Chattanooga Ice Cream, Inc.

Abstract

This paper will provide analysis of the Harvard Business Review case study: The Chattanooga Ice Cream Division. The Chattanooga Ice Cream Division is a subsidiary of The Chattanooga Food Company (CFC). The Introduction will focus on background information on company and overview of the case study. Discussion will focus on assessments of the leadership, employees and recommendations for both to improve profitability and team functionality.

Introduction

        Chattanooga Ice Cream, Inc., was one of the three divisions of Chattanooga Food Corporation, a family owned enterprise based out of Chattanooga, TN in 1936. The company’s sales revenue began to flatten year over year beginning in 1992, with corresponding decreases in operational profitability. Several moves were made in an attempt to remedy the down flux in sales. First the promotion of Charlie Moore to President and General Manager of the Ice Cream Division. The company also hired a new VP of Marketing, Barry Walkins and Stephanie Krane was hired on to upgrade the divisions information systems control functions. Finally, in an effort to increase profitability a new frozen yogurt line was introduced, at the same time the original manufacturing plant was shut down to reduce operational costs. Though all of these actions were applauded by the parent company, they had failed at providing sustainability and as a result the companies profits continued to fall (Sloane, 2003).

        The company continued to deteriorate for the next few years, but suffered a major blow in 1996 when the divisions third largest customer Stay & Shop replaced Chattanooga with a competitor in all of its southeast regional supermarkets. Charlie Moore gathered the leadership team in a meeting to discuss the loss of Stay & Shop.  All senior managers from each department were present: Barry Walkins, who was very creative and was in-tune with what the consumers wanted, but lacked direction and follow through; Stephanie Krane, who had a promising track record of delivering results; Kent Donaldson, vice president of R&D who had a grudge against Walkins over the failure of the frozen yogurt line; Billy Fale, VP of Production who was extremely knowledgeable and disciplined as a leader, however he was “old school” and tended to dismiss innovation; Les Holly, VP of Sales had a great relationship with the customers, but tended to withhold information that could be pertinent to the companies success. Of course running the meeting was Charles Moore; whose group based democratic leadership style was a huge contrast from the authoritative style of previous management. Where as the previous management made decisions alone that he thought was best for the company. Moore valued group input, team consultation, and shared consensus before making decisions. Unfortunately, the management team was so dysfunctional that the entire meeting consisted of finger pointing and blaming one another for the loss of the Stay & Shop account. In an effort to introduce order Moore, asked for solutions to the problem with two main proposals emerging: Reduce cost by placing salary freezes; Grow Revenue by increasing product lines and incorporating mix-in flavors as the competitors are doing (Sloane, 2003).

Assessment of Division Head

        Upon assessing The Chattanooga Ice Cream Division, it was imperative to analyze the leadership of Charlie Moore. Based on evidence presented in the case study it is apparent that Charlie Moore has a Steady (S) Leadership style in relation to the DiSC Management Assessment. Charlie’s inability to make decision with out a group consensus is typical of an S style manager, who values collaboration and support more then drive and action. Leaders with this DiSC Style like to work in an environment that is free from disorder at a pace that is both easy going and systematic. Working in face-paces or highly stressful situations may be viewed as intimidating by the S Style (Inscape Publishing, 2013). This was evident in the morning meeting, when the leadership team began to speak openly and debate their opinions of the best course of action to take after the loss of Stay & Shop. When the conversation got elevated, due to a slight disconnection in opinion, Moore requested to reconvene after people had time to cool down. “It is true that candid comments definitely freak people out at first” (Welch & Welch, 2005) so it is understandable that the teams candid remarks makes Moore a bit uneasy; however one of the fundamental rules of leadership is to “establish trust through candor, transparency and credit” (Welch & Welch, 2005). In consonance with the Thomas-Kilman Conflict Mode Instrument (Thomas & Kilman, 2007) Moore’s tendency to stray away from conflict is congruent with the avoidance style of conflict management. Moore continually attempts to dodge conflict and prolongs decision making by not taking control of the meeting, leading to having to reconvene at a later time.

Assessment of Employees

        With out a doubt the team at Chattanooga Ice Cream is highly dysfunctional, this is obvious by how they have a hard time interacting with one another. There is no accountability among this team; instead each department blames the other for the loss of business. Communication between the team members is scarce, with no positive dialogue between them at all. This team appears to be suffering from several of the five basic dysfunctions of a team (Lencioni, 2002). The Five Function Team Assessment shows indication that Moore and the management team are afflicted by all five of the dysfunctional areas. (Lencioni, 2002)

There is an overarching lack of trust among the group; this could be caused in part by the loss of three of the top seven members of the management team in the last five years. With the loss of a core group of leaders, employees may lack trust in the current management team. With further talk of pay freezes and budget cuts potentially adding to the lack of trust felt by departmental employees. According to research by Erickson & Roloff (2007) Budget cuts and downsizings are detrimental to an organizations employees, not only for the employees who are directly impacted, but for the survivors as well. Results indicate that 40% of staff reports feeling a lack of trust in their company after a budget cut or downsizing.

Fear of conflict comes more from Moore’s behalf than from the team. The team has no issue with conflict between each other, however it is often done in secret behind each other’s back instead of being discussed candidly among one another. With Moore being avoidant to conflict it will be difficult for him to introduce candor in to the culture at Chattanooga Ice Cream, but if he could see the benefits of how candor leads to winning he might be more open to it. Candor starts the ball rolling by getting people in the conversation “more ideas get surfaced, pulled apart and improved. Instead of everyone shutting down, everyone opens up and learns” (Welch & Welch, 2005).