rice capstone 21

Running Head: Organizational Framework for Success 1

Iggy’s Bread of the World: Adopting an Organizational Framework as a Recipe for Success

Organizational Framework for Success 2

Iggy’s Bread of the World: Adopting an Organizational Framework as a Recipe for Success

Iggy’s Bread of the World is a small business on the brink of good things. The bakery’s

potential business growth was rising as quickly as the bread upon which they had built their

dreams. Iggy’s began to experience significant problems with their organizational structure

almost as quickly as the organization became established from production of its product to its

financial performance. Iggy’s experienced rapid and remarkable growth from the onset, but

performance began unfavorably declining after peaking. Although net revenue has steadily

increased year over year between 1994 and 1999, but profit after taxes is declining steadily, from

15% at its peak to less than 1%. As the company grew, the culture began to deteriorate to the

dismay of its founders. The five-step PROACT decision making model will be used to develop

solutions by considering the problem, objective, alternatives, consequences, and tradeoffs. The

model is effective because it considers both the tangible and intangible factors present along with

the facts, feelings, opinions, beliefs and advice influencing the situation so the best possible

outcome can be arrived at. (Hammond et al., 1999) This capstone project will analyze how weak

communication and a poorly defined governance structure during times of growth can

compromise the future, but can easily be easily rectified by embarking on a planning process that

involves key members and stakeholders of the organization.

Background of the Study

Organizational Background

Iggy’s Bread of the World family owned bakery was founded by two immigrants Igor

and Ludamilla Ivanovic. Iggy’s was founded on a passion for baking and determined to create a

“nurturing and respectful environment at our workplace that fosters cooperation, communication


and a sense of accomplishment for all employees”. The vision for Iggy’s was based upon three

principal factors: quality ingredients, and engaged workforce, and a focus on the customer.

The Ivanovic’s took enormous pride in shaping Iggy’s operations and culture. In some

way, the early success at Iggy’s can be attributed to Ludamilla and Igor’s individual leadership

style. For her part, Ludamilla’s focus was on operations and she viewed role as an opportunity to

connect with her passion to engage employees in the success of the business. Iggy’s employees

were taken to the farm where the vegetables for their products were purchased and to the stores

where their end products were sold. Ludamilla considered employment at Iggy’s to be an

opportunity for their employees to grow as individuals, saying, “The mission was to be a full

person and to be completely involved in the business and understand all of the parts of the

business—but not to be a fake imitation of me or a fake imitation of Igor, just to be themselves”.

Iggy demonstrated his leadership skills in the kitchen. He was engrossed in developing

the products with ingredients that reflected the quality and pureness he valued, as well as an

opportunity to share his unique approach to preparing the product. Iggy bakes without recipes or

time charts and used a sour dough starter to yield the Old World flavor he strived for, even

though it requires nine to 12 hours for the dough to rise, opposed to the three hours commonly

implored by other bakeries. Although eventually cooking charts and recipes were provided as job

aids for the growing kitchen staff, but Igor ensured staff were still trained to recognize the

signature texture and taste and that they could improvise when needed to achieve it. Training a

new hire to develop a feel for the bread took six months. The structure of the workforce was

designed to allow for this training, operating 24 hours a day with overlapping shifts to ensure the

product was always fresh and operations were seamless.


The workforce at Iggy’s was culturally diverse, representing more than 20 different

countries. The Ivanovic’s invested in their workforce beyond what was required to deliver the

product, offering smoking cessation through acupuncture, massage therapy, English classes, and

even arranging soccer games, a largely universal sport, for recreation. Both Igor and Ludamilla

took a personal interest in the Iggy’s workforce and were proud to know every employee by

name.

As Iggy’s delivered its mission, net revenue increased steadily, more than doubling in the

first two years; business was booming and it became clear that the Ivanovic’s needed help. With

the growth they had experienced in sales, the Ivanovic’s expanded by adding a warehouse,

upgraded the vans they were using for deliveries, and added kitchen staff. This change, albeit

positive, did alter the work system and also the financial structure, as the Ivanovic’s had to take

out a loan for the first time in the four years they had been in business at Iggy’s Bread of the

World.

Iggy’s was profitable but were growing so fast they couldn’t keep pace, even having to

turn away big customers. The Ivanovic’s were in a dilemma, trying to expand Iggy’s while

maintaining the culture they took so much pride in establishing. They were in the midst of a

paradigm in that they admittedly needed leadership support and an expertise in business, but did

not want Iggy’s to lose its small business feel. The Ivanovic’s felt they needed help in the

administrative and fiscal areas of operations; acknowledging being overwhelmed with the

workload and demands. They wanted to hire someone in a leadership capacity to sustain the rate

of growth they were experiencing; someone who was experienced in business. They initially

hired a consultant named Matthew McRae, who, after demonstrating a passion for Iggy’s was

hired on as Chief Operating Office. McRae, in turn, added several other leadership positions,


including his brother as Distribution Manager and a high school friend as Chief Financial Officer

and later placed the CFO in charge of Human Resources. McRae also added a Vice President of

Sales and Marketing. The new management team was in place, but symptoms of an

organization in trouble began to present themselves soon thereafter.

Constraints/Limiting Factors

There are several limiting factors to the assessment and solutions presented in this paper.

The first is the depth of the analysis, which is limited to the information available in the case

study. A more meaningful assessment and actionable report could be produced with more

detailed data on the organization’s performance results, comparative analysis for peer business,

interviews with senior leaders and employees, and a site visit to observe key processes in action.

The other limiting factor is the lack of consult with experts in the field of business, in particular

the culinary or retail professions. This paper will draw on the professional experience of its

author who has performed similar analysis of businesses and will make recommendations that

are rooted in best practices or have been otherwise researched. Personalizing some of the

solutions is something that Iggy’s Bread of the World will need to take into consideration.

Assumptions

Several assumptions have been made and have influenced the assessment and

recommendations presented. These assumptions center primarily on personal and workforce

dynamics. It is assumed that the Ivanovic’s felt inadequate in their ability to manage the business

administratively and financially. They commented about hiring people who had been trained in

business and who “knew what they were doing”. It is also assumed that felt fearful that they were

losing their voice in, or control of, their business and that the Ivanovic’s were experiencing both


emotional and financial stress over the decreasing profit after taxes in light of the loan they had

taken out for the business. An assumption is made that they blame the McRae for the current

problems their business was experiencing.

Background of the Problem

The Problem

Iggy’s Bread of the World is struggling with what on the surface may appear like

growing pains, but in actuality, Iggy’s needs to establish a corporate framework that can support

future growth while sustaining the core values on which the company was founded. Iggy’s has

experienced exceptional growth, increasing net revenue by 600% in only five years from

1,000,000 in 1994 to 6,000,000 in 1999. While this is impressive, profit after taxes has

unfavorably declined from 190,000 in 1994 to 140,000, with a peak of 480,000 in 1996. The

culture of organization has begun to decline as rapidly as the financial indicators, with Iggy’s

employees reporting that they viewed the new management team as being disconnected form the

workforce and culture and isolated from the culture that they had become so accustomed to.

What had once been an environment where employees were nurtured and made a part of

operations was now characterized by departments that operated in silos and job titles. Even the

Ivanovic’s have felt the strain and tension and expressed concern that the changes were

happening too quickly and were beginning to feel out of touch with the company they built.

The Ivanovic’s have a vision for Iggy’s, and the company has grown, but there appears to

be an absence of a strategic plan, including a human resources management plan, and this has led

to poor growth management and an inability to sustain and capitalize on the company’s strategic

advantages and core competencies, one being a value-rich organizational culture. The Ivanovic’s


are disillusioned at how the company has changed and a loss of power over the present and the

future, yet it is more likely that they are most uncomfortable at how the company may be

compromising its value and mission while it forms a corporate structure. The Ivanovic’s are

conflicted with the strategic direction of the company; should they continue to grow, even if it

means giving up some control, or should they apply the brakes and manage growth within their

personal means? The Ivanovic’s are reacting in a way that is common when small businesses or

projects experience unprecedented growth: treating the symptoms and not the condition.

Essentially, they are pinpointing their displeasure with the newly hired COO, Matthew McRae,

rather than fulfilling a need to establish a governance structure and management system that

reinforces the organization’s culture, mission and values. The most significant challenges, or

problems, for Iggy’s to overcome are a shift in culture, a change in the structure of operations,

and communication breakdowns.

The Situation

When the Ivanovic’s found themselves having exceeded their capacity to produce, having

to turn away customers and new clients, they realized they were in a position of either expanding

physically and structurally to meet the demand for the bakery or scaling back and accepting no

new clients and customers. They were working beyond their means and that was not sustainable.

They acknowledged they had no desire to grow so large that they were franchised or publically

traded, but they committed themselves to growing their market share. They refrained from

explosive expansion because they valued the culture at Iggy’s and longed to preserve it. While

they wanted to be able to meet the demand for their products in their market, the philosophy that

they used to train their kitchen staff to make dough (not imitating Igor, but mastering their own

skill) extended to their view of other bakeries – every state could have their own version of


Iggy’s. It must have been painful for the Ivanovic’s to see their decision yielded the net result

they had feared – a deterioration of the culture, facilitated by poor growth management.

Aside from the Ivanovic’s and their family and close friends, whom they considered to be

their “family of mentors” or informal board of directors, the employees of Iggy’s were

stakeholders in the outcome of the conflict and future success of the organization. Some of the

employee had come from other countries and their life experiences made it difficult for them to

trust, especially an employer. The employees at Iggy’s were personally invested in the company.

Iggy’s customers are stakeholders with an interest in the outcome, too. Iggy’s has been supplying

their customers with high quality baked goods that they have been, in turn, offering to their own

customers. If Iggy’s is unsuccessful, their customers may not be able to meet their own

customer’s expectations.

With organizational growth comes the inevitable organizational change. Change is a

positive sign that the organization is making progress towards achieving its desired state, or its

vision. Change can feel adverse however because of some of the symptoms or side effects. Job

duties and responsibilities expand or contract. New employees may be added to accommodate

the increase in demand. Some employees who were with the organization from the onset may be

unable to adjust to the organization’s growth and change and may move on, thus introducing

additional new faces to the workforce. A position that was once key to the organization’s

operation may now be obsolete. (Feigenbau, 2012). For example, both Igor and Ludamilla wore

multiple hats and are integral in delivering a product, but also conducted hiring, training, and

accounts payable. As the business grew, there is now a need to devote more time to human

resources and product sales. While it may be a natural instinct for an organization to develop its

processes to accommodate the demand for more output, many fail to properly assess the need for


the organizational infrastructure to keep pace. Where a vision was once a conversation shared

when interviewing a potential job candidate or discussed in casual conversation while filling a

product order, as the business grows the vision needs to be set and deployed to key partners,

suppliers, employees, and other stakeholders. In the early days of Iggy’s the vision was close to

the heart of the Ivanovic’s and the workforce they assembled. As the company grew that vision

becomes more distant from the key processes. Having a system in place to set and deploy the

vision will ensure that all the effort put into growing the business, delivering high quality

products is not in vain.

The goal for Iggy’s is to effectively manage growth, characterized by increased market

share, debt reduction, and profitability, a vibrant organizational culture with strong values, an

engaged workforce, and customers loyal to Iggy’s production of high quality baked goods.

Effectively managing change determines just how painful the growing pains will be and if

growth experienced leads to the success of the organization or its demise. Becoming savvy at

managing growth will help create a more agile environment which will help the organization

meet changing demands and overcome strategic challenges and external factors that impact the

work process. (3) To accomplish this, Igor and Ludamilla will need to be able to effectively

convey their vision for Iggy’s to the leadership team and workforce and engage them in

strategically planning for accomplishment of the vision, establish a performance management

system, and design and manage a work structure and system to achieve desired outcomes.

Research/Literature Review

Research was conducted of a number of different literacy pieces including books,

journals, and articles. Literature review centered on three key themes: organizational culture;

managing growth and sustaining performance; and strategic leadership and planning.


Organizational Culture - Iggy’s took great care in establishing the organizational

culture that motivated and engaged employees and was successful in engaging employees in

helping them achieve the vision. There is a disconnect in the leadership style deployed by Igor

and Ludamilla and the new management structure initiated by Matthew McRae. The culture of

an organization is important not only to the future, but in coping with challenges that come up in

an organizational life cycle and operating environment. (Schein, 1985). A system must be in

place to communicate the culture to the workforce and deploy it to new employees so that they

are able to identify with the culture and the organization’s values, adapt to it and become

integrated with the culture. (Louis, 1980) To assist in understanding their differences and to

identify opportunities to unify their individual styles, a leadership assessment may be useful in

laying the foundation for restoring the culture and keeping it strong going forward. The areas of

leadership assessment can be classified in four major areas: Momentum, Commitment, Initiative,

and Reciprocity. Momentum describes followers responding positively to the leader’s direction.

Commitment describes an atmosphere where followers are focused on the leader’s goals and the

vision. Initiative occurs when followers are working together in departments, across departments,

and on special teams. Reciprocity occurs when followers work collectively with the leader.

(Daniels & Daniels, 2004) This is ultimately what the Ivanovic’s should strive for.

Strategic leadership and planning - Most businesses begin with a business plan but at

some point become so engrossed in operations that they fail to continue to plan, becoming

reactive rather than proactively aligning the strengths and advantages to opportunities. The

absence of strategic planning defaults to an environment where businesses are not establishing

long term goals, developing priorities or positioning themselves for long term success and

breakthrough performance. (Safranski & Kwon) A robust strategic plan involves key


stakeholders (leaders, employees, suppliers, voice of the customer, etc.) and creates alignment

that links departments as a cohesive work system. High performing organizations develop

specific strategies for key products and services that propel them towards stretch performance.

These organizations have a culture that allows them to be agile and adapt quickly to changes in

the environment and capitalize on core competencies to add value. (Kotter & Heskett, 1992)

Core competencies are those aspects of the organization that set it apart or give it a competitive

edge. They have longevity and are difficult to duplicate. (Prahalad & Hamel, 1990) Iggy’s will

be able to more effectively manage growth and sustain performance if it becomes more strategic

and systematic.

Managing growth and sustaining performance – Most organizations are in touch with

their bottom line, but being able to communicate a strategy or align processes to key business

results can be a challenge. Utilizing strategy maps and balanced scorecards can help

organizations engage stakeholders (employees, suppliers, customers). A balanced scorecard not

only provides leaders with a view of the organizational overall performance, but it provides

accountability to the strategic planning process. (Kaplan & Norton, 1996) To maximize

effectiveness, the balanced scorecard should be deployed throughout the organization.

Department level scorecards, with organization-wise metrics and unit specific indicators can be

rolled up to the organization-wide scorecard. (Kaplan & Norton, 2001) Engaging the workforce

to accomplish the strategic plan and accelerate performance measures at high levels requires

incentives, strategies, and communication to the workforce through a performance management

system that values innovation, customer focus, and development of the workforce. (Lattal, 2003)

With more input comes an increasingly important need to innovate processes and technology.

Many times, so much emphasis is put on meeting demand, that organizations fail to step back


and evaluate how best to meet demand. Support systems often fail to receive the attention

needed. Relying on processes that were not designed for the output expected after enormous,

even unprecedented growth. (Feigenbau) Iggy’s can benefit by establishing a system that allows

it to remain focused on the future, while managing the present.

Options

Criteria for Evaluating Options

There are a number of approaches and variations that can be applied to remedy the

problems the Ivanovic’s are experiencing at Iggy’s. In evaluating those options and alternatives,

consideration will be given to solutions that are aimed at restoring the culture, establishing an

infrastructure that transforms the organization to be able to more effectively manage growth,

improves employee morale and engagement, and whose results can be seen quickly and easily

sustained. The PROACT model will be utilized to select the most effective solution for Iggy’s.

Options Proposed and Evaluated There are several options the Ivanovic’s can take in response to the proposal they were issued by

McRae. In making this decision, the Ivanovic’s are shaping the future of Iggy’s.

Option 1. The Ivanovic’s could reject McRae’s proposal and choose to terminate McRae and his

new management team that do not demonstrate an understanding of or a commitment to the

organization’s unique dynamics or culture. Not only do the performance results included in

McRae’s proposal fall short of the levels Iggy’s was experiencing prior to McRae’s arrival, this

approach may eliminate the toxicity being injected in the workplace. Releasing McRae and his

team, however, does not alleviate the concerns that caused the Ivanovic’s to believe they needed

to hire additional administrative support with a background and expertise in business and does

nothing to propel Iggy’s forward in terms of being able to increase market share, address


operational capacity issues, or engage the workforce. In fact, the chaos created by such a bold

move may exasperate the unstable atmosphere hovering over the workforce.

Option 2. The Ivanovic’s could accept McRae’s proposal albeit with underwhelming

performance projections and staggering cost. Perhaps if McRae felt he was competitively

compensated and valued enough for the Ivanovic’s to oblige his request in order to retain him as

an employee, his renewed sense of acceptance could release untapped potential. After all,

Ludamilla did purse McRae, assumingly because she saw something in him she believed could

add value to Iggy’s, before becoming bewildered with McRae’s lack of boundaries in the

organization, there were some positives observed after his team was assembled. For example,

Nickola observed McRae and his team accomplishing task previously left undone such as

collecting all the data, doing the reports, and putting the numbers together.

Option 3. The Ivanovics could choose to negotiate McRae’s proposal and use the

negotiations process as an opportunity to undergo an organizational transformation by adopting a

performance management system. The Ivanovic’s could work with McRae and his team and the

informal board, which, incidentally, they may wish to formalize as the Board of Directors as part

of the organization’s governance structure, outline the organizational vision, values, and a

develop a plan to deploy the organizational structure to the workforce. As part of this process,

the Ivanovic’s would want to describe the characteristics that feel demonstrates how senior

leaders will model a commitment to the organization’s vision and value. This process would

include developing a strategic plan that aids Iggy’s in achieving its vision and enriches the

organizational culture. The adoption of a performance management system would be preceded

by defining the roles and expectations of senior leaders and establish metrics of performance. As

part of formalizing the organization’s structure and culture, the Ivanovic’s may consider


adopting a balanced scorecard or organizational performance dashboard to review business

results and accomplishment of the strategic plan.

Decision

Decision Choice

The option that most closely satisfies the evaluation criteria is option 3 –

negotiating with McRae in response to his proposal. This approach best addresses the evaluation

criteria and poses the least adverse impacts to the workforce and future of Iggy’s. This option

also positions Iggy’s to fulfill the original intention the Ivanovic’s had for hiring McRae:

managing growth.

Rationale for Decision Choice

Option 1 (rejecting McRae’s proposal) may help restore the culture in the eyes of the

Ivanovic’s and the staff who were part of Iggy’s before McRae and his team arrived and may

improve employee morale and engagement but would not address the criteria of establishing an

infrastructure that transforms the organization to be able to more effectively manage growth or

provide a sustainable approach to operations that yield improvement in business results and

performance.

Option 2 (accepting McRae’s proposal) would do little to restoring the culture, as it

continues to give McRae the proverbial upper hand and is likely to find the Ivanovic’s and long

term staff and supporters in a continued state of disillusionment with Iggy’s compromised

culture and challenged environmental. This approach does leave in place the original solution the

Ivanovic’s thought would answer their need to effectively manage growth and with a concrete


agreement in place, results are likely to be experienced in the specified timeframe, though those

results are clearly below the Ivanovic’s vision for Iggy’s.

Option 3 (Negotiating McRae’s proposal) best addresses all the evaluation criteria and

would help restore the culture by defining the desired attributes, leaders agreeing to it, and

developing a plan to deploy the culture to the workforce and engage the workforce in continuing

it, thus improving employee morale and engagement. This approach establishes the infrastructure

that could transform Iggy’s to be able to more effectively manage growth and through

organizational alignment results can be seen quickly and easily sustained through the use of

performance monitoring and strategic planning.

Option Evaluation Criteriarestores culture

Evaluation Criteriatransforms the organization to be able to more effectively manage growth

Evaluation Criteria improves employee morale and engagement

Evaluation Criteria results can be seen quickly and easily sustained.

Reject

McRae’s

proposal

Ivanovic’s stand to regain confidence of staff, obtain a sense of regaining ownership of their business, maintain control of the future and organizational

Iggy’s no better off than before McRae – still lacking infrastructure needed to grow. May have to stop accepting new customers

Iggy’s pre-McRae employees may be happy to see the unfavorable impact McRae and his team have had on the work atmosphere reversed

Results could be seen suddenly in terms of employee reaction, but being unable to add new customers will place a cap on profit and growth

Accept

McRae’s

proposal

McRae showed a disregard for the culture the Ivanovic’s tried to establish. If they accept his proposal the Ivanovics will need to comply with McRae’s plans in order to avoid being accused of being resistant to his ideas, thus preventing him from achieving performance expectations.

The Ivanovic’s acknowledged the need to establish an administrative governance structure at Iggy’s; McRae has assembled a team of individuals to operate Iggy’s. Agreeing to let them take the lead may result in Iggy’s having more control over growth, but at the sacrifice of the culture.

The workforce is likely to be least receptive to this option and if any were holding out hope for the Ivanovic’s to intervene, this will relinquish any hope for that.

McRae may be able to release untapped potential to improve business results

Negotiate

McRae’s

proposal

The Ivanovic’s can define their requirements and McRae can acknowledge and a plan could be

This approach leaves the structure intact that is needed to manage growth, but the process

A defined, formalized, and deployed organizational structure, communicated to the

It will take time for relationships to be repaired and restored but defining


developed to preserve the culture. The Ivanovics cannot both preserve the culture and position the company for growth. This option positions Iggy’s for both.

of strategic planning (facilitated by the negotiations process with McRae) can help define roles and expectations for all leadership positions.

workforce, with mechanisms to involve employees can restore the Ivanovic’s as leaders, include McRae and his team, and engage staff.

expectations, developing a strategy, and establishing performance measurements will provide a roadmap that will aid in that recovery process.

POSITIVE IMPACT NEGATIVE/FLAT IMPACT

Implications of the Decision

There is no guarantee that the negotiations process between the Ivanovic’s

and McRae would be successful but a couple things are clear: 1) the Ivanovic’s need help in

order to begin accepting new customers and for Iggy’s to continue to grow; 2) McRae clearly has

some desire to be at Iggy’s because he rescinded his resignation and provided a proposal, albeit

bold and unreasonable in the eyes of the Ivanovic’s; and 3)the Ivanovic’s saw some potential in

McRae or they would not have offered him a position after a stent of serving as a consultant. The

lack of communication between the Ivanovic’s and McRae is a serious undertone in the events

that transpired. The Ivanovic’s did not successfully communicate the attributes of the

organizational culture they worked to establish and wished to see preserved, nor were they

successful in communicating those expectations to McRae. There was poor communication

between the Ivanovic’s and McRae about performance expectations, performance results, and

support needed. There was clearly a misunderstanding about the extent of authority that

accompanied McRae’s position as CEO. It may be wise to include the mediating consultant as

part of the negotiations process but both sides, the Ivanovics and McRae, seem to have the best

interests of Iggy’s at heart so there is hope.

Implementation Plan


The Ivanovic’s, the informal board, key pre-McRae staff, McRae, and the team

he formed, along with the mediating consultant, should begin with a strategic planning retreat to

develop a framework and understanding of organizational strengths and opportunities for

improvement in Iggy’s management system. (Florida Sterling Council, 2012) This retreat should

be preceded by communicating with McRae that the terms of his proposal cannot be honored but

that they wish to engage in more discussion and planning to come up with terms both sides could

support. The retreat should begin with a history recap of how Iggy’s was formed, followed by

the current vision and mission. Those in attendance should contribute their thoughts, support, and

suggestions for improvement of the mission and vision until one can be agreed upon and

adopted. The next step will be selecting core values, in a similar manner.

The process should then move into leadership and governance structure, answering the

question “How do senior leaders lead?” The group will need to consider how Iggy’s leadership

will show a commitment to the adopted organizational values, how they will promote legal and

ethical behavior. The group will also need to consider how they will create a sustainable

organization through performance improvement and innovation, an environment for workforce

learning, an environment that delivers a consistently positive customer experience and create an

environment to accomplish your mission and strategic objectives. (Florida Sterling Council,

2012) They will need to discuss how they will communication with and engage the entire

workforce and how they will review and achieve management accountability, fiscal

accountability, and protection of stakeholder interests. This process can be accomplished with

brainstorming – the questions or factors to be considered can be put up on the board, facilitated

by the mediating consultant, and everyone’s response recorded. Key themes and trends will

emerge and the responses can be blended and consolidated into the answer, which becomes the


plan. This presents a good opportunity to decide who will be responsible for what aspects of the

organizations and span of control.

After defining and designing the organizational structure, Iggy’s leadership team needs to

decide how it will conduct its strategic planning; deciding what will be the process steps and who

key participants will be. They will need to identify Iggy’s core competencies, strategic

challenges, and strategic advantages. (Florida Sterling Council, 2012) They will want to

brainstorm strengths, weaknesses, opportunities, and threats and consider long-term

organizational sustainability through the future projections performance and that of competitors.

They need to establish key short and longer-term strategic objectives and a timetable for

accomplishing them. They must determine how they will develop and deploy action plans,

allocate financial and human resources, and establish key performance measures or indicators for

tracking achievement and effectiveness.

Iggy’s has always placed a great deal of importance on customer value. To ensure that

importance remains a key aspect of the organizational culture and is considered in all key

processes, the group must determine what methods Iggy’s will use to identify customer


requirements, suggestions, complaints and obtain actionable feedback on products and services.

They must determine how Iggy’s will identify current and anticipate future customer groups and

market segments and which customer groups and market segments to pursue for future growth.

They must decide how they will use customer and market data to improve marketing and

reinforce the customer-focused culture to acquire new customers, build market share, meet and

exceed customer expectations, and increase loyalty, repeat business, and gain positive referrals.

(Florida Sterling Council, 2012)

Iggy’s leadership team must spend time deciding how it will select, collect and use data

and information in daily operations, to track overall organizational performance, to track

progress on your strategic objectives and action plans. It must decide how it will select and use

key comparative data and voice-of-the-customer data and information (including complaints).

They need to agree on key organizational measures, including financial performance measures.

They need to decide how they will review and analyze organizational performance, identify and

set priorities for improvement, and how they will engage the workforce in this process. (Florida

Sterling Council, 2012)

The workforce of Iggy’s has been a pride and strength of Iggy’s. During the planning

retreat/session, Iggy’s leadership must come to terms with how they will assess current and

future workforce capability and capacity needs, how new members of the workforce will be

recruited, hired, and retained. This will prevent things from happening, like McRae adding

positions without a systematic process to determine the need and obtain approval and ensuring

that someone is not placed in a position above their ability. Iggy’s prides itself on a diverse

workforce, so the leadership team must consider how it will ensure your workforce represents

the diverse ideas, cultures, and thinking of its hiring and customer community. The leadership


must also agree on how it will organize the workforce and avoid departmentalization and the

presence of silos, as well as considering how it will ensure, measure, and improve workplace

health, safety, and security. They will need to discuss what policies, procedures, and benefits are

needed to support the workforce and determine the key elements that affect workforce

engagement and satisfaction, including different workforce groups and segments. They need to

develop approaches foster a culture of open communications, engagement, and high performance

work, as well as how the workforce will be developed to achieve organizational objectives,

overcome strategic challenges, and manage career progression. (Florida Sterling Council, 2012)

In the spirit of improving communications and removing the trend of making

assumptions that the Ivanovics and McRae and his team are headed in the same direction, they

need to have a conversation and agree on work system design & requirements, answering the

question “how do you design and coordinate your key work system(s)?” The group will need to

ensure understanding and clarity on key work system requirements, incorporating input from

customers, suppliers, partners and collaborators, as appropriate. They need to agree on how to

manage and improve key processes to achieve success, control costs, and prevent defects, errors

and rework, and how they will manage supply chain and ensure suppliers are effective. They

need to establish the process that will be used to achieve better performance, reduce variability,

and improve products and services.

To manage performance of this newly defined organizational culture and governance

structure, the information gleaned from the brainstorming can be used to develop a balanced

scorecard or organizational dashboard. The areas to be monitored should include product and

service outcomes, customer-focused outcomes, workforce focused, leadership and governance


outcomes, and financial and market outcomes and should include appropriate comparative data

on competitors, as appropriate.

Reflections

Leadership

The Ivanovic’s clearly have a vision for Iggy’s but have struggled to

communicate that vision with McRae and his team or to translate their vision into action. The

communication breakdown should be acknowledged and improved. Using the structure above to

define the organizational framework will go a long way in the Ivanovic’s communicating their

vision, but will also begin to shift the culture from being one in which the Ivanovic’s have a

desire to one where they share their business and engage ,much needed help in delivering their

product.

Learnings and self-reflection

My initial reaction to this case study was very negative towards McRae. I think initially it

would have been my instinct to select option 1 - reject McRae’s proposal and terminate him and

everyone he brought with him to Iggy’s and simply start over. When I underwent the processes

of determining the root cause for the turmoil, it became clear that communication and the

absence of a clearly defined organizational structure would continue to be a problem for Iggy’s

and it was less about McRae’s personal style. This has taught me to be less reactive, to ask

questions, and consider what factors other than a personality can be at play when something is

not going according to plan. Honestly, I surprised myself when I suggested option 3 – negotiate

with McRae and began to find some responsibility for the unfortunate turn of events lying with


the Ivanovic’s. I also have a belief that a culture can be reversed as much for the good as for the

negative.

Conclusion

Iggy’s Bread of the World was founded with a passion for baking with high quality

ingredients, produced by an engaged and devoted workforce. Iggy’s success nearly has become

its demise because the absence of a governance structure and communication threatens a

sustainable future. To stabilize the work atmosphere, the Ivanovic’s need to engage key staff and

stakeholders in a process that considers the leadership, strategic planning, customer and market

focus, data and information management, workforce, and process design and improvement

characteristics that will provide the framework for the future. Including staff in developing the

framework will engage them in delivering on its promise.


References

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rice capstone 21

Documents

florida sterling

release untapped

negotiate

reject mcraes

poor growth

effectively

harvard business

performance