Delusions of Invincibility Daryl Horney SMART Leadership Consulting

1. ©
SMART Leadership Consulting
a SMART way of doing business
May 7, 2012
Daryl Horney
SMART Leadership Consulting
Delusions of Invincibility
Introduction
The owners of a marketing research organization came back from a meeting
in Los Angeles. My client received the first call and was asked to call the other
two regional directors to have an immediate meeting. Once they were all on
the phone they received the news. Their biggest client was cutting their
workload – meaning, they were going to lose half of their revenue.
This was not a huge surprise as the upper management team discussed their
worse case scenarios in the past. However, they never devised a crisis
prevention plan – “We just spoke of it.” My client says. She also proclaims,
“the organization became self-inflated.” The owners of the market research
organization thought they were invincible and income from their accounts
(clients) would continue to pour in while they sat on the sidelines counting
their money. Pauchant & Mitroff (1988) refer to these organizations as SIC
(self-inflated corporations) whose primary concern is themselves. They
believe a crisis only effects them personally and not their employees or third
parties. SIC’s believe any employee is irreplaceable and expendable. This can
be a costly mistake, as they do not always hire the right people for the job and
lose top talent to their competitors.
Turner (1976) declares insecurity creates an action needed to resolve problems
and issues. The president asked my client to create an immediate action plan.
The purpose of the plan, “for the company to sustain itself while the owners
looked for more clients or until their present clients could fulfill their financial
requirements.”

2. Company overview
The organization has one main objective, to collect data through surveys.
They do this by interviewing people in the public. Interviewers ask for
people’s opinions within a diverse demographic landscape. The quotas are
diverse. They range in age from seven to sixty and include a multitude of
ethnicities. The organization is present in twenty three designated market
areas (DMA’s) from New York to Los Angeles.
A manager represents each market. The bigger the market, such as New York,
Chicago, or Houston, the more management needed to have a lucrative
marketplace. In each market they conduct interviews from kiosks. They have
lease agreements in malls and movie theaters. If a market is small such as
Lexington, Kentucky where only one location exists (one kiosk) then only one
manager and eight employees are needed in that location.
When a DMA has two kiosks, there is one manager, a supervisor and sixteen
employees and so forth.
The busiest days of business are the weekends. That is when the public is out
in force and they are able to do the most interviews. Saturday is their busiest
day. Each Tuesday they send their availability to their clients. The availability
represents how many interviews they can do in a given DMA. The clients
such as, IPSOS, Nielsen Research Group, Marketcast and Lieberman in return
will give them more or less their requested availability; number of interviews
to complete.
Creating a plan of action
My client worked closely with many of the managers; in fact she interviewed
and hired over half of them. The client knew that her recommendations
would directly affect her DMA’s, their relationships with their staff and their
attitudes towards the company. It was important for her to rally their support
and convince them she was doing the best in their interest as well as the
organizations interest as well.
She had to take immediate action for the upcoming weekend. There was no
reason to postpone the inevitable, plus she didn’t have time. She had to accept
the leadership role she had been given and produce results (Selcow and
Glickman 2008). It was on a Monday when she received the news from the
owners. That evening she sent out emergency emails and called all the
managers to have an emergency meeting Tuesday morning. Monday
afternoon she started to put together a loose plan of action. Ehmke (2012)
remark, “Implementing strategic change is the corner stone when faced with
uncertainty.” The plan of action included:

3. 1. Reducing staff in half
2. Canceling kiosk leases
3. Asking assistant managers and supervisors to take unpaid leave
4. Cutting lower DMA managers and/or assistants pay
5. Cutting bonuses
6. Temporarily canceling reward incentives
7. Terminating all expenses
She noticed her plan of action included all negatives. It was important to
produce positives in a crisis situation. She knew that any action she took
would have repercussions; however, if she didn’t take any action there would
be greater consequences. The worse outcome would be everyone losing his or
her jobs and she couldn’t let this happen.
While she prepared for the Tuesday meeting she was pleased to know “a
team environment” already existed. This was the backbone of the
organization. Weick & Quinn (1999) claim team models embrace continues
change. Leaders provide change by changing their behavior in order to direct
change. (Weick & Quinn 1999). It was imperative for her to transition from a
regional manager to a true leader.
The organization has had slumps in the past and they have gone through
many changes, especially with the introduction of technological advances.
Four years prior they were using paper surveys to conduct their paper
surveys. Overnight, they went digital, thanks to their clients. In one way, it
was a blessing as it reduced manager’s workloads, as they did not have to
wait for the surveys to be delivered by mail, they didn’t have to sort out the
hundreds of color-coded surveys by hand, and they didn’t have to rush to
FED EX or DHL to send them by deadline. However, they had to learn new
systems, learn to work with new departments, and rethink their strategies.
All of the managers attended the emergency phone meeting. She didn’t waste
time and explained the situation. There was silence on the phone. My client
doesn’t recall exactly what she said, but she told everyone that they had to
pull together, think positive, and ride out the storm. Everyone was in
agreement; at least she thought that was the case. Weick (1998) refers to this
stage as enacted sense making. It is the stage that involves making sense of
information. In order to manage a crisis, we cannot blame outside influences,
rather we have to accept that we are part of it and work together to manage it.
McConnell & Drennan (2006) illustrate crisis planning is critical in order to
prevent an organization from collapse. Unfortunately, the organization did
not have that option to fall back on.
Other reactions included ambivalence as examined by Piderit (2000) and
cynicism as described by Fleming & Spicer (2003). She could understand
managers having mixed emotions about the future, however she had to put

4. out fires as quickly as possible. Those managers who were cynics were
reprimanded. The last thing she needed was for the collective to be divided.
After the Q & A session, she asked for suggestions to be sent via email and
then she proceeded to call each manager personally to discuss their thoughts,
concerns, and opinions.
Literature review examined
To establish the literature review, I used Toulmin (1958) argument model
because it provides the framework to highlight the process that demonstrates
why change is warranted. Toulmin’s model also provides clear reason for
explaining the process and allows the analysis to be supported. Figure 1
outlines the model.
Claim: The organization has to make quick and decisive changes
Reason: Organizational structural change is crucial for the organization to
tolerate its current condition
Evidence: Past experiences and peer reviewed literature
Warrant: It will take leadership and a team attitude to be successful
Figure 1: (2006 cited in levy and Ellis, Williams and Colomb (2003))
I made the claim that the organization has to make quick and decisive
decisions and that it will take leadership and team cohesion to be effective.
As Palmer & Dunford (2008) state it is the change agent who is responsible to
provide the necessary outcome. As my client was elected leader by default
she was in position as the change agent to make the required changes. She
acknowledged she was in full control with the support of the owners, but
more importantly she needed the support of the managers. DiBella (1993)
acknowledges leaders have to involve the persons who will be most affected
by change to maintain loyalty. She was very concerned that some of the
managers would be difficult to work with. She did not have time to gain all of
their trust. She needed them to trust her, take directives and act. Leaders
produce change (Kippenberger 2000) and ultimately change will have an

5. impact on the culture of an organization. She could already see this taking
effect. She started to receive numerous emails from the managers. There were
many concerns about people losing their jobs, not receiving raises and
changes in responsibility.
She couldn’t provide immediate answers to their questions, as she didn’t have
any. Staniforth (1994) explains that no one has the right answers to explain
what the outcomes will be. She only asked them to trust her and her decisions
and work together as a team. A team model provides participants of an
organization to be representatives of change. Employees can make
recommendations and know that their voice is being heard (Caldwell 2003).
It was essential to motivate the managers and it was essential that the
managers motivate their teams. Smith & Rupp (2003) argue that it takes
strong leadership to motivate people.
I personally believe that people have to motivate themselves. Leaders can
provide the resources, such as incentives for motivation, but it is up to the
people to implement the motivation. I also believe that in order for managers
to be successful at motivating their employees they have to believe in the
cause. Managers cannot second-guess what they are doing or why they are
doing it. They have to know and trust the big picture. In this case the big
picture was survival, by making quick decisive decisions that had an impact
on the culture and structure of the organization.
Devising the plan
During that week my client devised a plan. She knew she had to cut costs, but
maintain production, even if that production would be cut in half and at the
expense of quality. After having numerous discussions with city managers
she created a plan of action. Orton (2000) claims an organizations decision
process is designed by enactments. Orton (2000) further claims that
organizations can go through a redesign process to be able to restructure and
reorganize itself thus making it more solid and flexible. This was her goal, to
redesign and restructure each market to make it stronger and flexible to the
elements.
After going through each individual DMA budget reports, she noticed her top
three highest costs were salaries, kiosk leases, and offices space. She could not
cut salaries and she could not break leases, but she could get rid of office
space. The organization did not need them; they actually were not being
utilized in many cities. The fact that the organization held onto city offices
was a surprise to many. Most managers were working from home. In fact five
out of the twenty managers she spoke with said they never even went to their
local DMA office.

6. The first change she put on her list was to terminate office space as soon as
possible. The savings would be in the ten of thousands. The second plan of
action included managers to manage, but also conduct interviewers - the
same job of her employees (the interviewers). Any DMA that had a
supervisor or assistant manager would do the same. This would be an added
responsibility, but she knew the managers were capable. This would allow
each city to lose their worse employee or an employee per kiosk. Therefore, a
DMA that had four locations or four kiosks would lose four employees. If a
DMA found itself with more employees than there was work, the manager
would have to make the decision to whom they would lay off.
My Client digresses, “I believe that by allowing managers to think for
themselves and make their own decisions in their DMA allows them to be
empowered and not feel that they are not in control.” It is important during
crisis situations that managers do not feel helpless; if they do they will
become cynics as described by Fleming & Spicer (2003) and may retaliate and
jump ship making the crisis worse.
The third plan of action included purchasing Ipad’s for each city manager.
This would allow them to be completely mobile. They would have access to
electronic quotas, instant emails, and direct communication with different
departments internally and externally, and instant messaging.
Communication was key to the development of each DMA. The organization
was paying managers a monthly stipend of $100 a month for the cell phones.
Her strategy was to reduce that to $40 a month, allow them to use the Ipad for
personal use as they covered any additional cost outside of work. She
believed the Ipad’s would pay for themselves in 9 months. She also believed
this would be good news for the managers. The underlining factor they were
to be given IPads as tools to succeed was seen as a reward.
My client purposed her action plan to the owners and the other regional
directors that Thursday of the week when she received the news. Everyone
embraced the proposed changes and wanted to implement them immediately.
They were surprised at how simple the plan of action was and were asking
why they didn’t have an action plan in place before the crisis. I didn’t have
any answers and neither did my counterparts.
A crisis is a low probable situation and happens when least expected (Pearson
& Clair 1998). As I mentioned before, my client believed the leaders (owners)
of the organization thought they were invincible. “It won’t happen to me!”
This attitude only will get an organization in trouble. Paraskevas (2006)
explain in order to prevent a crisis from occurring all actors including the
CEO and President must be involved to learn and anticipate changes in the
environment.
Results

7. The next day, my client had a meeting with the managers before the
upcoming weekend. It was on a Friday. She sent the managers an email
describing the changes and its impact. During the meeting she was paying
attention to their reactions. No one was displeased with the news. In fact,
there was a feeling of relief. The common denominator amongst the group
was. “We’re losing our jobs!”
As Weick (1988) described if people are to make sense of the situation around
them then they are able to make progress. That is what she wanted, to see the
managers make sense of the problem and its solution.
Another result was an open discussion with their clients (NRG, etc.). They
needed to establish some sort of safety net. This dialogue was extremely
significant, as it would create minor guarantees, such as a minimum
guarantee of available work that would be supplemented if not met. They
also established future lease agreements where they would have the first
rights to conduct interviews in their movie theaters or mall kiosk (retail space)
at a fixed rate.
Conclusion
From all the negativity that comes from a crisis, surprising positive results can
develop and blossom into progressive business development. If we continue
to develop and have an action plan and a set of clear strategies, then it is
possible to be progressive and thrive in an unstable environment.
Carmeli & Schaubroeck (2008) explain it is extremely important to learn from
our failures. The organization failed to have a proper crisis plan. What is
worse is that they anticipated an event like this would occur, but did nothing
to prepare for it. They rode out the storm. Their clients began giving them
more and more work and they established new relationships with new clients
(IPSOS). However, this does not diminish the fact that they were ill prepared.
There were many unexpected lay offs that could have been prevented,
contacts singed that did not need to be signed. As Carmeli & Schaubroeck
(2008) admit, it is important that we change our behavior to prevent crises
from happening in the first place.
The organization is a high reliability organization that is able to manage in an
unbalanced environment where their survival depends upon their client’s
demands. As Bigley & Roberts (2001) reflect, “We are flexible when faced
with challenges and adapt quickly to outside influences.”
Employees will be resistant to change, especially when their role changes and
they have to take on more responsibility (Smith & Rupp 2003). However, I
believe people are resilient when faced with difficulty and it is human nature

8. not to give in, but on the contrary, to continue to push forward in the hope that
hard work will prevail.
If we want to be resilient we have to be prepared and have a clear strategy
that will allow us to be competitive, but more importantly, give us longevity
(Carmeli & Markman 2010).
I think, it is of the upmost importance to keep a record of what happens
during a crisis. This will allow for critical reflection that will hopefully enable
us to prevent future problems from happening. As a practitioner I would like
to see a record of literature from companies that have gone through similar
issues. Naturally, all organizations do not share their misfortunes or lack of
crisis prevention, however for those that do, I imagine will be a benefit to us
all.
Reference
Bigley, G.A. & Roberts, K.H. (2001) ‘The incident command system: High reliability
organizing for complex and volatile task environments’, Academy of Management Journal, 44 (6)
pp.1281–1299. Available
from: http://sfxhosted.exlibrisgroup.com.ezproxy.liv.ac.uk/lpu?title=Academy+of+Manage
ment+Journal&volume=44&issue=6&spage=1281&date=2001
Caldwell, R. (2003) ‘Models of change agency: A fourfold classification’, British Journal of
Management, 14 (2), pp.131–142. Available
from: http://sfxhosted.exlibrisgroup.com.ezproxy.liv.ac.uk/lpu?title=British+Journal+of+M
anagement&volume=14&issue=2&spage=131&date=2003
Carmeli, A. & Markman, G.D. (2010) ‘Capture, governance, and resilience: strategy
implications from the history of Rome’, Strategic Management Journal. Available
from:http://sfxhosted.exlibrisgroup.com.ezproxy.liv.ac.uk/lpu?title=Strategic+management
+journal&volume=32&issue=3&spage=322&date=2011
Carmeli, A. & Schaubroeck, J. (2008) ‘Organisational crisis-preparedness: The importance of
learning from failures’, Long Range Planning: International Journal of Strategic Management, 41
(2), pp.177–196. Available
from: http://sfxhosted.exlibrisgroup.com.ezproxy.liv.ac.uk/lpu?genre=article&isbn=&issn=
00246301&title=Long+Range+Planning&volume=41&issue=2&date=20080401&atitle=Organi
sational+Crisis-
Preparedness%3a+The+Importance+of+Learning+from+Failures&aulast=Carmeli%2c+A.&s
page=177&sid=EBSCO:ScienceDirect&pid
DiBella, A. (1993),"Planned Change in an Organized Anarchy: Support for aPostmodernist
Perspective", Journal of Organizational Change Management, Vol. 5 Iss: 3 pp. 55 – 65
Available from: http://dx.doi.org/10.1108/09534819210018054
Ehmke, C. (2012) ‘Strategies for Competitive Advantage’ Applied Economics, pp.1-8. Available
from: http://ag.arizona.edu/arec/wemc/nichemarkets/05competitiveadvantage.pdf

9. Fleming, P. & Spicer, A. (2003) ‘Working at a cynical distance: Implications for power,
subjectivity and resistance’, Organization, 10 (1), pp.157–179.
doi:10.1177/1350508403010001376. Available from:
http://sfxhosted.exlibrisgroup.com.ezproxy.liv.ac.uk/lpu?title=Organization&volume=10&i
ssue=1&spage=157&date=2003
Kippenberger, T. (2000),"Two contrasting theories of change: Theory E and Theory O", The
Antidote, Vol. 5 Iss: 7 pp. 17 – 21 Available from:
http://dx.doi.org/10.1108/EUM0000000006873
McConnell, A. & Drennan, L. (2006) ‘Mission impossible? Planning and preparing for
crisis‘, Journal of Contingencies & Crisis Management, 14 (2), pp.59–70. Available from:
http://sfxhosted.exlibrisgroup.com.ezproxy.liv.ac.uk/lpu?title=Journal+of+Contingencies+
%26+Crisis+Management&volume=14&issue=2&spage=59&date=2006
Orton, J.D. (2000) ‘Enactment, sensemaking and decision making: Redesign processes in the
1976 reorganization of US intelligence’, Journal of Management Studies, 37 (2), pp.213–234.
Available from:
http://sfxhosted.exlibrisgroup.com.ezproxy.liv.ac.uk/lpu?title=Journal+of+Management+St
udies&volume=37&issue=2&spage=213&date=2000 [Accessed: 5 May 2012].
Palmer, I. & Dunford, R. (2008) ‘Organizational change and the importance of embedded
assumptions‘,British Journal of Management, 19 (S1), pp.S20–S32. Available from: http:
//sfxhosted.exlibrisgroup.com.ezproxy.liv.ac.uk/lpu?title=British+Journal+of+Management
&volume=19&issue=s1&spage=s20&date=2008
Paraskevas, A. (2006) ‘Crisis management or crisis response system?: A complexity science
approach to organizational crises’, Management Decision, 44 (7), pp.892–907. Available from:
http://sfxhosted.exlibrisgroup.com.ezproxy.liv.ac.uk/lpu?title=Management+Decision&vol
ume=44&issue=7&spage=892&date=2006
Pauchant & Mitroff, (1988) ‘Crisis Prone Versus Crisis Avoiding Organizations Is your
company’s culture its own worst enemy in creating crises?’ Organization & Environment, 2(1),
pp.53-63. Available from: http://oae.sagepub.com/cgi/doi/10.1177/108602668800200105
Pearson, C.M. & Clair, J.A. (1998) ‘Reframing crisis management’, Academy of Management
Review,23 (1), pp.59–76. Available
from: http://sfxhosted.exlibrisgroup.com.ezproxy.liv.ac.uk/lpu?title=Academy+of+Manage
ment+review&volume=23&issue=1&spage=59&date=1998
Piderit, S.K. (2000) ‘Rethinking resistance and recognizing ambivalence: A multi-dimensional
view of attitudes toward an organizational change’, Academy of Management Review, 25 (4),
pp.783–794. Available
from: http://sfxhosted.exlibrisgroup.com.ezproxy.liv.ac.uk/lpu?title=Academy+of+Manage
ment+Review&volume=25&issue=4&spage=783&date=2000
Turner B.A. (1976) ‘The organizational and interorganizational development of
disasters’, Administrative Science Quarterly, 21 (3), pp.378–397. Available from:
http://sfxhosted.exlibrisgroup.com.ezproxy.liv.ac.uk/lpu?title=Administrative+Science+Qu
arterly&volume=21&issue=3&spage=378&date=1976

10. Selcow, M. & Glickman, M., (2008) ‘Process Improvement Taking Control of the Game’ Merced
Systems, Inc. Available from:
http://www.mercedsystems.com/m2/Resource_Library/Merced%20Systems%20-
%20Contact%20Center%20Process%20Improvement.pdf
Smith, A. & Rupp, W. (2003),"An examination of emerging strategy and sales performance:
motivation, chaotic change and organizational structure", Marketing Intelligence & Planning,
Vol. 21 Iss: 3 pp. 156 – 167 Available from: http://dx.doi.org/10.1108/02634500310474
, D. (1994),"To Restructure or Not? That Is the Managerial Question", The TQM Magazine,
Vol. 6 Iss: 5 pp. 28 – 31 Available from: http://dx.doi.org/10.1108/09544789410067925
Toulmin, S. (1958). ‘The uses of argument.’ Cambridge, UK: Cambridge University Press.
Weick, K.E. (1988) ‘Enacted sensemaking in crisis situations’, Journal of Management Studies, 25
(4), pp.305–317. Available
from: http://sfxhosted.exlibrisgroup.com.ezproxy.liv.ac.uk/lpu?title=Journal+of+Manageme
nt+Studies&volume=25&issue=4&spage=305&date=1988
Weick, K.E., & Quinn, R.E. (1999) ‘Organizational change and development’, Annual Review of
Psychology, 50, pp.361–386. Available from:
http://sfxhosted.exlibrisgroup.com.ezproxy.liv.ac.uk/lpu?title=Annual+Review+of+Psychol
ogy&volume=50&issue=&spage=361&date=1999