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Running Head: BLAKE SPORTS APPAREL AND SWITCH ACTIVEWEAR
JWI 510: Leadership in the 21st Century
Professor Jamie CheslerBlake Sports Apparel And Switch ActivewearNovember 15, 2018
Blake Sports Apparel AND SWITCH ACTIVEWEAR
Blake Sports Apparel, established by Barker’s father, paid licensing fees to leagues and brands in order to manufacture sports apparel and accessories using their logos, which in turn sold to retailers in the marketplace. He was preoccupied by a phone call earlier from a member of his executive team: two members of the team had failed to cooperate to resolve a simple issue, and the caller had asked him to intervene.
Lately such incidents were all too frequent. Individually, the executives were competent, most had been at the company for several years and contributed substantially to its growth but the team’s dynamics were dysfunctional.
Dysfunctions and Risks to the Business
Despite the accomplishments of the company and the talent of individual team members, the Executive Team at Blake Sports Apparel endured a number of dysfunctions that were impacting the business.
One year, Blake Sports Apparel received innumerable inquiries from retailers fascinated in selling its products. However, the team became unsuccessful with cooperation and collaboration. A number of customers’ “test orders”, a routine part of the set-up procedure, went unprocessed. The executive team became unsuccessful with timely business decisions, such as how much credit to extend to a consumer. As a result, consumers were still waiting six months to be set up in the Blake Sports Apparel’s systems.
This inaction generated months of lost revenue; meanwhile products sat in distribution centers instead of reaching store shelves. Consumers were aggravated. Barker contemplated about taking their business elsewhere or placing smaller orders that they had initially intended.
Another problem pertained to “gap plans,” generated annually by reviews of the previous year’s revenue data. These plans recognized opportunities for the company to reach its goals, and included such items as developing new products and revamping existing ones. Every department played a role in generating and executing a gap plan-a plan started in Sales, moved on to Product, and required the involvement of Finance and Operations to access its viability. Six months after the most recent gap plan had been finalized the executive team was failing to develop new products outlined in the plan, resulting in lost time and revenue and creating urgency for employees in their departments: such new products had to be designed, developed, sourced, set up, and shipped within the calendar year. Demand for innovative products that had been launched was miscommunicated between the Sales and Product departments. For instance, the company hustled to produce a product under the misapprehension of high demand at one of its largest customers; once the product was ready, the order never materialized.
Pricing was also problematic. Innovative products and those that were renovated or revived after being discontinued were referred to Finance to assess margins and establish pricing. The process frequently became extensive, delaying release of the products. The Finance department in turn complained that people were slow to submit such necessary information as packing and shipping costs and expected discounts. Others declared that Finance had been vague about the information it needed. Barker insists that he was trying to administer an executive team at a very high level. He was not saying that they are not executing, but they are not coming together as a team.
Executive team members identified their colleagues as passionate, entrepreneurial, knowledgeable, competent, self- motivated and devoted. They also acclaimed the team’s dynamic conversations and good quality debates. The corporation went into survival mode, and then had to refocus. A load of processes and procedures were put into place. They went to a global bank and ameliorated their systems. A lot of time was spent on looking at growth and revenue and really perceiving what was really happening.
Despite frustrations along the way, the executive team got the job accomplished, resulting in a 5 percent bonus for every employee at the corporation. Thanks to collaboration between the Sales and Product departments, the corporation reached number one in the world for sales of unquestionable products, in some cases overtaking its biggest competitor: Cartlock. The corporation also secured financing from a global bank, which obliged everyone to adhere to stringent policies and procedures to obtain indestructible audit results. These successes obscured the challenges facing the executive team.
Impact of Early Entrepreneurial Success
As a young entrepreneurial corporation, Blake Sports Apparel had pursued its goals with unfamiliar flexibility; initially, very few policies and procedures were in place to impose structure. As the corporation developed a stronger relationship with Howell, that profile began to alter. The executive team had to be more methodical and detail-oriented to maintain the growth the company was experiencing. Up until three years ago, the corporation was run by revenue; revenue was the king. As long as the company could get revenue, they were fine. Then Cameron introduced landed margin equation where revenue was not just observed, but margin as well. By doing so, the corporation saw that some of their biggest selling items that were the number one selling items were either low from a profitability standpoint or margined as a loss.
Individual departments built their own reporting mechanisms. Sometimes a given department’s metrics looked favorable, but did not work in the company’s favor when viewed in terms of the big picture. For example, Operations authorized manufacturing a particular product in large quantities during an off- peak season to create inventory and reduce the product’s cost. The Sales department agreed to the plan and put the product on auto-replenishment status; thus, a customer could request the product from inventory at any time, which would hopefully create or increase sales. However, the quantities were not always accurate. Sometimes the product did not turn over at the expected rate and ended up sitting in warehouses months, consuming cash. At other times, due to auto-replenishment, the company sometimes lacked the appropriate quantity on hand to meet a customer’s needs and had to pull the product from other customers to fill an order. Thus, though Operations was producing the product for a lower price and Sales had inventory for its customers, the situation was unfavorable overall. Zachary Fried, GM of North America Sales, described the impact. The corporation went from being a lucrative company, where there were no errors to be found because of its fast paced growth, to a company that suddenly had to start looking at itself differently. Aside from the company still growing very fast, there were concerns about different areas within the business model that required concentration, like FOB’s, margin, and discounts. Then, suddenly, the finger pointing started: everyone wanted to blame someone else for any performance gaps uncovered when they started to drill down into the numbers.
Trust, Communication and Information Sharing
The level of trust, communication, and information was challenging. Inadequate communication amongst members of the executive team was a multi-faceted issue. One aspect was withholding of information. Carl Herman, Senior Director of Planning and Procurement, described barriers he encountered as a direct report to a member of the executive team. Inventory reports to the Sales team were contributed. Not only was the inventory provided, but the associated sales data for the inventory that was previously sold. More integrated information to the Sales team was contributed to the Sales team so that they are better prepared to sell. However, when those reports were contributed, the Sales director felt insulted. That was not Carl Herman’s initial intent to make the director’s feel as though the director’s team was being looked upon as not doing their job.
Barker responded to the criticism that team members withheld information by pointing out that the information sharing process was designed to shelter proprietary ideas. In the past, departing employees had escaped pricing models; to avoid more transgressions. Barker empowered the executive team to establish who should have access to what information. However, when information was shared, it was sometimes accessible in a format that managers found inaccessible or difficult to leverage. The combination of apparent secrecy and the corporation’s privately held status led employees to question the establishment’s financial standing and the degree of its profitability.
Another instance of withholding information was the Finance department’s failure to enlighten the executive team when bonuses would be paid out; hence this information could not be communicated to employees. This inclination to withhold information led team members to “make a decision in a vacuum,” as one executive put it.
Even when information was approaching, open communication was hindered by lack of trust. For example, when Finance informed Sales that the corporation was losing money on the given product, the Sales department’s reaction was to question the pricing analysis. The Finance and Product departments second-guessed the Sales department’s decisions to discount prices on specific products for its consumers. The executive team did not collaborate in order to build a cohesive sales strategy because individuals did not trust one another to emphasize the good of the corporation over their own respective priorities.
Finally there was lack of responsiveness. Deadlines were being ignored, which led to preventable issue, such as missing shipping dates to consumers and conflict resolution was poor. Team members depended on Barker to step in and mediate disputes. For example, Barker recalled two team members who met with him about a dispute, and each brought with him to the meeting a folder of emails detailing their electronic communications with one another. The team members’ lack of ability to work simultaneously to resolve conflicts amongst themselves eventually cost both the team members and Barker time that could have been spent in more prolific ways.
Impacts on Team Performance and Cohesion
Company-wide goals, established by the executive team during an offsite with Barker, focused on margin and revenue. A five percent company-wide bonus was attached to accomplishing those goals. Barker collaborated with each team member to initiate weighted KPI’s specific to his or her department. At individual performance reviews, Barker scored executives on each objective; the executives scored them as well. Scores were weighted to establish the bonus the executive would receive.
Sometimes setting goals around revenue targets and margin targets get pulled in numerous different directions by all of the socioeconomic issues that can occur outside of what is controlled. There were always struggles between Sales, Product, Operations, and Finance to figure out individual goals, and how those individual goals were prioritize so that they can accomplish the goals set as an association. Sometimes they do not align.
Occasionally there were areas of frustration, because the goals set for the executive team were not aligned. What might be good for one person may not essentially be good for their colleague. It generates conflict and trust issues. That was one big opportunity for enhancement within the corporation. Goals that appear to be aligned in theory were not always aligned in practice. Sometimes team members pursued self interest before company goals. The executive team incorporated competitors that want to win. Overall that is a great thing, but it did construct challenges at times.
Team Structures and Decision Making Processes
Frequently the executive team’s structure and distribution of power prevented it from performing as a cohesive group. The executive team’s power structures in other corporations were much more balanced. Finance administers the majority of the corporation and also the products. The Finance department should be better incorporated with the rest of the business. It provides a lot of feedback on what is wrong but no solutions. Feedback is given to others prior to the people accountable for the issue.
The degree of control wielded by Finance, and lack of trust between it and other departments, often caused processes to delay when they reached the Finance team. Finance focused too often on their needs, without deliberation and support for the entire team. They need to think, “What can we do to clarify processes, allowing the other departments to work more proficiently and effectively?” Some departments felt so unsupported by Finance that they created new positions and employed their own shadow finance teams to meet their needs.
The executive team focused so attentively on the Howell business that it often failed to support Switch Activewear, a subcompany that Barker had founded in the past year. Since the corporation had little to do with the Howell business, it was apprehended as a lesser priority. The Switch Activewear team objective was to create an infrastructure that would be triumphant in the environment. Though the corporation tried learning the process, getting up to speed, and growing the business, it seemed to be overwhelming for them. Planning and executing on their own became unfeasible, which resulted in lost production and revenue. Processes were not streamlined in a timely manner, and Switch Activewear lacked a website and online sales capability.
In the course of scrutinizing the dynamics of the executive team, Barker had to analyze his own leadership. The majority of the team categorized him as a passionate entrepreneur and visionary with both strengths and shortcomings. He was described as inspiring, empowering, and proficient. As a self identified introvert, he admitted to spending diminutive time engaging with colleagues. Though efficient at motivating his executive team to perform, Barker often failed to hold people accountable. He was also disengaged from day to day details of the business, devoting most of his time to strategy and to leveraging external resources, such as professional organizations, to help him think through strategic issues.
Cameron considered it urgent to address the executive’s team’s challenges. A strong, cohesive team at the top would position the corporation better to address the challenges and opportunities of the months and years ahead. Blake Sports Apparel woul need to expand its ecommerce business, execute better systems and processes, enhance innovation, help grow Switch Sportswear, and reassess its business model. Barker accredited the executive team with many successes, but enumerated the ways that its dysfunctional dynamics impaired performance. Revenue is missing, opportunities are missing, decisions are not being made quicker, and relationships and communication are hurting.
Barker needed the executive team to manage abruptly to rebound the next year back into a growth rate of twenty or more percent. He needed the executive team to work together to reach his long term goals for the corporation; five hundred million dollars in revenue by five years later, and one billion dollars in revenue by ten years later. Although the corporation had grown under the leadership of the existing executive team, Barker could not help but wonder how many growth opportunities had been lost due to their inability to work together and align themselves for the advantage of the company. He wondered if and how the existing team would be able to facilitate the company deal with its current challenges and reach its ambitious goals for the future. If Barker did not do something, the team was going to deteriorate.
(n.d.). Retrieved from C:UsersRitaDownloads417048-PDF-ENG.pdf
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