Leading Change in the Church - Lesson 5

Dr. Rick Sessoms
Leading Change in the Church
mc612-05
Case Study: Johnson's Shoes
Lesson Transcript

[00:00:00] Well, what I'd like for us to do at this point is to work on a case study. You ready for another case study? This is a case study that a colleague from London wrote, and it's about a shoe company in Idaho. Can you believe that? And it's a fictional story. When I first when I first read this thing, I asked him, I said, are you sure this is fictional? He said, Sure enough, it's fictional. So I believe it's fictional. And so Will will assume that it is. And let me read through this and then I'd like you to spend some time in groups discussing the questions at the end. It's called Johnson's Shoes. Johnson Shoes was a family company based in Boise, Idaho, over the last 90 years. The company had been very successful throughout its history and had risen to become one of the best known shoe manufacturing companies in the U.S.. Johnson's had also been making headway in the European markets in the 1990s. Patrick Johnson was the company's current CEO. He had taken over the business from his father, George, who had also taken over from his father and so on, from the beginning of the company some 90 years earlier. Patrick had been quite successful in the early days of his leadership, but the company began to face stiff competition from some of the energy emerging offshore shoe manufacturers. Changes in the global economy were having a dynamic negative effect on the fortunes of Johnson Shoes. Before long, it became obvious that the company was under serious financial threat and that the future looked bleak. Patrick considered the future and realized that only a successful merger would save the company. There had been one or two companies looking to take over Johnson shoes in the past, and Johnson's had managed to avoid any such merger.

[00:01:51] However, in the light of the current income and current cash flow crisis, Patrick Johnson realized he must give in and they must merge with one of the highest bidders in the past. Patrick accepted the terms of the merger, which include the fact that Patrick would remain as CEO, but that the board would be replaced with the board from the new company. At first there was a great deal, a great deal more energy in the new company in Patrick, those struggling to find his way enjoy the new challenges that the company offered, even though it was no longer like the old days. Nevertheless, he was making the best of it until the next set of financial figures came in. It was obvious to the new board that the current strategy would mean that even though they had they had had a positive merger, they would not survive the current climate. The board met together and the new plan came into being. First of all, changes would be made at the leadership level. The board decided that Patrick was not the man to be the CEO. If the new company was to become the shoe store of the future. Patrick was given a new role and asked to become a product consultant in view of his long experience with the product. A new CEO was brought into the company from the outside, someone who had a track record of turning businesses around. There were some additional revolutionary plans in the strategy of the company. The board decided the company would stop manufacturing shoes, a process that had been going on for 90 years. Instead, they would now buy the product from the emerging countries around the world. Realizing that competition was difficult, they could not compete price for product at the same level.

[00:03:31] It was decided that if this new strategy were to be implemented, a new company name would be needed to meet the demands of the day. The board decided to rename the company. The name would no longer be Johnsons shoes. They would now be known as shoes direct. This would, of course, mean that there would be staff layoffs and portions of the building would be sold off since manufacturing space would no longer be required with the new shape of the company. Patrick found that change is very difficult to accept. He had never considered himself to be anything other than the boss, like his father and grandfather and great grandfather before that. Due to circumstances that were beyond his control, he had been reduced to the position of product consultant. The new board instituted a sales director and a purchasing director, both of whom reviewed the products that would be bought and sold by the company. With only the occasional reference to Patrick in terms of quality. Patrick seriously considered leaving the company in the industry altogether? He reviewed the future and realized a man of 57 years of age that perhaps this would not be a good time to start a new career. So he decided to settle in for what was a respectable salary and quietly set out set out to put in his time until retirement. So the questions are to the range of feelings that Patrick may have experienced on his journey to his new role of product consultant. US first. And secondly, what actions could the board have taken to minimize the negative impact upon Patrick? These changes may have introduced in his life. Fair questions. So what do you suppose Patrick experienced when when he went through this merger and then became product consultant, not CEO? What what experiences do you.

[00:05:27] Think he might have gone through as through this process, his whole identity changes since this. I've heard the word disenfranchisement. Confused. Yeah. Just read off your list? Niall Behringer Is that it? So it's all there in that. Yeah. There's there's that there really is the death of something that that was very, very precious to him and was was identified even in his family as is an identity of who he was, not just a job. So it's a big deal. And I think we experience this more in the church than we realize. Church is family. It's it's about who we are. It's our identity. It's this culture that we become very identified with in a very real way. So you're a consultant now and you have been asked to come in and say what could have been? What should have been? How how might you advise if if, if this shoes direct now had another go at this, an opportunity to change the scenario with the way that Patrick was dealt with through this process, maybe starting even back before the merger. How would you advise them to maybe do it differently to save this save Patrick from some of what he went through? Suggestions, thoughts. I heard some good discussion going on. I'm curious you shared out loud or what have you'd like to share Regret. Great. Now changing the actual in the outcome of him not being CEO. That's the change that probably had to take place. They they could have communicated upfront and this is a real possibility. He probably should've known that was a real possibility of how you can possibly give up control and not think that they're going to keep you around and see you. But so definitely communicated that this was a possibility, even though they were going to leave it to you initially.

[00:07:56] This is a that he might not stay there. So you're saying in communicating, communicating the process to him, not just the end result. So making sure you've got a process before which you can communicate. We were discussing some. We weren't. It could be the board. Some members of the board had a plan which they didn't share at all, but it could have been that the board didn't know what they were doing until they were encountering the problems. I think one part of the initial plan, they should not call it a merger and they should have just told him, we want to buy our company. And he knows has been really upfront about that. I mean, if that was the case, it seemed like could have been maybe from the very beginning that this wasn't. So if that was the case, then. So you feel like it could have been a little bit of bait and switch there? That what you mean? Yeah. I don't know what they weren't able to do. They bought this company. I mean, I don't know what what else you would call it. I mean they, they took over the board and apparently. So it really wasn't a merger. It was. It was a buyout. Yeah. Other thoughts. When things that we talked about a bit was as they were facing the challenges the board could have done differently in terms of engaging Patrick, in terms of how do we approach this, as it seemed to that the board should be that the board or a small group of the board had made the decision in more announcing that we didn't get into too deep a discussion with the CEO's role, how many meetings was he at? What seemed like something occurred without him being a part of the process? I think particularly to think about parallels to churches.

[00:09:34] How do you involve the people that are part of the process and it could be impacted. It still has to be done at a leadership level, but that can still be done intentionally and carefully, as opposed to putting someone on a board and then announcing we're going to make these changes. Mm hmm. And. Instead, a new company probably realized that he had this affinity to to be leader when he he followed their proposal, you know, to to stay as a CEO despite the fact that no one else on the board was from his own company and could represent his interests, that they were the only ones representative interests, really. So. You know, I'm thinking that when it came time for him to. To. When it came time for them to let him go, they could have looked to give him some. Worse. So to say something respectable, maybe they would decide to stop manufacturing shoes, but they still could have put him as one. Over buying certain things. You know, this could have been something. At least for a time, to prove himself. No candidate. Yeah, it looks like they put him in a role that that was being phased out. Is the real issue. Product consultant. And you no longer have a product that you're that you're manufacturing? That's certainly part of it. I think. I think you you've really hit on the core of this. And what we'll be dealing with as we go along is process is everything. How we go about the process of leading change really matters. And it's it's one thing to think about the goal, but how we get to the goal is is really in in so many respects what makes it Christian. And so we're will be talking about that in some detail.

[00:11:43] But but as we look at Patrick, it's a case in point where there really was no process is what it comes down to. And there probably are a number of potential processes that could have been followed. And I overheard one of you say it. It may have been the same outcome because obviously the something needed to happen for the organization to survive. So the question then is about process. It's about how we respect the dignity of people and and and treat them as as people made in God's image is precious in his site that is so critical. And in the church, the ante goes up because these are God's people and this is this is God's God's church. And and they are the sheep. So in a in a real sense, the shepherding role is a process role so that we work with people.