Case Analysis: Leading Culture Change at Seagram
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Case Analysis: Leading Culture Change at Seagram
Seagram is a diversified enterprise that succeeded in four global business segments: music, filmed entertainment, recreation, spirits and wines (“Leading Culture Change”, 2006). With many successes in companies, forces of change had to have take place to improve the company. In Seagrams case, the forces that drive the change was to increase profit because profit came to a stall. The core markets of Seagram was maturing and eroding (Jick and Peperial, 201). Seagram wanted to increase the profit through global expansion, which was another force of change. In 1995, Edgar Bronfman Jr. (hereafter known as Bronfman), president and CEO of Joseph E. Seagram Sons, Inc., told 200 senior managers that his vision for Seagram was to be the “best managed beverage company” (Jick and Peperial, 255). His vision was made in the middle of major change and transformation, and in order to be the “best managed beverage company,” Bronfman knew the culture must change. Bronfman brought in some new values and made them an increasingly central role in the company (“Leading Culture Change”, 2006). The creation of Seagrams Values was a key to the direction of Seagrams expansion. The change was transformational and the challenge he faced was to get the employees to unlearn the culture that they already know and learn the new values of the new culture. In this paper, I will provide a summary and an analysis on the case: Leading Culture Change at Seagram.
The obvious goals that Bronfman wanted to focus on were growth; it will be fast and flexible and customer and consumer oriented (Jick and Peperial, 255). In addition, Bronfman will value the employees by honoring and rewarding teamwork; will lead and not control; will develop, train and motivate the people (Jick and Peperial, 255). These beliefs that Bronfman has is an important piece in driving change and changing the culture. Part of the responsibility of a good leader is to foster an atmosphere of teamwork among employees (Anderson, 2011). A company must involve its people to make things happen and in my opinion, companies must reward or give back, which is one kind of motivation to the employees the drives these changes. However, in my opinion, I dont think the leaders at Seagram knew what challenges were heading their way to ensure the new culture be implemented and sustained.
Before the Seagram Values were introduced, Bronfman and the Seagram executives knew they had to improve the position of the company. They did so by acquiring Martell which opened the doors of their business into China and the Asia Pacific. This was a smart move on Seagram to purchase an established and well known company. In addition to purchasing Martell, Seagram also purchased the global fruit juice business from Dole Food Company. In my opinion, this was another smart move because it opened up more doors and channels for their global expansion on a non alcohol related product. Even in the course Global Management, we learned its easier to go into a business thats well and established than to start from scratch.
Other changes Seagram made were they redeemed 156 million shares of DuPont for $8.8 million, but purchased 80% of MCA/Universal, which was an entertainment company. I didnt quite understand why they purchased MCA/Universal. Its a complete different business from the spirits and wines business.
When Seagram began to reengineer the company Bronfman emphasized on business process, reduce costs and identify future growth opportunities (“Leading Culture Change”, 2006). These processes need the changes from employees; employers behaved and interacted with each other. This reengineering task involved hundreds of employees who were organized into teams (focus groups) by the key business process (i.e. MIS, Customer Fulfillment, manufacturing, etc). These focus groups were tasked to find out what customers wanted and how to bring back the growth to Seagram (Jick and Peperial, 257). This is a good way to start the change and to grow and/or improve the business, finding out what the customers really wants because thats where the money comes from. After a few months of examining what is needed, the areas of improvements were huge. Seagram would have to learn how to be more innovative, cooperative, communicative and customer focused (Jick and Peperial, 257). The areas of these improvements cause Bronfman to create the corporate values, the values he calls The Seagram Values. The Seagram Values are shown on Exhibit 1 and Exhibit 2.
To launch the culture change, the Seagram Values were introduced to the company which included three steps: step one was a personalized communication; second step was a 360-degree feedback for senior executives; and finally, a training program for the top 1200 managers. During step one, participants of the focus group sent a strong message to Bronfman stating that it shouldnt be another dog and pony show. Senior management looked to their employees for advice, which is a good move by them because they got the employees involved! The personalized message was communicated top down but in groups of people. One manger to it directs reports and from that group down to their direct reports and so on. Communication of the Seagram Values continued until everyone in the company was communicated. This was a smart move by Seagram on the communication until the 1200 employees are aware about the Seagram Values. A study published in 2011 in the journal “Organizational Development” indicated that “redundant communication” helps projects move more quickly and smoothly (Hamlin, 2011).
The second step was a 360 feedback on the six Seagram Values. Seagram put into a lot of thought and process on how to implement this 360 feedback. Professional coaches and third party processors were hired to help with this step. The feedback from those who participated in the focus group helped the management team to develop an action plan for improvement.
The final step in launching the culture change was introducing the values of training. The two training programs were: Leading with values and the Seagram Challenge. The Leading with Values was aimed for the top 200 managers and The Seagram Challenge were aimed at approximately 1000 middle managers. Small cases were put together in which the values were put to the test. The participants were encouraged to come up with action plans and recommendations for the company. Again, continuous involvement of the employees helps in getting the buy in on the changes.
The Seagram executives were faced with issues on supporting and enforcing the values that was created. Participants spend Friday morning with leaders