Etm Case Picking Up Right Strategy

“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.”

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

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.


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
.

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.


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.

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

STRATEGIES ADOPTED BY STEFAN:-
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 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.


WATKINS'S RECOMMENDATIONS FOR NEW
LEADERS:-
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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.


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.


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.

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

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

ADOPTING THE RIGHT LEADERSHIP STYLE
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 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


LEARNINGS FROM THE CASE:-
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 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’


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 Case Picking Up Right Strategy

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