Yong Woodworks Example

Company history Yong Chee Wah, a woodworker from Malaysia, immigrated from the small town of Malacca to Hobart, Australia in 1947 when he was 18 years old. He left a family of woodcrafters to start a new life in Australia. In Hobart, he started by working for various builders and quickly impressed his bosses and customers by delivering highquality work on time. He lived frugally for 15 years and eventually built a custom furniture shop, Yong Woodworks Company (YWC), on a large piece of land. In its first year of business, YWC employed five carpenters and made no profit. Luckily for Chee Wah, however, the riverside capital city soon developed as a thriving artsandcrafts centre. Chee Wah became the carpenter of choice for many projects in Hobart and surrounding areas, and by 1970, YWC earned profits of AU $1.8 million. As the fine reputation of YWC spread, market pressures demanded it expand product offerings to include massproduced items. Chee Wah understood the need for change but insisted that even the massproduced goods be of the finest quality. To ensure consistency and quality, YWC produced a limited selection of office furniture. By 1975, the company grew to 100 employees and expanded to include two facilities the original craft shop for specialty items and a factory for massproduced office furniture. Throughout the 1980s and 1990s, the company grew to 250 employees and the factory expanded and was run in two shifts. By 1999, manufactured goods accounted for 75% of sales, and handcrafted products accounted for 25%. Even though YWC's custom market accounted for a smaller percent of sales, that business division enjoyed profit margins of nearly 200%, whereas profits for its manufactured goods were in the 20% to 50% range. Company culture Chee Wah held a vision for YWC as the premier provider of quality woodwork. In exchange for helping to build the business, his initial staff received generous percentages of YWC's profits rather than large salaries. This policy encouraged other hardworking entrepreneurial workers to join the company. To make employees feel part of a large and caring family, the company held two large events each year and celebrated special occasions to bring workers and their families together. In return, workers felt committed to the company and were compelled to give their best efforts. Even when the company grew and hourly wages replaced profit sharing for practical reasons, Chee Wah insisted that all employees receive a bonus in profitable years. Changes at YWC In 1999, Chee Wah retired on his 70th birthday and passed the business to his oldest son, Yong Ee Leen, who had worked in the factory during summer breaks from school and then in the Finance department after he graduated from college. As the newlyappointed chief executive officer (CEO), Ee Leen decided it was time for YWC to progress. He saw unlimited potential for mass distribution of YWC's manufactured products. Ee Leen believed YWC should take advantage of the profitable trend to export mass goods to foreign markets. YWC had been successful at pursuing mostly highend homebuilders and elite office supply stores without relying on retaildistribution channels. But Ee Leen was convinced that the company could more than double its sales of manufactured goods if it pursued other retail markets more aggressively.

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Conflict at YWC Ee Leen's proposed changes were met with resistance. Ian Condon joined the factory when the company expanded to two facilities in 1975. His strong work ethic and commitment to product quality earned him several promotions, leading to his current role as vice president of manufacturing, a post he has held for the last 10 years. Ian and Chee Wah had enjoyed a very respectful, open working relationship and had always listened to one another's ideas before making decisions. Ian didn't agree with Ee Leen's proposed changes and was against the idea of adding a third shift to make more products. He resented the idea that YWC should change its winning formula to produce cheaperquality products. The thought of cheap wood displaying the YWC logo disgusted him. Ian said, "We've grown into a substantial company by doing what we do best making and selling highquality furniture. If we start making things fast and cheap, we will destroy our reputation a reputation that Chee Wah spent his entire life building." Furthermore, Ian thought of Ee Leen as a young entrepreneur who had not proven himself. "The son is not the father," Ian would think to himself. Ian felt Ee Leen tried to shorten deadlines without regard to the quality standards that were YWC's trademark. Their feuding caused rifts between manufacturing and sales. In general, the sales team was thrilled about growth that could increase their commissions, and they supported Ee Leen. Many of the sales people were young and eager to try new ventures. According to the vice president of sales, a classmate of Ee Leen's and the daughter of one of YWC's original worker's, "It's time YWC becomes a progressive, global company. Manufacturing will have to keep up with sales." In support of organisational change, Sonali Patel, the vice president of human resources, insisted that YWC would improve its ability to meet deadlines if the compensation system were changed. Workers in both facilities were being paid a flat hourly rate, no matter how much they produced. Raises were based more on tenure than merit, and bonuses were now given regardless of company profitability. Sonali claimed that the system did not encourage people to work quickly enough. She believed employees especially those in the factory should receive a lower hourly wage but receive bonuses and incentives based on company success, as well as the quantity of pieces produced on time that met quality standards. Ian rejected the proposal. "A new pay structure that values speed over quality will hurt product quality," said Ian. Ee Leen responded, "But we miss so many deadlines. Over 50% of our factory orders are a week late. That can't be good for business! Our competition delivers quality pieces at lower prices in much less time." Ian retorted, "Once we start to lower our people's pay, we will certainly lose some of our best people. And this work is not ordinary factory work. It takes skill and experience to do it right." Ee Leen presented financial analyses of trends he had been studying throughout the last year. Business projections revealed that YWC would be gradually beaten out by

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Ian was not sure that some of the "oldtimers" could change to selfdirected work teams and new technologydriven processes. He argued that if YWC rushed forward with technological upgrades, older workers might react by retiring immediately. Most of the experienced workers had long since built their pensions, and continued working not out of need for money, but from pride. Not only would the company lose valuable institutional knowledge held by these workers, but manufacturing processes would be seriously disrupted until new workers could be hired and trained. Customer service and quality would suffer tremendously. Ee Leen insisted that his analyses clearly showed that profits on manufactured goods were slowly decreasing as costs were increasing. If the company refused to change, it would soon stagnate (at best) or experience massive losses (at worst). Ian insisted that if changes were made, the company would experience massive disruptions and losses. Each side was sure the other was wrong. One thing was certain. If Ee Leen could not gain Ian's support, his plans would fail. Ee Leen presented his concerns to his father, and Chee Wah responded, "The business is in your hands now, you must solve this yourself. One piece of advice, do not make an enemy of Ian, he has tremendous influence. Perhaps you should hire some specialists to help you think through these problems?" Ee Leen agreed and has invited your consulting team in to help him resolve these issues. One of your coworkers already started to complete this proposal for Yong Woodworks Company. Unfortunately, he has been called out of the office and needs you to finish his work. He has provided you with the introduction he has written and a template to follow. The template (which you would have downloaded at the beginning of the assignment) will guide you through the necessary steps to produce a complete proposal for Yong Woodworks Company. Assignment Guide While the template provides all the instructions you will need, you may find the following guide and hints helpful as you work through the proposal. Section 1: Summarise the situation Briefly summarise the company's history and events leading to the current work situation. How would you characterise the current state? What is the desired state? This step allows the consulting team to describe to the client that they understand the client's situation and need. This is an important first step; if your team incorrectly interprets the situation at the beginning, the rest of the problemsolving process will be flawed. Much like solving a math problem, the team must correctly solve each step in the process, starting with the summary. Act like a doctor healing a patient. When a doctor treats an ailment, he or she first asks about the symptoms. Next, the doctor asks questions to identify what is causing the symptoms, and then treats the source of the ailment. What historical events

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In this step, do not solve problems. Simply state what you believe to be true to convey your understanding of the situation. Section 2: Define the problem Clearly define the nature and scope of key problems faced by YWC. List problems in the form of problem statements, then provide "symptoms" or evidence to support your claim that these problems exist. Identifying problems sounds easy. However, appearances can be deceiving and organisational problems may go deeper than the obvious symptoms. A problem is the difference between the actual state of affairs and the desired state of affairs. To accurately define a problem, you must identify the current state, and then define the desired state in clear, quantifiable terms. For example, the current state of affairs in a factory might be that it only produces 300 chairs a day, but the market demands 500. Your problem definition would then be: Current State: XYZ corp. produces 300 chairs per day Desired State: XYZ corp. produces 500 chairs per day Gap: XYZ corp. produces 200 less chairs per day than needed From this example, you can define your problem as: the factory's goal is to produce 200 more chairs per day to keep up with market demand while holding costs constant. Section 3: Diagnose and synthesise causes Identify what is causing problems. Use the 10Question process to diagnose root causes of the problems identified in Section 2. Next, synthesise causes. Your final list should comprise only root causes. First, consider the performance problem(s) you identified in Section 2. Analyse the ways in which work, people, culture, and/or structure might be causing the performance problem. Use the proposal template to guide you through the process of identifying possible causes. After you have identified multiple causes, look for root causes. Remember, a root cause is a cause that (when addressed properly) will close the gaps that you have identified. Resolving a cause that is not a root cause may bring about some change, but it will not bring about complete closure of a gap. For example, if you incorrectly identify a person's personality as a root cause of a performance problem, then firing that person will not necessarily improve your company's performance. After listing all causes, see if you can further reduce the list by integrating causes that stem from the same root. For example, you may identify several types of conflict that all stem from differences in values. Thus, the root cause of these multiple types of conflict might be "conflicting or competing values". Then, test your analysis by asking the following: is this just a rephrasing of the questions in the template? If so, delete the bullets. If not, leave as is. As a team, test your cause analysis by asking Is there any other reason this could exist as a problem? Why is this a problem? What else could explain this? Have I covered everything?

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List each root cause and generate 12 possible solutions to resolve the causes you noted in Section 3. In presenting your solutions, be sure to identify the criteria you used for selecting the solutions. 2 Consolidate your list of causes and solutions, and eliminate repeats by determining which solutions address which causes. 3 Begin to plan to implement your solutions. Review the list of solutions. Prioritise the order in which solutions should be implemented and provide rationales for your prioritisation system. Refer to your textbook chapter DecisionMaking and ProblemSolving Processes topic The DecisionMaking Process for information about applying a problemsolving model. What would you be applying the model to? 1 As a team, discuss and establish criteria to evaluate the effectiveness of solutions you will generate. For example, if you generate a list of 10 possible solutions how will you choose the best solution? Criteria for solutions include factors such as ease of implementation, cost and time to implement, acceptability of solution to employees, and effect of solution on the environment or community. When possible, distinguish criteria that are absolutely necessary from those that are merely desirable. For instance, you may have a strict monetary budget but unlimited time. If so, a solution that costs under AU $10,000 is necessary. Choosing a solution that takes less than three weeks to complete is desirable. 2 For each root cause, brainstorm several possible solutions. Teams should generate as many solutions as possible. Get creative! 3 Review your list of possible solutions and your criteria. Choose the solutions to meet your necessary criteria (eg, strict budget), and eliminate all the rest. Then prioritise the remaining solutions according to how they meet your desirable criteria (eg, can be completed quickly). For each root cause, present one or two solutions that meet the needs of the organisation according to your criteria. Section 5: Plan for contingencies What difficulties do you anticipate in implementing your solutions? How can you manage those consequences so that the change process is not derailed? Use the following questions to guide your analysis: What positive and potentially negative consequences can you anticipate? What types of resistance will you encounter, and how will you manage it? This will help you and your client anticipate and plan for the positiveit? and section What uncertainties will you encounter, and how will you manage negative consequences of implementing your solutions plan. Review the problem statement, root cause analysis and proposed solutions. Based on everything you have learned in this course, what can you expect to occur as a result of these changes? For example, what kinds of problems will you encounter if you change the organisational design from one based on divisions to one focused on customer segments? Any change you propose will meet with resistance. What types of resistance should you anticipate? Who will resist your change? By

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