Background    

Chattanooga Ice Cream was a division of Chattanooga Food Products and had a reputation for producing mid-priced, basic ice cream sold mainly in grocery stores. In the four years prior to the Case Study, the Ice Cream Division had experienced some rather drastic changes. Charles Moore, who was the grandson of the founder, took over as new President and General Manager. As well, three of the seven members of the top management team had recently departed and, in a drastic change for production personnel, the oldest plant was closed and production was consolidated into two newer plants.

Roots of the Problem    

Each of these changes seems to have placed some stress on the system and climate of the company and, at the time of the Case Study, the company’s previous level of profitability and market performance had not yet returned. Exhibit 3 showed, graphically, that the bottom line (operating profit) was dropping more steeply than the top line (sales revenue). They appeared to be becoming less efficient as well as less effective. These recent changes the company had been experiencing, especially the recent management team and leadership turnover, were root causes of many of the company’s problems that were outlined in the case study. The team appeared to have not quite reached a point of comfort, trust and effective teamwork with each other and, although the recent loss of a large grocery store account was presented as the main problem in the Case Study, the loss of the account was a symptom and not the cause of the problem, the management team’s response, lack of teamwork and shortsightedness was. The immediate crisis may have been precipitated by the loss of the account, but it was exacerbated by the management team’s reaction, and was merely a symptom of a larger problem. Ups and downs always occur and accounts are gained and lost, that is normal in the life of a business; the management team’s inter-departmental bickering and finger-pointing was not normal and was indicative of an unhealthy environment. Each of the management team members seemed to be committing the fundamental attribution error in thinking that the blame for the loss of the account lay in departments other than their own, and needed to be corrected there, rather than taking a good, close look at their own department and seeing what could be improved there. As well, in the management meeting, negative emotions were involved to the detriment of professionalism and, consequently, there was a profound lack of looking at the big picture and not much chance for real teamwork.

The new leader, Moore, had a very different leadership style from his predecessor. This may have disrupted long-standing relationships and affected command and control structures as well as communication channels in the company. Moore came from a process of group decision-making at his previous job with National Geographic, whereas his predecessor made self-contained decisions, without consulting others much. As it turned out, Moore’s new, consensus style of leadership did not work well, in part, because the departmental managers seemed to be down in their own functional silos and reluctant to offer much input beyond the borders of their own departments. Contrastingly, however, in private, they often spoke ill of their colleagues and laid blame for the company’s problems on others without much introspection of their own departments. Further exacerbating things, the high turnover of the managers and the closing of the older plant seemed to have contributed to morale problems from the top managers down to the general production workforce.

Recommendations

All of the players in the Case Study seemed to be acting as managers, and attempting to do things right (within their own silos) rather than zooming out to the big picture, being leaders and doing the right thing. Moore seemed to be acting more as a manager and attempting to do things right (being egalitarian and leading through consensus) but, more than anyone, really needed to take charge, look at the big picture, make some leadership decisions and do the right thing in moving the company forward. I believe that, in general, action is better than non-action and this company needed some action. Moore should have abandoned the consensus process of leadership he was used to once he saw that it would not work in the context he now found himself in. He needed to make some decisions to keep the company moving forward and needed to figure out a way to get the management team to gel into a real team, whether that meant replacing people or finding ways to foster trust among the present team.

Contracting, after the loss of the large account, would probably not be the right decision. They may just need to spend some money to make more money and brace themselves for a period of investment activity and change of direction. They may be wise to retool with some investments in new markets, perhaps need to look at giving in to what seems to be a trend of paying for shelf space, and may be wise to make the investment necessary for production of mix-in flavors. Contraction, specifically cutting out chocolate chip, as suggested by the Vice President of Production, could have negative consequences for the company’s image and the perception of the clients. They need to revamp their image and perception in the marketplace and that means spending. They should brace for some unprofitable years of investment activity for the good of the long-term picture.

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