Strategy and Competitive Advantage – MGMT 450 Your Individual Paper ---1000 words

ORGANIZATIONAL CULTURE

What’s Stiing the Creativity at CoolBurst? by Suzy Wetlaufer

Luisa Reboredo had never been one to count her hours in the office, let alone take all thevacation days she had accumulated in her 15 years with CoolBurst, a Miami-based fruit-juice company. Now, as the newly appointed CEO, she seemed to live at work. The job exhilarated her, and she had big plans for the company’s future—if she could just get performance on

track first.

It took a great deal of pleading, therefore, for Reboredo’s 18-year-old son, Alfonse, to get her to

attend Miami’s popular outdoor art festival with him one Saturday in May. She had regularly been

working weekends, using the time to pore over CoolBurst’s books in an effort to figure out why

annual revenues were stuck at $30 million and why profits hadn’t risen for four years straight.

Finally, the two struck a deal: Luisa would attend the art festival in the morning and spend the rest

of the day at the office.

They arrived at 10, and already the sun was baking the festival grounds. Alfonse, almost a full foot

taller than Luisa and a basketball star at Southwest Miami High, put his arm around his mother.

“Mom, this is great—you’ve got to get out more often,” he practically sang. “You’re missing the

action stuck inside that office.”

Luisa sighed. Raising Alfonse by herself hadn’t been easy, and now that she had reached the top of

her career and could comfortably afford his college tuition, the last thing she wanted was to have the

company she’d helped to build collapse beneath her. Just the thought of CoolBurst’s stagnant

performance suddenly made her tense. Why was it, she wondered, that CoolBurst wasn’t growing

anymore? For over a decade, it had been the most successful juice maker in the Southeast.

Practically every school in Florida, Georgia, Alabama, and South Carolina had a CoolBurst vending

machine in its cafeteria, and thousands of restaurants listed CoolBurst’s apple, grape, and cranberry

drinks by brand name on their menus. In fact, CoolBurst had grown so steadily over the years that its

parent company, a Chicago-based conglomerate, rarely interfered with operations. Lately, however,

Luisa had been receiving weekly phone calls from the higher-ups in Chicago inquiring about budget

projections, expenses, and personnel changes.

“Mom, stop thinking about work!” Alfonse shouted, interrupting Luisa’s thoughts. “You should see

the expression on your face!”

Luisa tried to smile but shrugged instead. “I’m sorry, Alfonse,” she said. “Let’s look around.”

Her son readily agreed, steering her toward a row of paintings by a local artist they both liked. Then

Alfonse stopped for a moment. “Wait a second, Mom,” he said, “let me grab a drink first. I’m burning

up.”

Alfonse dashed over to a man selling drinks from a cart a few yards away. The cart was topped by a

large red umbrella emblazoned with the words Destroy Your Thirst! Drink a Thirst Smasher. A

moment later, he was back, unscrewing the cap of a red glass bottle shaped like a rocket.

“Alfonse!” Luisa practically gasped. “How could you?”

“How could I what?” Alfonse replied, somewhat irritated. “I couldn’t get a CoolBurst around here if I

tried, Mom. I suppose I could sprint over to the high school, but that wouldn’t exactly be

convenient.

“Besides,” Alfonse added, “everyone knows CoolBurst is for kids. These Thirst Smashers are

something new. Get a load of this flavor—Mango Tango. It tastes fabulous.”

Luisa cringed—she knew all about Mango Tango. In fact, the flavor had been invented in CoolBurst’s

own labs, a collaboration between chief scientist Carol Velez and CoolBurst’s then marketing

director, Sam Jenkins. The two had concocted Mango Tango and four other exotic drinks on the sly

about a year earlier. But when they presented them to the company’s then CEO, Garth LaRoue, he

had been so angry about their unauthorized use of time that he had practically fired them both.

Velez hadn’t had her heart in her job since. And Jenkins had left CoolBurst shortly thereafter to join

Thirst Smashers, one of a half dozen start-ups that had recently begun venturing into the drink

business in the Southeast. To Luisa, it felt as if every month a new company joined the competitive

fray, each one coming from a different angle. Thirst Smashers was parking its drink carts on every

corner. Drink-Ups, another new player, was selling carbonated juice drinks and advertising like mad

on the radio with a jingle even she couldn’t get out of her head.

But so far, Luisa reminded herself, none of the start-ups had put a noticeable dent in CoolBurst’s

market share in schools and restaurants. The reason, she figured, was the company’s efficient set of

systems, in both the factory and the field. CoolBurst’s purchasing agents and plant operations were

located in Atlanta, where managers worked to make a high-quality product as inexpensively as

possible. The company’s salespeople were all over the Southeast, developing close relationships

with their customers. An advanced—and pricey—information technology system, which CoolBurst

had installed in 1990, allowed salespeople in the field to place orders, which were filled swiftly by a

fleet of CoolBurst drivers. And finally, the company’s labs were located at headquarters, where Velez

and a small staff focused on improving the flavors of CoolBurst’s products and the efficiency of the

company’s factory processes.

CoolBurst is like a well-oiled machine, Luisa told herself: not many bells and whistles to what we do,

but we do it well. Perhaps that was why it caused such a scandal when Velez and Jenkins got

together to invent Mango Tango and the other new flavors. Everyone in the company was sick and

tired of the way Jenkins was trying to change things. Most employees considered him a

troublemaker—a transplanted New Yorker and business school graduate who did nothing but

harangue people to “think outside the box.”

“What box is he talking about?” was the refrain from most of CoolBurst’s 200 employees, who were

predominantly native Miamians who had joined the company after high school or college. CoolBurst

had been an independent company until 1975, and it still retained much of its old organizational

culture, which reflected the traditional, family-oriented background of its Cuban-born founder.

Employees were loyal and conservative in both mind and manner. The company’s dress code was

formal, even in Miami’s warm climate, and employees treated one another with a politeness that

seemed like a throwback to the 1950s. But as old-fashioned as it seemed, that politeness was an

aspect of CoolBurst’s culture that employees valued highly. No one at CoolBurst argued. No one

swore. No one complained that the company’s offices were small and nondescript. No one ever

answered the phone in any way other than the expected “Thank you for calling CoolBurst. How may

I be of service?” The company was a calm and civilized place to work in the midst of a changing,

chaotic world.

It’s no wonder, then, Luisa thought, that Sam Jenkins rubbed a lot of people the wrong way: he was

always confronting colleagues about their assumptions and ways of doing business. His favorite

phrase was “Everyone’s entitled to my opinion.” And he seemed to delight in challenging rules and

norms around the office. He often arrived late to work, left early, and blared rock-and-roll music

from his computer’s CD-ROM drive. Some days, when he left at lunchtime, he would tape a note to

his door that read, “Gone to the movies to get my creative juices flowing. Ha!” Even his office space

seemed to challenge the status quo. The walls were covered with large, haunting photographs he

had taken while traveling through Africa and India, and several fanciful “dream catchers” hung from

the ceiling. When the phone rang, Jenkins always answered, “Yeah?”

Worse, his behavior had a negative effect on the productivity of other employees. When Jenkins left

early, other people followed. If the director of marketing worked half days, they figured, why

couldn’t they? As a result, the phones in customer service often went unanswered.

Jenkins’s work habits seemed to suit him: despite his odd hours, he always got a lot done. But Luisa

—and many others in top management—had noticed that allowing other employees this freedom

didn’t seem to do much for the overall output of the company.

Luisa liked Jenkins. She knew he had passed up high-paying offers in consulting and on Wall Street

to take the job at CoolBurst because, as he put it, he loved business “in the trenches.” She also knew

that, soon after starting at CoolBurst, Jenkins had quickly grown worried about the company. He

told everyone who would listen that CoolBurst’s past success had been a simple matter of being in

the right place at the right time—and a fortuitous lack of competition. “The bubble is going to burst

one of these days,” he kept repeating. CoolBurst had to innovate, he warned—or it would evaporate.

Jenkins wanted to lead the charge. First, he started working on the director of distribution, Roger

Blatt. Why was it, he asked, that CoolBurst was sold only in school vending machines and in

restaurants? What about opening up new channels? How about handing out CoolBursts to everyone

who stepped off a plane at Miami International Airport? Blatt nearly roared when he heard that

suggestion. There were a hundred reasons why that couldn’t be done. For one, the airport had

extremely tight security regulations. And where would the drivers park? How could they possibly

get the juice to the gates? And what about keeping it cold? Finance certainly wouldn’t approve the

idea anyway.

Blatt’s final words on the matter were strong: “If it ain’t broke, don’t fix it.”

For a while after his run-in with distribution, Jenkins restricted his creativity campaign to his own

territory. His first idea was to get CoolBurst—or maybe even its corporate parent—to cough up some

money for advertising. Sure, CoolBurst had advertised in the past, but minimally, and never on TV.

In fact, all advertising had been designed in-house and usually consisted of point-of-purchase

posters. Jenkins had a different plan in mind. CoolBurst needed fresh minds from outside the

company to help create a new vision of the brand. After making his case for three months, he was

given a modest budget. He immediately hired a New York firm well known for its jazzy TV

commercials.

But the agency didn’t last long at CoolBurst. In their first meeting with CoolBurst’s management

team, the account executives launched into what they called a “creativity-enhancement exercise.”

After dimming the lights, they urged the CoolBurst managers to close their eyes and imagine

themselves on a desert island, dying of thirst. “Suddenly, an angel arrives and offers you the drink of

your dreams. Let your imagination go—you can have anything you want—no constraints,” incanted

one ad executive. “Let yourself fantasize.”

“That’s enough!” snapped LaRoue, who was still CEO at the time. “I’m all for new ideas around here,

but these kinds of mind games are a waste of time. Either you’re born creative or you’re not.

Fantasizing about an angel isn’t going to do us a bit of good. We all should be back at our desks

working.”

LaRoue’s comments hadn’t surprised Luisa. He was nearing 65 and had been at CoolBurst his entire

career, starting as a stock boy in the factory. He valued tradition, just as he valued self-discipline and

respect for authority. He had quickly come to distrust Jenkins, and, after the incident with the

advertising agency, he had strongly urged Luisa to get rid of him.

Even if she had wanted to, Luisa didn’t have the chance. A few days later, Jenkins and Velez

presented their four new drinks to LaRoue, only to be shouted out of his office. When Luisa found

Velez back in the lab later, she was dejectedly pouring the prototypes down the drain. Luisa stopped

her before she emptied the Mango Tango, and took a taste. It was delicious, and she told her so.

“It doesn’t make any difference that it’s delicious,” said Velez. “You can’t do anything different in

this company. Everyone gets hysterical.”

“Well, I won’t get hysterical,” Luisa said, “and I may soon have the final say as the new CEO.”

“Forget it,” said Velez. “That’s not what CoolBurst is about. We’re not a creative company. We’re just

a little juice company that knows how to do one thing well—make plain old juice and deliver it to

plain old schools and restaurants.” She looked Luisa straight in the eye. “We’ve got one creative

person here, and he makes everyone nervous. Even if you told everyone it was okay to be creative

like Sam Jenkins, no one would know what to do. How do you make a bunch of people who are

happy doing the same old thing come up with new ideas? It’s just not the CoolBurst way.”

Jenkins and Velez presented their new drinks to LaRoue, only to be shouted out of his ofce.

“We’ve got one creative person here, and he makes everyone nervous.”

Velez’s assertion didn’t make Luisa happy, but it couldn’t be denied. CoolBurst wasn’t a creative

place, and it didn’t attract creative people—with the exception of Jenkins and Velez. And when it did

find that rare creative person who wanted to make a difference, management didn’t know what to

do with him—apart from forcing him out the door.

As Luisa stood outside in the blazing sun with Alfonse—who was polishing off his Mango Tango

Thirst Smasher—she couldn’t stop thinking about Velez’s assessment of CoolBurst. Was the company

really a lost cause when it came to the issue of creativity? Were its employees really as stolid as Velez

thought they were? And was there some way to get everyone—from distribution to manufacturing—

to think of new and exciting ways to revitalize CoolBurst’s product line and way of doing business?

Was there a way, Luisa wondered, to make CoolBurst a more welcoming, nurturing place for creative

individuals like Jenkins? Sure, some of his ideas were off the wall; Luisa smiled to herself as she

remembered his plan to have thousands of bottles of CoolBurst wash up on the Miami beaches

during spring break. But others, such as exotic new flavors, were terrific.

“Hey, Mom, you’re still thinking about work!” Alfonse broke into Luisa’s thoughts once more. “Let’s

have some fun. Let me buy you a Mango Tango!”

How can Reboredo foster creativity in her current employees and nurture creative individuals who

join the company in the future?