Identifying the root causes of problems

Business Problem -- Chattanooga Ice Cream Company

The Business Problem

The Chattanooga Ice Cream Company is one of three divisions of the Chattanooga Food Corporation, founded in 1936 by the grandfather of its current division president, Charlie Moore (Sloane, 2003). The Chattanooga Food Corporation also maintains a Grocery Products Division and a Specialty Foods Division in addition to the Ice Cream Division. The Ice Cream Division had been strong until recently and sales have flattened out. Some of the external factors to which that decline is likely attributable are: (1) the increased market share of "super-premium" ice cream products such as Haagen-Dazs and Ben & Jerry's; (2) the growing popularity of healthier ice-cream-like alternatives such as frozen yogurt and fat-free ice creams; and (3) the growing popularity of "mix-in" ice cream products such as those that include pieces of cookies or candy bars in the ice cream mix. Making matters even worse, Charlie just received the news that Chattanooga's third largest customer, Stay & Shop, has decided to drop the Chattanooga line and to replace it with the Sealtest product line in its stores throughout a substantial region of its market (Sloane, 2003).

Charlie had recently replaced a retiring veteran of the company who managed using an autocratic style wherein he solicited information from his department heads (as well as from other information channels that he had developed) and then made decisions independently (Sloane, 2003). Charlie believed in a much more collaborative leadership methodology and hoped that by conducting joint meetings with all of his department heads he could create an environment in which they all learned from one another and in which decisions were the product of a consensus rather than of his independent decisions (Sloane, 2003).

When Charlie called a meeting of his department managers, the session quickly devolved into arguments wherein each department head blamed the other for the problem (Sloane, 2003). Specifically, the head of Marketing blamed the head of Product Development and Production, who blamed both the head of Marketing and the head of Information Systems. Meanwhile, the head of Sales argued that the main problem was that Marketing was not being aggressive enough to secure premium shelf space and also, and that the product line was stale because product line desperately required more products to compete in the health food, specialty, and super-premium areas. This was the first time that the respective department heads had expressed those views to one another. Previously, all of them had expressed them only to Charlie in private. Not wanting to allow a rift to develop within his management team, Charlie tried to "turn a deaf ear" to their mutual blame of one another and hoped that by finally airing out these grievances, he could channel their respective concerns into a productive collaborative process (Sloane, 2003).

Identifying the Source of the Internal Problem

Charlie has two major problems: the first is the external problem of flattening sales and increased market competition; the second is the ineffectiveness of his managing and leadership style. The external problem is out of his control and the only way that he can address that problem is by first solving his internal problem, because that problem is completely within his control as a manager (Kinicki & Williams, 2005) and as an organizational leader (Maxwell, 2007).

Initially, Charlie's decision to radically change managing styles from that of his predecessor was a mistake. Generally, leadership changes already have a disruptive effect on the management team (McFarlin, 2006); therefore, radical changes should be avoided unless there are very specific and good reasons to depart from what worked previously, at least until the new leader has established their trust and confidence (Maxwell, 2007). In this case, Charlie was already in possession of sufficient information to know that his team could not simply begin collaborating effectively under a consensus-based approach to decision-making. Charlie should have known that before any such change in management and leadership style could possibly be successful, he would have had to first establish a culture of openness that precluded privately voiced complaints by heads of departments about other departments that they would not repeat in a group meeting. That culture of honesty and of mutual respect is a prerequisite to the collaborative decision-making environment that Charlie envisioned for his team (George & Jones, 2008; Maxwell, 2007; Russell-Walling, 2007). In this particular case, Charlie has the incentive to make good decisions but apparently lacks the business leadership acumen to understand the group dynamics involved (Maxwell, 2007; Robbins & Judge, 2009).

Solving the Internal Problem