Rick Cohen, president and CEO of C&S Wholesale Grocers, is faced with the dilemma of deciding whether and how to implement the self-managed team concept in his unionized warehouse. With the holiday season approaching, the busiest time for C&S, he needs to come up with a solution or the reputation of C&S will be jeopardized. Cohen, grew up in the family business and completed his undergraduate studies at the Wharton School at the University of Pennsylvania.
One of his greatest strengths that he was able to identify about himself early on is that he is able to look at the production numbers and quickly be able to figure out what areas needed improvement. C&S Wholesale Grocers grew from a small company in 1918 into a multimillion-dollar business by securing military bases, obtaining large supermarket accounts, such as Big D, and through innovation and attention to customer service.
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In 1987, C&S had begun to act as principal wholesaler to A&P throughout New England, a decision that was consistent with the firm’s growth strategy, but that also represented a significant increase in daily output and additional pressure on the business structure. Cohen is concerned about whether the company’s existing operations would be able to meet the needs of all its customers and maintain the high levels of customer satisfaction for which the company was known throughout New England.
In order to deliver, the company had continued to expand its workforce; however, coordination also became an issue, and soon Cohen found himself hiring more supervisors thus leading to an overcrowded workplace. Cohen is now concerned for several reasons: higher workload due to A&P, the increased staff creating an overcrowded workplace, the diminishing quality of the orders, and stress causing turnover which peaked at 90%.
The constant influx of new and untrained employees led to more inefficiencies and confusion. This was a turning point and Cohen knew that he had to change something. Cohen met an external consultant named Reuben Harris at a seminar, and Harris was able to identify some key problems that were having a detrimental effect on the efficiency of C&S. Cohen read an article about a new concept called self-managed teams, which had been credited with enhancing an organization’s quality, productivity, and competitiveness.
The concept behind self-managed teams was to eliminate layers of management by turning over to teams responsibility for their work, for monitoring and evaluating their performance, and for adjusting the way tasks were carried out in order to solve problems. When implemented successfully, the self-managed teams concept had been credited with enhancing an organization’s productivity and competitiveness. Cohen wondered how such a concept could be implemented in the context of a labor-intensive, unionized warehouse environment.
Cohen took this concept and decided to run a scaled-down experiment in the warehouse. He took five senior employees and asked them to form a team and run the orders for four supermarkets unsupervised. The results of this experiment were consistent with Cohen’s goals and the experiment showed increased team productivity, an increase in the quality of the orders, and an overall enjoyment by the team members. However, the experimental team informed Cohen that they would need to be compensated differently for working as a team.
Cohen was now faced with the position of whether or not to execute the self-managing team concept. Additionally, he was on a time crunch since the work at Brattleboro warehouse was too high and was not operating efficiently. Action Plan There are a few avenues that Cohen could go down in order to resolve this dilemma. His first option would be to move forward immediately with the self-managed teams. Cohen outlined principles that he believed were necessary in order to execute the self-managed teams concept successfully.
These principles included the following : 1) should be self-selecting rather than assigned, 2) should have he power to remove any member for any performance-related reason, 3) should earn compensation based on total team productivity and split the pay equally among members, and 4) should be paid bonuses for quality (accuracy) and receive deductions from pay for errors in shipments. If Cohen were to implement these principles, it could have a significant impact on the efficiency of C.
To begin with, by allowing the teams to pick their team members, they will chose teammates they work best with both personally and professionally. Second, because the teams will earn compensation based on total team productivity, they will have vested stake to be as productive as possible as well as accurate as possible with their shipments. If this concept is applied successfully, it could increase shipments as well as decrease labor costs. Also, workers would be less inclined to miss work since they have such a high vested interest in the firm’s success thus also decreasing turnover.
As Hackman notes, “…they grow a shared commitment to the team and a measure of caring for one another. ” Finally, the effect of all these positive attributes will lead to an lower operational costs overall. However, he is hesitant to implement the new concept because the holiday season is approaching and is questioning whether this is the right time to restructure operations. According to Hackman, “…teams are most vulnerable to mishaps when they’re starting out, before they’ve had the chance to learn through experience how to best work together. This being the case, his second option would be to wait till after the holiday season to implement the new strategy. However, this scenario is highly volatile and from the information given to us about the current state of C, it seems unlikely that the company will be able to uphold its reputation through the holiday season. In the short term, I would suggest that Cohen implement the self-managing teams concept to individuals that have been at the company for the longest time and ask them to include at least one new person on their team of no more than six people.
Therefore, in the short-term, at least there will be some form of organizational structure while simultaneously providing training for the newer employees. In the long term, I would suggest that Cohen should engage a team of consultants to fully carry out all the steps of the operations restructuring. It is necessary to have experts assist with the transition and provide the formal framework and training to the employees. Hackman notes, “…a team’s basic design is what provides the platform on which members do their work.
Devoting time, thought, and energy to making that platform as high and steady as it can be is always a good investment. ” Overall Learning This case demonstrates the complexity of a situation where a company’s operations need to be restructured, but timing presents a challenge. Cohen is faced with a decision of whether he should take a risk and apply a concept that has never been fully tested in a unionized warehouse, but could be extremely beneficial. This case study brought light on how thinking outside the box and implementing an unconventional solution might prove beneficial in the long run.
Maximizing team performance is crucial to how many companies operate, especially C. However, I also think it is important to be able to recognize when it would not be useful to implement this specific team concept. As Hackman notes in his article, when a team’s direction or design is flawed, one needs to be able to analyze the situation and be able to conclude whether the team is imperative to the work at hand because sometimes it is an inappropriate design choice.
I think that because Cohen experimented with a smaller team it might prove beneficial for him to implement the new structure immediately since the current structure is not going to be able to handle, or be efficient, in the upcoming holiday season. Bibliography “C Wholesale Grocers. ” Delong, Thomas J. , Mody, Tejal, Ager, David L.. Case No. 9-404-025. Revised 10/14/03. Harvard Business School Publishing. “New Rules for Team Building. ” Hackman, J. Richard. July 2002, OptimizeMag. com. Pages 50-62.