Visioning Carlos first undertook a process to devise his vision. It involved taking a pulse of the current reality: where did his company stand today? As CEO of Ferco, Carlos believed he had a solid grasp on the current reality. Income statements from the few last years indicated that sales were leveling off. They hadnt yet dropped, but there hadnt been any growth in the last three years. Carlos worried that sales could decrease in the next few years if a change wasnt implemented. Indeed, the market had experienced some challenges and his company was initially slow to recognize the consequences. First, technology had changed the purchasing habits of Fercos customer base. Second, certain global trends had affected the customers bottom line, shrinking budgets. For example, the price of oil had placed additional costs on the clients and erratic exchange rates made certain markets volatile and risky. Finally, Fercos own cost structure had also been influenced by these global trends and despite flat sales, costs had risen. To address these major challenges, Carlos identified a three-pronged approach to addressing them. He believed he knew exactly what was needed in Fercos future. For the first challenge, Carlos assumed that face-to-face time had become less important to Fercos customer base and that much of the sales process could be faster and more customer-friendly if it moved to web- based technologies. This would mean embracing the new technologies that had changed the landscape of the market, something that Ferco initially was slow to recognize. Regarding the second challenge, Ferco was not in a place to reduce its prices, but given the strain on clients budgets, Carlos knew that Ferco couldnt raise prices to make up for its own cost structure. Therefore, Ferco needed to make a stronger value proposition to clients so that they felt as though they were getting more from Ferco at the same competitive prices. If the value proposition were stronger, the client base would grow. Acquiring new clients, Carlos believed,

2 was the path to sales growth, rather than selling existing clients more services. Finally, Ferco needed to revamp how it did things to bring its costs under control. In part, Carlos believed that introducing new technologies would help, but he also understood that the entire company had to change the way it thought about managing its costs, from every detail as small as paper use, to larger ticket expenses such as choice of hotels and company cars. Therefore, the resulting vision was: To innovate in everything we do. Carlos believed that this vision was sufficiently inclusive that it would be meaningful for everyone in the company. He believed that it would inspire a new way of thinking. This change was to be radical: a few process changes would not be sufficient for Ferco to address the three main challenges. Rather, the very way of thinking needed to change. Practicing Charisma and Presenting the Vision While preparing for the unveiling of his vision, Carlos believed that the content of the vision was inspiring, but its delivery needed to be, too. Therefore, he took time to practice certain Charismatic Leadership Tactics (Antonakis, Fenley, & Leichti, 2012) and developed a meaningful presentation to explain his vision. Working with a leadership coach, he identified three behavioral tactics that would help communicate his vision in a compelling way. First, the coach had explained that three-part lists are a nice way to distill a message down to clear takeaway points. This would be easy since the vision involved a three-pronged approach. But the other two tactics required some practice. Carlos wanted to portray confidence in the vision and make sure he did not dwell on the lackluster results of the last few years. Therefore, he carefully wrote and edited a speech that used language reflecting confidence. He also knew that metaphors are a powerful tool that charismatic leaders use and inserted a couple to help reflect his confidence. Finally, his coach helped him see that his tone and body language would also convey messages and to ensure that they also showed confidence and emphasized the most important points. Carlos was confident of his tone after practicing hand gestures, facial expressions, and pauses in front of a mirror. To deliver the message, Carlos had the marketing department organize a company-wide event that involved an opening address, small team meetings, and a closing reception. During his motivational address, he felt that his employees were ready for a change. The energy in the room was palpable and Carlos thrived in the moment of delivery. During the meetings throughout the day and at the reception, employees expressed their excitement about the new vision. Many thanked him for having the courage to make changes and others conveyed their motivation to make the vision a reality. In the following days, an exhilarating energy filled the company. The chatter at the water cooler revealed an excitement for the future and a shared sense that together the employees would make anew the company that Carlos believed they could become. A Different Change Initiative Feeling thrilled about how well his vision was received, Carlos opened a bottle of champagne over the weekend to celebrate with his wife, Anna. He recounted the event and the days following, reflecting on how it made him feel. Anna listened, encouraging his musings and

3 affirming his effectiveness as a leader. Overall, Carlos felt convinced of his own leadership ability to take his company in this new direction. He told Anna that change required an inspiring and optimistic leader and that he had risen to the challenge. As they relaxed, they received a phone call from their youngest daughter, Jacklyn, who was in her first year at university. She was noticeably upset: she had just failed an assignment. As a top student through secondary school and an achievement-oriented child, her hard work usually paid off. She had been accepted to and now attended her top choice university and subject. But the transition had been more difficult than she anticipated. The workload more strenuous than in secondary school and requiring more independence and discipline. Carlos and Anna were keenly aware of challenges of the first year of university and were as supportive as possible from afar. Jacklyn explained that she had already met with the instructor who suggested that she could still achieve passing marks in the class if she performed extraordinarily well on the next essay. But Jacklyn felt deflated by the failure and did not believe she had the competence to improve her marks. Feeling the charisma still running through his veins, Carlos gave Jacklyn a pep talk. He reminded her of all of her past successes and her ability to overcome challenges. He explained that this is an obstacle that is typical at university and part of the learning experience. He expressed his confidence in Jacklyns ability to change her studying habits to meet the higher standards of the university and boosted Jacklyns belief that she could achieve high marks in the next essay. Indeed, the remarks worked. The following week Jacklyn rang to explain with enthusiasm that she had indeed received a high mark on her essay and the instructor had provided glowing feedback that further boosted her confidence. Carlos quickly realized that the same charismatic tactics he had used to present his vision to his company had also worked with his daughter. At the Soccer Club After their children left home to attend university, both Carlos and Anna became active in community organizations. They both took on leadership roles in the organizations that had been so influential in their lives and that of their children. Anna started volunteering for the United Way, joining the fundraising team, and eventually becoming the coordinator for the local chapter. This involved managing the dues and fundraising schedules as well as deciding on the organizations who would receive donations. Carlos, an avid soccer enthusiast, missed coaching his kids team in the local club, so he stayed involved. He joined the Board of Directors of the club, helping to manage the finances, club membership, and club facilities. Unfortunately, the clubs finances were in trouble. The board assessed the situation and discovered that membership was dropping while at the same time maintenance costs of the facilities were rising. For Carlos, the corollary to Ferco was uncanny. He knew that the club needed a strategic change and expressed his belief at the most recent board meeting. The rest of the board agreed and the general manager of the club, Patti, committed to presenting a vision and strategy to the board at the next monthly meeting.

4 That meeting was scheduled to happen soon, but Carlos wasnt confident that Patti would have much to report. Whenever he saw Patti at the club, she wasnt in her office working hard drafting a strategy. Instead, she was out on the field or in the clubhouse, socializing with members. His most recent conversation with Patti contributed further to his concerns: she asked Carlos a series questions about where the club is today and the future of the club. Carlos couldnt believe Patti was asking him to do her job! When the day of the board meeting arrived, Carlos was prepared to be underwhelmed. He expected Patti to explain that she still didnt know what to do about the club. But he was completely shocked by what he witnessed! Patti delivered a compelling vision including elements that he himself had offered (and with which Carlos was credited). He looked around the room and heads were nodding in agreement and enthusiasm. What appeared to Carlos as Patti goofing around, socializing, and generally avoiding facing her difficult task had turned out to be a highly effective method of crafting a vision for the club. Patti had been gathering data, understanding the viewpoints of the many different constituents the club served. It turned out to be a vision that everyone could get behind because it reflected all the voices of the club. Therefore, nothing about the vision needed to be sold to the constituents because they are already behind it. Explaining this event to Anna later that evening, Carlos suggested that in a community organization such as the soccer club, perhaps this is how leadership needs to be enacted. Maybe leadership needs to be more democratic or at least participative, because the constituents pay dues rather than being paid by the organization. But from his experiences at Ferco, Carlos was convinced that such leadership would never work in the business world, which required a leadership style such as his. Implementation of the Change Strategies A few months after the successful delivery of Carloss vision, the reality of the change initiative took root. The positive energy had subsided and employees started feeling the discomfort of the reality of the change. Carlos expected obstacles and knew that people would resist change, but these obstacles seemed larger than he anticipated. First, he didnt expect people to lose enthusiasm quite so quickly. The new web-based technology did not make the sales process easier. Rather, it seemed to become a burden both for sales staff and for customers. The sales staff complained about being overworked and stressed as much of their day was now spent deflecting angry customers who were frustrated by the new system. In addition, they felt their time was spent teaching the new technology to existing clients, rather than selling to new clients. Frustrated with declining sales, John, the sales director, gave Carlos an earful. He explained that the problem with the new system was that it put a wedge between the salespeople and their clients. Now, the salespeople have lost any direct involvement in the client relationship. This company was built on strong client relationships. Now the web-based technology has eroded that relationship. Our clients are complaining and our sale people are complaining. What we really needed was technology to help our sales staff free-up their time so they could have more face-to-face time with clients, not less. This new technology was exactly the opposite of

5 what we needed. Our clients want to see our sales people in person. They see value in the personal touch we used to give. Now, they just see us as the same as any other dehumanized service. Carlos almost choked as he heard Johns words. It made complete sense and John was right. Ferco had always prided itself on the personalized touch and now that it had been taken away, sales were declining. Later that day, the marketing director, Jean, had similar complaints to how poorly the new value proposition was being received. I wish you had talked to me about this before moving ahead with this strategy. By the time you delivered it, it was too late to give you feedback because you never asked for it. You hired me to be your marketing person. How can I do that when you so recklessly change our entire value proposition? How much time did you spend with the clients before you decided that everything should move online? The sales department and the marketing department could have told you what we needed to improve sales. Weve been trying to tell you for months before your vision unveiling. You just refused to listen. By this point, Carlos was seething. How dare John and Jean mouth off to him like this? Where were they when he was figuring out the vision? And thats when Jeans words echoed in his head...he had refused to listen. Carlos arrived home that night in a sullen mood. He didnt want to talk about it, but Anna needed to know why he was so cranky. He didnt want his bad day to spill over and ruin her day, but he recounted both conversations for her. She asked him what he would have done differently and all he could say was listen. But he realized he didnt know how to listen. And even worse, what would he do now to fix the damage his charisma had created. He had so many questions and no answers.

What is(are) the issue(s) facing Carlos, Ferco, Patty, and the others in the case?

Who are the stakeholders?

What is the context of the problem, including the strengths and weaknesses of the organizations (and leader)?

What key facts should be considered?

What choices are available to the decision-maker?

What would you recommend and why?