Chattanooga Ice Cream Division Case Analysis Abstract The Ice Cream Division of Chattanooga Food Corporation had shown declining sales for 5 consecutive years through 1996. That was the year that they lost their third largest customer, Stay & Shop. A turn around had to take place but the Ice Cream Division leadership was unsure how to accomplish this. The division was run by Charlie Moore, grandson of the company founder. Charlie was a very democratic leader but had major issues controlling and leading his team of vice presidents.
The team was very dysfunctional considering they did not trust each other, had open conflict that was often malicious and mostly unproductive, a very apparent lack of commitment to work with each other, and the biggest issue appears to be avoidance of accountability. Moore had to get his team on the same page and quickly. Each management team member has their own issue with the other team members. Moore needs to publicly put the loss of Stay & Shop in the past and let everyone on the team know that it is all of their responsibilities to get together and become a functional team to make sure that no other business is lost.
He needs to leverage this as an opportunity to finally build his team in a way that functions as needed but also in a way that he can ultimately manage in a style he is comfortable with. This paper will examine the problems with the team and propose how Moore can get this accomplished. Situation Chattanooga Ice Cream Company, a wholly owned subsidiary of Chattanooga Food Corporation founded in 1936, sold ice cream products primarily to supermarkets and regional food chains. It was one of the largest regional manufacturers of ice cream in the United States. Chattanooga showed revenues of $150 million in 1996.
This was down from $185 million just five years before, due in part to a decline in per capita consumption and increased competition. A further consideration was the fact that mix-in flavors (like fruit, nuts, sauces) were gaining in popularity over smooth flavors. Chattanooga was not tooled for mix-ins due to significantly increased cost requirements. Despite having taken action with the introduction of a line of frozen yogurt, and making other operational changes, the Company continues to founder and seemingly remains anchored to the past. To address declining sales, a management change was undertaken in 1993.
Charlie Moore, grandson of the company founder, was put in charge of the division. New talent, Barry Walkins, was brought in to shore up marketing. Information and control systems leadership was revitalized with the employment of Stephanie Krane. Additionally, in an effort to reduce costs, Chattanooga Ice Cream Division closed its original manufacturing plant in Chattanooga and consolidated production in its two other plants in Birmingham and Memphis in 1995. The problem that brought everything to a head was the loss of their third largest customer, Stay & Shop (representing $6. million in revenue), with little apparent forewarning. Analysis The previous general manager for the Ice Cream Division was a stern manager that made decisions in a vacuum, seldom consulting any other senior team members. This led to a culture of dependence (on the leader) and team autonomy, which did not foster sharing vital information within the management team. His coercive management style yielded a management staff whose only decision making skill is in matters that only involve their own departments. Moore was completely different, believing significantly in the value of a team approach.
Moore found that no one was ready to open up in front of each other. He did find, though, that most were willing to openly criticize the others in private. Although his leadership approach and attempt at engagement should be commended, he failed to adapt his style to the appropriate state of the team while moving them to a storming state. This failure is quite obvious with the way he approached this back door criticism, rather than address it he turned a deaf ear to the issues in the vain hope that his management team would perceive his unwillingness to take action on their complaints as direction to not continue the behavior.
Moore further perpetuated the behavior by not directly confronting his senior leadership team. He found that it was easier to pay repeated visits to each department to determine the critical information and the state of the business versus directing them to provide the information back to him in a method and manner of his own choosing. Moore, in essence, made he own job more difficult and time-consuming by inefficiency in his leadership approach. Moore had truly hoped that just getting them together in group meetings would get them to feel more comfortable with each other and encourage them to open up.
He needed to become more active in the leadership of the meetings, using techniques similar to those defined in The Five Dysfunctions of a Team. The team itself is highly dysfunctional because they have a difficult time interacting with each other. They all feel that every issue contributes to the decrease in sales is completely the fault of other team members. There is no positive dialogue between the teams, and it appears that no one, including Moore, really has a finger on the pulse of what the current market looks like and how their primary demographic is changing.
If they continue to blame each other and not focus on the real issues, they will all end up wondering how their business unit disappeared from the market. An immediate problem that needs to be addressed is how they lost one of their largest customers before anyone knew it was happening. If Marketing or Sales knew that the loss was imminent and did not involve other relevant departments and Moore, this was an unacceptable dysfunction. Since the broader leadership team was not made aware immediately of any insights of the potential customer loss, this highlights a potential lack of trust in both Moore and the senior leadership team members.
Assessing this, the root cause could only be, either the team member feared for their job, they were unaware that the broader team should know, or they simply didn’t have the confidence that anyone could help fix the problem. Moore should have made an effort to talk to Les Holly (VP of Sales) to determine whether or not he knew of the impending loss. Now, Moore needs to focus all efforts on how to fix his team. He needs to quickly assess if the current team can solve this problem, and determine if it is the right team to move the Company forward ong-term. Key to this is understanding whether or not this team can ever be a cohesive unit and what steps he needs to take to get them there. All of this has to be done quickly in order to address the larger issue of replacing the lost revenue from Stay & Shop’s departure as well as preventing further customer defections. Recommendations In the years since becoming the president, Moore has failed to develop a functional management team. The Five Functions Team Assessment (Figure 1) indicates the management team is dysfunctional in all five areas.
There is a complete lack of trust in each other and in their leader. There is no fear of conflict between the team members, but it is often behind each other’s backs, malicious in nature, and unproductive. There is a very apparent lack of commitment to work with each other but each appears to work well within their own department. The biggest issue appears to be avoidance of accountability. Each management team member feels that all of the problems exist because of the failings of another department.
Inattention to results is a problem because each department wants to work in a vacuum and each team member looks at the other departments as holding them back from progress. In order to correct their deficiencies as quickly as possible, the team must commit to a series of team building exercises and personality profiling. This also means they need to open up to each other and work on establishing a trust-model, which will be uncomfortable at first. They must gather and review key information, make key decisions on an action-plan, set deadlines, and review their progress.
The first thing Moore should do is engage the head of HR, Frank O’Brien, to determine O’Brien’s comprehension of the issues and if he (or someone on his team) can assist in facilitating the leadership team coming together as a group and help Moore understand his own leadership shortcomings. If not, Moore should find a consultant to help with this effort. The team needs to spend time working in each other’s departments to try and understand how what they did effected the other people in the company and vice-versa.
Moore needs to sit the team down and address the key issues that he has observed. He felt positive because he had heard many good ideas on how to replace lost revenue but no one was in agreement as too which one was best for the company. Moore felt that he had a full 90 days to consider options to implement, but in our assessment it would be a mistake to allow this to drag on that long. He needs to make short term progress quickly while the urgency is high and can be leveraged to get his team working together and driven to consensus.
Moore needs to drive collaboration and should schedule team meetings frequently, while mandating a spirit of open discussion and constructive conflict. Moore needs to get the team to focus on the collective results of the company and not the results of their own departments. In order to do that, he is going to need to build trust among the group. Moore should consider using the 4-E (and 1P) framework (Welch, 2009), to identify the strengths of each team member and to determine if they were the right fit in the first place. Then determine if they should stay or go.
He may also need to be clearer on how the team needs to shift their focuses. Stephanie Krane (VP of Technology, Controller) seems to be the least empathetic and most direct team member and Moore needs to get her to voice the true nature of her concerns. He needs to get her to become more committed to a deadline for the technology implementation and to more closely partner with Billy Fale (VP of Production) and Kent Donaldson (VP of R&D). She also needs to understand that in her role as controller she can be part of the financing/funding solution rather than simply the gatekeeper.
Part of a recovery may need to be the release of new products. These three need to be in tune well before anything would go to marketing or sales. They need to commit to each other and be supportive of an agreed upon plan. By getting this collaboration going, the other two may concede some on a need to hold pay raises, which Krane is really pushing for but most others are against. Because there is already a good relationship between Fale and Donaldson, and Les Holly only seems to have an issue with Krane, if the above mentioned relationship can be fostered, Holly may agree to some of the oncessions more readily and may help foster improving relations between Donaldson and Barry Walkins (VP of Marketing) which is very tenuous because of a previous blame game incident. O’Brien may be the unknown in all of this. He is obviously against any cuts to personnel or benefits, but his opinion on anything else was not apparent. If a growth strategy is presented, he may be the one that needs the most convincing to get a commitment on at least temporary changes that impact personnel. His alliances are also not known.
Because Moore is highly democratic, and apparently non-confrontational, he is going to have to change his style to get everyone to open up, present their positions fully and honestly, commit and agree. He is going to have to be much sterner in his expectations of accountability and meeting of promised expectations. He already acknowledges that Holly has issues with communication because he is always on the road and he is going to have to better embrace existing technology to require Holly to be in better contact during his absences. Moore also has to get a true commitment from Krane on the implementation of the new IT system.
He can’t allow her to be very direct and confrontational on financial matters and wishy-washy on the readiness of a key piece of technology required for production issues to get resolved. Moore also needs to make sure that any guarantees that are made from R&D and Production are held to, which some on the management team feel is an area of concern. Another thing that Moore needs to do is publicly put the loss of Stay & Shop in the past and let everyone on the team know that it is all of their responsibilities to get together and become a functional team to make sure that no other business is lost.
He needs to leverage this as an opportunity to finally build his team in a way that functions as needed but also in a way that he can ultimately manage in a style he is comfortable with. He can’t run this team like a National Geographic photographic expedition, but he can instill a similar sense of team, partnership, and common goal. Moore also needs to make sure that his team is spending time with one another. The only way to build trust is to spend time with each other. One way he may do this is to mandate that any new ideas are shared among the team and that these ideas are discussed openly.
Moore also needs to set the tone that there can be no more private criticism of the team members. References Goleman, D. (2000). Leadership that gets results. Harvard Business Review, 78(2), 78-90. Goleman, D. (1998). What makes a leader? Harvard Business Review, 76(6), 93-102. Lencioni, P. (2002). The five dysfunctions of a team: a leadership fable, San Francisco, CA: Jossey-Bass. Sloane, C. (1997). The Chattanooga ice cream division. Harvard Business School Cases, Jul1997, 1-11. Appendix Figure 1