Sigtek Case Analysis

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Introduction

        John Smithers was faced with a challenging and potentially rewarding opportunity which was to become one of two site instructors for a Total Quality program to be launched at Sigtek.  Sigtek is a small New England telecommunication firm where John Smithers worked for about three years. Not only was he excited at the chance to apply some management tenets he believed in so fervently, he also felt that this program could be the key to setting Sigtek on a path toward much needed change.

        But things weren’t going well at Sigtek, competitors who stock up merchandise from Sigtek were selling at better price and delivery time could not be defeated.  In an attempt for Sigtek to bring the company back normality Sigtek tried to incorporate software into a compute system for signal handling was falling abysmally behind schedule.  As a result, Sigtek’s sales had tumbled to about $40 million, and it had trimmed its workforce to 800.

        On top of the financial situation Sigtek was undergoing, the company was faced with its new owner.  Sigtek was bought by another company a year earlier.  But unlike its former corporate parent, its new owner, Telwork, a $500 million European telecommunications company, made it clear that it planned to influence how its new subsidiary operated.

        Sigtek now a subsidiary of Telwork began formulating a Total Quality program, based on a highly acclaimed model.  Sigtek and Telwork’s other acquired subsidiaries’ goal of the program was not only to improve product quality and encourage better management practice, but also to gather all of the scattered and diverse companies which Telwork had acquired under a single corporate umbrella.

        Therefore in the spring, April of 1988, Sigtek was preparing to launch a Total Quality program designed by Telwork.  John Smithers became one of the two site instructors for the soon to be launched program; however, something went wrong bringing this change program to the ranks fell, in part to John’s approach due to his inability to communicate with other instructors.  John Smithers failed to reach unification of criteria with other employees, inadequate preparation, and lack of support from team members, incongruences, mix messages, lack of involvement, and lack of concern from upper management. These making John Smithers implementation of change a true failure.

Key External Factors

• Competitors – after AT&T breakup lead to subsequent opening up of long-distance market to other competitors, therefore with the telecommunication industry turmoil, both the carriers and the suppliers that served them had stockpiled products including the signal-handling equipment that Sigtek Made.
• Outside consultant – Telwork steps in to assist Sigtek’s quality program.  CEO Mr. Murphy is not keeping good communication techniques with newly assigned Total Quality Program Manager Mr. John Smithers. Murphy may be basing his instincts on the fact that Sigtek’s management team does not have enough concern for the quality program despite the fact that incongruities and mixed messages mount. Outside consultants are often unusually effective precisely because they are not part “of” an organization, and therefore are not entangle in the relationship, power struggles, and habitual way of doing things that a political hierarchy helps reinforce.

• Known-Wins – the two consultants hire to implement the Total Quality Program cannot communicate with Sigtek about the incongruities and mixed messages mounting as weeks pass by.  Lack of commitment, communication and unable to establish a professional, healthy, and crystal clear relationship is apparent.

• Industry – Telwork does not design Total Quality program just for Sigtek’s needs, but more as a mean so for uniting its subsidiaries. Telwork does not seem to be providing the time or the resources for a quality program to take hold.

Key Internal Factors

• Team Lead’s Failure – Sigtek hired two instructors to implement an 8-month total quality process but the employees at the Telecommunication Company were not able to follow the change.
• Lack of communication – CEO Telework (Strategist), and John Smithers (Implementor) not necessarily have to communicate during the change.   This kind of disconnect is responsible for many of the chaotic and out of control situations which may arise during the company’s change process.
• Interdepartmental Conflicts – there is a disconnect between the two constituencies.  Telwork the CEO and strategist has not only declared its support for Total Quality, but has actually mandated that the program be implemented.  On the other hand, Smithers (implementor) despite his doubts, implemented his teachings of the Total Quality program to his line workers (recipients); however this “united front” is only a façade because later on he realized that Smithers does not have the support port from Telwork nor from top management from Sigtek.
• Philosophical Differences with partners –Smithers and Murphy share the same philosophy of how to properly implement Total Quality but the people (top and middle management) who would be ultimately responsible for reinforcing and monitoring the program's success do not have a chance to evaluate the quality program not until a months later.
• Inflated employees expectation – The issue here is that neither Smithers nor Murphy know whether to blame Patricof or the pressure that Patricof is receiving from Telwork.  Either way lack of team unity is the result of trainers not been prepare for the Total Quality classes on time.
• Cultural resistance to change – At Sigtek management believes that the employees (receptacles) is not too much of their concern which is considered as an easily fixable problem.  Management wants to focus on problems that are more serious than the components bouncing out of the boards. Clearly, nearly Telwork, nor Patricof as its representatives, has convinced Sigtek’s managers that the Total Quality program deserves more than lip service.
• Previous failure to building cross-functional team – regardless of which management theory an organization embraces on its quest for change, unexpected and unforeseeable events will force it to react and respond in ways that do not “go by the book.”  Diverse personalities among Smithers and his fellow teacher Sam Murphy, their overt hostility that existed between engineering and operations at Sigtek is too large a barrier for the two to handle alone.
• Theory X Managers – Sigtek Telecommunication firm culture was composed of a Theory-X environment, but Smithers was trying to implement his Theory-Y.  This constituted to a culture clash which caused a manifestation not in the slow response to workers’ request for change, but also in the nearly invisible activities of the site Quality Improvement Team, in the supervisor who refuses to hold weekly meetings despite a direct “corporate mandate” to do so, and, finally, in the apparent failure of the entire quality program.

Significant Factors

• In 1988, Sigtek, a small New England telecommunication firm, decides to take a different approach by hiring external assistance this is done as a measure to help the company stablish a major organizational change.
• Smithers’s case is not a success story but a field of implementation landmines.
• Smithers faced with a company full of turmoil, a company that which performance has gone steadily downhill.
• In 1985 Sigtek’s sales dropped persisted, reduction in personnel, and new products in the pipeline was badly behind schedule, and other competitor crowding into the marketplace.
• Factors contributing to the failure of the quality process change effort, i.e., cultural resistance to change, and distraction of business demands.
• Implementing change can be complex and prone to failure; though, results can be positive if stock of personnel muster a united front that support that change. (this known as unification of criteria)
• For a successful implementation of a change three constituencies must be considered: a) the strategists, the implementors, and the recipients.
• Top Management Education - Murphy and Smithers offered no training to middle and top management about the Total Quality program not until a month later. Managers confronting such change or implementing such program should receive the same amount of training as “The strategist” and “The implementor”.  Simple and passive training given to top management in such mediocre and simple format s created lack and poor preparation of the team.
• Smithers begins to doubt Telwork most basic motives in bringing Total Quality to Sigtek.
• Launching a change program without all its constituencies in place cannot achieve its goals without organizational backing.  Smithers realizes half way into the change crusade that he is in front alone “in his quest for change” Note:  A change program with this kind of imbalance has no chance for success.
• Smithers tries to implement Theory-Y to Sigtek without taking into consideration the organization existing culture.
• Organization Political/hierarchy Structure - Outside consultants must know the functionality of a company in order to be able to change that organization.  In this case Smithers was not aware of the political considerations to be taken and went awry despite his efforts.
• Smither’s middle manager does not have the necessary political sophistication to be successful in this case, he seems blind toward normal organizational channels and protocols, and he is less than politic in his dealings with Patricof.

Summary of Findings

        I order for any company to successfully implement any type of change three factors must be taken into consideration, envision the change and map its basic outlines, work out the details of a plan and put it into operation and adopt the change plan. This should be the number one factor before any changes are considered for any company.  At Sigtek the CEO declared the need for a change without giving implementors, and at first glance “the disconnect” between constituencies takes an unusual twist.  At first it appeared that Sigtek’s change program has all the right backers; and that Smither starts out as a zealous change agent, with a band of spirited followers and a considerable number of factors make it clear that he is operating without any meaningful organizational support, either from Telwork, or from top management at Sigtek.