Leadership and Change

The action wheel correlations in the warehouse were:

“Existence” – We had a history of stocking the warehouse, filling orders, and perhaps most importantly, personal contact with customers when we delivered the product.

“Resources” – Our infrastructure consisted of men, machines, information and storage space.

“Structure” – It was a union shop with work rules defined by the contract, and within which were procedures and structures used to accomplish the mission.

“Power” – As workers we were all committed to accomplishing the mission as efficiently and safely as possible for a variety of reasons: keeping our jobs and all of our limbs, earning a bonus in profitable years, and the peer pressure of being perceived as one who carries his share of the load.

“Mission” – Fill the orders properly, efficiently and deliver them on time while avoiding accidents.

“Meaning” – Accomplishing the mission meant the customer was happy and would buy from us again. We could stay in business, keep our jobs and get paid.

“Fulfillment” – At the end of the day it was usually a shot of whiskey for those who were old enough to drink and a few minutes of camaraderie, jokes and mockery of the executive front office people. In all of my years there, I cannot remember ever being yelled at by an angry customer.

Jim’s leadership in the warehouse largely encompassed the fixed and knowable world of zones 1 and 2. In “Serving the Past”, he evaluated our existing methods and structures with an eye on creating more efficient ways to accomplish the mission. In the 6 years I worked there, I remember numerous overhauls of the storage area intended increase the efficiency of our order filling staff based on the sales history of various product categories. Leaving a cumbersome, heavy group of plumbing fixtures closest to the loading dock would have been irresponsible if they did not sell fast enough to justify readier accessibility.

His interaction with me took place largely in zone two. I was a resource in which he wished to build core competencies. Essentially I was a cog in a Newtonian system and after being around for a couple of years could be plugged into almost any task as resources were required. My becoming this resource would not have been possible without Jim’s leadership.

As he dealt with the executive management, he would venture into the 3rd zone of “Systems Thinking” and become the warehouse team’s link to the overall company strategies. How we interfaced with the city desk where orders were created, billing, inventory managers and the sales representatives all came through Mr. Campbell.
His influence obtained the warehouse staff buy-in to the system. To accomplish this, he communicated the vision, and more importantly “modeled the way”, often participating where his predecessor had not, in the hard labor of unloading a truck full of heavy product, or filling a rush order when everyone else was busy. In this way he would inform us of changes to the system and then participate with us as we adopted them. This was his form of authentic action based leadership.

In the 3rd zone he would also work on building our shared identity with the customers. These were working class people like us, skilled in the mechanical trades. They could take their pick of plumbing and heating suppliers, so it was important that they had a satisfying buying experience. Jim encouraged us to take a few minutes and get to know our customers as we loaded their trucks or dropped off products at a job site. His predecessor would often glare at us or later mention our inefficiency if he saw us going beyond getting a signature on the packing list. Our identity encompassed the warehouse and our relationships with the customers. “Growing the identity is the glue of organizational life. Stakeholders-comprising customers, communities, employees and shareholders-link to grow with the organization as it creates its own long-term sustainability.” (p. 50)

Adversarial tensions between the union shop members and the management may have prevented this organization from achieving a zone 4 “Creating Ownership” level. Ours was an essentially positional structure, with leadership polarized on opposite sides of the bargaining table. The warehouse team’s interests were represented by the shop steward and the Teamsters union bosses. We did not really have any direct voice in labor negotiations, and the employees ratified the contract when they were told it was OK. Though we had a good level of buy-in, ownership never went beyond the executive team.

Moving into zone 5, “Anticipating Change, I shift the focus from the warehouse to the executive team who also owned the company. They were a very successful group and built up their organization into one of the largest suppliers in our market in less than 25 years. However they also saw the trends of consolidation in the industry and thought that they needed to grow larger very rapidly to retain their competitive edge as organizations with greater buying power increasingly eroded industry margins.

Aspects of Zone 6 and 7 also appear in this case. As they explored their options, assessed their resources and began to make various plans to increase growth, an unexpected offer came from another company to acquire them. This could be considered a manifestation of “permanent white water” (Vaill, 1996, p. 51). At stake were the entire identity, future, mission and meaning of the company. Management could accept or reject the offer.

To “serve the promise of authenticity”, which is the purpose of zone 7, management needed to decide what would be best for their organization and for themselves. This was a family business run by a father and two sons. As Terry states, “Fulfillment is at stake” (p. 51). Will not selling fulfill the purpose of legacy, providing continuity and employment to the two sons? Will selling provide a secure retirement for the father? What will happen to the employees? If they don’t sell will the business survive, or will it fold, leaving the employees high and dry? If they do sell, will the buyers lay off large numbers of people? How can the needs of all the stakeholders be met in some fashion?

The decision was made to sell, with a stipulation that a 3 year management contract be granted to the owners. There was cash out for the family, continuity for the sons, a secure retirement for the father, and all employees were retained. Now the management team was in charge of a much larger, more competitive entity. This appears to fulfill the promise of authenticity, as the family acted from their hearts in trying to provide for everyone in their organization. There is undeniably a spiritual quality in their intent to keep the effects of change on their employees to a minimum even as they replaced their vision with that of another company.

Unfortunately as is sometimes the case in the corporate world, the buyers ultimately used some obscure clauses in the contract to oust the family within 1 year of the acquisition. Did the family really examine what was really going on as they entered into the deal, or were they in denial of the buyer’s true intent? Could they have rewritten the contract in a way that protected their management positions? Why did they sell, instead of continuing to operate and perhaps realizing the potential of their vision?

As framework for analysis, the zones give us a platform from which to observe organizational events and learn from history, or reach out into a functioning entity to influence positive change.

Mike Fink 2/10/08