Position Paper on Simmons Success can often lead to failure. This is what the case of Simmons illustrates, where the management had become overconfident of its capabilities and intuitions so that it ignored the market trends and failed to listen to its consumers demands.
Some may argue that success leads to success as the organization grows learning from the past strategies, but nothing teaches success as failure does. In case of Simmons there are many points arguing in favor of the position that arrogance due to success can cause management to overlook obvious, changing market trends and instead go with intuition against all logical reasoning.
Taking the Simmons example, the sales department of the company was making redundant phone calls to large retail and furniture stores while the retail vogue had changed to customers preferring local stores. But the company following past trends had missed this development and had not analyzed the situation in its proper context to avail and keep abreast of the situation and change accordingly.
Moreover, taking into perspective the marketing strategy, the firm was still focused on the 4 p’s of marketing and the communication was complicated and unfocused, making sense only to the company and its marketers. Therefore, the company had to revisit its communication strategy to make it more effective for receivers and the target was shifted from the conventional 4 p’s of marketing to the four basic drivers of sales: positioning, purchase and post purchase satisfaction and product trials.
Along with these issues arrogance with success also led to the downfall of the organization when the company failed to listen to its employees and the CEO was neglected to be informed of inconsistencies in the implementation of the new vision and the culture of change and learning. As the Executive Leadership Team was not ‘walking-the-talk’ in terms of following and believing in the organizational culture, feedback from internal and external sources was not forthcoming depriving the organization of valuable insight into the situation and making the organization’s employees and customers feel that the ideas were being ‘thrust’ upon them. This led to discord and a feeling of disassociation with organizational values among employees.
Hence, it is imperative for an organization to have a firm base in terms of strategy, organizational structure and culture and keep on learning and focus on constant improvement.
Some may argue that strategy is more important than structure or that culture is the most prevalent factor in success. But the verified truth is that all three are important components in building upon a company’s success. For instance in the case of Simmons if one were to argue that the cultural program COGL was the key behind the company’s success, it could be said that even though COGL was introduced, many in the top management were not following the culture to its fullest. They were not convinced of the company’s vision and hence did not practice it or incorporate it in their manner of work. Thus the structure of the organization came into play where people in the ELT had to be replaced with those of a more open mind-frame and functional divisions had to be realigned for better coordination. Furthermore the CEO’s strategy to install people whom he considered as capable of doing the job was a crucial factor in bringing about a change as fast as he did.
Thus under the leadership of a visionary leader Simmons conceit with success was checked early, while and the new ELT was able to reenergize and reformulate its strategies so that the firm, within a span of a few years was able to beings its profitability up again.
Keys to Recovery and Success
Owing to it erroneous judgment regarding the speculated success of HealthSmart, Simmons had been facing trouble since 2005.
There were several measures that Simmons took to stage a recovery. However, the basic idea that led to the much-needed change was the fact that the top management identified and admitted its mistakes and was willing to pursue corrective measures to bring the company back on the road to success.
Detailing the steps and the measures that were the keys to its recovery, firstly, the CEO, Charlie Eitel restructured the organization by replacing employees at key positions in functional departments with people who he thought fit well with the company’s vision and changing culture. Because the right people who had good hold on their respective fields and were passionate about achieving the Simmons’s vision were in a position of authority, restructuring was easier.
The sales function was restructured in view of market changes, where more attention was given to local stores and specialized mattress stores than general retailers while the product line was changed just in time so that the failed product, HealthSmart would not pull down the revenues of the firm for longer than it already had.
Along with this the marketing strategy was changed to be more relevant, simple and consistent to the marketing communication and product processes. The manufacturing processes were reengineered to a cells system and this system allowed Simmons to have better coordination between its manufacturing and marketing departments.
The human resources too underwent change where the CGOL system focused more on the top management than at the lower rungs of hierarchy. Recognizing this and the fact that constant training was needed to uphold cultural values, an online training program was introduced to modify behavior and performance.
Finally, the integrated change in all functions led to the recovery of the company while suitable strategy, appropriate organizational structure and a learning culture were recognized as the ones upholding the success of the business.
Edmundson, Amy .C., Tiziana Casciaro and Kathryn .S. Roloff. Leading Change at Simmons. Case Study. Boston: Harvard Business School Publishing, 2007.