change management

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scenario1.pdf

HARVARD BUSINESS SCHOOL PUBLISHING | ONLINE SIMULATIONS 1

ONLINE SIMULATION SCENARIO INTRODUCTIO N

Change Management: Power and Influence

Scenario 1: Director of Product Innovation

You are Director of Product Innovation within the Research & Development unit of Spectrum Sunglass

Company. Spectrum’s immediate future looks bright as the company enters its second decade of

operations. Externally, the consumer sunglass market is growing again, and competitive-pricing

pressures have subsided. The company recently rehired some of the workers laid off during the last

recession, and many departmental budgets have been restored to well-funded, pre-recession levels. You

are especially proud that one potential new product design has received positive focus group feedback

after the first phase of development, and some exciting branding deals with Hollywood celebrities are

under negotiation. Everyone at Spectrum Sunglass is looking forward to growth and enhanced earnings.

While you generally feel very positive regarding the situation at Spectrum, you have noticed that the

topic of sustainable economic development and the link between sustainability and innovation is

featured in many of the professional articles you read, such as “Why Sustainability Is Now the Key

Driver of Innovation.” You are frustrated that you don’t have any new sunglass products to offer to the

vocal customers who increasingly express concerns about Spectrum’s environmental impact. Not only

does sustainable development make sense to you personally, from both a moral and an economic

standpoint, but you also see this as an opportunity to differentiate Spectrum’s products from your

competitors, which focus exclusively on design and price.

During Spectrum Sunglass Company’s annual strategy retreat, you decide to pitch the idea of forming a

task force to make the company and its products more environmentally sustainable. Your vision for

Spectrum consists of three specific goals: (1) Eliminate 25% of waste by redesigning the manufacturing

process; (2) reduce the current level of greenhouse gas emissions by 15%; and (3) create a new product

line based entirely on environmentally benign materials. You argue that these goals, while aggressive, are

achievable within the next two years. You also add that based on your current understanding, the task

force will need to pursue the following activities: (1) Conduct energy audits and set aggressive milestones

Online Simulation Scenario 1 Introduction—Change Management Simulation: Power and Influence

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for improvement on the three goals; (2) redesign processes and products to be more environmentally

sustainable (and scale up successful experiments quickly); (3) analyze environmental life cycles

throughout the entire value chain inside the firm and with its suppliers; (4) seek to replace fossil-fuel

energy sources with renewable energy sources; and (5) seek to replace petroleum-based materials with

biodegradable materials.

After politely listening to your proposal, Andrew Chen, the General Counsel, interjects that in his

professional opinion, the sustainability project opens up the company to unnecessary legal risks. If the

company does go ahead, he advises that only one of the three goals be pursued and that it not be publicly

announced or promised until after a careful internal due diligence process. Then the CFO, Paul D’Arcy,

speaks up, adding that instead of focusing on a pie-in-the-sky sustainability project, the task force’s time

and money would be better spent on finding innovative ways for Spectrum to reduce raw material costs

and counteract the seasonality of its business. Just when you are about to inject a counterargument to this

increasingly negative reception, Luke Filer, the VP of Operations, states that he is concerned about a

product and process change that is likely to increase raw material costs and disrupt existing production

flows.

Breaking the impasse, Leslie Harris, Spectrum’s VP of Sales and Marketing, argues that this idea has

considerable promise and that it would be foolish to reject it prematurely. After an hour-long discussion,

during which some members of the top management team voice support for the initiative while others

express skepticism, Henry Adams, the CEO and the rest of the management team agree to support your

proposal, with the condition that the measure of success be your team’s ability to achieve the proposed

three goals within the next two years. The CEO agrees to allow you and your task force members to

spend 75% of your time on this change initiative over the next two years. You agree to this arrangement,

and you recommend that the task force report directly to the CEO in order to signal its importance to the

rest of the organization and to facilitate direct communication on key issues as they come up. As the

retreat ends and everyone heads to dinner, you start pondering the numerous issues and obstacles you’ll

need to overcome in order to implement your sustainability vision.

Your central challenge is to convince your colleagues that a dramatic change in the organization’s

strategy and products is necessary and that environmental sustainability is one of the keys to the firm’s

future. This challenge is somewhat complicated by the fact that you must influence the rest of the

organization without the formal authority to command employees’ attention, and there is no generally

HARVARD BUSINESS SCHOOL PUBLISHING | ONLINE SIMULATIONS 3

perceived need to change at this moment because of the firm’s return to normal profitability. However,

you do have a reputation for being competent and trustworthy, and this reputational capital will be

invaluable to you as you take on this new challenge.

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Scenario 1: Organizational Structure for Spectrum Sunglass

Henry Adams Chief Executive Officer

Paul D'Arcy

Chief Financial Officer

Bob Ingram Corporate Controller

Walt James

Director, Information Systems

Deborah Edge

VP, R & D

YOU

Director, Product Innovation

Yao Li

Director, Process Innovation

Luke Filer

VP, Operations

Diane McNatt

Plant Manager

Mark Roberto

Foreman

Paul Schenian

Foreman

Mary Gopinath

VP, Human Resources

Ian Newman

Director, Health &

Safety

Louise Orysh

Director, Benefits Administration

Leslie Harris

VP , Sales & Marketing

Sam Puffer

Director, Marketing

Regina Quinn

Director, Sales

Anne Thompson

Manager, Customer Relations

Michelle Barth Executive Assistant

Andrew Chen

General Counsel