change management

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ONLINE SIMULATION SCENARIO INTRODUCTIO N

Change Management: Power and Influence

Scenario 2: CEO

You are the CEO and founder of Spectrum Sunglass Company. As the company enters its second decade

of operations, its immediate future is looking bright. Externally, the consumer sunglass market is

growing again, and competitive-pricing pressures have subsided. Spectrum recently rehired some of the

workers laid off during the last recession, and many departmental budgets have been restored to well-

funded, pre-recession levels. A potential new product design has received positive focus group feedback

after the first phase of development; furthermore, some exciting branding deals with Hollywood

celebrities are under negotiation. Everyone at Spectrum is looking forward to growth and enhanced

earnings.

While you generally feel good about the state of the business, you just turned 60 years old, and you are

beginning to think about your legacy. You are reading more and more professional articles emphasizing

the importance of sustainable development for business and linking the themes of sustainability and

innovation, such as “Why Sustainability Is Now the Key Driver of Innovation.” You are frustrated that

you don’t have any new sunglass products to offer to the vocal customers who increasingly express

concerns about Spectrum’s environmental impact. Not only does sustainable development make sense to

you personally, from both a moral and an economic standpoint, but you also see this as an opportunity to

differentiate Spectrum’s products and overall company from your competitors, which focus primarily on

price and design.

During Spectrum Sunglass Company’s annual strategy retreat, you decide to pitch the idea of forming a

task force to make the company and its products more environmentally sustainable. Your vision for

Spectrum consists of three specific goals: (1) Eliminate 25% of waste by redesigning the manufacturing

process; (2) reduce the current level of greenhouse gas emissions by 15%; and (3) create a new product

line based entirely on environmentally benign materials. You argue that these goals, while aggressive, are

achievable within the next two years.

Online Simulation Scenario 2 Introduction—Change Management Simulation: Power and Influence

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After politely listening to your proposal, Andrew Chen, the General Counsel interjects that in his

professional opinion the sustainability project opens up the company to unnecessary legal risks. If the

company decides to proceed, he advises that only one of the three goals be pursued and that it not be

publicly announced or promised until after a careful internal due diligence process. As you start to think

up counter-arguments to the General Counsel, you get a double whammy in the form of Luke Filer, the

VP of Operations, who expresses concern about the impact of these changes on raw material costs and

production processes. To top it off, the usually quiet Louise Orysh, the Benefits Administrator, comments

that since Spectrum is still recovering from the recession and has only recently begun rehiring workers, a

dramatic shift to focus on sustainability may be premature.

You acknowledge your colleagues’ objections, and as a solution propose that you plan to lead a five-

person, interdisciplinary task force to look into the issues. As the task-force chair, you will commit to

devoting 50% of your time to this sustainability initiative while juggling your responsibilities as CEO. The

remaining four task-force members would devote 75% of their time to the project. You add that based on

your current understanding, the task force will need to pursue the following activities: (1) Conduct

energy audits and set aggressive milestones for improvement on the three goals; (2) redesign processes

and products to be more environmentally sustainable (and scale up successful experiments quickly); (3)

analyze environmental life cycles throughout the entire value chain inside the firm and with its suppliers;

(4) seek to replace fossil-fuel energy sources with renewable energy sources; and (5) seek to replace

petroleum-based materials with biodegradable materials.

Breaking the impasse, the VP of Human Resources, Mary Gopinath, suggests that Spectrum needs to give

this initiative serious thought and endorses your proposed cross-functional task force as a way to come to

a compromise solution. After an hour-long discussion, during which some members of the top

management team express support for the initiative while others express skepticism, everyone agrees to

support your proposal. With your reputation on the line, you realize that success will be measured

according to your team’s ability to achieve these three goals within the next two years. As the retreat ends

and everyone heads to dinner, you start pondering the potentially numerous issues and obstacles you

may need to overcome in implementing your sustainability vision.

In this context of "back to business as usual," your central challenge is to convince your colleagues that a

dramatic change in the organization’s strategy and products is necessary and that environmental

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sustainability is one of the keys to the firm’s future. Fortunately, you have the requisite formal authority

and widespread respect throughout the organization to tackle this challenge.

Online Simulation Scenario 2 Introduction—Change Management Simulation: Power and Influence

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Scenario 2: Organizational Structure for Spectrum Sunglass

YOU Chief Executive Officer

Paul D'Arcy

Chief Financial Officer

Bob Ingram Corporate Controller

Walt James

Director, Information Systems

Deborah Edge

VP, R & D

Nancy Kerr

Director, Product Innovation

Yao Li

Director, Process Innovation

Luke Filer

VP, Operations

Diane McNatt

Plant Manager

Mark Roberto

Foreman

Paul Schenian

Foreman

Mary Gopinath

VP, Human Resources

Ian Newman

Director, Health &

Safety

Louise Orysh

Director, Benefits Administration

Leslie Harris

VP , Sales & Marketing

Sam Puffer

Director, Marketing

Regina Quinn

Director, Sales

Anne Thompson

Manager, Customer Relations

Michelle Barth Administrative Assistant

Andrew Chen

General Counsel