XYZ Company is a listed product-development company in Singapore, with 250 staff strength. XYZ's products include a variety of lifestyle products targeting middle class working individuals, since 1985, and turnover profit was an average of $30 million. XYZ's unique selling proposition involves high-volume sales of its products to distributors, as well as individual buyers, due to its extremely user-friendly products that were based on cutting-edge technology. XYZ prides itself for being a cohesive organisation, and was awarded the "Employer of Choice" award for three consecutive years. However, its turnover profit was $15 million the previous year, and was on the watch-list for being unlisted.
A new CEO has recently come on board, and together with a team of senior management members, decided a new business strategy which involves developing luxury goods targeting the high-end income group of individuals. Due to the high number of competitors in the market, the current staff members have to look at developing both middle- and high-end products, to ensure minimum cost of production. This leads to additional stress on the staff members, and eventually led to resentment of the new CEO.
ALIGN SMA SOLUTION
We looked at the challenge in multiple dimensions:
1. Whether the stress stemmed from overwhelming workload
2. What was the ultimate cause(s) of resentment
3. CEO's actions
4. Common consensus on resentment and stress
From surveys, focus groups, observation studies and semi-structured interviews, the main reason for additional stress came from the difficulty of transitioning from middle- to high-end product development, as the staff members had gotten used to innovating within the middle-end products field, and did not understand the needs of the high-end market. Staff members also expressed that they had almost reached a plateau of innovations for the products, and found it difficult to come up with additional middle-end products to fund the research and development of high-end products. The organisation was not providing enough support for innovation. The entry of additional players in the middle-end products industry and the limited market for high-end products caused additional stress on staff members as well.
There was general displeasure with the board's directives, but not at the individual board members; staff members were highly respectful of board members for their courage in stepping into a new market. Their displeasure stemmed from lack of communication of rationale for moving into a new market and job-role clarity with the new directive. Also, the new CEO happened to be a quiet man, who failed to interact much with staff members, and did not engage staff members in a change management process to manage their expectations and understanding.
The CEO had felt immense pressure and resistance from his staff, and was upset, but did not know why they felt this way or how to correct it. He tries to attend more meetings with potential clients, so as to alleviate the stress that his staff members are facing based on the limited market and demand for their products. Unfortunately, he does not understand the importance of sharing this with his staff.
Most staff members felt the stress was acceptable, except some who were potential candidates for a promotion. This information was useful to shape the individuals whom we should target to shape a solution around.
With the research data collected, we decided on the following areas to target:
1. Enhancing an innovation culture at XYZ
2. Communications amongst all staff members
3. Change management
A three-day retreat was planned, where all staff members (including senior management and the CEO) attended a team-building event. Relaxation and fun was introduced to help clear their thoughts and open their minds to new ideas. It also gave the CEO a good chance to interact with staff members, and to remove silos within the organisation. With careful facilitation, staff members managed to know one another more.
A new communication channel was instilled in the organisation – intranet with anonymous forum (allowing screened comments) was initiated to facilitate discussions and communications amongst staff members. Regular formal Meet-the-Board sessions were also held and facilitated by our facilitators such that official business directives were discussed with all in the organisation. The first session involved the CEO giving a brief of what the needs of high-end consumers are.
Transformational journey began with a workshop that motivated all members to embrace change, and to move along with it. Professional tools were used to find out general perception of change along the journey over a period of two years.
The new CEO was given an external coach, who could support him in his work, and also provide support in managing staff. Staff members who were identified as being key influencers were provided with mentoring by the board members as well, to ensure an alignment in beliefs and values for the organisation.
A survey was conducted every two years to get a pulse of the organisation's culture with the implemented solutions. Four years after the initiation of the whole solution package, survey results showed tremendous improvement in perceptions of level of stress and resentment within the organisation, and XYZ exhibited a 20% increase in productivity and an estimated 35% increase in profit turnover.