“Leadership, cultural and performance change at meatpack”

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McShane, Olekalns, Newman, Travaglione, Organisational Behaviour, 5e

CASE STUDY 05

LEADERSHIP, CULTURAL AND PERFORMANCE CHANGE AT

MEATPACK

BY WILLIAM S. HARVEY, UNIVERSITY OF EXETER, UK

Context

MeatPack is a family-owned food-processing business based in Sydney, Australia. The

company, which has over 27 years’ experience in meat products, fresh soups and prepared

meals, has processing plants in New South Wales and Queensland. Its customers are the

major retail chains and food-service companies in Australia and abroad. MeatPack is led by

the founder and CEO, Derek Bison, who is the fourth generation of his family to work in the

meat industry. In 2013, the company was performing well, with group sales of over

AUD$300 million. One of the strategic goals MeatPack set in 2002 was to become a 1 billion

dollar company by 2020. However, in order to meet these targets, the company is currently

dealing with two major sets of changes: senior leadership changes and cultural and

performance changes.

Senior leadership changes

Over the past two years, Bison has been keen to develop the leadership competencies of his

senior strategy team. He feels that there are a number of ways in which his leaders could

develop further and he recognises that he could have helped with this more in the past. He

describes himself, for example, as ‘interfering, visionary, driven, competitive, obsessive,

never satisfied and restless’. With a view to changing the mindset and behaviours of his

senior strategy team, Bison started working with an executive coaching and senior

leadership development company. A number of his team members said that they were

gaining a lot of insights from this exposure. Initially, Bison was very enthusiastic about this,

too, but in the past year he has stopped his own direct involvement in the coaching,

although the senior strategy team continue to be involved.

Influenced by the activities of a respected business colleague and personal friend, Bison

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has introduced the Human Synergistics Circumplex to MeatPack. This outlines 12 behaviours

into three colours: red (aggressive/defensive), green (passive/defensive) and blue

(constructive). Bison found that the organisational culture of MeatPack was red and he

recognised that it would need to switch to blue if his growth plans were to be realised. He

understood that MeatPack would need to shift its structure from a hierarchical organisation

to a more horizontal organisation, with front-line workers having greater responsibility and

accountability for their performance (Stayer, 1990).

Underpinning this transition have been the following: a number of changes to the

company’s human resources set-up; a company-wide leadership development program; and

a coaching consultation for members of the senior strategy team. Bison feels that these

have had a positive impact on members of his senior strategy team but confesses that he

himself has struggled with this transition. He finds it difficult, for example, not to intervene,

jump in or direct others when he feels that sufficient progress is not being made or when

decisions are not being taken expediently.

There has generally been a positive dynamic in the senior strategy team, which is

composed of the CEO, COO, CFO, head of People, head of Sales and head of Business

Development. Bison has fostered an open dialogue with his team and it is clear that

members are encouraged to speak frankly with him and each other, both on a one-on-one

basis as well as during meetings. There has, however, been some uncertainty about the

composition of the senior strategy team, with one attendee at a strategy meeting being

unsure of whether he was officially part of the senior strategy team. This led to subsequent

discussion among the group about the matter, as well as over whether another member,

who was not present at this point, should be part of the team. There is also a separate

senior leadership team, which includes all of the senior strategy team members above, plus

the senior line managers. There has been some discussion about the exact purpose of both

of these teams. Because Bison is one of the founders of the company and the current CEO,

some members of the senior strategy team are a little reluctant to question his decisions,

despite Bison actively encouraging an open dialogue. The CFO wonders whether the board

should hold Bison more accountable and whether Bison should hold the senior strategy

team more accountable. The COO expressed concern that MeatPack has lost some of its

senior leaders within the past few years. This has caused some anxiety for the following

McShane, Olekalns, Newman, Travaglione, Organisational Behaviour, 5e

reasons: they were direct reports to Bison; their personalities were in conflict; Bison had

involvement in their area of operation; they were making a positive impact before they left;

and relationships with some suppliers and customers have been lost as a result, causing

business to move to a competitor.

The senior strategy team was about to embark upon some major structural changes—

with the arrival of a new CEO of the soups and meals business at the end of 2013, and the

existing COO of the meat division replacing Bison as the CEO of meat. Bison said that in the

short term he saw himself moving to group CEO alongside these two CEOs. In the long term,

he envisioned that he would move from group CEO to executive chairman, with both CEOs

reporting to him. In his own words, ‘I’m not really a big people person and the people thing

will go to the CEOs. I want CEOs to be CEOs.’

In five to 10 years, Bison’s vision is to move from executive chairman to chairman. When

this was broached in one of the strategy meetings, there was some heated discussion about

who would be reporting to whom in the new structure. For example, the CFO was

concerned about whether benefits would be derived if MeatPack decentralised the

functions of support teams such as Finance and IT. The head of Business Development asked

how the new structure was different from the old structure, and it was debated what, if

anything, the other employees should be told before the company’s annual meeting the

following week. It was decided by an independent chair of the meeting that discussions

would be paused and discussed further at a later date. Some members were clearly

frustrated that the issue was not resolved during the meeting.

Cultural and performance changes

In the past two years, MeatPack has introduced an enterprise resource planning (ERP)

initiative, which seeks to integrate multiple divisions of the company such as finance,

production, investment and management. At the heart of this system is the desire to be

more structured and efficient in ensuring that each line is hitting and exceeding its targets.

Part of this system is also about encouraging managers to change their methods of

communication. In the past, dominating, shouting and other aggressive forms of

confrontation were quite common practice. There was a focus on making things happen

instead of understanding how things worked and why they were not working. As with any

McShane, Olekalns, Newman, Travaglione, Organisational Behaviour, 5e

results-driven organisation, this created a culture with a top-down environment for the

managers, in which targets had to be reached.

Bison has been strongly influenced by his executive training at the Harvard Business

School and one of his major goals at MeatPack has been to install a flatter structure across

the organisation, which empowers managers and supervisors to take on greater

responsibility and accountability. For example, he has encouraged line managers to take a

more hands-on role in terms of the recruitment of personnel and performance appraisals. In

general, there has been an overall drive to get people across the company to lead rather

than manage (Kotter, 2001). The CFO and COO both feel that this has been a positive

endeavour, but find that this is taking place ‘in pockets’, and that Bison could lead more by

example with respect to the senior strategy team.

Bison’s aim across the organisation is for there to be six to eight people per report in

order to ensure that managers and supervisors have the opportunity to lead and be more

clearly accountable. He argues that if he was coming into the company now with no

previous ties then he would remove certain people immediately, but he won’t do so

because he and the team all know these people and there are established relationships and

emotional ties, making such decisions significantly more difficult.

There is a strong sense of loyalty on the ‘floor’ and staff turnover is low in an industry that

is known to have problems with retention because of the repetitiveness of the work. One

interviewee remarked that given that the factory floor is cold and noisy, there is a certain

type of person who can work in this environment. Staff are employed almost continuously

on the production line, the work is physically demanding and standards are exacting.

Despite a diverse array of cultural backgrounds, with employees from multiple countries,

there have been few cross-cultural clashes.

The majority of the workforce has worked at MeatPack for between six and 10 years, with

many others having been at the company for at least 15 years. While this is positive in terms

of loyalty, it is also potentially challenging with regard to changing attitudes towards the

proposed cultural changes. MeatPack is perceived internally as trustworthy and honest, and

employees feel ‘safe’ because decisions seem to be made with the ‘best intentions of the

company’. The company has developed quite a collegial and family atmosphere. While there

are ‘serial complainers’, as one employee put it, most are happy in their positions.

McShane, Olekalns, Newman, Travaglione, Organisational Behaviour, 5e

Recruitment is often via word of mouth, with many employees coming from the same family

group working at the factory. Employees who have moved from MeatPack’s competitors

have commented on the company being more organised, methodical and collaborative in

culture.

Bison has made a significant investment in his staff’s training, and employees with proven

skills and a strong work ethic can move up the company chain quickly. The CFO, for

example, started out as the assistant accountant, which indicates that there are good

opportunities for talented individuals to develop within the company. Bison has invested in

management and team leader development courses, with newly promoted shift leaders

being put through a front-line management course. This aims to improve their leadership

skills and enable them to better manage and lead their teams. The development of a line

focus has created a culture of accountability for each position, which has allowed line staff

to have a hand in developing the efficiency of the company front line, and this has made

them feel a valued part of the team. One manager remarked that without his team he

would not be in the job.

Since the start of the cultural change program, there has been a shift from managers

‘managing’ to ‘leading’ their teams. In particular, there has been a more systematic process

of managers sitting down with employees and talking problems through. There have been

some important cultural changes taking place as a result of managers being encouraged to

take some time out to ‘step back’ and reflect on their ‘tool box’ to address certain

situations. Bison has pushed for a focus on the ‘Rockefeller Habits’—created by Verne

Harnish (2002) and based on the leadership and management principles applied by John D.

Rockefeller, business magnate, philanthropist and co-founder of Standard Oil. There are

three pillars to the Rockefeller habits: priorities, data and rhythm, and Bison has placed a

strong emphasis on MeatPack’s strategic goals (priorities), performance feedback (data) and

accountability (rhythm). Bison has also invested in the leadership training of his front-line

and middle managers, whereby they have developed skills through an external provider on

the life cycle of a leader, including attracting, hiring, developing, mentoring and appraising,

as well as confronting and removing, where necessary. The feedback from senior managers

has been that their managers have appreciated such level of investment in their

development.

McShane, Olekalns, Newman, Travaglione, Organisational Behaviour, 5e

The managers are generally considered quite young, ‘fresh’, ‘open-minded’ and ‘close’.

Some managers feel that although they are now much better at saying things without

offending their teams, jobs are often left incomplete because what people say is different

from what they do. There are 17 line managers who plan for the following day’s production

and there is general concern that while it is good practice to codify this on a large

whiteboard next to the factory floor, there are too many managers going over the data and

not enough people on the lines to deliver the targets. The vision is that the targets, which

are manually inserted on the whiteboard, will eventually be inserted electronically.

A major challenge with regard to reaching daily targets stems from the difference

between the day and afternoon shifts. The day shift starts at 5:30 am and finishes at 2:30

pm; the afternoon shift starts at 2:30 pm and finishes at midnight. Bison has encouraged

‘huddles’ at the beginning of and between the shifts—at these, workers can discuss what

the day shifts have done and what the afternoon shifts need to do. The cultural norms of

the shifts are significantly different. The day shift is described as taking a ‘gung-ho’

approach, which leads to higher yields. This is partly explained by the day shift choosing the

lines that make it ‘easier’ to hit their targets. The afternoon shift is under greater pressure

because of specific cut-off times at 3 and 3:30 pm, when lorries arrive to pick up particular

products for delivery to the supermarkets. In short, there are differences in priority—with

the day shift focusing on maximising yields, and the afternoon shift on being ready for time-

sensitive lorry pick-ups. In general, there is growing pressure for managers and workers to

increase their line’s productivity. Despite this, yields have increased and there has not been

any loss time injury (LTI) in the past year.

Sources:

V. Harnish, Mastering the Rockefeller Habits. What You Must Do to Increase the Value of

Your Growing Firm (Ashburn, Virginia: Gazelles, 2002)

Human Synergistics International, ‘Our Measurement Model—The Circumplex’ (2010),

www.human-synergistics.com.au/TransformingCultureAndLeadership/Circumplex.aspx,

accessed 17 February 2015

J. P. Kotter, ‘What Leaders Really Do’, Harvard Business Review 79, no. 11 (2001): 85–98

McShane, Olekalns, Newman, Travaglione, Organisational Behaviour, 5e

R. Stayer, ‘How I Learned to Let My Workers Lead’, Harvard Business Review (November

1990): 66–83.