Use this case study as a discussion prompter with your teams or students.
Over the last 20 years, growth had been phenomenal, and the privately owned company had swiftly become an industry leader in healthcare. With over 300 employees, the retention rate had been very high, and employees generally had a great level of job satisfaction. Pay was well above the market average and many worked independently since the work was often entrepreneurial in nature. Employees often spoke of the autonomy they had in using creative approaches to get the job done. They were often recognized for their ingenuity and their ideas were shared throughout the organization.
Now that the company was a major player, the owner became greatly concerned about quality control and continued growth, as many startups and established companies intensified competition. The owner enlisted a longtime friend to become the new CEO. His friend had been a manager of a large privately-owned chain of convenience stores for over 30 years. Other managers were brought in to handle the company’s aggressive growth, but the new hires also came from unrelated industries.
Shelley, one of the new hires and a recent grad was made team lead over employees who had been on the job for many years. She often made mistakes and when confronted, blamed others, and would often call the new CEO to complain about them. Rather than listening to the other employees’ side, in response the CEO would reprimand anyone Shelley singled out as the person who blamed her. As a team leader, Shelley wielded her power over other team members, creating a negative organizational climate that resulted in low morale and motivation.
Bob, another new hire, also negatively impacted the climate. He was assigned as department manager and took a hardline approach with those under his supervision. Bob expected salaried employees to not only work a full day from 8 to 5, but to continue working into the evenings for another 2 to 3 hours. He drove by the office building every evening to see whose office light was on and would make derogatory comments the next day about those whose light was off. He was also non-empathic to Karen who had a child with epilepsy and occasionally arrived a few minutes late because of her child’s seizures. He would loudly reprimand her where others could hear threatening her with termination if she continued to arrive late.
Management instituted changes in policy virtually every day. If questioned about the changes, the new CEO would become defensive and aggressive uninterested in hearing employees’ ideas. He admitted that every time a new rule was enacted, employees would respond, “What are they doing to us now?” Another common saying became, “don’t say anything, because they don’t want your ideas.” Complaining became the new norm, and people would comment, “This is a soul-crushing place to work.”
Questions to Consider
What are the intrinsic and extrinsic motivators in the case?
What mistakes, if any, were made by the owner and/or CEO?
What approach would have recommended the owner take in hiring a CEO?
At this point in the case, what recommendations would you make to the owner?