Case study for "leading change at Simmons (A)"

Company Overview

The present world Simmons founded in 1875, when the CEO and founder of the company, Zalmon Gilbert Simmons had decided to change his focus from dairy farming and wooden products to the manufacturing of woven wire mattresses at a large level. The company had generated healthy profits from this initiative and rapidly grown up to the international market with its factories in London, Paris and Mexico City. After the death of Zalmon Gilbert in 1909, the company was led by his son and achieved a number of milestones, but in 1978, finally the company went into the hands of some outsider, Theodore Greef. After this change, the company was not remained a family business anymore and it came under the succession of many CEOs, which had destabilized the company and left the company with no specific long term vision. However, Charlie Eitel, was appointed as the new CEO of the company in 1999, when the company was acquired by Fenway Partners against a consideration of $513 million from InvestCorp. The company is now headquartered in Atlanta with 18 bed manufacturing facilities in different countries that make mattresses for the U.S households.

Situation Analysis

Till the appointment of Charlie Eitel, the company was running over certain highly established core values that dated back to the founding in 1870. These core values were 4 in number, i.e. base the future decisions over the company’s historical experiences, maximize the opportunity to think creatively, encourage innovation and keep the customers at the top most priority of every new policy of the organization. Whereas, after the appointment of Eitel as CEO, he had added three more core values: caring about employees, customers and associates, supporting each other in the workplace and empowering people within a specified span of authority or boundary. He had conducted a survey and evaluated that instead of working cooperatively; the company’s most of the plants were competing with each other. He found that only a few of the plants were working well, while the majority of them were not upto marked standards. It was evaluated that the company had 18 plants and each plant had their own general manager and there was a high degree of role conflict because these managers were actually sales manager, but also had accounting, production and HR departments reporting to them. Charlie Eitel had terminated a number of incapable and so called general managers and also changed the job designations and responsibilities of the remaining personnel. He made them plant managers and required them to directly report up to the manufacturing, controllers and HR heads at the head office of the company. Apart from these organizational conflicts and cultural weaknesses, the company was also facing a number of financial problems, which was raised due to the 9/11 backlash. The company had also faced recall from a number of suppliers and bad production experience due to certain defective supplies. This had negatively affected the company’s brand image and customer base in the market. In order to cope with these issues the company’s CEO had decided to launch the Great Game of Life program in all the plants. This program was based upon such a business model, which states that the profitability and growth of an organization depends upon a strong and loyal customer base, cooperative, committed and a creative organizational culture; and a competent leadership team that serves and empowers the workforce. The program was designed to bring together all the associates at a single platform, where they can share their expertise and knowledge and work for the achievement of the overall organizational goal. At first the company had decided to launch the program throughout all the plants of the organization simultaneously, but due to the uncertain nature of the program and resistance from most of the plant managers, it had initially implemented the program in the Charlotte Plant by the end of 2000. The program had initially turned out positive results for the company by the end of 2001, but the top executives were uncertain about the successful roll out of the program throughout all the plants of the company.

Problem Statement

The company was facing a number of problems after the incident of 9/11, i.e. the country’s overall economic downturn, the uncertain law and order conditions and the use of defective raw materials in the production of mattresses. But these problems were related to the impact of external environment and could be solved by planning a broader external policy by the executives of the organization, but the major threat to the existence of the company was from the increasing internal organizational conflicts and the weak organizational culture. Although, it had implemented the Great Game of Life program in the Charlotte plant successfully, but the CEO of the company was still uncertain about the successful execution of this plan in the other plants of the company as well. Hence, the main problem……………….

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Explores the problems of management of large-scale organizational change Simmons, old and established company that manufactures and sells mattresses. New CEO, Charlie Eitel, hired to turn the organization around, as to whether to use non-traditional programs of study that includes an outdoor experiential team-building as a central element of its strategy change. Asks participants to consider the decision to invest in expensive training program after the loss of the three largest customers – retailers, which together have a third of revenues Simmons. A central theme is the role of a leader in attracting and motivating employees to implement changes that improve product quality and operating performance and value.

1) What is Eitel attempting to accomplish with the “Great Game of Life” (GGOL) program? What is the premise of GGOL? How is it supposed to help Simmons or other companies?

2) How would you describe Eitel’s leader values and leadership style? How would you describe Eitel according to the transformational/transactional leadership framework? Does his leadership style appear to be a good ‘fit’ with Simmons at the time of the case?

3) Based on Kotter’s key elements of successful transformation efforts, how would you evaluate Eitel’s efforts to turnaround Simmon’s performance? What were the strengths and weaknesses of his efforts?

4) Should Eitel proceed with continued investment in the culture change program? Why or why not? Prepare a compelling case to Fenway Partners in support of the program or an alternative strategy for turning around performance at Simmons.