CEO of Lakeland Wonders

Welcome Aboard (But Don’t Change a Thing) by Eric McNulty

Case Study Background • Lakeland Wonders is a manufacturing company of high quality wooden toys;

it has three plants in Minnesota and almost 5,000 employees, and is a 94 year-old company

• Cheryl Hailstorm has been recently appointed CEO of Lakeland Wonders to expand and achieve new growth targets set by the board

• She is the first person from outside the Swensen family to hold the top job

• She was the general merchandise manager, and later the COO, of one of Lakeland’s largest customers, Kids&Company

• Her visions to launch a lower-priced line outsourcing offshore manufacturing

Summary of Issues • Products of Lakeland Wonders are traditionally made in the US, which are

one of the selling point over the other manufacturing companies

• The cost to produce in the US is too high to achieve growth targets

• To achieve targets, Cheryl needs to land the Bulls-eye contract

• Offshoring manufacturing vs focusing on in-house manufacturing

• Union negotiations will occur at the same time that the company may offshore, which might cause union to react through costly strike or work slowdown

• Cheryl’s co-workers do not support her vision

• The company needs to go through major changes to advance which cannot be done without the commitment and support of the team.

Employee Resistance • Strong traditional culture that resist change

• Cheryl feels most of her managers are “agreeable to her face, but are deliberately moving slowly behind her back“

• Mark Dawson (VP of Operations) doesn’t understand Cheryl’s vision and has no interest implementing her strategy

• Lack of trust and communication between Cheryl and her team

• Cheryl cannot gain support from her team

• Engagement and commitment issues

“You have to understand, this is a very old company. You may need to pull people along more slowly to make sure you don’t end up tearing the place apart”

Nature and possible causes of the problems Failure to share a common vision with the rest of the employees/ team members and managerial line

• Employees are uncomfortable with the sudden changes

• Disagreements amongst the employees/ employers

• Other opinions are not being recognized-> lack of co-operation and communication

Cheryl’s overconfidence with the trust and support that she had received from her past experiences at Lakeland Wonders

• “She thinks she has already earned the support of her colleagues and investors. She needs to earn it anew each day.”

Disregarding Lakeland culture and traditional ways approaching challenges

• Acting on plans too fast

• Cheryl’s driving style isn’t aligned with Lakeland’s culture

Steps to Overcome and Prevent Problems

Involve team members

• Give them a chance

• Involve them in planning process; engage others in the creation. People support what they create.

Enhance communication with team/ staff members

• Be clear and articulate

• Have proposed body language

• Stop talking about “my” vision and start acting on “our” vision

• Communicate with major stakeholders and senior managers

Executives come in and say, “Here’s my vision, let’s go forward.” But they fail to create any sense of urgency about why a change is required

“It’s easy to see why Cheryl is frustrated. She saddled with a bunch of managers clinging to their familiar turf”

Have a clear strategy and process

• Develop a common vision of the company’s future

• Create objectives clear to the top management and the other company members

• Establish the rules of engagement of working together

Change leadership style

• An emphasis on persuasion, inspiration, and negotiation

• Signal openness to hearing the concerns of people with divergent points of view

• Operate with full disclosure and mutual respect

Align driving style with organization’s culture

• Link the vision of expansion with the individuals’ needs and expectations

• Articulate a clear operating direction that specifies how changes can be consistent with the company’s most treasured values and norms and also improve performance

Steps to Overcome and Prevent Problems

More Desirable Course of Action

• Communicate

• Demonstrate

• Engage