Etm Case Picking Up Right Strategy


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Etm Case Picking Up Right Strategy

  1. 1. “Managers are people who do things right and leaders are people who do the right thing.” by Peter F Drucker “The best leaders don’t know just one style of leadership—they’re skilled at several, and have the flexibility to switch between styles as the circumstances dictate.”
  2. 2. Picking Up The Right Transition Strategy:- 2 Presented by:- By:- GROUP-8 Mr. Michael D Watkins 1ST MBA- SEC ‘A’ Anusha Jose Revathi H Priyadharshni Sudhakaran Kimoth Veronica ETM-PICKING UP THE RIGHT TRANSITION STRATEGY 5/22/2009
  3. 3. LEARNING OBJECTIVE:- 3 To learn how a leader transitioning into a new situation can correctly diagnose the situation and then select the right leadership approach. ETM-PICKING UP THE RIGHT TRANSITION STRATEGY 5/22/2009
  4. 4. THE STARS FRAMEWORK. 4 START UP TURN-AROUND ACCELERATED REALIGN- SUSTAINING GROWTH MENT SUCCESS [Assembling [Saving a business [Managing a [Helping a [Continuing a ,people ,financing widely rapidly expanding previously good record of & technology to acknowledged to be business] successful accomplishment] get a new in serious trouble] organization business] that now has problems] CHALLENGES 1. Building the 1. Reenergizing 1. Putting in place 1. Convincing 1. Finding ways strategy from demoralized all resources to employees to take scratch employees & permit scaling. that change business to without a clear stakeholders 2. Integrating is necessary. new levels. framework. 2. Making many new 2. Carefully 2. Playing with 2. Recruiting a effective employees restructurin good caution high decisions under g the top and defense on performing time pressures. team & new initiatives team refocusing 3. Limited the resources organization ETM-PICKING UP THE RIGHT TRANSITION STRATEGY 5/22/2009 .
  5. 5. Contd….. 5 START UP TURN- ACCELERATED REALIGN- SUSTAINED AROUND GROWTH MENT GROWTH OPPORTUNITIES 1. Things can be 1. Everyone 1. The potential 1. The 1. A strong done right from recognizes for growth helps organization team may the beginning. that change to motivate has already be in 2. Employees are is necessary. people. significant place . energized with 2. A little 2. People will be pocket of 2. People like possibilities. success goes inclined to strengths to continue 3. There is no rigid a long way. stretch 2. People want their history preconception. themselves. to see in success. themselves as successful. ETM-PICKING UP THE RIGHT TRANSITION STRATEGY 5/22/2009
  6. 6. CASE SUMMARY:- 6  Stefan Eisenberg ,a hard driving German born executive was the vice president of European manufacturing operations of an international consumer products firm based in United States.  In Europe-  He restructured the organization in the following ways:-  Centralized manufacturing support functions.  Closed down four of least efficient plants.  Shifted a big chunk of work to eastern Europe.  Efforts bore fruits by end of 18th month and 3 yrs after these changes the company plants were in the top 20% of Benchmarked plants in Europe.  His success in Europe led to his promotion as Executive Vice President for Supply chain in North American operations, headquartered in New Jersey. ETM-PICKING UP THE RIGHT TRANSITION STRATEGY 5/22/2009
  7. 7. Case summary Contd…. 7  In North American operations:-  The job was a much bigger one combining with many works.  The Organizations long term success had recently shown signs of slipping and industry benchmark for the company was slightly below average.  Stefan’s own assessment indicated that serious problems were brewing.  Managers reveled in their ability to react well in crisis rather than tearing problems from their root.  Now Stefan need to adopt a measured approach and open people’s eye that a problem even exists. ETM-PICKING UP THE RIGHT TRANSITION 5/22/2009 STRATEGY
  8. 8. STRATEGIES ADOPTED BY STEFAN:- 8  Using STARS Model, Stefan was able to recognize the difference between realignment situation he was heading into and the dramatic turnaround situation he so successfully managed in Europe. ETM-PICKING UP THE RIGHT TRANSITION STRATEGY 5/22/2009
  9. 9. WATKINS'S RECOMMENDATIONS FOR NEW LEADERS:- 9 New Situation Requires Fresh Approaches. Watkins recommends these steps: • Diagnose the situation. Are you leading a startup? A turnaround? Realigning a faltering company? Managing a rapidly expanding business? • Select the right organizational strategies. For instance, turnarounds require faster, riskier changes than realignments and call for technical learning (strategies, markets, technologies). Realignments demand mastery of cultural and political nuances. • Adopt the right leadership style. For example, in turnarounds, people are hungry for hope, vision, and direction. You’ll need a heroic style—charging against the enemy, sword flashing. Realignments require stewardship: diplomatic building of consensus around the need for change. ETM-PICKING UP THE RIGHT TRANSITION STRATEGY 5/22/2009
  10. 10. CONTD…… 10  Establish A-item priorities:- In Turnaround , managers should address shortcomings immediately e.g.:- slashing costs. In Realignment, managers need to focus on systems, skills and culture.  Build the leadership team fast:- In Turnaround , recruit new senior talent from the outside. In Realignment, firing those who don’t support the new vision or promoting high potentials with innovative ideas.  Identify where early wins can be secured. In Turnaround , early win-moving people from state of despair to one of hope. In realignment, early win- to raise people’s awareness of the need for change. ETM-PICKING UP THE RIGHT TRANSITION STRATEGY 5/22/2009
  11. 11. THE IDEA IN PRACTICE 11 Watkins focuses on two transition types……….. Turnarounds and Realignments:- 1. In a turnaround, you must save a business recognized as in crisis. Challenges include: • Reinspiring demoralized stakeholders • Making effective decisions under pressure • Going deep enough with painful cuts 2. In a realignment, you must reenergize a previously successful organization. Challenges include: • Convincing stakeholders that change is needed • Restructuring the top team and refocusing the organization. ETM-PICKING UP THE RIGHT TRANSITION STRATEGY 5/22/2009
  12. 12. SELECTING THE RIGHT TRANSITION STRATEGY 12 Strategy In a In Europe, In a In North Elements turnaround... Stefan... realignment. America, .. Stefan... Learning Focus on Assessed the Focus on Thought how technical organization’s cultural he, as an learning (e.g., strategy,comp and political outsider, could about etitors,produc learning. help people see competition or ts,markets the need for technology &technologies change. Changes) Establishing Make fast, risky Lessened Make more Fostered a priorities moves focusing employees, Deliberate culture of on strategy and centralized moves ownership(e.g. structure. manufacturin focusing on by promoting g systems skills managers from functions to and culture. Within. cut costs ETM-PICKING UP THE RIGHT TRANSITION STRATEGY 5/22/2009
  13. 13. Contd… 13 Strategy In a In Europe, In a In North Elements turnaround. Stefan... realignment. America, .. .. Stefan... Building Clean house at Drastically Make just a Recruited several leadership the top; recruit reduced top few important leaders with teams external ranks and changes, strong technical talent. hired promoting skills to support most new from within systems changes senior talent when possible. he planned for from outside. manufacturing. Securing Replace Closed ailing Replace denial Revamped early wins despair plants, with performance with hope. refocus- ed awareness metrics in people’s manufacturing & attention on customer service the company’s to highlight core strengths. crucial ETM-PICKING UP THE RIGHT TRANSITION weaknesses. 5/22/2009 STRATEGY
  14. 14. ADOPTING THE RIGHT LEADERSHIP STYLE 14  Turnarounds call for heroic leadership:- A Leader need to give people a sense of hope, a compelling vision, and clear direction. In Europe, Stefan immediately took charge and made some very painful calls. Because the outlook was bleak, people acted on his directives without resistance.  Realignments require stewardship:- Leader must set aside ego and patiently build consensus around the need for change. In North America, Stefan resisted the urge to step in and issue directives. Instead, he provided data and let people form their own conclusions. They took ownership of problems and of the change initiatives required to solve them ETM-PICKING UP THE RIGHT TRANSITION STRATEGY 5/22/2009
  15. 15. LEARNINGS FROM THE CASE:- 15  If Stefan had treated his new situation as a turnaround , he would probably have incurred both active and passive resistance, undermining his ability to realize needed change especially because he was an outsider coming in and therefore vulnerable to being isolated . • “ LEADERS IN TRANSITION RELY ON THE SKILLS AND STRATEGIES THAT WORKED FOR THEM IN THE PAST………… THAT’S A MISTAKE’ ETM-PICKING UP THE RIGHT TRANSITION STRATEGY 5/22/2009
  16. 16. CONCLUSION:- 16  The STARS framework is helpful for individuals moving into new business situations and seeking to develop organizational and personal strategies.  It can also play a central role, no matter what the business situation, in a new leader’s attempts to get bosses& peers to agree on the core challenges and change ETM-PICKING UP THE RIGHT TRANSITION STRATEGY 5/22/2009