Executive Summary
FP employs highly professional and highly-skilled tradespeople and the demand for its service has reached an all time high so that they are kept busy even in the lean months. However, if the corporate leaders at FP will not be able to turn things around, then they will begin to lose their key personnel. It will take some time and resources to train a new worker and transform him into a reliable employee that can get the job done on time and in a cost-efficient manner. There is therefore a need to improve how things are being done at FP.
Main Recommendations
The current organisational structure must be transformed into a matrix type where the company is divided into two equal branches with its respective team of tradespeople and administrative support and this includes a competent Human Resource manager. Aside from that Skip and Bob Donovich will have to shed off their autocratic style of leadership. Finally, investment has to be made on modern tools and strategies to store and retrieve business information.
Conclusion
Skip and Bob Donovich will agree to the proposal because they cannot afford to keep on hiring and training new workers. They will also realise that a change in structure and leadership style will make the company more efficient and even though they will have to spend money to implement the changes they know that in the long run their profit will increase significantly because they can do their job more efficiently especially when it comes to managing people.
Background
The success and current problems of the firm can be understood fully if one will study its history. Finemaster Projects (“FP”) – a residential and construction firm – was established in 1955 by two brothers. Thirty years later ownership was transferred to their sons, Skip and Bob Donovich who became the managing partners of the said firm.
Together they transformed the company into a non-unionized and privately held firm that specialises in high-end residential and commercial building projects. This includes complete turnkey service and at the same time provide their customers drawings and blueprint preparation, cost estimates, budgeting, job scheduling, design, installation and even interior decoration.
On average the company employs 55 qualified and licensed trades people who were highly committed to their craft and have the same desire as the owners to provide quality service to their customers (Harvey, p.1). The employees were attracted to work at FP because the company is commuted to use the best techniques and the latest technology.
Everyone in the organisation, including the Bob and Skip Donovich continue to strive to use the newest styles and highest quality products. This is the reason why tradespeople who are just starting out in their profession would like to join FP. Employment in this company is seen as a solid stepping stone for better opportunities.
The success of the firm based on its specialized service allow the company not only to hire the best but also to keep them motivated in the long run. But only because these employees are well aware of what they can receive from the company. It is not much on the monetary gain but the level of experience about the latest technology and the best techniques to build structures and add style to a project that would surely increase customer satisfaction.
However, there is a problem when it comes to those who wanted to have a long-term commitment. It is difficult to talk about and discuss their future with the corporate leaders or even the Human Resource manager if there is one. This is unfortunate because FP will simply become the stepping stone for many and when they are experienced enough they will leave the company.
Present
It is important to first identify the issues faced by the FP. There are many but the problems of John Balmer provides an overview of what could become a major hindrance to the future of the firm. This is because of two things. First, John Balmer is willing to work full-time and can commit to a long relationship with FP. Second and most important of all, Balmer is not an ordinary worker trying to learn the ropes at FP. It is therefore imperative for the business leaders of FP to find every way possible to retain the service of this young man. If Skip and Bob Donovich fails in this regard then there is a possibility that they can lose some of their best men much sooner than expected.
There are two major factors though that will make it a challenge to change the way things are being done at FP. First of all there is the corporate structure that at first glance seems to be an inefficient hybrid between a functional type of corporate structure and a matrix structure.
The second major factor is the culture that exists within FP. Since the company was established by two brothers and then passed on to their sons it is understandable why they tried to maintain a family-like atmosphere within the company. However, there are challenges that they had to deal with and this necessitates major changes in corporate structure as well as leadership style.
FP has to deal with a rapidly growing business as well as the need to keep their diverse group of highly-skilled tradespeople happy and contented. They have under their employ people with varied skills and responsibilities. The person who is in-charge with the planning and creation of blueprints and diagrams is not the same person in-charge of the construction sites.
Expert interior decorators possess a different skill set as compared to those whose expertise is in carpentry. The need to manage such a diverse set of highly-skilled workforce is not an easy task. Interestingly, FP managed to thrived in a competitive environment using inefficient strategies when it comes to human resource management. Case in point is John Balmer’s frustration to receive what he believed was due him after a year of dedicated service to the company.
Action Plan
The first thing that has to be done is to make sense of the organisational structure of the company. Skip and Bob Donovich could not afford to develop a system wherein order and stability is only good on paper but in real-life the workers are at a loss as to how they were being managed and taken cared of by the company.
For example there is only one building that houses all the administrative functions of the company but when it comes to the actual work the leaders created two branches. One group works for Skip Donovich and the other one works for Bob Donovich. Each branch is focused on their specific projects and rarely worked on jobs that was linked to the other group. Sometimes the two groups share resources.
This set-up could have worked for the long-term except for two issues unique to the company. First, the insistence to maintain a family-like atmosphere. This means that although there are two branches it is still impossible for the workers to know who is accountable for them if it is Skip or Bob Donovich. Secondly, the leadership style adopted by the leaders is something that can add confusion and frustration to the workers as seen by the reaction of Balmer and the unethical behaviour of Winters.
Changes has to be Made
In order to overhaul the company and minimize the number of skilled personnel leaving FP to look for greener pastures, the major part of the solution has to deal with the organisational structure and the leadership style of Skip and Bob Donovich.
The first thing that they need to do is to make a decision whether they will use the functional structure or the matrix structure. It must be pointed out that combining the attributes of these two types of structure will simply frustrate and confuse the employees when it comes to accountability, sharing of resources, and dealing with human-resource related problems.
Due to the workload as well as the need to share resources FP would probably choose the matrix structure. If they will go with this set-up then there is a need to create a clear line of delineation between the two branches. This means that the worker in Branch A should never work in Branch B and the sharing of resources must stop. In other words these two groups should be independent of each other. To some extent this is what is happening at present.
But there is one more thing that they need to do. The administrative, marketing and human-resource-management aspects of the business must also be divided between the two groups. This means that Branch A and Branch B will each have their own set of administrators, finance department, marketing department as well as a human resource manager that can deal with the specific members of each branch.
The downside to this proposition is that it would force the company to buy more equipment because sharing of resources is no longer allowed. More importantly the company has to hire another administrator, finance officer, and HRM personnel. Finally, Skip and Bob Donovich will have to make a commitment to one branch and they are not allowed to cross-over to the other side and take part in their projects or meddle with their problems.
The next thing that has to be done is to deal with the issue of leadership style. No information was given with regards to Skip Donovich but one can assume that he shares the same leadership style as Bob. Based on the information given Bob Donovich’s leadership style can be described as autocratic – he solves problems and makes decisions alone.
In the case of Balmer he did not consult anyone from the administrative division to find out about Balmer’s work performance. Donovich does not have a system in place where he can evaluate his employees. But worse of all he makes decisions on the fly without thinking about the consequences to the company and to the individual.
Timeline
The change in leadership style can be done immediately. Skip and Bob Donovich will have to make a decision to not do everything in an autocratic manner especially when it comes to issues of job performance reviews and pay raise. It is interesting to note how a company has thrived for many decades using management strategies that seems only good for a start-up business and not an organisation that has at least 55 employees not counting those working in the administrative and finance departments.
When it comes to changes in the organisational structure perfect timing is needed. There is no need to rush and the leaders will have to provide time for all the changes to occur. It would be best to implement the change during lean months such as during wintertime. This is to capitalise on slow demand and would allow for more meetings and discussions with regards to the proposed changes in the corporate structure.
Justification
It is possible that the leaders will resist the idea of change. After all they already experienced a significant level of success. However, they have to understand that if they will lose their key personnel then there will come a time when they will have a few experts under their employ and it would become increasingly difficult to finish projects on time and not waste their resources on duplicate work because customers are unhappy with the final results.
The leaders may disagree with the proposed changes because of the additional expenses involved. But it must be pointed out to them that in the long run they will increase their profit. They need to know that it is costly to train workers without experience and then after a few years lose their service to a competitor who is willing to pay more.
The proposal must be communicated in such a way that the leaders will feel that this is not only for the employees but also for the overall success of the company. The leaders should be made to understand that their inability to provide what the employees are asking for in terms of benefits and salary increase may not be due to financial considerations but the lack of a system that will help them make accurate and effective decisions.
In this regard changes should not only be limited to leadership style and corporate structure but also in modernising their systems. When Balmer went to see Donovich, the boss was busy looking for a purchase order because of the mess that was cluttering his desk. Donovich kept on shouting instructions to a subordinate while he kept on looking for the missing document.
Thus, the company would benefit greatly if they move from a manual system of storing and retrieving information and shift to digital technology for more efficient storage and faster retrieval of the same.
A better leadership style, an improved organisational structure and the use of modern tools to manage business information will help them free up resources and allocate it more efficiently. FP’s business leaders will be amazed at what is possible with these changes in place and so they will support it all the way.
Works Cited
Harvey, Julie. Finemaster Projects Ltd. Ontario, Canada: Richard Ivey School of
Business, The University of Western Ontario, 2010.