5.

1 Situation Analysis/ Size-Up

_____/ 8 points Key decision-makers in case, their title, name of firm, etc. Main aspects of situation: the market, the industry, the product, and the customer, etc. Summarize the facts of case Critical inferences from facts So what? question to be answered Sort out symptoms from problems

The first activity that you should carry out is to read the material, identify and collect any necessary data/information and to provide structure to the resulting data. This activity takes place before you deal with the issue of the problem statement. In the size-up, you try to identify critical issues and to draw both logical and critical inferences from the resulting data. Most students tend to do a good job on collecting and summarizing the data. Where they do poorly is in the drawing of critical inferences, (What does such data imply? What does it mean? What can happen as a result?). Summarizing data is useful but remember that your reader (the decision-maker) is probably familiar with the facts that you are summarizing. If all that you do is to summarize then you have not really generated any real value for the reader. To draw the critical inferences from the data, remember the so what question. Pose it repeatedly to the data. If the application of this question results in findings of little importance, then the data that you have looked at may be of limited value. The so what question is intended to uncover critical issues that may affect the analysis, the problem or the resulting alternatives. In some cases, the size-up focuses on critical aspects of the firm, the market, the products, competition or the customer. In other cases, the size-up focuses attention on certain facts that cannot be ignored. In other cases, the size-up identifies critical constraints. Also included in this section is your view of the vision of the firm. The vision describes to management how the firm provides value in the market and how it differentiates itself from its competitors. The vision statement often plays a critical role in how you select, evaluate and structure the alternative and recommendations that you present the firm. What if there is no vision statement? Then you should propose a hypothetical vision statement that complements the future strategic direction of the firm. In short, the size-up provides a context-rich setting for the report; it prepares the ground for both the problem statement and the analysis. It identifies issues and constraints as well as identifies the symptoms from the problems. Clearly, there is a need for change as relationships between Northwell, Inc. (Northwell) and Medichek are strained, the Northwell board is concerned about lack of progress, and

uncertainty within Northwell has resulted in the departure of top employees. Identify the following critical components to understanding and building the need for change: Perspective of the stakeholder (note that there are multiple stakeholders) Individuals readiness for change (Claudia) Organizational readiness for change (Northwell) Strategic frame Change vision Go beyond simply providing responses to these components to understanding and building the need for change. Utilize course concepts from assigned reading and other research to support your responses. Change leaders develop their own views about the need for change, but they should also understand the perspective of other stakeholders. Further, creating legitimacy and awareness of that need is also important to gain the support of others (Cawsey & Deszca, 2007). In the case study of Northwell, Inc. and Medichek the need for change is clear based on the problems arising from the attempted joint venture between the two. Perspectives range, but the consensus is that things must improve and projects must be completed: Stakeholders Claudia and Nathan- Both of these individuals want change because things are not going as they had planned. They feel a great deal of pressure to perform, but are limited by the development teams ability to produce. They want things to be finished and the online mall to be up and functioning properly. Northwell senior management- Upper management wants a change; they want the project finished. They have voiced dissatisfaction about the progress of the project and wish to see results, especially considering the $4.5 million they have invested in it so far. Northwell sales staff- There has already been a number of resignations as a direct result of the mall project. Sales people, fearing that their jobs will be eliminated because of the new website, started to leave the organization in anticipation of it. They want a change that is not perceived as a threat to their jobs. Medichek- The staff of the company are getting irritated with the constant badgering from Claudia who is making visits and demands for progress reports more and more often. They naturally feel that they are progressing as best they can and that her constant nagging is only costing more time and money that could be better spent on development of the mall. The change they seek is less Claudia and more time for progress.

Northwell distributors- Naturally, distributors are a little leery of the company that promises a great new online system, but has not delivered months after it promised. They may feel unsure about the future of the company as well as their price structure with millions being spent on a new system that is not yet producing anything. They want the mall to be available, yesterday. Investors- Frustration from those who are financing both companies is high. Investors want one thing; return. However, they are not seeing results from the online mall that was promised. Some investors have no doubt invested in one or both companies because of the anticipated success of the online mall, but must be irritated that it has not even been implemented yet. Claudias readiness for change Although she was excited about the change in the beginning, Claudia is now having a difficult time bringing things together. The project is months behind schedule and she feels the need to make weekly visits instead of monthly. She probably feels frustrated because she is not capable of creating the website herself, so she must rely on the Medichek employees to take care of that part of it. Her role is simply to encourage progress and ensure that things are moving along properly (which they are not). She has also been asked by senior management to recommend a course of action to rectify the situation. Consequently, something has to change whether she wants it to or not. Northwells readiness for change It seems that Claudia, Nathan, and the management of both companies were eager for the change the online mall would bring. However, the organizations at large were not necessarily ready for it. This is clear through the loss of a number of high performing sales associates who left in anticipation of the change. At this point in which the project is floundering in difficulties, it seems that all of the stakeholders want things to change. What they want differs, but everyone wants the project to be completed so they can move on. Strategic frameworkBuilding an appropriate framework for the company to operate under is an important part of success. It helps the organization to stay on course and make the right decisions (Coakes, 2003). In this case either the framework failed, or the Claudia and Nathan failed to utilize the framework. The fact that several good employees quit, one major distributor left, and the project is a mess all indicate that a review of the relevant framework is overdue (or else one needs to be developed). Change visionThe visions for needed change are probably very different among stakeholders. There seems to be agreement that something needs to change, but what exactly needs to change will depend on

who is asked. Claudia likely believes that Medichek is the problem because they are so far behind on delivery of the product. Northwell management on the other hand probably believes that Claudia is to blame as she is in charge of the project. The Northwell sales staff wants a change that gives them more job security and Medichek employees are certainly irritated with Claudias constant nagging. Northwell distributors would also like to see change that makes their position more secure and investors are concerned about change that will make them money; currently they are losing it. Whatever the perspective, change needs to occur, but what change? Identification of what to change is essential and must be identified objectively based on the needs of the company. An effective way to this is through a tool such asGAPanalysis, which asks the question: where is the problem? A change framework is also essential in helping identify the kind of change that will work. For example, the McKinsey model or Burke-Litwin models aide change managers in recognizing how changes will interconnect with the organization. By identifying the needed change and then making it compatible with the company through a change framework, change can be effective and beneficial (Matejka & Murphy, 2005). The first thing that Claudia needs to do is complete an organizational analysis. This will assist her in understanding the forces for change and the organizational system. It will also help her too see where the organization is, where she wants it to be, and how to get there. This can be done with the following steps (Cawsey & Deszca, 2007): 1. Understand the forces for change and the organizational situation- There are two organizations, one who is well-established and cost focused; the other is young, innovative, and value focused. Working together, they are creating on online mall for distribution of products, but it is behind schedule, creating tensions among managers of both companies as well as for the project manager who is doing her best to see the project through. Employees at Northwell also worry about the implications of the new project for their jobs. 1. Determine the need for change and change vision- The need for change almost goes without saying as the project is months behind schedule. This has created tensions among managers, undue stress for Claudia, and caused a number of high performing employees to leave Northwell. 1. Define the desired future state- The desired future state is simply to have the online mall ready for use and functioning properly. 1. Determine where there are gaps (GAP analysis)- There is clearly a gap between the progress of the project at its intended completion date. 1. Describe the present state- Currently, the project is behind schedule by several months and Northwell has put $4.5 million into it. Medichek has contributed the manpower to create the online mall. This has ultimately shaped the tensions described above.

1. Create an action plan- The action plan must be to finish the online mall and have it functional for distributors to use. Clearly, the manpower available to Medichek is insufficient to accomplish this as they are months behind schedule. To complete this process in a timelier manner, more manpower is apparently required. Therefore, the action should be to hire additional staff to aid Medichek in completion of the online mall (this could include temporary or contract employees). Preferably for Northwell, the funding of such a venture would be shared as opposed to being done so entirely by themselves. 1. Measure the change- Determining how well this works should be straightforward as progress should increase. If the project remains behind schedule and fails to gain lost ground as a result of additional help, then this change will be a failure. It will be a success if the progress of the project accelerates and the website is functioning earlier than it is currently on track to. At the end of the case, Claudia is told by senior management to find a solution to the issue and report back. They are not happy with the current state of affairs and want things to be fixed. At this point, Claudia needs to recommend increasing the staffing of those working on the online mall. There is a strong argument to be had that more experts working on the mall will increase the speed at which problems are resolved and ultimately when it will be finished. Also, the reason for the slow progress can be attributed to limited human resources to combat problems. Concern for the perception of stakeholders is essential to project completion, and especially success (McManus, 2004). Claudia must deal with the perceived risk associated with this course of action amongst stakeholders to get the project back on track. They must understand that $4.5 million has already been spent on the project and a lack of acceleration of progress will only end up costing more. Also, the risk of staying with the current course could be further detrimental to investor dissatisfaction, tensions between the companies, distributor concerns, and employee retention. The project has to be finished as quickly as possible, even if it costs more than expected to do so. The cost of not following this course of action could be far more expensive than paying a few more programmers to assist in product development.