Change Management Simulation: Power and Influence V3

You are the CEO and founder of Spectrum Sunglass Company.

While you generally feel good about the state of the business, 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, you also see this as an opportunity to differentiate Spectrum's products and company from your competitors, which focus primarily on price and design. You have a potential new product design that has received positive focus group feedback as well as some exciting branding deals with Hollywood celebrities in the works. Even still, you are preoccupied with sustainability.

At Spectrum's annual executive strategy retreat, you decide to ask for a special, unplanned session to discuss the conversations you recently had with a vice president at Spectrum Sunglass Company's largest retail customer, BigMart, which comprises 30% of Spectrum's annual revenues. The VP explained he was now in charge of national sunglass procurement for BigMart, and that they had recently made a policy to promote all products which bear a Green Stamp manufacturing certification for environmental friendliness. He added that, notably, BigMart's market research revealed that even its most price-sensitive consumers were starting to prefer green products within their price range. The VP explained that BigMart was now considering recommending that all of its suppliers go through the Green Stamp certification process.

Paul Diaz(CFO): What exactly are BigMart's terms?

You: They want us to reduce petrochemical raw materials, such as polycarbonate plastics, in the manufacturing process from 90 percent to 50 percent within two years. The VP not-so-subtly threatened that, if we don't respond within three months with a detailed implementation plan, then BigMart will consider canceling all our contracts with them and shift to a competitor who will. While this is unexpected, this could be an opportunity to develop a unique product line for a mass market base, and I think we're up to the challenge!

Leslie Harris(VP of sales and marketing): A sustainability feature will help distinguish us in the long term and this marketing angle may open up new consumer markets, such as exporting to more environmentally conscious countries in Europe.

Paul Diaz(CFO): We can't afford to start a sustainability project just because BigMart demands it! Green material substitutes for petroleum are probably expensive. We're highly leveraged as it is, so a drop in profitability might put our ability to meet our debt covenants at risk.

Aisha Farook(VP of operations): We just spent 12 months undergoing a grueling Six Sigma quality certification process. Our plant managers will absolutely refuse another major change in material inputs.

Louise Orysh(benefits administrator): Spectrum is still recovering, and has only recently begun rehiring workers; isn't a dramatic shift in focus to sustainability premature?

Mari Gopinath(VP of human resources): But we need to give this serious thought, there's a lot at stake at ignoring this. Why don't you head a cross-functional task force to come up with a compromise solution?

You agree, suggesting the following plan for the team's work:

1. The four additional members come from marketing, R&D, finance, and production.
2. They devote at least 75 percent of their time to developing a proposal for BigMart that is acceptable to all four departments.
3. You will devote 50 percent of your time to the task force while juggling your responsibilities as CEO.
4. The task force will present Spectrum's senior management team with a financially acceptable plan to use petrochemical alternatives within three months.

Questions-

• What worked for you in the simulated change and why
• What did not work and why
• The lessons learned from the simulation that can be used to improve Strategic Change Management (SCM) within your own organisation
• Practical recommendations you would make to a manager thinking of implementing change as a result of what you have learned in the simulation