Problem_Solution__Best_Snacks_Inc.

Problem Solution: Best Snacks Inc. Best Snacks, Inc., a 150-year-old company is known as a top tier organization within its industry. Best Snacks has traditionally held the number one or two positions in the snack market, providing an outstanding return for their stockholders investment. But in the past several years, Best Snacks sales have been falling, market share has decreased and, particularly in the past two years, stock prices have taken a dive. This year, the company will finish a very weak second, and with several smaller competitors emerging as major players in the snack industry, Best Snacks is in danger of losing its long-held premier standing in the snack market,” (University of Phoenix, 2010, ¶ 2). The new CEO Elizabeth Fairchild is looking to reverse this trend, she understand that innovation and creativity are important to success of Best Snacks going forward. Her goals is to make Best Snacks the first consumer snacks company to make radical innovation and creativity a vital part of the organization's culture. Describe the Situation Issue and Opportunity Identification Best Snacks has a number of issues confronting them, declining sales, complacency, and a lack of motivation within the employees. These issues are due to the lack of support from the previous management team. Best Snacks has the opportunity to benchmark its competitors and other successful organization in order to find way to remain competitive within their industry. Capitalizing on the new changes in leadership, Best Snacks has the opportunity to restructure their organization in a way that will foster an environment of creativity and innovation. Stakeholder Perspectives/Ethical Dilemmas There are a number of stakeholders in this scenario that includes the customers, executive management, employees, and stockholders. The key dilemma presented in this scenario is “risk”. Embarking on a plan to change the organizational culture at Best Snacks in order to promote and encourage creativity and innovation involves risk within the organization. “An innovative culture is conservative and risk-taker at the same time.” (Davila, Epstein, & Shelton, 2006) this risky undertaking of change can move Best Snacks back to the top of its industry or could drop then farther. The probability of success of implementing a cultural shift is equal to that of failure; the outcome will be determined by the CEO’s ability to implement change within the organization in such a way that it is embraced positively by all levels of the organization. Frame the “Right” Problem Change is the only constant in any industry and Best Snacks must find and create ways for its organization to adapt and respond to continuous market changes, as well as remain profitable and a market leader. Creating a corporate vision, fostering creativity, and developing a system for innovation are all organizational tools that can help Best Snacks to meet the demands of the market continually. Describe the “End-State” Vision Best Snacks will become a leader in the snack industry once again by promoting creative and innovative learning within the organization that will inspire a new product lines and allow them to remain a major player within their industry. Identify the Alternatives and Benchmarking Validation Best Snacks overall goal is to bring creativity and innovation to the organization. Best Snacks can begin to reach this goal through implantation of one or all of the following solutions: (A) Create A System of Innovation: This system would promote collaboration and communication, aide in the development of new products and ideas, allow and promote organizational learning as well as be aligned with organizational strategy. The innovation system that suits Best Snacks current management style and would not incur a huge culture shock is “Structured Idea Management.” This system would be a formal framework by which employees could present new ideas and innovations, and each step from original thought through to creation and implementation could be managed and evaluated. The value of such a system can be seen at 3M and its innovation successes. “In 3M, this translates into a structure where most employees network into at least five levels: department, division, group, sector and company. For purposes of innovation, the key level is the division. Each of the company’s 40-some divisions develops, manufactures and sells its own products, and each has a structure appropriate to its market. Most divisions include functional departments—division labs, manufacturing, marketing, sales, logistics and so forth—as well as cross-functional teams.”(Baskin, 1998) (B) Create an organizational culture that fosters creativity an innovation by providing opportunities for employees to contribute creatively at multiple levels. This can be achieved through cross-functional teams, surveys, and promoting idea campaigns that challenge employees. The use of idea campaigns is a creative tool that often works for many organizations as seen by its success at John Hardy Group, “Hardy took matters into his own hands creating a competition co-sponsored b y Hospitality Design Magazine, to search for radical innovation in a hospitality concept.” (Long, 2008) (C) Develop and promote an organizational vision that clearly directs employees towards management’s goals and initiatives. This vision needs to clearly communicate to all of Best Snacks employees the shift toward creativity and innovation. This well defined vision is the initial guidepost that sparks employee creativity as seen in the management style at Virgin Atlantic “From Day One, we wanted to be known for our innovation. It's ironic -- we fly identical Boeing and Airbus aircraft as other carriers, and yet we do make our experience feel different. It's the culmination of the way we approach design and innovation. And above all, it’s about the chemistry of the people who work for Virgin, and their commitment, youth and fervor.” (Michaels, 2007) (D) Develop a system of organizational learning that manages knowledge and mitigates corporate ignorance. This system would provide opportunities for feedback from customers, business partners and employees, as well as research to help Best Snacks gain greater knowledge about their industry, products and customers. Starbucks have started using what they call “Learning Journeys” to gain a better insight of their customers and trends within their industry. Learning Journeys are like field trips, Starbuck send their product development and cross company team around the world to research local cultures and behaviors. Starbucks senior vice-president for category management Michelle Gass, recently took her team on a learning journey to Paris, Düsseldorf, and London. While on their trip they visited local Starbucks and restaurants, this allow then to look for fresh innovated ideas and also see what is working for Starbucks and what is not. When returning from their recent trip Gass stated "You come back just full of different ideas and different ways to think about things than you would had you read about it in a magazine or e-mail." (Bloomberg, 2006). Evaluate the Alternatives All of the mentioned solutions are worth pursuing; however the first step to initiating change is defining the goals. The most important and foremost solution to this scenario is to define Best Snacks vision going forward in order to begin the cultural shift toward innovation. Narrowed List of Alternatives Narrowing down the list of alternatives, the two best solutions for Best Snacks is to create a new corporate vision and system of innovation. The newly defined vision will announce and continue the drive towards innovation and creativity as the culture begins to change at Best Snacks. The innovation system will provide the organizational frame work, polices, and procedures that manage the ideas and proposals going forward. Identify and Assess Risks The solution that carries the greatest for Best Snacks is the creation of the organizational learning system. The ability to do accurate industry research, along with a technology system to manage such data can be a great risk for Best Snacks to assume. An organizational learning system must accurately assess what knowledge is needed, if this is not done costly dollars and employee labor is wasted on the wrong initiatives. “Can organizational theory inform the designers and implementers of business intelligence (BI) systems to help increase the likelihood of their success' The link between BI and the organization that uses it is that an organization collectively is a cognitive system: it senses the environment, makes a representation of it, acts on the basis of the representation and learns from the results of its actions, storing its experience as institutional memory. A BI system supports this process at various levels of organizational learning.”(Kurtyka, 2003) Make the Decision The optimum solution will begin to create a more innovative culture and provide a frame work and a clear direction for that vision to be achieved. The new CEO must step back and clearly define where Best Snacks is now heading and how it will get there, either through management changes, employee and corporate innovations, or a complete change in organizational strategy. Once this overall vision is in place and has been communicated to all with a commitment of executive management to drive this new vision, then a framework for an innovation system can begin. Best Snacks would then move toward building an innovation system of Structured Idea Management that will guide employees, and management through the creative process to the implementation process. Develop and Implement the Solution The implementation strategy that Best Snacks’ should employ would include the following elements: • Management would begin to promote the importance of innovation • Management would promote the idea that innovation and creativity is something that each employee should take time working toward. • Management will begin to reward rather than discourage creative thinking • Mistakes will be tolerated and used as opportunities for learning • A committed budget toward innovation will be provided • A committed budget for testing and implementing new ideas will be provided the process goes smoothly. Evaluate the Results Evaluating the results of the implementation will be seen through the number of new ideas and proposals that are generated through the structured idea management system. As well as metrics detailing how many ideas were initiated, researched, and ultimately developed and implemented. Conclusion Best Snacks is a company that has lagged behind in innovation for the past five years, and begun to lose its foothold in the marketplace. The study of this problem has revealed that Best Snacks lack of innovation, creativity and adaptability. The solutions put forth previously will set in motion the creation of an organizational that will foster radical innovation and growth at Best Snacks. References Bloomberg Businessweek (2006) The World's Most Innovative Companies retrieved on September 8, 2010 from http://www.businessweek.com/magazine/content/06_17/b3981401.htm Davila, T., Estien, T.J., & Shelton, R. (2006). Making Innovation Work: How To Manage It, Measure It, and Profit From It. Upper Saddle River, NJ: Wharton School Publishing. 3M; 3M CEO: Innovation Continues to Transform 3M into Faster Growing Company. (2008, June). Healthcare Mergers, Acquisition & Ventures Week,111. Retrieved September 18, 2010, from Research Library database. (Document ID: 1486405791). Long, R. (2008, January). Celebrating radical innovation. Hospitality Design, 30 (1), 81-82, 84-85. Retrieved September 18, 2010, from Career and Technical Education Database Michaels, D. (2007, July 31). Boss Talk: No, Virgin Atlantic's CEO isn't Richard Branson; Steve Ridgway balances profits and innovations. The Wall Street Journal Asia,27. Retrieved September 18, 2010, from ProQuest Newsstand database. Structured for innovation (1998) Innovative Leader, Volume 7, Number 1 (January), Baskin. Retrieved on September 18, 2010. from: http://www.winstonbrill.com Implementing Business Intelligence Systems: An Organizational Learning Approach (2003) DM Review Magazine, (November) Kurtyka, Retrieved on September 17, 2010 from http://www. dmreview.com . Table 1 Issues and Opportunities Identification Issues Opportunities Reference to Specific Course Concept Lack of product innovation for the past 5 years Creativity and product innovation by changing the company’s culture . “Integrating innovation into the company’s basic business mentality” (Davila, Epstein, & Shelton, 2006, p. 11). Organizational culture that doesn’t foster innovation Provide opportunities for new innovative ideas. Each company’s management team has to craft its own innovation strategy, adapt to changing conditions, and choose the right time to make key moves (Davila, Epstein, & Shelton, 2006, p. 59). Lack of a clearly defined corporate vision. Promote and direct towards a cultural shift toward innovation. “A vision that tells the organization where it’s going” (Davila, Epstein, & Shelton, 2006,). Best Snacks do not have any creativity.| Best Snacks has the opportunity to develop and implement creative ideas.| |“The organization learns which products and procedures work and continually adjusts its activities so that it can continue to expand” (Jones, 2004, Chapter 11, pg. 351). Best Snacks are behind their competition. Best Snacks need to use innovation to grow to the business and get new products to market |before their competition. “Superior innovation provides a company the opportunities to grow faster, better, and smarter than their competitors and ultimately to influence the direction of their industry” (Davila, Epstein, & Shelton, 2006, Chapter 1, pg. 2). Employees feel creativity/innovation is not supported by management. Management can develop a culture for innovation by leading by example and promoting employees to come up with new ideas. The CEO needs to make certain that collaboration occurs and becomes part of the culture. Steve Jobs works this critical cultural angle at Apple by being the clear leader of innovation and pushing hard to ensure that there is effective collaboration between the technology and business folks, (Davila, Epstien, & Shelton, 2006, p. 258 & 259). Table 2 Stakeholder Perspectives and Ethical Dilemmas Stakeholder Perspectives and Ethical Dilemmas Stakeholder Groups with Competing Values List: Group X versus Group Y The Interests, Rights, and Values of Each Group The Ethical Dilemma Based on the Competing Values Executive Management Team Vs. The Shareholders. The main interest is the history of innovation, market shares, stock performance, operating profit, return on investment, and profitability. The shareholders have the right to have a stable investment management of their investment capital with a decent return on their invested capital. The values are: Reputation, loyalty, responsibility, and the potential future of revenue. The ethical dilemma based on the values with the Executive Management Team and the shareholders is if the shareholders are fearful about their investments not increasing.| Best Snacks Leadership Vs The Employees The employees at Best Snacks feel that leadership does not value their opinions and has not created an environment for open innovation and integrity. Both management and the employees need to be honest about what they’re needs and expectations are. Though management sees the need for employees to develop a creative mindset, they are unsure about the best ways to utilize those skills. Opening the door to communication will allow them to work together as a unit. Management has the responsibility to treat employees with fairness and respect, understanding that although their titles may be lower in rank, their opinions and desire to grow the organization is what will ultimately lead Best Snacks into their next phase of success. Best Snacks vs. The Competition Both Best Snacks and the competition have a vested interest in their individual corporations. Each would like to be the number one holder of sales and market share in their industry. It is the responsibility of each in their quest to be number one to do utilize fair business practices, and conduct themselves with honesty and integrity. Table 3 Analysis of Alternative Solutions Table 4 Risk Assessment and Mitigation Risk Assessment and Mitigation Alternative Risks and Probability Consequence and Severity Mitigation Techniques and Strategies Creation of corporate vision • Very little risk great probability for implementation and success Organizational resistance to change Change and vision focused toward greater opportunities for employees and an more open working environment Create an innovation system • High risk, high probability of being time consuming. The time needed to create a system could affect other projects at hand, Likely, but these can be revamped to be more cost-effective • Implement new system in stages Create an organizational culture focused on creativity • Little risk, High probability of success Resistance to change could be costly. • Gradual implementation with management including employee input on change Table 5 Pros and Cons of Alternative Solutions Alternative Pros Cons Create a corporate vision • Provides a clear direction for company • Resistance to change Creation of Innovation System • Empowers employees • Creates opportunity for open communication • Long implementation time • Costly Cultural shift to focused on creativity • Increases innovation • Provides new opportunities • Lack of focus • Cost to support culture change Table 6 Optimal Solution Implementation Plan Action Item Deliverable Timeline Who is Responsible Set clear vision for organization 1 month CEO Measure of new ideas and proposals 2 months Innovation Team Leader Implementation Plan 3 months Operations Manager Metrics to be used to evaluate success of the plan after implementation 1 month Operations Manager Table 7 Evaluation of Results End-State Goals Metrics Target Management and employees will develop and maintain open communication. Employee survey 85-90% satisfaction Best Snacks increase sale and market share. Industry reports 50% increase Well defined process for innovation and product creativity Measure of successful idea to implementation projects 100% through communication across all departmental lines