Leading Culture Change Case Study: Seagram

The Seagram Company expansion resulted in diversification of the business to different regions leading to many employees with different cultural inclinations. Despite the success that the company has enjoyed, it has not been able to achieve a growth of 15%. The challenge has been attributed mainly to the lack of shared values. Thus, the current challenge is the need for effective strategies that will cause a paradigm shift to lead culture change and spur global expansion, reengineering, and diversification.

The core of organisational success is the realm of human resource that is characterised by cohesive culture (Fusch, Fusch, Booker, & Fusch, 2016). According to an article in the Journal of the Medical Library Association, for a belief or behavior to be considered cultural it should be shared by the employees (Harris, Mayo, Prince, & Tooey, 2013). However, in the current setting of multinational companies, the managements of such entities are faced with the challenges of ways they can lead cultural change defined by set values for people of diverse backgrounds. Also, it becomes an issue on ways to institutionalise the specific culture, reward value-based behavior, and address the issue of employees who do not conform to the expected change.

For Seagram, the desired culture should be characterised by teamwork, cooperation, participative approach, customer focus, and innovation rather than the authority, individualism, personal relationship, and functional pride. Considering the present situation and expected change, strategic measures are required to create a new culture and ensure synergies that promote quality for consumers. Therefore, the following proposal provides recommendations for ensuring value-based behavior, enticing employees to sustain proposed value system, institutionalisation of the values and making them hallmark for all the employees, and ways to evaluate and reward those values. It is on these confines that the following project provides actionable strategies to address the challenges at Seagram for it to achieve the growth rate of 15%.

Diagnosis of Current Situation

Trans-global companies like Seagram face the issue of diversity of the workforce. It requires the leaders/management to put in place leadership and managerial strategies that create and maintain organisational change by incorporating the diverse needs of the employees if the workers are to adopt the corporate culture that transcends their national culture (Fusch, Fusch, Booker, & Fusch, 2016). The current situation at Seagram is lack of clear strategies to achieve and sustain the values proposed by the textbook, Managing Change: Cases and Concepts.

The company faces a challenge of a lack of ways to create synergies for the old and new employees for it to have a corporate culture that transcends personal and national orientations. As a result, there is a need for reengineering and diversification efforts that will lead to a clean change from the old culture that has hindered the attainment of the 15% growth rate. The values were originally considered as the missing links (Jick & Peiperl, 2011). Fortunately, the desired values were clearly stipulated by Bronfman and redefined by the top executive as committing to consumer and customer focus, respect, integrity, teamwork, innovation, and quality. However, currently, Seagram lacks a clear path to driving and achieving the value across the organisation.

The current setting at Seagram is that there are three channels for introducing and evaluating the listed values. They include a personalised communication cascade system in which senior managers, for example the fifteen top executives, refined and redrafted values. The second channel was 360-degree feedback process and, third, is a training program (Jick & Peiperl, 2011). Despite the three channels, the desired outcome may not be realised due to some bottlenecks regarding the culture issue and performance. For instance, the cascade system emanates from the top to bottom and may make the employees, who are the true bearers of the value change, feel that the change is being forced on them. Secondly, the differences in culture orientate and skill set of employees does not guarantee the desired synergies.

Recommendations

To lead the desired culture change of shared values, the recommendations include transformational leadership, direct communication channels, linking performance rewards and employee behavior.

Transformational Leadership

Studies in effective change in an organisation have pointed to the need for transformational leadership in which leaders create a vision and engage employees in leading the change process (Ghasabeh & Provitera, 2017). Through the transformational and participative approach, trust is created and employees feel part of the change process. Based on the current processes, there is a need to ensure the acceptance process for each of the individual employees. Therefore, the leaders at Seagram should use idealised influence to create a shared vision that will form the basis for acceptance of the values.

The idealised influence should be a shift from the individualised approach to the identification of common needs of followers, specifically, the employees. The focus groups of not more than twenty people should be created in various regions with a leader who will help them to create the shared vision and mobilise the employees’ support towards the acceptance and practice of the values. According to Mostafa Ghasabeh and Michael Provitera in their article Transformational Leadership: Building an Effective Culture to Manage Organisational Knowledge, leaders can apply inspirational motivation to arouse human assets and set a level of acceptance and desired expectations (Ghasabeh & Provitera, 2017).

Direct Communication

Communication plays an integral role in the change process. As a result, a starting point for the change process should be creating open and direct communication channels that allow employees to submit their recommendations about the proposed value system and ways they should be implemented. The communication strategies should entail setting up consultative meetings with the human resource department that promote open dialogue. A team should be formed to evaluate the suggestions by the employees and provide feedback to sustain the momentum that promotes employee input.

Linking Performance Rewards and the Behavior of Employees

All employees starting with the top executives to the lower tier employees should be subject to an evaluation process that considers performance and the behavior of the employees based on the set values. The evaluation tool of the 360-degree feedback should be modified to capture both the behavior and performance.

This should be through a weighting process in which an equation is set to determine the overall score based on the two measures. The feedback will be the basis for retraining the low score employees while the high performers are rewarded. The reward should be categorised in terms of bonus, vacation, cash based on the preferences of the employees as per their recommendation. The strategy will serve as a tool to enforce the values. The strategy will also serve as the basis for sustaining momentum and institutionalisation of the values in the organisation (Jick & Peiperl, 2011).

Implementation Plan

The implementation plan will entail engaging all the key stakeholders in the change process. The stakeholders are the employees and the management. Through the transformational change process, the company needs to be restructured and the skill set for employees adjusted to align with the values. Instead of the authoritative approach, transformational leadership should be embraced and employees retrained. Case in point, creation of vision and use of influence as it was in the case of Steve Jobs in transforming Apple Inc. The change process can be informed by The McKinsey 7-S Model to analyze the value system. The model is about developing and linking soft and hard skills to attain shared values. It has seven elements of Strategy, Structure, Systems, Skills, Staff, Style, and Shared which should be applied in leading the culture change process (Jurevicius, 2013).

(Jurevicius, 2013)

In addition to the model, a modified 360-degree feedback should be used as a tool for reshaping the new culture to modify employees’ perception and idealised behavior that reflect the new values.

The timeframe for implementation will be one year. The resources required are the human resources, external and internal consultants with expertise in organisational culture change. Other resources are financial resources that will be mobilised on a case-by-case basis for the change needs.

Summary

It is evidenced from the case that the biggest challenge for Seagram is to ensure a new culture based on the set values is implemented and sustained across the organisation. Thus, the proposed strategies to achieve the desired culture is to set systems for open communication for all employees, institute transformational leadership approach by constituting small focus groups of about twenty persons through which a shared vision is enforced by a leader, link the performance rewards to behavior through modified 360-degree feedback.

The implementation plan should be through a consultative process that includes training and aligning the value system based on the McKinsey 7-S Model that focuses on developing both soft and hard skills and integrating them to achieve shared values of committing to consumer and customer focus, respect, integrity, teamwork, innovation, and quality (Jurevicius, 2013).

References

• Fusch, G. E., Fusch, C. J., Booker, J. M., & Fusch, P. I. (2016). Why culture matters in business research. Journal of Social Change, 8(1), 39-47. doi:10.5590/JOSC.2016.08.1.04
• Ghasabeh, M. S., & Provitera, M. J. (2017). Transformational leadership: Building an effective culture to manage organisational knowledge. The Journal of Value-Based Leadership, 10(2). Retrieved from https://dx.doi.org/10.22543/0733.102.1187
• Harris, R., Mayo, A., Prince, J. D., & Tooey, M. J. (2013). Creating shared campus experiences: The library as culture club. Journa of the Medical Library Association, 101(4), 254-256. doi:10.3163/1536-5050.101.4.005
• Jick, T. D., & Peiperl, M. A. (2011). Managing change: Cases and concepts (3rd ed.). New York: McGraw Hill.
• Jurevicius, O. (2013, December 20). McKinsey 7s Model. Retrieved from Strategic Management Insight: https://www.strategicmanagementinsight.com/tools/mckinsey-7s-model-framework.html