrated, or confused his wife and family by forgetting birthdays, appointments, dinner engagements, etc.
    He seemed to be describing a pattern of behavior which resulted from continuing pressure and frustration. He was setting the scene to describe his baffling and humiliating position in the siding department. In looking back and recalling his activities during this first year, Dick commented on the fact that his frequent wanderings throughout the plant had resulted in a nodding acquaintance with the workers, but probably had also resulted in foremen and supervisors spending more time getting ready for his visits and reading meaning into them afterwards than attending to their specific duties. His attempts to know in detail the accounting procedures being used required long hours of concentration and detailed conversations with the accounting staff, which were time-consuming and very frustrating for him, as well as for them. His lack of attention to his family life resulted in continued pressure from both wife and family. Siding was the product which had been budgeted as a large profit item of Modrow.
    Aluminum siding was gaining in popularity among both architects and builders, because of its possibilities in both decorative and practical uses. Panel sheets of siding were shipped in standard sizes to order; large sheets of the coated siding were cut to specifications in the trim department, packed, and shipped. The trim shop was located near the loading platforms, and Dick often cut through the trim shop on his wanderings through the plant. On one of his frequent trips through the area, he suddenly became aware of the fact that several workers responsible for the disposal function were spending countless hours at high-speed saws cutting scraps into specified lengths to fit into scrap barrels. The narrow bands of scrap which resulted from the trim process varied in length from seven to twenty-seven feet and had to be reduced in size to fit into disposal barrels. Dick, in his concentration on cost reduction, picked up one of the thin strips, bent it several times and fitted it into the barrel. He tried this with another piece, and it bent very easily. After assuring himself that bending was possible, he walked over to a worker at the saw and asked why he was using the saw when material could easily be bent and fitted into the barrels, resulting in saving time and equipment. The worker's response was, "We've never done it that way, sir. We've always cut it."
    Following his plan of not commenting or discussing matters on the floor, but distressed by the reply, Dick returned to his office and asked the manager of the siding department if he could speak to the foreman in the scrap division. The manager said, "Of course, I'll send him up to you in just a minute." After a short time, the foreman, very agitated at being called to the plant manager's office, appeared. Dick began questioning him about the scrap disposal process and received the standard answer: "We've always done it that way." Dick then proceeded to review cost-cutting objectives. He talked about the pliability of the strips of scrap. He called for a few pieces of scrap to demonstrate the ease with which it could be bent, and ended what he thought was a satisfactory conversation by requesting the foreman to order heavy duty gloves for his workers and use the bending process for a trial period of two weeks to check the cost savings possible. The foreman listened throughout most of this hour's conference, offered several reasons why it wouldn't work, raised some questions about the record keeping process for cost purposes, and finally left the office with the forced agreement to try the suggested new method of bending, rather than cutting, for disposal. Although he was immersed in many other problems, his request was forcibly brought home one day as he cut through the scrap area. The workers were using power saws to cut scraps. He called the manager of the siding department and questioned him about the process. The manager explained that each foreman was responsible for his own processes, and since Dick had already talked to the foreman, perhaps he had better talk to him again. When the foreman arrived, Dick began to question him. He received a series of excuses, and some explanations of the kinds of problems they were meeting by attempting to bend the scrap material. "I don't care what the problems are," Dick nearly shouted, "when I request a cost-reduction program instituted, I want to see it carried through."Dick was furious. When the foreman left, he phoned the maintenance department and ordered the removal of the power saws from the scrap area immediately. A short time later the foreman of the scrap department knocked on Dick's door reporting his astonishment at having maintenance men step into his area and physically remove the saws. Dick reminded the foreman of his request for a trial at cost reduction to no avail, and ended the conversation by saying that the power saws were gone and would not be returned, and the foreman had damned well better learn to get along without them. After a stormy exit by the foreman, Dick congratulated himself on having solved a problem and turned his attention to other matters. A few days later Dick cut through the trim department and literally stopped to stare. As he described it, he was completely nonplussed to discover gloved workmen using hand shears to cut each strip of scrap.

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    Solution Preview

    1. Do you think that Dick Spencer has incurred many personal costs in his career so far? What are they?
    Dick Spencer had a regular schedule of working for the first year, but when the second year was in gear - his fast pace and constant traveling and selling made Dick feel unsure about his future. His disruptive life caused his wife to divorce him during that second year. Resentment set in when the divorce occurred but Dick analyzed it away by believing that he needed his freedom to be successful at what he was doing and where he wanted to go.

    His socializing with high level presidents made his coworkers think he was trying to become successful by hanging on their "coat tails." Dick again felt a personal loss when he started to understand that he was not satisfied with his job. He felt no accomplishments like he did in the first year.
    He transferred into production thinking the job would become more alive but he gained ...

    Solution Summary

    Discusses management style and the personal price of working in imbalance.
    Need to balance work, personal, and self.