Skidune is a locally owned, mature, and successful family-owned tourist business that rents boats, jet skis, kayaks, etc. to locals and tourists.  Located in the most popular area and marina, the company is known as "the place to go" for water equipment rentals.  Originally started by Alex Sandman, the company was turned over to his son Adam decades ago. Adam doesn't know a stranger and treats everyone like a lifelong friend. Most customers return year over year, are highly satisfied, and are always happy to recommend Skidune.  However, the board of directors just appointed new leadership to Adam's son Sean. Although still a family member, Sean is a young Ivy League Millennial with big goals for the company.  Most are in agreement that Sean is ready to take over as Adam retires, but others are worried that Sean's only experience is a few summers, and he wants the CEO title but doesn't want to be a day-to-day boss.

In addition, Skidune used to be the only game in town, but a large national vacation rental company just rented space in the same marina.  Although Skidune already suffers profit fluctuation due to seasonality, tourist season is fast approaching, and additional seasonal employees are hired with increased demand. Although seasonal employees don't work all year, they typically return year after year. The bulk of employees have been at Skidune forever and grew up working here. It's a family business and blood relative or not, the Sandman's take care of their own and value employees work ethic and support. For these reasons, in the past, everyone was always motivated to chip in and help when needed personally and professionally. Employees have always been well cared for financially.  The Sandman's have often rewarded all employees with seasonal bonuses and time off when out of season without cutting pay or benefits. Even when times were bad, bonuses were given as a thank you for loyalty and hard work. Overall employees know what to expect. Turnover is extremely low and motivation and satisfaction is the norm.  

The company functions across  3 departments. 

• Personal wear including life jackets, wet shirts, scuba/snorkel gear.
• Boat Rental with engines such as ski boats, fishing boats, and jet skis.
• Non-motorized such as kayaks, water bikes, and paddleboards. 

Most employees want to work for the Boat department because it's the most consistent throughout the year and is always the highest profit department.  However, not all employees are qualified to work for the Boat department since it requires significant training on the various vessels, several different types of water and fishing licenses, as well as first-aide, CPR, and OSHA training.  So, as a standard to keep costs in line, employees stay within their dedicated department and don't rotate. Although some employees are ok with this, others don't think this is fair.  However, most tolerate because it's a family business and they get free use of all equipment during their off-time. In fact, most employees feel like they live on vacation. 

As Sean steps into his first real job out of college to take over for his father, he wants to be a different kind of leader and more hands-off.  He feels like the company has a long history of success and at this point, can be self-managed without him giving them a step by step plan.  Instead, he sets overall long-term goals. He immediately sets extremely high commissioned-based yearly (vs current seasonal) sales goals, ignores many needed equipment updates, cuts training programs and marketing (because he thinks they cut into profits and the company was always successful via reputation and repeat), and expects that since employees  are happy, never quit, and are like family, they will fall in line, go along with the changes, and meet the new goals. 

Instead of seasonal bonuses for each employee, the new sales goals will be yearly. If the goals are met at the end of the 12 month calendar year, all yearly employees (excluding seasonal) from the highest profit department will have their name put into a drawing and 1 lucky employee will be given an additional week of vacation at a mountain campsite and a $1000 bonus.  The employee's name will be randomly drawn at the end of the year party.  If the goal isn't met, some employees will be let go.  Sean thinks mentioning this will scare employees and increase motivation.    

Unfortunately, 6 months in, things aren't looking great. Hurricanes caused some issues and competition is taking it's toll.  In the past, the team typically looked to their leader (Adam) for guidance, but no one has heard a word from Sean and no one is really running the show. Skidune seems to be slow and might be losing new customers and previous loyal customers due to promotions from the competition as well as complaints about boat motors quitting and the captain not knowing what to do, old and ripped life jackets, and out of stock rental availability.  Boat rental demand is doing the best, but doesn't have enough trained help. At this point, employees have lost motivation, are frustrated and feel helpless. In fact, many have just given up and some have even started pursuing jobs at the competition. Customers are starting to notice the changes and complain.  One of the employees decides to call Adam and asks for help.  Adam is confident Sean will eventually be the future of this company, but at this rate, there might not be a future. If you were Adam..... what would you do?

Questions

1. What is happening, specifically? (brief summary in your words)
2. Analyze why Sean's plan isn't working using theories 
3. What recommendations should Adam offer Sean to improve and fix the issues?
4. Describe an incentive system from your current or past work experience that was either effective or ineffective. 
5. what made it effective or ineffective - be specific.  (you're welcome to name the company, but it's ok to keep this confidential)
   1. What was the problem that needed to be solved
   2. What was the overall goal of the plan
   3. What was the motivational/incentive system?
   4. In your opinion, was this successful?  why/why not?
   5. If you were in charge, what would you have done instead?

Answer rating: 100% (QA)

Summary of the Situation Skidune a successful familyowned tourist business is facing challenges under the new leadership of Sean who wants to be a handsoff leader and implement significant changes to ... View the full answer