ORGANIZATIONAL DEVELOPMENT AND CHANGE / FALL 2018 ONLINE
REAL WORLD EXERCISE Case
You have been hired as an external Organizational Development Practitioner by Elizabeth Connor, the CEO of the FLORIDA PET FOOD Company, with its headquarters located in Sebring, Florida. The company has been in business for 20 years and is well known in the Southeast.
Visual of FLORIDA PET FOOD COMPANY geographic distribution
You have been contracted to take the organization through the five stage model of the organizational development process. Sales revenue has not increased in three years. Overall market share (-10%) has been declining for the past two years and Elizabeth is worried that if the trend continues, the company will eventually have to make changes that could involve a reduction of employees and adverising cuts. She also believes that there is a risk and need to sell the business to a pet food giant such as Purina or Iams. The board of directors wants to avoid moving in this direction. Instead, Elizabeth is certain the organization needs a change. She is confident that with a few positive changes, the company will regain the momentum they enjoyed in previous years.
Elizabeth wants you to identify change and build a plan to steer the organization in a new direction. She has assigned Kurt Martin, VP of Marketing and Sales, as your internal client go-to-person. He has been asked to work with you on the project. Be aware that Kurt has been with the company for only 4 years however, he has been instrumental in new product launches over the years that have fueled some quick sales revenue growth. He is a bit of a cautious person, resisting any possibility of “ruffling feathers” within the organization.
As an OD Practitioner, you need to gather as much information about the company as necessary to assess the current situation and to recognize and anticipate a need for change. Kurt has provided you with details about the company as outlined below:
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Florida Pet Food Company Vision
With a desire to become the leader in the pet food business in the southeast, we are dedicated to nurturing “a healthier, happier pet”.
Florida Pet Food Company Mission
At Florida Pet Food Company, we are devoted to helping pets live longer, happier and healthier lives through correct nutrition and care. We have an essential responsibility to provide safe, appetizing and nutritious products made to the uppermost standards of quality and safety.
Florida Pet Food Company Products
Dog Food: 10, 20 and 40 lb bags dry food (Manufactured in Florida only)
12, 24, 40 ounce cans wet food. (Manufactured in Florida and Dallas)
Cat Food: 10, 15 and 20 lb bags dry food. (Manufactured in Dallas)
2, 4, 6 and 8 ounce cans wet food (Manufactured in Florida only)
Sales Revenue (3 year view)
Dog dry food: 34% of revenue, down 3 percent
Dog wet food: 23% of revenue, up 5 percent
Cat dry food: 30% of revenue, down 1 percent
Cat wet food: 13% of revenue, down 2 percent
Florida Pet Food Company SWOT Analysis
Strengths
Quality: Concentrates on wholesome, natural ingredients.
Social Consciousness: Committed to a number of social causes such as the Rescue Bank and The American Society for the Prevention of Cruelty to Animals. The FPFC foundation donates 2% of their profits to these and other charities across the country.
Operational Restructuring: FPFC decided to ramp up the operational efficiencies with the investment of a new bag filling system. This system enables FPFC to fill dry dog and cat food bags faster. This increased production of finished goods by 15 percent. FPFC also purchased a new warehouse facility in Dallas, Tx to accommodate sales revenue growth in Texas and Oklahoma.
Customer Focused: FPFC has stepped up relationships with their Top 5 teired sales volume customers.
Strength in the Grocery Stores: FPFC has distribution in 90% of grocery stores in the Florida. They have long standing relationships with Publix and Winn Dixie.
R & D: FPFC has a small R&D team. They are very strong at finding ways to make their products healthier for dogs and cats.
Weaknesses
Slow Decision Making: making decisions go through a long, rigorous process and opportunities are sometimes lost.
Distribution: FPFC’s supply chain management system is causing them to short ship customers or late deliveries. Costs rise as FPFC strives to maintain their trucks which are apporaching 20 years old.
Low Penetration: Beyond Florida and Georgia, FPFC has minimal distribution in the Carolinas and in Alabama and Mississippi. The brand is well-known in Florida however brand awareness weakens as distribution gets further from the state.
Short Term Thinking: FPFC has always been a short term thinking company because of the speed and the ever changing conditions of the pet food industry. They react to current conditions to ensure momentum is not lost. It is difficult to pinpoint a long term strategy.
Work Culture: The work culture at FPFC is that of a casual and welcoming workplace. Leadership style is relaxed. Decisions are always made at the highest level of the organization and frequently pile up cauing hierarchial overload. Employees are evaluated on goals that they seldom see or understand. Turnover rate at lower levels of the organization are minimal. However, higher level management such as VP’s have turned almost annually.
Creativity: What is losing to competition is the ability to innovate quickly. New products are often late and only get a large spurt of sales revenue early then rapidly tail off. FPFC is missing a creative, eye catching marketing campaigns. They struggle to gain the attention of customers who are easily distracted by other brands.
Promotional Patterns: FPFC sales revenue is frequently driven by deep discounts and Buy 1 get 1 Free promotions. This generates revenue but negatively impacts margins.
Packaging: Current packaging is boring. It lacks “pop” and consumer appeal. Nutritional value is barely visible on the packaging.
Technology: FPFC’s technology is routine with low interdependence.
Opportunities
Huge Market Potential: The pet food industry provides vast market potential and it is forecasted to $30 Billion by 2023 with a cumulative annual growth rate of 3 %. Most of that growth will come from the demand of products that offer specific health functionalities such as joint and hip, diabtes, and digestion. There will also be an increase demand for dry food because of the convenience it provides within a busy lifestyle of pet owners. Healthy dog treats is trending upward.
Threats
Destructive Pricing: Competition could drastically reduce the prices of their pet food products to gain market share causing FPFC to struggle to match prices that had already hit rock bottom.
Competition: There are many small pet food companies in the southeast and mid south that have the capability to react to external and internal pressures. Many of these companies in the past have proven their agility.
A slight decrease in pet ownership: People still own pets however, trends show a slight decline. This comes from people that have lost a pet and have decided not to replace it.
CURRENT STRATEGIES
PRICING STRATEGY
- Maintain pricing integrity.
- Avoid matching competitors price reductions.
- Share quality/value/price relationship with key customers.
PROMOTIONAL STRATEGY
- Buy 1 Get 1 free to generate quick market share and volume hits.
DISTRIBUTION STRATEGY
- On time delivery to customers
- Reduce delivery costs and streamline distribution delivery
- Reduce fixed and variable distribution costs
PRODUCTION STRATEGY
- Produce high quality products every day
- Invest in quality assurance and continuously train production workers
- Invest in machine parts to have on hand in the event of breakdowns
OTHER STRATEGIES
Technology
- Protect fraud and security incidents by delivering customer authentication.
Human Resources Strategy
- Improve performance reviews to reduce turnover.
Sustainability Strategy
- Energy Conservation: All lights and electrical equipment on all business premises turned off when not in use.
FLORIDA PET FOOD COMPANY Organizational Chart
REAL WORLD EXERCISE
PART 1 TEMPLATE
To complete this exercise, you will need to reference course learning. Refer to the rubric to guide you on exercise expectations. In addition to reflecting what you learned, provide your own point of view. Always provide reasoning to back up your point of view. Write with clarity allowing the reader to fully understand your thought process. Your focus is “quality”, not quantity. There are no word minimums for this exercise.
——————————————————————————————————————————————————Building the Client Relationship
You will be working with Kurt for the next 9 months. You need to build a practitioner-client relationship with him and with other key people in the organization.
- Define your role as a practitioner.
- What style will you choose? Why?
- What are your operating ground rules as the hired practitioner?
- What will you expect from Kurt?
- Who else in the organization will you need to build a relationship? Why?
- What additional information might you need? Why do you need this information?
Anticipating the Need for Change by Diagnosing the Organization
As a practitioner, you have gathered valuable information about the organization and have an understanding of its current state. Your task is to determine what will need to change to take the organization to its desired state. At this point you are not listing what needs to change rather diagnosing the current situation.
- Identify and explain five core problemswithin the organization that you believe may need a change. A core problem is not a list of problems. A core problem is something that if not changed will cause consequences across the entire organization. It is also something that is recognized as a common theme; a group of issues that are interrelated. For example, if the common theme is “low morale”, evidence of this is turnover, uncertainty, low efficiencies, and poor organizational structure.
- What do you believe could be the driving forcescausing the problems? Internal? External? Why?
- OD Practitioners make early high level predictionson the type of change that the organization might go through. Based on the core problems you identified, what type of change do you believe may exist? Is it one type? A combination of each? Explain your reasons.
- What data will you need to collect to strengthen your position on what needs to change? What method will you use to collect the data? Why?
- Using the checklist to assess the client’s (the organization) readiness for change(Chapter 4 video and slides) and based on what you have diagnosed about the organization, what do you believe is an item(s) that may propose a challenge to you when implementing a change plan? Why?
Anticipating Resistance to Change
- What type of resistance to change do you anticipate within the organization?
Selecting an OD Intervention
An intervention is coming between members of organization for the purpose of change. Based on what you have learned in the course:
- What will be your intervention strategies?
- What type of intervention will you use? Why?
- What techniques will you administer? Why?
PART 1 of the REAL WORLD EXERCISE complete
REAL WORLD EXERCISE
PART 2 TEMPLATE
To complete this exercise, you will need to reference course learning. Refer to the rubric to guide you on exercise expectations. In addition to reflecting what you learned, provide your own point of view. Always provide reasoning to back up your point of view. Write with clarity allowing the reader to fully understand your thought process. Your focus is “quality”, not quantity. There are no word minimums for this exercise.
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High Performance Teams to help drive change
- HPT’s help drive change. Who within the organization would you select to be on your change team? Remember, change agents are not necessarily top management. In fact, typically, they are within middle and even lower management ranks within different departments and functions within the organization.
- Why did you chose these people and what value will they add being on your high performance team?
With change comes conflict
As an OD Practitioner, you have assembled a high performance change team. It is common to encounter conflict among these team members. With change comes conflict provoked by differences of opinion and disagreements.
- What are three occurrences that might drive conflict among your team members?
- As the OD Practitioner, how will you deal with it?
- What conflict management style will you choose?
Developing Change Goals
Change goals shape your change plan. Based on what you diagnosed as a need (or needs) for change within Florida Pet Food Company, construct at least five change goals for the Florida Pet Food Company. Use the following questions to guide you.
- What are you going to change? (Describe the actual change you are proposing)
- Why are you changing it? (We are changing because . . .)
- How will you change it? (What actions are you going to take to make the change?)
- Who within the organization will be responsible for the change? Why? (The head of sales will own the change because …)
NOTE: Please be detailed in your plan. This is the most critical document constructed by an OD Practitioner. It is the document senior management will use to make decisions. It is a document that truly defines the OD Practitioner’s credibility.
New Ways of Working; Putting new processes into place
A business process refers to a wide range of structured, often chained, activities or tasks conducted by people.
- With two of the five changes you intend to make, build a process showing the organization the new “way of working”. It is recommended you name your process (e.g.: Decision Making Process) and identify the steps within the process (Step 1: xxx, Step 2: xxx, etc).
- What part of the organization will ownthe process? Why? (Ownership means responsible for the success of implementing the process)
Implementing your change plan; Kotter’s Model
The final step as an OD Practitioner is to help the organization implement your change plan. You will be referring to Kotter’s Change Model. After watching the Kotter Change Model video, build your implementation plan as follows:
- Build a sense of urgency statement. The statement should say what we are changing, why we are changing it, why it is urgent and what the consequences are if we don’t change. If there are multiple changes you are making, try to make one statement that captures the common theme among all changes. The final sentence in your urgency statement should state the benefit of the change.
- How will you know change is happeningand how will you measureit? (For example, “We will know change is happening when we see negative attitudes decrease and more optimism is evident. This will be measured through twice per year employee satisfaction surveys with an expected improvement rate over two years of 10 percent)
- Once the change plan has been implemented and is happening, build a scorecard. Refer to Chapter 14, slide 11 regarding “Constructing the Scorecard”. The scorecard is used by all to measure the change plan impact on the organization.
- What are our strategic priorities? List 3.(For example, since one of the root issues was declining sales as a result of no sales training, your change plan called for a sales training program focused on stronger relationships with the customer (a weakness in the SWOT analysis). In order to make this stick, the strategy is to reinforce training every three months with a one day session focused on customer relations and sustaining it long term)
- What will be measuring? (For example, what we will be measuring is the impact of the training on sales growth)
- What will our targets be? (For example, our target for this strategy will be 80% training participation rate)
PART 2 of the REAL WORLD EXERCISE complete
Congratulations, you have experienced the real world of an OD Practitioner!
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