The previous culture at White Cap had carried over even after the acquisition. White Cap was known for the way they treated their employees, regardless of the cost, they always said that “our people are important to us”. It was stated that 80% of all employees had been with White Cap for over 15 years. People liked how they were treated so they never left. Despite during a time where sales were steady, but costs were on the rise, White Cap always managed to take the extra step to satisfy their employees through numerous avenues.
The Whites were known to lend money to employees during the holiday season to assist with bills. They also provided lunch to all of their employees at specific facility locations year round. As the years went on competitors began to cut prices in attempt to gain market share. However, despite the increased competitive marketplace, White Cap continued to treat their employees like royalty, and lost a lot of money while doing it. Competitors evolved into new market space by creating new and more efficient ways to gain market share.
As this happened White Cap remained stagnant, failing to change with the times, losing numerous accounts and falling out of the top market share holder spot in the industry. At this moment, Continental White Cap has allowed the culture of White cap to remain intact. Within White Cap, all is good. The wool has been pulled over the eyes of all of the workers. They continue to be treated like gold even though their respective market does not warrant it. Their company has failed to adapt, and by doing so has consistently lost traction over time.
As I read in the Leading Change article I can see that in this case there is definitely a lack of urgency (Error 1). Based on Exhibit 1 it is shown that glass is being used less and less. While on the other hand plastic is exponentially being utilized. White Cap really dropped the ball when they failed to notice that there had been a dramatic shift of demand from glass to plastics. If they had noticed this they could/would have still been a market leader. Another thing that has happened is that there is nothing anchoring the changes in the corporation’s culture (Error 8).
After Continental Can Company bought White Cap there was never a defined plan of action. A human resource manager even described it as being viewed as if White Cap purchased Continental. These two driving factors have played a major role in what White Cap has become today. Peter Browning has since been appointed vice president of the division and has a lot of cleaning up to do. He will need to look at his division through many lenses. Defining the culture will be the foremost important area to address.
According to the article, Continental’s goal for Peter is to “communicate a sense of impending crisis and urgency” while maintain White Caps “tradition of employee loyalty”. In my opinion, Peter’s challenge will be to define the culture and vision to the division, but if he acts authentically there will be no need to create a sense of urgency, because there already will be one… There are a lot of things that went wrong in this case. The main problem occurred during the acquisition. When Continental purchased White Cap there should have been a major effort to standardize the expectations of the staff.
Although White Cap was known for the way they treated their employees, Continental was not. I am not saying that White Cap should have immediately started treating their employees poorly, but instead equal to all others employed by Continental. It was also stated that, due to how White Cap employees were treated, their administrative cost was nearly four times as much as all other divisions. White Cappers were viewed as a division that was comprised of prima donnas that were bound to fail. In addition to a lack of defined culture, there was no sense of urgency with the division either.
There had been a paradigm shift from glass to plastic almost overnight that was never anticipated. And, once they figured out that their old selling points had not value, they still didn’t create a game plan to bounce back, other than selling off assets. One thing that I would recommend for Continental, is a creation of a corporate training program in attempt to create a foundation for the company’s culture. I understand culture is something that cannot be “taught”. However, with these common rules and operating procedures in place, they would act as guidelines to define the cultures boundaries. This
Program would be taught to all divisions to ensure that everyone was on the same page. A BHAG for this would be to have a cultural change within Continental Group within 10 years from inception. The next thing I would recommend would be to create something that measures each division’s performance. This would hold every manager accountable for their division’s performance. If their department’s administration cost was too high, they would have to either increase their sales or cut numbers. While if their administration cost was too low, they would be warranted to bring on some new bodies to even-out the work load.
This would also standardize the way each division is graded. This case taught me how important it is for a company to have a clearly defined vision, and performance/reward systems in place. It also taught me how important it is to treat employees well when it is deserved. In this case the White Cappers were viewed as the cash cows of the business. However, as times changed, their pay/rewards did not. They fell into a mentality that “all was good”. When in fact it was the complete opposite. They continued to receive free lunch, and take their unearned perks, slowly eating away from the bottom line.
It is nice to be at an employer that has a family style atmosphere, but when that management style gets in the way of the bigger picture (the well-being of the company) actions need to be taken immediately. I learned that Browning may have a challenge on his hands, but it is something that HAS to be done. He will need to let people go, and he will need to make some tough decisions, but all of these things are being done with the business’ best intentions in mind. If he can get the wrong people out and keep the right people in, the culture will take form and start to create some long term reinforcing anchors.