Running Head: Organizational Framework for Success

Iggys Bread of the World: Adopting an Organizational Framework as a Recipe for Success

Organizational Framework for Success

Iggys Bread of the World: Adopting an Organizational Framework as a Recipe for Success

Iggys Bread of the World is a small business on the brink of good things. The bakerys potential business growth was rising as quickly as the bread upon which they had built their dreams. Iggys began to experience significant problems with their organizational structure almost as quickly as the organization became established from production of its product to its financial performance. Iggys experienced rapid and remarkable growth from the onset, but performance began unfavorably declining after peaking. Although net revenue has steadily increased year over year between 1994 and 1999, but profit after taxes is declining steadily, from 15% at its peak to less than 1%. As the company grew, the culture began to deteriorate to the dismay of its founders. The five-step PROACT decision making model will be used to develop solutions by considering the problem, objective, alternatives, consequences, and tradeoffs. The model is effective because it considers both the tangible and intangible factors present along with the facts, feelings, opinions, beliefs and advice influencing the situation so the best possible outcome can be arrived at. (Hammond et al., 1999) This capstone project will analyze how weak communication and a poorly defined governance structure during times of growth can compromise the future, but can easily be easily rectified by embarking on a planning process that involves key members and stakeholders of the organization. Background of the Study Organizational Background Iggys Bread of the World family owned bakery was founded by two immigrants Igor and Ludamilla Ivanovic. Iggys was founded on a passion for baking and determined to create a nurturing and respectful environment at our workplace that fosters cooperation, communication

Organizational Framework for Success

and a sense of accomplishment for all employees. The vision for Iggys was based upon three principal factors: quality ingredients, and engaged workforce, and a focus on the customer. The Ivanovics took enormous pride in shaping Iggys operations and culture. In some way, the early success at Iggys can be attributed to Ludamilla and Igors individual leadership style. For her part, Ludamillas focus was on operations and she viewed role as an opportunity to connect with her passion to engage employees in the success of the business. Iggys employees were taken to the farm where the vegetables for their products were purchased and to the stores where their end products were sold. Ludamilla considered employment at Iggys to be an opportunity for their employees to grow as individuals, saying, The mission was to be a full person and to be completely involved in the business and understand all of the parts of the businessbut not to be a fake imitation of me or a fake imitation of Igor, just to be themselves. Iggy demonstrated his leadership skills in the kitchen. He was engrossed in developing the products with ingredients that reflected the quality and pureness he valued, as well as an opportunity to share his unique approach to preparing the product. Iggy bakes without recipes or time charts and used a sour dough starter to yield the Old World flavor he strived for, even though it requires nine to 12 hours for the dough to rise, opposed to the three hours commonly implored by other bakeries. Although eventually cooking charts and recipes were provided as job aids for the growing kitchen staff, but Igor ensured staff were still trained to recognize the signature texture and taste and that they could improvise when needed to achieve it. Training a new hire to develop a feel for the bread took six months. The structure of the workforce was designed to allow for this training, operating 24 hours a day with overlapping shifts to ensure the product was always fresh and operations were seamless.

Organizational Framework for Success

The workforce at Iggys was culturally diverse, representing more than 20 different countries. The Ivanovics invested in their workforce beyond what was required to deliver the product, offering smoking cessation through acupuncture, massage therapy, English classes, and even arranging soccer games, a largely universal sport, for recreation. Both Igor and Ludamilla took a personal interest in the Iggys workforce and were proud to know every employee by name. As Iggys delivered its mission, net revenue increased steadily, more than doubling in the first two years; business was booming and it became clear that the Ivanovics needed help. With the growth they had experienced in sales, the Ivanovics expanded by adding a warehouse, upgraded the vans they were using for deliveries, and added kitchen staff. This change, albeit positive, did alter the work system and also the financial structure, as the Ivanovics had to take out a loan for the first time in the four years they had been in business at Iggys Bread of the World. Iggys was profitable but were growing so fast they couldnt keep pace, even having to turn away big customers. The Ivanovics were in a dilemma, trying to expand Iggys while maintaining the culture they took so much pride in establishing. They were in the midst of a paradigm in that they admittedly needed leadership support and an expertise in business, but did not want Iggys to lose its small business feel. The Ivanovics felt they needed help in the administrative and fiscal areas of operations; acknowledging being overwhelmed with the workload and demands. They wanted to hire someone in a leadership capacity to sustain the rate of growth they were experiencing; someone who was experienced in business. They initially hired a consultant named Matthew McRae, who, after demonstrating a passion for Iggys was hired on as Chief Operating Office. McRae, in turn, added several other leadership positions,

Organizational Framework for Success

including his brother as Distribution Manager and a high school friend as Chief Financial Officer and later placed the CFO in charge of Human Resources. McRae also added a Vice President of Sales and Marketing. The new management team was in place, but symptoms of an organization in trouble began to present themselves soon thereafter. Constraints/Limiting Factors There are several limiting factors to the assessment and solutions presented in this paper. The first is the depth of the analysis, which is limited to the information available in the case study. A more meaningful assessment and actionable report could be produced with more detailed data on the organizations performance results, comparative analysis for peer business, interviews with senior leaders and employees, and a site visit to observe key processes in action. The other limiting factor is the lack of consult with experts in the field of business, in particular the culinary or retail professions. This paper will draw on the professional experience of its author who has performed similar analysis of businesses and will make recommendations that are rooted in best practices or have been otherwise researched. Personalizing some of the solutions is something that Iggys Bread of the World will need to take into consideration. Assumptions Several assumptions have been made and have influenced the assessment and recommendations presented. These assumptions center primarily on personal and workforce dynamics. It is assumed that the Ivanovics felt inadequate in their ability to manage the business administratively and financially. They commented about hiring people who had been trained in business and who knew what they were doing. It is also assumed that felt fearful that they were losing their voice in, or control of, their business and that the Ivanovics were experiencing both

Organizational Framework for Success

emotional and financial stress over the decreasing profit after taxes in light of the loan they had taken out for the business. An assumption is made that they blame the McRae for the current problems their business was experiencing.

Background of the Problem The Problem Iggys Bread of the World is struggling with what on the surface may appear like growing pains, but in actuality, Iggys needs to establish a corporate framework that can support future growth while sustaining the core values on which the company was founded. Iggys has experienced exceptional growth, increasing net revenue by 600% in only five years from 1,000,000 in 1994 to 6,000,000 in 1999. While this is impressive, profit after taxes has unfavorably declined from 190,000 in 1994 to 140,000, with a peak of 480,000 in 1996. The culture of organization has begun to decline as rapidly as the financial indicators, with Iggys employees reporting that they viewed the new management team as being disconnected form the workforce and culture and isolated from the culture that they had become so accustomed to. What had once been an environment where employees were nurtured and made a part of operations was now characterized by departments that operated in silos and job titles. Even the Ivanovics have felt the strain and tension and expressed concern that the changes were happening too quickly and were beginning to feel out of touch with the company they built. The Ivanovics have a vision for Iggys, and the company has grown, but there appears to be an absence of a strategic plan, including a human resources management plan, and this has led to poor growth management and an inability to sustain and capitalize on the companys strategic advantages and core competencies, one being a value-rich organizational culture. The Ivanovics

Organizational Framework for Success

are disillusioned at how the company has changed and a loss of power over the present and the future, yet it is more likely that they are most uncomfortable at how the company may be compromising its value and mission while it forms a corporate structure. The Ivanovics are conflicted with the strategic direction of the company; should they continue to grow, even if it means giving up some control, or should they apply the brakes and manage growth within their personal means? The Ivanovics are reacting in a way that is common when small businesses or projects experience unprecedented growth: treating the symptoms and not the condition. Essentially, they are pinpointing their displeasure with the newly hired COO, Matthew McRae, rather than fulfilling a need to establish a governance structure and management system that reinforces the organizations culture, mission and values. The most significant challenges, or problems, for Iggys to overcome are a shift in culture, a change in the structure of operations, and communication breakdowns. The Situation When the Ivanovics found themselves having exceeded their capacity to produce, having to turn away customers and new clients, they realized they were in a position of either expanding physically and structurally to meet the demand for the bakery or scaling back and accepting no new clients and customers. They were working beyond their means and that was not sustainable. They acknowledged they had no desire to grow so large that they were franchised or publically traded, but they committed themselves to growing their market share. They refrained from explosive expansion because they valued the culture at Iggys and longed to preserve it. While they wanted to be able to meet the demand for their products in their market, the philosophy that they used to train their kitchen staff to make dough (not imitating Igor, but mastering their own skill) extended to their view of other bakeries every state could have their own version of

Organizational Framework for Success

Iggys. It must have been painful for the Ivanovics to see their decision yielded the net result they had feared a deterioration of the culture, facilitated by poor growth management. Aside from the Ivanovics and their family and close friends, whom they considered to be their family of mentors or informal board of directors, the employees of Iggys were stakeholders in the outcome of the conflict and future success of the organization. Some of the employee had come from other countries and their life experiences made it difficult for them to trust, especially an employer. The employees at Iggys were personally invested in the company. Iggys customers are stakeholders with an interest in the outcome, too. Iggys has been supplying their customers with high quality baked goods that they have been, in turn, offering to their own customers. If Iggys is unsuccessful, their customers may not be able to meet their own customers expectations. With organizational growth comes the inevitable organizational change. Change is a positive sign that the organization is making progress towards achieving its desired state, or its vision. Change can feel adverse however because of some of the symptoms or side effects. Job duties and responsibilities expand or contract. New employees may be added to accommodate the increase in demand. Some employees who were with the organization from the onset may be unable to adjust to the organizations growth and change and may move on, thus introducing additional new faces to the workforce. A position that was once key to the organizations operation may now be obsolete. (Feigenbau, 2012). For example, both Igor and Ludamilla wore multiple hats and are integral in delivering a product, but also conducted hiring, training, and accounts payable. As the business grew, there is now a need to devote more time to human resources and product sales. While it may be a natural instinct for an organization to develop its processes to accommodate the demand for more output, many fail to properly assess the need for

Organizational Framework for Success

the organizational infrastructure to keep pace. Where a vision was once a conversation shared when interviewing a potential job candidate or discussed in casual conversation while filling a product order, as the business grows the vision needs to be set and deployed to key partners, suppliers, employees, and other stakeholders. In the early days of Iggys the vision was close to the heart of the Ivanovics and the workforce they assembled. As the company grew that vision becomes more distant from the key processes. Having a system in place to set and deploy the vision will ensure that all the effort put into growing the business, delivering high quality products is not in vain. The goal for Iggys is to effectively manage growth, characterized by increased market share, debt reduction, and profitability, a vibrant organizational culture with strong values, an engaged workforce, and customers loyal to Iggys production of high quality baked goods. Effectively managing change determines just how painful the growing pains will be and if growth experienced leads to the success of the organization or its demise. Becoming savvy at managing growth will help create a more agile environment which will help the organization meet changing demands and overcome strategic challenges and external factors that impact the work process. (3) To accomplish this, Igor and Ludamilla will need to be able to effectively convey their vision for Iggys to the leadership team and workforce and engage them in strategically planning for accomplishment of the vision, establish a performance management system, and design and manage a work structure and system to achieve desired outcomes. Research/Literature Review Research was conducted of a number of different literacy pieces including books, journals, and articles. Literature review centered on three key themes: organizational culture; managing growth and sustaining performance; and strategic leadership and planning.

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Organizational Culture - Iggys took great care in establishing the organizational culture that motivated and engaged employees and was successful in engaging employees in helping them achieve the vision. There is a disconnect in the leadership style deployed by Igor and Ludamilla and the new management structure initiated by Matthew McRae. The culture of an organization is important not only to the future, but in coping with challenges that come up in an organizational life cycle and operating environment. (Schein, 1985). A system must be in place to communicate the culture to the workforce and deploy it to new employees so that they are able to identify with the culture and the organizations values, adapt to it and become integrated with the culture. (Louis, 1980) To assist in understanding their differences and to identify opportunities to unify their individual styles, a leadership assessment may be useful in laying the foundation for restoring the culture and keeping it strong going forward. The areas of leadership assessment can be classified in four major areas: Momentum, Commitment, Initiative, and Reciprocity. Momentum describes followers responding positively to the leaders direction. Commitment describes an atmosphere where followers are focused on the leaders goals and the vision. Initiative occurs when followers are working together in departments, across departments, and on special teams. Reciprocity occurs when followers work collectively with the leader. (Daniels & Daniels, 2004) This is ultimately what the Ivanovics should strive for. Strategic leadership and planning - Most businesses begin with a business plan but at some point become so engrossed in operations that they fail to continue to plan, becoming reactive rather than proactively aligning the strengths and advantages to opportunities. The absence of strategic planning defaults to an environment where businesses are not establishing long term goals, developing priorities or positioning themselves for long term success and breakthrough performance. (Safranski & Kwon) A robust strategic plan involves key

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stakeholders (leaders, employees, suppliers, voice of the customer, etc.) and creates alignment that links departments as a cohesive work system. High performing organizations develop specific strategies for key products and services that propel them towards stretch performance. These organizations have a culture that allows them to be agile and adapt quickly to changes in the environment and capitalize on core competencies to add value. (Kotter & Heskett, 1992) Core competencies are those aspects of the organization that set it apart or give it a competitive edge. They have longevity and are difficult to duplicate. (Prahalad & Hamel, 1990) Iggys will be able to more effectively manage growth and sustain performance if it becomes more strategic and systematic. Managing growth and sustaining performance Most organizations are in touch with their bottom line, but being able to communicate a strategy or align processes to key business results can be a challenge. Utilizing strategy maps and balanced scorecards can help organizations engage stakeholders (employees, suppliers, customers). A balanced scorecard not only provides leaders with a view of the organizational overall performance, but it provides accountability to the strategic planning process. (Kaplan & Norton, 1996) To maximize effectiveness, the balanced scorecard should be deployed throughout the organization. Department level scorecards, with organization-wise metrics and unit specific indicators can be rolled up to the organization-wide scorecard. (Kaplan & Norton, 2001) Engaging the workforce to accomplish the strategic plan and accelerate performance measures at high levels requires incentives, strategies, and communication to the workforce through a performance management system that values innovation, customer focus, and development of the workforce. (Lattal, 2003) With more input comes an increasingly important need to innovate processes and technology. Many times, so much emphasis is put on meeting demand, that organizations fail to step back

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and evaluate how best to meet demand. Support systems often fail to receive the attention needed. Relying on processes that were not designed for the output expected after enormous, even unprecedented growth. (Feigenbau) Iggys can benefit by establishing a system that allows it to remain focused on the future, while managing the present. Options Criteria for Evaluating Options There are a number of approaches and variations that can be applied to remedy the problems the Ivanovics are experiencing at Iggys. In evaluating those options and alternatives, consideration will be given to solutions that are aimed at restoring the culture, establishing an infrastructure that transforms the organization to be able to more effectively manage growth, improves employee morale and engagement, and whose results can be seen quickly and easily sustained. The PROACT model will be utilized to select the most effective solution for Iggys. Options Proposed and Evaluated There are several options the Ivanovics can take in response to the proposal they were issued by McRae. In making this decision, the Ivanovics are shaping the future of Iggys. Option 1. The Ivanovics could reject McRaes proposal and choose to terminate McRae and his new management team that do not demonstrate an understanding of or a commitment to the organizations unique dynamics or culture. Not only do the performance results included in McRaes proposal fall short of the levels Iggys was experiencing prior to McRaes arrival, this approach may eliminate the toxicity being injected in the workplace. Releasing McRae and his team, however, does not alleviate the concerns that caused the Ivanovics to believe they needed to hire additional administrative support with a background and expertise in business and does nothing to propel Iggys forward in terms of being able to increase market share, address

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operational capacity issues, or engage the workforce. In fact, the chaos created by such a bold move may exasperate the unstable atmosphere hovering over the workforce. Option 2. The Ivanovics could accept McRaes proposal albeit with underwhelming performance projections and staggering cost. Perhaps if McRae felt he was competitively compensated and valued enough for the Ivanovics to oblige his request in order to retain him as an employee, his renewed sense of acceptance could release untapped potential. After all, Ludamilla did purse McRae, assumingly because she saw something in him she believed could add value to Iggys, before becoming bewildered with McRaes lack of boundaries in the organization, there were some positives observed after his team was assembled. For example, Nickola observed McRae and his team accomplishing task previously left undone such as collecting all the data, doing the reports, and putting the numbers together. Option 3. The Ivanovics could choose to negotiate McRaes proposal and use the negotiations process as an opportunity to undergo an organizational transformation by adopting a performance management system. The Ivanovics could work with McRae and his team and the informal board, which, incidentally, they may wish to formalize as the Board of Directors as part of the organizations governance structure, outline the organizational vision, values, and a develop a plan to deploy the organizational structure to the workforce. As part of this process, the Ivanovics would want to describe the characteristics that feel demonstrates how senior leaders will model a commitment to the organizations vision and value. This process would include developing a strategic plan that aids Iggys in achieving its vision and enriches the organizational culture. The adoption of a performance management system would be preceded by defining the roles and expectations of senior leaders and establish metrics of performance. As part of formalizing the organizations structure and culture, the Ivanovics may consider

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adopting a balanced scorecard or organizational performance dashboard to review business results and accomplishment of the strategic plan.

Decision Decision Choice The option that most closely satisfies the evaluation criteria is option 3 negotiating with McRae in response to his proposal. This approach best addresses the evaluation criteria and poses the least adverse impacts to the workforce and future of Iggys. This option also positions Iggys to fulfill the original intention the Ivanovics had for hiring McRae: managing growth. Rationale for Decision Choice Option 1 (rejecting McRaes proposal) may help restore the culture in the eyes of the Ivanovics and the staff who were part of Iggys before McRae and his team arrived and may improve employee morale and engagement but would not address the criteria of establishing an infrastructure that transforms the organization to be able to more effectively manage growth or provide a sustainable approach to operations that yield improvement in business results and performance. Option 2 (accepting McRaes proposal) would do little to restoring the culture, as it continues to give McRae the proverbial upper hand and is likely to find the Ivanovics and long term staff and supporters in a continued state of disillusionment with Iggys compromised culture and challenged environmental. This approach does leave in place the original solution the Ivanovics thought would answer their need to effectively manage growth and with a concrete

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agreement in place, results are likely to be experienced in the specified timeframe, though those results are clearly below the Ivanovics vision for Iggys. Option 3 (Negotiating McRaes proposal) best addresses all the evaluation criteria and would help restore the culture by defining the desired attributes, leaders agreeing to it, and developing a plan to deploy the culture to the workforce and engage the workforce in continuing it, thus improving employee morale and engagement. This approach establishes the infrastructure that could transform Iggys to be able to more effectively manage growth and through organizational alignment results can be seen quickly and easily sustained through the use of performance monitoring and strategic planning.
Option Evaluation Criteria restores culture Evaluation Criteria transforms the organization to be able to more effectively manage growth Iggys no better off than before McRae still lacking infrastructure needed to grow. May have to stop accepting new customers The Ivanovics acknowledged the need to establish an administrative governance structure at Iggys; McRae has assembled a team of individuals to operate Iggys. Agreeing to let them take the lead may result in Iggys having more control over growth, but at the sacrifice of the culture. This approach leaves the structure intact that is needed to manage growth, but the process Evaluation Criteria improves employee morale and engagement Iggys pre-McRae employees may be happy to see the unfavorable impact McRae and his team have had on the work atmosphere reversed The workforce is likely to be least receptive to this option and if any were holding out hope for the Ivanovics to intervene, this will relinquish any hope for that. Evaluation Criteria results can be seen quickly and easily sustained. Results could be seen suddenly in terms of employee reaction, but being unable to add new customers will place a cap on profit and growth McRae may be able to release untapped potential to improve business results

Reject McRaes proposal

Accept McRaes proposal

Ivanovics stand to regain confidence of staff, obtain a sense of regaining ownership of their business, maintain control of the future and organizational McRae showed a disregard for the culture the Ivanovics tried to establish. If they accept his proposal the Ivanovics will need to comply with McRaes plans in order to avoid being accused of being resistant to his ideas, thus preventing him from achieving performance expectations.

Negotiate McRaes proposal

The Ivanovics can define their requirements and McRae can acknowledge and a plan could be

A defined, formalized, and deployed organizational structure, communicated to the

It will take time for relationships to be repaired and restored but defining

Organizational Framework for Success

developed to preserve the culture. The Ivanovics cannot both preserve the culture and position the company for growth. This option positions Iggys for both. of strategic planning (facilitated by the negotiations process with McRae) can help define roles and expectations for all leadership positions. workforce, with mechanisms to involve employees can restore the Ivanovics as leaders, include McRae and his team, and engage staff.

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expectations, developing a strategy, and establishing performance measurements will provide a roadmap that will aid in that recovery process.

POSITIVE IMPACT

NEGATIVE/FLAT IMPACT

Implications of the Decision There is no guarantee that the negotiations process between the Ivanovics and McRae would be successful but a couple things are clear: 1) the Ivanovics need help in order to begin accepting new customers and for Iggys to continue to grow; 2) McRae clearly has some desire to be at Iggys because he rescinded his resignation and provided a proposal, albeit bold and unreasonable in the eyes of the Ivanovics; and 3)the Ivanovics saw some potential in McRae or they would not have offered him a position after a stent of serving as a consultant. The lack of communication between the Ivanovics and McRae is a serious undertone in the events that transpired. The Ivanovics did not successfully communicate the attributes of the organizational culture they worked to establish and wished to see preserved, nor were they successful in communicating those expectations to McRae. There was poor communication between the Ivanovics and McRae about performance expectations, performance results, and support needed. There was clearly a misunderstanding about the extent of authority that accompanied McRaes position as CEO. It may be wise to include the mediating consultant as part of the negotiations process but both sides, the Ivanovics and McRae, seem to have the best interests of Iggys at heart so there is hope. Implementation Plan

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The Ivanovics, the informal board, key pre-McRae staff, McRae, and the team he formed, along with the mediating consultant, should begin with a strategic planning retreat to develop a framework and understanding of organizational strengths and opportunities for improvement in Iggys management system. (Florida Sterling Council, 2012) This retreat should be preceded by communicating with McRae that the terms of his proposal cannot be honored but that they wish to engage in more discussion and planning to come up with terms both sides could support. The retreat should begin with a history recap of how Iggys was formed, followed by the current vision and mission. Those in attendance should contribute their thoughts, support, and suggestions for improvement of the mission and vision until one can be agreed upon and adopted. The next step will be selecting core values, in a similar manner. The process should then move into leadership and governance structure, answering the question How do senior leaders lead? The group will need to consider how Iggys leadership will show a commitment to the adopted organizational values, how they will promote legal and ethical behavior. The group will also need to consider how they will create a sustainable organization through performance improvement and innovation, an environment for workforce learning, an environment that delivers a consistently positive customer experience and create an environment to accomplish your mission and strategic objectives. (Florida Sterling Council, 2012) They will need to discuss how they will communication with and engage the entire workforce and how they will review and achieve management accountability, fiscal accountability, and protection of stakeholder interests. This process can be accomplished with brainstorming the questions or factors to be considered can be put up on the board, facilitated by the mediating consultant, and everyones response recorded. Key themes and trends will emerge and the responses can be blended and consolidated into the answer, which becomes the

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plan. This presents a good opportunity to decide who will be responsible for what aspects of the organizations and span of control.

After defining and designing the organizational structure, Iggys leadership team needs to decide how it will conduct its strategic planning; deciding what will be the process steps and who key participants will be. They will need to identify Iggys core competencies, strategic challenges, and strategic advantages. (Florida Sterling Council, 2012) They will want to brainstorm strengths, weaknesses, opportunities, and threats and consider long-term organizational sustainability through the future projections performance and that of competitors. They need to establish key short and longer-term strategic objectives and a timetable for accomplishing them. They must determine how they will develop and deploy action plans, allocate financial and human resources, and establish key performance measures or indicators for tracking achievement and effectiveness. Iggys has always placed a great deal of importance on customer value. To ensure that importance remains a key aspect of the organizational culture and is considered in all key processes, the group must determine what methods Iggys will use to identify customer

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requirements, suggestions, complaints and obtain actionable feedback on products and services. They must determine how Iggys will identify current and anticipate future customer groups and market segments and which customer groups and market segments to pursue for future growth. They must decide how they will use customer and market data to improve marketing and reinforce the customer-focused culture to acquire new customers, build market share, meet and exceed customer expectations, and increase loyalty, repeat business, and gain positive referrals. (Florida Sterling Council, 2012) Iggys leadership team must spend time deciding how it will select, collect and use data and information in daily operations, to track overall organizational performance, to track progress on your strategic objectives and action plans. It must decide how it will select and use key comparative data and voice-of-the-customer data and information (including complaints). They need to agree on key organizational measures, including financial performance measures. They need to decide how they will review and analyze organizational performance, identify and set priorities for improvement, and how they will engage the workforce in this process. (Florida Sterling Council, 2012) The workforce of Iggys has been a pride and strength of Iggys. During the planning retreat/session, Iggys leadership must come to terms with how they will assess current and future workforce capability and capacity needs, how new members of the workforce will be recruited, hired, and retained. This will prevent things from happening, like McRae adding positions without a systematic process to determine the need and obtain approval and ensuring that someone is not placed in a position above their ability. Iggys prides itself on a diverse workforce, so the leadership team must consider how it will ensure your workforce represents the diverse ideas, cultures, and thinking of its hiring and customer community. The leadership

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must also agree on how it will organize the workforce and avoid departmentalization and the presence of silos, as well as considering how it will ensure, measure, and improve workplace health, safety, and security. They will need to discuss what policies, procedures, and benefits are needed to support the workforce and determine the key elements that affect workforce engagement and satisfaction, including different workforce groups and segments. They need to develop approaches foster a culture of open communications, engagement, and high performance work, as well as how the workforce will be developed to achieve organizational objectives, overcome strategic challenges, and manage career progression. (Florida Sterling Council, 2012) In the spirit of improving communications and removing the trend of making assumptions that the Ivanovics and McRae and his team are headed in the same direction, they need to have a conversation and agree on work system design & requirements, answering the question how do you design and coordinate your key work system(s)? The group will need to ensure understanding and clarity on key work system requirements, incorporating input from customers, suppliers, partners and collaborators, as appropriate. They need to agree on how to manage and improve key processes to achieve success, control costs, and prevent defects, errors and rework, and how they will manage supply chain and ensure suppliers are effective. They need to establish the process that will be used to and improve products and services. To manage performance of this newly defined organizational culture and governance structure, the information gleaned from the brainstorming can be used to develop a balanced scorecard or organizational dashboard. The areas to be monitored should include product and service outcomes, customer-focused outcomes, workforce focused, leadership and governance achieve better performance, reduce variability,

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outcomes, and financial and market outcomes and should include appropriate comparative data on competitors, as appropriate.

Reflections Leadership The Ivanovics clearly have a vision for Iggys but have struggled to communicate that vision with McRae and his team or to translate their vision into action. The communication breakdown should be acknowledged and improved. Using the structure above to define the organizational framework will go a long way in the Ivanovics communicating their vision, but will also begin to shift the culture from being one in which the Ivanovics have a desire to one where they share their business and engage ,much needed help in delivering their product. Learnings and self-reflection My initial reaction to this case study was very negative towards McRae. I think initially it would have been my instinct to select option 1 - reject McRaes proposal and terminate him and everyone he brought with him to Iggys and simply start over. When I underwent the processes of determining the root cause for the turmoil, it became clear that communication and the absence of a clearly defined organizational structure would continue to be a problem for Iggys and it was less about McRaes personal style. This has taught me to be less reactive, to ask questions, and consider what factors other than a personality can be at play when something is not going according to plan. Honestly, I surprised myself when I suggested option 3 negotiate with McRae and began to find some responsibility for the unfortunate turn of events lying with

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the Ivanovics. I also have a belief that a culture can be reversed as much for the good as for the negative.

Conclusion Iggys Bread of the World was founded with a passion for baking with high quality ingredients, produced by an engaged and devoted workforce. Iggys success nearly has become its demise because the absence of a governance structure and communication threatens a sustainable future. To stabilize the work atmosphere, the Ivanovics need to engage key staff and stakeholders in a process that considers the leadership, strategic planning, customer and market focus, data and information management, workforce, and process design and improvement characteristics that will provide the framework for the future. Including staff in developing the framework will engage them in delivering on its promise.

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Feigenbau, Eric. Define Organization Change. Demand Media. Retrieved from: http://smallbusiness.chron.com/define-organization-change-2786.html. Florida Sterling Council. Governors Sterling Award Criteria. 2012 Gendron Alexis and McGinn, Kathleen L. Iggys Bread of the World, Case Study. Harvard Business Review. 801-282. Rev. March 29, 2001 Hammond, John S., Ralph L. Keeney, and Howard Raifa. 1999. Smart choices: a practical guide to making better decisions. Harvard Business School Press, Boston, MA Kaplan, R. S. and Norton, D. P. 1996. Linking the Balanced Scorecard to Strategy. California Management Review, 53-79. Kaplan, R. S., and Norton, D. P. 2001. The Strategy Focused Organization: How Balanced Scorecard Companies Thrive in the New Competitive Environment. Harvard Business School Press, Boston. Louis, M. R.1980. Surprise and sense making: What newcomers experience in entering unfamiliar organizational settings. Administrative Science Quarterly, 25: 226-251. Safranski, Ph.D., Scott R and Kwon, Ph.D., Ik-Whan. Strategic Planning for the Growing Business. U.S. Small Business Administration, Emerging Business Series. Schein, Edgar H. 1985. Organizational Culture and Leadership: A Dynamic View. JosseyBass. San Francisco, CA. Kotter, John and Heskett, James. 1992. Corporate Culture and Performance. Free Press. Lattal, Darnell. 2003. The Science of Success: Creating Great Places to Work. The Performance Management Magazine.

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Daniels, Aubrey and Daniels, James. 2004. Performance Management: Changing Behavior that Drives Organizational Effectiveness. Performance Management Publications; 4th edition Prahalad, C.K. and Hamel, Gary. 1990. The Core Competence of the Corporation. Harvard Business Review. Boston, MA.