Strategic Messages to Different Stakeholders
Key message to executive: Introducing a new CEO
Objectives:
Issues:
According to Koyne & Koyne (2007), the executive should know that the new CEO and managing partners are likely to reorganize the company through layoffs and dismiss top management. However, the top management can tell the new leaders that they want to help them achieve implement the changes. Porter, Lorsch &Nohria (2004) established that CEOs should focus on managing the organizational structure and not on daily operations. Additionally, the CEO at BrightStar should understand that his position does not give him the right to lead or a guarantee that the organization will be loyal to him. Aiken & Keller (2007) suggest that the executive should provide a good reason for carrying out the changes, and they should ensure that employees are openly engaged and reporting successes along the process.
Li (2015) holds that the reorganization that comes with a new CEO should establish stability and order to daily practices and functions. However, the communication channels should be opened for employees who may not agree with the new direction that the company is taking. Karaevli & Zajac (2012) believe that an outside CEO is a good choice for BrightStar considering that it has been underperforming as he will find his mandate well cut out and it will be easy to assess his performance after a while. According to CEB Global, the executive should ensure that there is effective communication on either departure or arrival of a new CEO though it is a challenging function of the communication department. Internal communicators should know about the new CEO, develop a plan to inform the employees about the new leader’s strengths, experience, management style and, goals. New CEO should focus on developing executive teams and relationships, two-way communication and creating collaboration through engagement.
O’Toole (2014) suggests that new executive team should know that there have been successful projects, strategies, and programs in the past, and they should be continued. It is critical for new leaders at BrightStar to identify things that need to be changed and those that need to remain the same. Locker (2014) found that 55 percent of outside CEOs leave within 18 months because they try to introduce their personal values which are different from that of the organization. However, they are good in bringing a new perspective and enable the company to make strategic changes. Successful CEOs should possess some qualities like achievement-oriented, humanistic approach, positive outlook, inclusive, integrity, and self-aware. The new leadership at BrightStar is a good opportunity to examine the composition of its current executive and see whether the team can make the planned changes.
Eckfeldt (2015) believes that the new CEO needs to listen actively and learn about the culture of the company, its people, its business, and its history. It is crucial to know that whatever might have worked in a different environment may not work in the new context, and it is necessary to ask for feedback from other stakeholders. The new CEO should define his purpose and role and clearly and transparently communicate it to other people in the organization. Ofek & Avery (2014) advises retailers like BrightStar to learn to use discounts smartly so that the customers will enjoy and convey the value of the brand at the same time. Chen & Thompson (2015) warn against replacing founder-CEOs as many companies that have done so have failed, even though the ones that survive grow considerably faster.
Strategic message to Finance: Cost reduction
Objective:
The operating expenses for the company need to be reduced as one of the short term goals so that it can lower manufactured retail price to be competitive in the market. Some of the cost reduction strategies include:
Layoffs
Closing non-performing stores.
Issue:
According to Men (2012), the communication about the new CEO should create an image of a competent, qualified and properly knowledgeable and skilled in the minds of employees. If the employees perceive their CEO as trustworthy and honest, they will evaluate the entire organization positively. Clapham, Schwenk & Caldwell (2005) assert that firms going through a decline and financial stress may fail to improve if the turnaround strategy is not adapted correctly.
Strategic message to Buyers: focus more on customers
Objective:
Buyers should appreciate that the company is focusing more on their needs and expectation by changing its brand culture as well as becoming highly merchant driven.
Issue:
CEO Global suggest that buyers and the market, in general, take longer to adjust to changes. Shane (2016) holds that connecting with customers is a very important aspect in improving the business as it will lead to increased sales revenue. Gaines-Loss (2013) recommends the use of social media to communicate with stakeholders
Strategic message to IT: Operational efficiency and accuracy
Objective:
For the company to achieve its short and term goals, it should improve its level of efficiency in its operations and accuracy of information used by management to make decisions.
Issue:
Gaines-Loss (2013) suggests that the IT department should provide the infrastructure for electronic communication within the organization. Luo et al. (2016) advise leaders to be aware of the five dimensions of communication style in the environment of change. The dimensions are reality orientation, hope orientation, support orientation, subordinate orientation, and enforcement orientation. Mayfield & Mayfield (2002) believe that employee commitment is an important measure of success for a leader. Communication triggers establishment and sustainability of trust as well as sharing the emotional state by highly committed employees and leaders. According to Hicks (2011), leaders in finance department should be equipped with the right tools and sufficient training to ensure continuous communication. Man (2015) reports that CEOs use mostly emails and face-to-face approaches to communicating with employees.
Strategic message to Procurement: Low cost of supplies
Objective:
Reducing retail prices of items will require the company look for cheaper but quality products from its suppliers. Additionally, the level of efficiency along the supply chain needs to improve.
Issue:
Shish, Lusch & Goldsberry (2002) believe that leaders in procurement should have technical and managerial skills to be able to deal with employees. Today, the performance expectations of purchasing managers have expanded to include other more advanced functions other than their traditional role of ensuring that organizations have the goods and services at the right time and place. The vertical interaction between leaders and frontline employees is important in improving communication (Cumberland &Alagaraja, 2016). Keevy & Perumal (2014) suggest that it is important for the procurement department to undertake professional and learning in the areas of management and leadership development. Kaifi & Mendenhall (2012) believe that procurement and other departments need to adapt to change. Kantabutra & Vimolratana (2010) established that store managers with vision are related with higher staff satisfaction. Store managers with high levels of passion are likely to engage in activities that motivate staff. According to Speculand (2012), social media should not replace the traditional international communication but should complement it. A study by Chitrao (2014) found that employees still prefer face-to-face interaction.
Implementation Plan
Making the executive team support the new brand identity and vision.
Stakeholders: The executive team of the company
Objective: Communicating with executives about the new brand identity and the new CEO’s vision.
Communication Channel: Face-to-face Meetings
Message: The executive team should support the new CEO’s vision and pass it to their teams.
Tactic: Use negotiations and persuasions to win the support of the executives on the new goals.
February to March
Communicating with employees in the field about the change of strategy by the company management.
Stakeholders: Employees working in different stores across the country.
Objective: To inform the workers about the steps that the company has taken to ensure it recovers from the current problems.
Communication Channel: Internal memo and emails.
Message: Employees are very important part of implementing the current strategy and as they will ensure that the company relates well with its customers.
Tactics: Will inform the employees the benefits that they will get individually if the company improves its performance including pay raises and bonuses.
April to May
Creating a customer service system
Stakeholders: Buyers
Objective: To communicate with customers on the changes in service delivery models.
Communication Channel: Ads, social media and sales promotion.
Message: the company will be offering quality and reliable services to its customers so that their need and expectations can be met beyond expectations.
Tactics: The marketing team will have to identify various channels of informing the customers about the changes in the quality of service in the company. Additionally, the marketing manager will have to conduct regular customer satisfaction surveys to find out whether the satisfaction index is going up or not.
References
Aiken, C. & Keller, S. (2007, February). The CEO’s role in leading transformation. McKinsey & Company. Retrieved from http://www.mckinsey.com/business-functions/organization/our-insights/the-ceos-role-in-leading-transformation
Chitrao, P. (2014). Internal communication satisfaction as an employee motivation tool in the retail sector in pune. The European Journal of Social &Behavioral Sciences, 10(3), 1541-1552. doi:10.15405/ejsbs.137
Clapham, S. E., Schwenk, C. R., & Caldwell, C. (2005). CEO perceptions and corporate turnaround. Journal of Change Management, 5(4), 407-428. doi:10.1080/14697010500359276 Retrieved from: http://www.tandfonline.com.libproxy1.usc.edu/doi/abs/10.1080/1469701050035927
Chen, J., & Thompson, P. (2015). New firm performance and the replacement of Founder‐CEOs. Strategic Entrepreneurship Journal, 9(3), 243-262. doi:10.1002/sej.1203
Cumberland, D. M., &Alagaraja, M. (2016). No place like the frontline: A qualitative study on what participant CEOs learned From Undercover boss: CEO interactions. Human Resource Development Quarterly, 27(2), 271-296. doi:10.1002/hrdq.21252
Eckfeldt, B. (2015, June 1). Five things new CEOs should focus on. Business Insider. http://www.businessinsider.com/5-things-new-ceos-should-focus-on-2015-6
Gaines-Ross, L. (2013). Get social: A mandate for new CEOs. MIT Sloan Management Review, 54(3), 1.
Hicks, J. M. (2011). Leader communication styles and organizational health. The Health Care Manager, 30(1), 86.
Kaifi, B. A., & Mendenhall, S. (2012). Strategic leadership applied to retail management: Joe contrucci discusses the 21st century dynamic organization. Journal of Applied Management and Entrepreneurship, 17(4), 103.
Karaevli, A. & Zajac, E. (2012, June 19). When is an outsider CEO a good choice? MITSloan Management Review. Summer. Retrieved from http://sloanreview.mit.edu/article/when-is-an-outsider-ceo-a-good-choice/
Kantabutra, S., &Vimolratana, P. (2010). Vision-based leaders and their followers in retail stores: Relationships and consequences in Australia. Journal of Applied Business Research, 26(6), 123-134.
Keevy, Z.,& Perumal, J. (2014). Promoting transformational leadership practices of retail managers. Journal of Management Development, 33(10), 919-931. doi:10.1108/JMD-05-2012-0057
Koyne, K. &Koyne, E.J. (2007). Surviving your new CEO. Harvard Business Review. May. Retrieved from https://hbr.org/2007/05/surviving-your-new-ceo
Li, S. (2015, March 29). American Apparel’s new CEO brings order to company chaos. Los Angeles Times. Retrieved fromhttp://www.seattletimes.com/business/american-apparels-new-ceo-brings-order-to-company-chaos/
Locker, A. (2014). Outsider CEOs: The impact on firm performance and employee commitment. University of Rhode Island. Schmidt Labor Research Center Seminar Series. Retrieved from http://web.uri.edu/lrc/files/Lockmer_CEO_Succession.pdf
Luo, W., Song, L. J., Gebert, D. R., Zhang, K., & Feng, Y. (2016). How does leader communication style promote employees’ commitment at times of change? Journal of Organizational Change Management, 29(2), 242-262. Doi: 10.1108/JOCM-11-2014-0204
Mayfield, J., & Mayfield, M. (2002). Leader communication strategies critical paths to improving employee commitment. American Business Review, 20(2), 89. Retrieved from: http://search.proquest.com.libproxy1.usc.edu/docview/216319467?pq-origsite=summon&accountid=14749
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O’Toole, J. (2014, January 13). Why new CEOs sometimes bring big problems. Strategy+Business. Retrieved from http://www.strategy-business.com/blog/Why-New-CEOs-Sometimes-Bring-New-Problems?gko=186b5
Ofek, E. & Avery, J. (2014). Case study: Second thoughts about a strategy shift. Harvard Business Review. December. Retrieved from https://hbr.org/2014/10/case-study-second-thoughts-about-a-strategy-shift
Porter, M., Lorsch, J., &Nohria, N. (2004). Seven surprises for new CEOs. Harvard Business Review. October. Retrieved from https://hbr.org/2004/10/seven-surprises-for-new-ceos
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Shane, D. (2016, January 7). Marks & Spencer new CEO urged to revive retailer’s clothing. Express.http://www.express.co.uk/finance/city/632575/Marks-Spencer-new-CEO-urged-revive-clothing-business
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Shim, S., Lusch, R. F., &Goldsberry, E. (2002). Leadership style profiles of retail managers: Personal, organizational and managerial characteristics. International Journal of Retail & Distribution Management, 30(4), 186-201. doi:10.1108/09590550210423663
Speculand, R. (2012). Why communication of strategy frequently fails. Strategic HR Review, 11(6), 353. doi:10.1108/shr.2012.37211faa.009
