Leadership Challenges in Fast-Growth Industry - Case Study Example

Celeritas Inc. Case Study: Leadership Challenges in a Fast-Growth Industry

Introduction

In 2011, Celeritas was one of the leading firms in the enterprise-network optimization industry, highly competitive and very dynamic. Since 2003, the company grew rapidly and was positioned as a top player (Beer and Ingrid 4359). Celeritas established a trustworthy market reputation of a pioneer in new solutions and a high-quality products provider. However, in the middle of 2011, the company experienced sales decline and was the last of its competitors to launch products enhancements for the cloud computing technologies (Beer and Ingrid 4360). The Celeritas’s President and CEO, Philip Boyer, invited an organizational effectiveness consultant to identify and address problems that affected the business. This paper will include key concerns, expressed by the senior management team, define main leadership challenges, and provide recommendations as for the organizational change process and performance improvements.

Observations and Areas for Improvement

The initial study of the business case revealed the following concerns related to poor leadership and inefficient management expressed by the Celerita’s executives and the engaged organizational consultant:

• weak corporate culture that cannot ensure the right attitude and standards of corporate behavior;
• lack of trust between the chief and senior executives;
• insufficient leadership for organizational change, lost confidence in executives;
• weak delegating practices and lack of professional development opportunities at Vice Presidents’ level;
• ineffective executive team meetings, unable to handle substantive matters;
• lack of clear direction and priorities in achieving set objectives (annual, monthly planning);
• failure to develop a unified strategy and specific goals, and communicate them;
• poor interaction (communication and cooperation) between business units;
• inconsistent and nontransparent decision making;
• vacant position of SPV Sales & Marketing;
• high employee turnover;
• higher prices on Celeritas products as compared to the competitors;
• insufficient investment in products’ marketing.

The observations mentioned above could be divided into two key areas of concern: a weak leadership, exercised by the Celeritas executives (issues 1-6), and process inefficiencies and their outcomes (7-13). Each group of observations will be further addressed with the recommendations on performance improvement.

Recommendations

Leadership Recommendations. The company President should consider implementing the following guidelines in order to enhance company leadership and reduce the resistance of Vice Presidents to the organizational change process.

1. The Celeritas’ CEO should adapt his leadership behavior to the changing situation. Firstly, Boyer needs to understand strengths and weaknesses of his leadership behavior and change it to more relevant in the current environment (Yukl 177). This will require evaluation and development of his leadership skills. Activities that can facilitate leadership development include multisource feedback workshops, mentoring, personal growth programs, and even outdoor challenge programs (Yukl 386).

In the present unfavorable situation, Boyer should focus on engaging employees in shared meaning in order to mobilize them around a new management approach; development of a compelling voice; he should be able to persuade colleagues and defuse a situation using only words; a sense of integrity, which means a strong belief in values; and his adaptive capacity (Harvard Business Review 101). The latter is the most critical trait of the four that helps transcend adversity and gain a greater trust from subordinates. Mix of hardiness and the ability to grasp context constitutes the adaptive capacity.

2. The focus should be set on opportunities rather than problems. The chief executive should remember that opportunities, not solving problems, lead to success. Hence, he should explore opportunities and be careful with not being overwhelmed with on-going business problems. All existing opportunities must be studied and properly dealt with while administrative and current issues should be also handled, but be considered of a secondary importance. An effective executive ensures that best opportunities are supervised by their best managers (Harvard Business Review 32).

3. The CEO should set priorities and provide execution of the top-priority tasks. Boyer should engage internal and external experts (as opposed to owners, employees, or customers) regarding what should be done first and what is right for the company at the moment. The decisions that are good for the company will ultimately be beneficial for all stakeholders (Harvard Business Review 26). The knowledge gained from the experts and colleagues will reveal urgent tasks, which should be handled one by one. It is crucial to carry out critical tasks effectively. Priority objectives should be defined not just for the CEO, but for other executives as well. After completing the tasks, it is important to reset priorities rather than continue with the following point on the list (Harvard Business Review 25). In the dynamic business environment, priorities cannot stay unchanged with the pace of time. During organizational changes, a leader is also recommended to provide more supervision to less experienced or unreliable subordinates and workers on interdependent positions and trace execution of critical activities more closely.

4. The CEO should ensure companywide accountability. This could be achieved through productive meetings, right decisions, effective communication, and trust in the company leader. Effective meetings are announced in advance, followed by reports or minutes with clear directions and timelines, and do not require overtime. The meeting chair sticks to the approved meeting format and ends the meeting once the issues in question are resolved. It is well known that any meeting is one of two: a productive session or a waste of time (Harvard Business Review 35).

The chief executive should feel responsible for decisions and the communication of the action plans on all levels. An effective leader shares his plans and requests for comments from all the colleagues to make sure that planned activities are clear and understood (Harvard Business Review 31). He monitors decisions regularly and makes sure that each decision has an assigned performer, deadlines, budget, and approved by the required subject-matter experts. If decisions are wrong, they should be changed or canceled before the damage takes place. The CEO should also accept responsibility for informing all required stakeholders about the planned actions and getting the needed input from subordinates or the Board.

Finally, the trust of the organization is integral for the companywide accountability. A leader should think and, of course, say “we” as any effective executive knows that has ultimate responsibility for the company success or fail (Harvard Business Review 36). The CEO should put needs and opportunities of the company before his own.

5. It is highly recommended to establish a corporate leadership culture. This means not only recruiting individuals with leadership potential, but creating leaders within existing teams. Decentralization and delegation of authorities could be the way for Celeritas to contribute to its leadership culture. Such management tactics will create jobs with higher responsibility at the lower organizational levels. Delivering new products can also create leadership opportunities. The executive team should contribute to development of the subordinates’ skills by finding ways to improve performance of their employees (training or learning from the experience), providing coaching and proper career advice (Yukl 66). It is a good practice to encourage mentoring by peers. Although peers normally provide support or advice informally, this could also be encouraged by managers. Managers and executives should not forget to recognize significant achievements and valuable contributions of their subordinates through praise and rewards. Furthermore, it is the leader’s responsibility to increase employees’ involvement by clarifying what kind of behavior is needed for effective accomplishment of the assignment and reward (Daft and Lane 77).

Recommendations on Process Optimization. Process inefficiencies, highlighted in the previous section, should be addressed with the following changes in leadership and management systems.

1. The CEO should encourage review of the processes with the observed inefficiencies, analyze roles and responsibilities, and develop clear procedures which will determine the interaction between business units and the decision making criteria. The CEO should consider creation of decision making bodies in order to avoid unilateral hasty decisions such as Strategy Committee, Budgeting Committee, etc.

2. For successful organizational changes, the offered management solutions need to go alongside with the leadership initiatives based on motivation and inspiration. People should be eager to implement changes and feel that they contribute to something larger. It is integral to set corporate behavior standards and ensure that every team member sticks to them. A productive and inspiring corporate culture requires efforts and dedication from the team leader (Scudamore par.6). While managerial objective is to organize people and processes, a leadership challenge is to find a match between people and the corporate vision. The leader’s responsibility is to inspire and make people believe in the future success and share collaborative ethos as a result.

3. The CEO, with the assistance of top executives, should set direction for business strategy focusing on adapting to a dynamic and highly competitive industry environment. Direction-setting should result in a corporate vision and overarching strategy for achieving it. The principal strategy should be detailed into a unified strategic plan. Celeritas’ executive team has to define planning and budgeting timeframe, e.g. annually or quarterly, and plan activities and budgets accordingly. It is recommended to avoid long-term planning as in a changing business environment it becomes extremely burdensome (Harvard Business Review 46). The plans should be realistic and specify target results as well as constraints. Plans’ execution has to be regularly monitored and revised for new opportunities. Effective executives foresee several checking points in their actions plans, for example, at the halfway and at the end, when the next action plan is initiated.

Recommendations on the support of the external consultant. In addition to the developed recommendations, the CEO should continue cooperation with the organizational consultant, Carla Reese. As an external member of Boyer’s team, Reese will help him to get a clear understanding of the existing problems and root causes. The conceived organizational change requires project management skills and more knowledge from external sources including examining best practices specific to Celeritas’ fast-growing high-tech industry and relevant expertise in the change management process (Yukl 86). Reese will provide Celeritas a qualified and timely support connected with the acquisition of such external knowledge as well as project management practices. It is highly recommended to administrate the launched project carefully and monitor its execution. This task could also be carried out by Reese. Outside consultants have proved to be more efficient in the specified areas comparing to company’s internal experts.

Conclusion

The Celeritas’ CEO set challenging objectives in order to revive the company in its adversity period: to introduce organizational changes and overcome resistance from personnel, and increase Celeritas’ market share. In order to meet the set objectives, Philip Boyer should concentrate on his leadership practices first and then enhance the company’s processes and controlling activities. The dynamic hi-tech industry environment requires the use of adaptive leadership practices in order to keep up with the constantly evolving business requirements. The CEO should start with setting the right direction and vision of Celeritas’ strategy. It is integral that Boyer engaged superiors as well as peers and subordinates to define what is right for the company and what needs to be done. The input from all company’s stakeholders is equally important for making smart decisions. Then the gained knowledge should be converted into action by means of action plans with specific goals, clear tasks, determined deadlines, and assigned performers. The plans have to be revised on a regular basis to ensure that team adheres to the approved schedule and budgets, and arisen opportunities are identified and prioritized. Finally, the Celeritas’ CEO should ensure accountability on all levels of the organization by holding productive meetings and recognizing ultimate responsibility for the company’s performance. Leadership effectiveness depends heavily on the discipline of the executive team when applying these guidelines. Hence, establishment of corporate standards of behavior and productive corporate leadership culture is integral for the business success.