Programme-Managing Organisational Performance and Innovative Improvement
Programme-Managing Organisational Performance and Innovative Improvement
FOR
“I hereby declare that this assignment is entirely my own work, and that it has not previously been submitted to any Higher
Education Institution. I also declare that all published and unpublished sources have been fully acknowledged and properly
referenced. This includes figures, tables and exhibits. Where modified by me, this has also been indicated.”
Table of Contents
PREAMBLE...................................................................................................................................................................................................................................................... 3
EXECUTIVE SUMMARY................................................................................................................................................................................................................................ 3
INTRODUCTION.............................................................................................................................................................................................................................................. 4
1. CASE STUDY ANALYSIS (Problems and Causes)............................................................................................................................................................................ 5
2. SWOT ANALYSIS....................................................................................................................................................................................................................................... 8
3. ROOT CAUSES........................................................................................................................................................................................................................................ 11
4. RECOMMENED SOLUTIONS................................................................................................................................................................................................................ 14
5. RECOMMENDATION AND CONCLUSION.......................................................................................................................................................................................... 20
Bibliography.................................................................................................................................................................................................................................................. 22
PREAMBLE
This is my individual examination assignment for the module Programme Managing Organisational Performance and Innovative Improvement
(M2)
The Case Study is based on LEVI STRAUSS STRUGGLES WITH CREATING ORGANISATIONAL CHANGE
Source: Lynch, “Strategic Management”, Pearson.
CASE QUESTION
1.1 Critique the case from an Industry 4.0 characteristics perspective.
1.2 Based on your critique, what should be done to remedy the situation?
EXECUTIVE SUMMARY
Kenton (2021) defines a leverage buyout (LBO) as the acquisition of another company, using a significant amount of borrowed money to meet
the costs associated with the acquisition. It is stated that LBOs have garnered a negative reputation as ruthless and predatory. In 1996 when
Robert Haas led Levi Strauss & Co.’s the recent LBO, he placed its future of one of the world’s most successful brands into the hands of four
family members. The other family members were faced with only two choices, cede power to the five for 15 years or cash out, a majority
stayed. Steyn and Schmikl (2021:181) et alia, state that business change can be a complex exercise and most business cases, will fall short of
the defined expectations and objectives. Organisational change involves all aspects of a business, the epicenter behind every aspect of
change with any business, is its people. It is the people who make the change and not the technological enhancements alone. Changing
strategy, case in point the Customer Service Supply Chain initiative, includes changing products/services which require new processes to be
implemented. Processes are performed by employees in an organization, the way employees operate is managed through organisational
culture, which also affects how Levi’s employees behave. The authors state that processes are enabled by technology, an integral part of the
operational strategy. All the aspects of Levi Strauss are affected in the change process. In a world where change is constant and/or
INDIVIDUAL EXAMINATION ASSIGNMENT M2 (Programme-Managing Organisational Performance and Innovative Improvement)
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continuous, the authors further suggests, “organisations might never have the time to settle down before the next re-shaping and a good
change objective might be to achieve a culture where change is welcomed and encouraged”. According to Steyn and Schmikl (2021:182) all
the above require what is termed leadership excellence.
Steyn and Schmikl (2021:181) et alia, mention that to become competitive, traditional organisations need to improve their leadership skills.
Managing Levi’s through the projects and programmes approaches, requires extensive support from top management to be successful. On the
positive, Haas is already fiercely supported by the employees. The authors add that the rigid approaches employed by traditional organisations
can no longer cope with the demands of the new economy and to succeed, Levi Strauss must transform into a learning organisation.
Based on Steyn and Schmikl (2021:335) et al, state that the main gain(s) for strategic transformation is not only organizational efficiencies, first
price is organizational effectiveness. Strategic transformation programmes concentrate on what has known as ‘doing the right things’, for
example making certain that the right strategies (prescriptive or emergent) are implemented in order to enhance the strategic value proposition
for Levi’s. The authors weight in on there being four processes embed in the transformation and change process and Corporate is required to:
1. Articulate its vision and mission as a cohesive set of objective measures in easily understood terms
2. Communicate and link strategy to all ranks of the organisation
3. Initiate business planning which enables Levi Strauss to foster integration of business and financial plans and
4. Process of feedback and learning which will enable Corporate to achieve innovative double-loop learning or feedback loop (BSPM)
INTRODUCTION
Matshidiso (2012) states that Levi Strauss is a well-known organization and they have enjoyed great successes in the last century, especial
from the 1960's and the mid 1990's. The company was doing very well and they took their successes for granted.
Levi Strauss lack innovation and stuck to what they knew, which morphed into offering few product lines that were outdated. By not being up to
date, Levi Strauss lost sales and profit when they failed to forecast on changing fashion trends. The company also failed to be responsive to
the target market, "In 1993, kids started telling parents that the Levi's jeans legs were to narrow" but Levi's did not take this preferences into
consideration.
New competitors for example Miller Outpost, Hilfiger and JNCO were more customer forecast. In response to these customer needs, Miller
Outpost created its own line of jeans with legs as wide as 23 inches and J.C Penney and Sears got into the act by creating flared legs and
boots cut jeans.
As we analyze the case study further, it is evident that Levi Strauss was employees oriented and the company always believed in corporate
charity and social responsibility; this has hindered productivity and profit. The CEO, Robert Haas failed to put strategic direction in order to find
balance between employee and task oriented leadership.
There are few pressing issues that emerged during the analysis of the case study which are as follows:
Steyn and Schmikl (2021:80) define regeneration as the implementation of one, transformation and two change. This requires a change in
attitudes and behaviour on the part of Levi Strauss & Co. To lead employees and work teams through such a course of action requires insight
of the personalities of one’s subordinates at the cognitive, conative, and emotional intelligence levels. Haas and his leadership team thus must
deal with the Leader, Followers, and Situations. It is further stated that transformation does not affect at one level only, it cuts across three
strategic dimensions and have defined problems identified in each:
Lack of authority and leadership in decision making - No matter how benevolent Haas’s sincerity was, group decision
making usually degenerated into endless meetings, task forces, memos, and E-mails. It is also stated that the
"principled reasoning approach" to decision-malting taught in the core curriculum did not help. The CFO George
James alluded to needing to convince everyone to agree with your idea as there was no authority to make decisions,
making it difficult to be responsive. This is further exacerbated by everything needing to go through the corporate
process before any decision can be taken
Lack of communication between management and subordinates – When a new supply chain was being designed, the
team of 200 employees responsible for the new supply chain, comprised of mainly vice presidents heading important
divisions, divisions that would now be without leaders, who were leaving work behind and forcing colleagues to do
double duties
Employee dissatisfaction – Over 600 employees were negatively affected by newly created job categories and had to
reapply for their positions. Employees that did not get the jobs they applied/reapplied for broke down and others simply
resigned
Lack of strategic planning and direction from CEO and his leadership team – The organization once again underwent
major organizational changes when Levi’s redefined its utopian mission, recently changing to a brand management
structure which was popular with consumer companies like Procter & Gamble as well as Sara Lee. Once again, people
had to move into new jobs and were given new titles. Levi’s organigram is flawed as there is no evidence of
Programme Managers
Struggle with creating and implementing change management – According to Steyn and Schmikl (2021:81) an
improved behavioural paradigm can only be housed in a virtual dynamic learning organization, calling for employees to
operate in high-performance teams, where good communications and information flow flourish. It is clear from the case
study that a performance orientated culture housing sound accountability and responsibility, which are much needed
by Levi Strauss & Co.
Poor project planning, monitoring and control – The Reengineering team’s (the Customer Service Supply Chain
Initiative) budget, termed a disaster and swollen by 70% to US $850 million. This initiative was to improve service to
retail clients but morphed into a monster, attempting to change everything.
Lack of continuous improvement projects - Steyn and Schmikl (2021:86) indicate that business processes serving
internal and external customers require continuous improvement. This is amplified by the Industry 4.0 economy, where
organisations are continuously striving for higher quality products and service in improving their competitive edge.
Lack of innovation – Dockers, Levi’s immediate success was last launched in 1986, replacing suites with casual attire.
In 1993 Dockers misses one of the biggest trends in the khaki market, wrinkle resistant pants. In the same year, the
market needed jeans with flared legs and boot cuts, again Levi Strauss stayed put.
Poor customer focus - Retailers are receiving product lines late and finding it difficult to sell a product that lacks in
store marketing. Retailers are not aware of the changes at Levis, the very same changes that were to help customers
resulted in further confusion from customers. The reengineering at a budget of US $850 million turned out to be a
disaster, with one of their biggest customers reporting delays of 45 days in delivering an important back to school line
during fall.
Levi’s failed to overcome barriers to change. Steyn and Schmikl (2021:268) articulate that even at the business unit level they lacked cross
functional systems, hindering strategy implementation. This is a clear indication that Levi Strauss failed to overcome functional bureaucracy.
To the former CEO’s point, Robert Siegel, there is a clear gap between knowing what to do and doing it. During 1990, Levi’s market share
dropped by 50% among males 14 to 19, new product success has not been achieved in years, advertising campaigns failed, the presentations
in-store were said to be embarrassing and manufacturing costs were high.
2. SWOT ANALYSIS
According to Jones & George (2018: 247), a SWOT Analysis is a planning exercise where managers identify internal organizational strengths
and weaknesses and external environment opportunities and threats. It is based on the SWOT Analysis that managers at different levels of
Levi Strauss & Co. select corporate (a corporate level strategy to manage the growth and developments of Levi’s maximizing its long run to
create value), business (business level strategy taking advantage of favorable and finding ways to counter threats in order to compete
effectively within the industry) and functional (functional level strategy to improve ability of organisation’s departments in creating value)
strategies to best aid Levi’s in achieving its mission and goals. Figure below adopted from Jones & George (2018:248):
3. This is a well-established global player, with a market share that reached US $14 million
Upon evaluation of the above SWOT Analysis it is apparent that Levi Strauss has endured mainly 14 internal weaknesses and in the external
environment fallen victim to 10 identified threats. There is a dearth of strategic thinking that exists within Levi Strauss.
3. ROOT CAUSES
According to Steyn and Schmikl (2021:272) define six highly prevalent barriers that trouble Levi’s, these being taken together have created a
vicious cycle which has proven difficult to escape. The authors continue to group the barriers into three categories namely the quality of
direction, the quality of learning and the quality of implementation as illustrated in Figure 6.1 by Steyn and Schmikl (2021:272):
By adopting a prescriptive strategy, the CEO is undermining the potential of the team, avoiding discussions that may lead to conflict and
when it comes to coordinated decision making, managers are not able to hold the subordinates to account. By being laissez-afaire
managers reduce trust, effective strategy reformulation and overall business performance. In the authors opinion, Steyn and Schmikl
(2021:273), “a lack of a strong and convincing statement of the strategic direction deprives many top management groups of the common
uniting cry that might help them coalesce as a team”. Effective strategies are about making decisions. It is as crucial to decide what not to
do, as debating what to do.
This seen when the third floor brigade made changes that impact 600 employees without effectively communicating intentions. This
according to Steyn and Schmikl (2021:271), this lead to Levi’s staff who recognize grave difficulties backing down as they fear that senior
managers not being open to open discussions. This is said to worsen coordination, integration and collaboration adversely.
Levi’s, according to Steyn and Schmikl (2021:271) is in need of guidance for development of resources, this makes prioritization of the
utmost importance for the organisation. It is further elaborated that businesses that pay attention to develop clear strategies that identify
preferred objectives and prioritizing, seeing to it that strategies that deliver the best objectives are given preference, resulting in optimised
value and performance.
Steyn and Schmikl (2021:271) et al, poor coordination across functions and business units is a major challenge identified within Levi
Strauss and often goes hand in hand with unclear strategy and poor prioritization.
According to Steyn and Schmikl (2021:271) and others, the above stated points leads to skepticism seeing Levi’s employees, at the lower
levels, believing that senior management prefer avoiding possible threatening concerns. This silent killer moves employees to believing
that they would be better off keeping observations to themselves. With the stated conditions, lower level managers will fail to develop skills
through created opportunities in order to lead the change and will not be supported through the much needed leadership coaching,
mentoring and training.
4. RECOMMENED SOLUTIONS
Steyn and Schmikl (2021:194) recommends that for Levi Strauss & Co. to survive modern needs for organisations, there is a need for a
management system which integrates and coordinates the current disorder into order for business and operational dimensions. Strategy
focused leadership is an imperative dimension of modern general management. The Balanced Scorecard (BS), Steyn and Schmikl (2021:194)
et al, is an ideal tool for describing corporate strategy into unsophisticated terms so that the vision and mission are easily conveyed and
understood by all people in Levi Strauss. BS promotes identifying critical organisational success factors (CSFs) and accompanying key
performance indicators (KPIs) for measuring the degree to which organisational objectives are achieved. The BS would enable Levi’s to link its
long-term strategy with short-term actions and moves away from relying solely on short-term financial measures as indicators of performance.
The Balanced Scorecard will complement Levi’s financial perspective by adding three additional outlooks namely the customer, learning and
growth as well as internal business process perspectives. The financial perspective is a lagging indicator (long term strategy) as some of
Levi’s improvements may take some time to be realised in financial rewards. In the short term, the leading indicators of performance (customer
CSF, learning and growth CSF and intern process CSF), as organisational progress will be immediately evident.
Contrary to the case study, where strategies are developed around the leading indicator perspective, the philosophy at the center of the
approach is to safeguard against negative long-term effects on Levi’s financial performance, by not developing strategies around the three
leading indicators.
Steyn and Schmikl (2021:55) et al, that transformational leaders, focusing on behaviour attempt to stimulate the feelings of the employees’
being personal mastery, control and intrinsic motivation, it is recommended that Levi’s current/future leadership adapt to this change.
Transformational leaders present a philosophy of leadership where they as leaders focus on increasing support to others, including followers,
rather than to themselves. Someone who motivates others, as well as followers by developing their self-management skills, is said to be a
transformational leader. They endeavor to create a sense of community within the internal and external environments of the work situation and
lay claim to the assumption that they are stewards of the human talent and resources they manage. In so doing, they rely less on their position
of power and more on informed persuasion skills when making decisions, including trying to influence team members and partners. These
transformational aspects also apply to collaboratist leaders within the Industry 4.0 economy.
4.3 Shaping the Virtual Dynamic Learning Organisation (VDLO) Value Chain
Steyn and Schmikl (2021:231) aver that the balanced scorecard delivers a framework to described and communicate strategy in a reliable and
perceptive way to all employees. Despite this, in striving for both effectiveness and efficiency, programme management structures must be
linked to the balance scorecard in order to carry strategy implementation in a coordinated and integrated team-based system, measuring and
appraising the degree to which objectives of strategic importance are achieved. In demystifying the differing views that are present concerning
programme management, as well as providing a clear definition and contextualized description of both programme and portfolio management,
the following must be noted:
Programme management defines the coordinated and integrated management of a group of related projects on the one hand; and on
the other the coordinated and integrated management of cross-functional processes of the modern-day supply chain
Additionally, programme management focuses at achieving specific strategic benefits, whereas portfolio management aims on selecting
the right programmes to best meet an organization’s strategic outcomes
Steyn and Schmikl (2021:232) describe, project and programme management as distinguished by:
Project management strives to accomplish a specific strategic benefit over a unique set of interrelated tasks and the effective utilization
of resources
Programme management collaboratively deals with the leading, creating, implementing and improving of a cross-functional project or
supply chain portfolio, that delivers goods and services, and achieves organisational benefits of strategic importance
A Portfolio refers to a collection of programmes constituted of operations processes and projects, shaped cross-functionally, managed
as a group to effectively and efficiently achieved organisational strategic outcomes. Portfolio Management refers to leading, creating,
implementing and improving of the supply chain processes portfolio, and secondly, capital expenditure, continuous improvement and
strategic transformation project portfolios, with the aim of achieving organisational strategic outcomes optimally
Steyn and Schmikl (2021:221) et al, affirm that a BSPM System is created when the balanced scorecard (BS) formulation, strategy description
together with criteria for measuring organisational benefits are coupled with Programme Management. The BSPM System enables integrative,
coordinative and collaborative management of the Levi’s value chain processes from suppliers to external customers (see illustration adopted
from Steyn and Schmikl (2021:222) where the representative organogram and different business models of the value chain schematic are
illustrated):
The authors affirm that the knowledge-based learning organisation makes use of Total Quality Management (TQM) principles, having
emphasis on internal and external customer needs, including management and staff at all levels of Levi Strauss in teamwork, decentralizing
managerial decision-making, focusing on uninterruptedly improving the products, services, systems, and processes of Levi’s, systems
thinking, and creation of a learning environment that stimulating human creativity and knowledge management. There are two distinct
components within the knowledge- based learning organisation. The BS component provides for a framework that describes and
communicates strategy, as well as its measurement criteria in a consistent and insightful way to teams. The second component, Programme
Management delivers strategy implementation in a cross functional coordinated and integrated team-based way, providing information
feedback for appraising and reviewing the organisational outcomes.
In the article published by Professor Pieter Steyn titled, “The Need for a Chief Portfolio Officer (CPO) in Organisations”, Steyn (2010:1)
affirmed that consensus was reach by CEOs that organisations are bombarded by change and that many, like Levi Strauss, are struggling to
cope with the needed transformation. This led CEOs in moving aggressively towards global business designs, deeply changing capabilities
and partnering more extensively. This inclination had great significance for the programme methodology to managing the enterprise value
chain. It made it necessary to introduce cross-functional programme management structures to create synergy in monitoring and controlling
operations. In order to succeed, CEOs and the entire employee complement of Levi’s for the future, need to be well versed in the principles of
project, programme and portfolio management. Moreover, as programme offices in the organisational structure grow in numbers, the need for
an executive position where portfolio managers report increases. It would be unthinkable that programme managers all report to the CEO who,
according to the IBM survey, is already “bombarded by change” and “struggling to cope”. The emergent role of Chief Portfolio Officer or “CPO”
aims to solve this problem.
Steyn and Schmikl (2021:238) state that, Innovative Continuous Improvement Portfolio projects result from business initiatives generated from
various sources in the value chain. The requests for proposal take the form of business cases prepared by internal customers, also referred to
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as sponsors. The authors further state, Steyn and Schmikl (2021:239), that these projects that result from business cases be prioritised based
on benefits of strategic importance. Those projects that will bring the best benefits to the organisation are assigned the highest priority for
implementation.
Steyn and Schmikl (2021:239) state that, virtual dynamic learning organisations (VDLO’s), as opposed to bureaucracies, follow a policy of
continuous improvement in everything that they do. Bureaucratic organisations fail to adhere to total quality management (TQM) principles and
degenerate over time, losing their competitiveness and getting bogged down in ineffectiveness and inefficiency. Organisations that follow a
policy of innovative continuous improvement are always engaged in continuous upgrading of human talent, processes, infrastructure,
technology and systems. It is for this reason innovative continuous improvement is closely associated with an organisation’s Quality
Management System and generally present in the structures of ISO 9001 certified organisations. As a result, they hardly ever reach a stage
where radical transformation is required.
According to Steyn and Schmikl (2021:239), in modern knowledge-based virtual dynamic learning organisations, work is performed cross-
functionally in the supply chain portfolio, as well as project portfolios. The cross- functional processes operating in a matrix structure are
overseen by process managers and project managers who depend on line managers for their resources. Not owning these human talents as
direct reports, process- and project managers predominantly draw on their leadership abilities and interpersonal skills to motivate cross-
functional team members and give them direction. It is important to note that cross-functional processes can either be normal operational
supply chain work, for example, procurement, customer relationship management, customer service management, demand management and
capacity planning, and production flow management: or project related, inter alia, portfolios of continuous improvement, strategic
transformational, and capital expenditure projects.
It is recommended that Levi Strauss & Co. embark on a journey of strategic transformational change, moving away from a traditional matrix
organisation to the alluded VDLO. With this change, they will need to manage the resistance for change. Steyn and Schmikl (2021:310) affirm
that there are leading reasons why people resist change. It is in the first place subject to every individual’s predisposition towards change.
Pressure from peers is often a major influence and can add to negativity that may already be present in an existing climate of mistrust. Many
people fear failure, the loss of status or job security, lurking surprises, and the unknown. Moreover, the disruption of cultural traditions or group
relationships, personality conflicts, and non-reinforcing reward systems also play a role. Change agents must take great care not to
demonstrate a lack of tact or poor timing in the change process, since this can derail the change initiative and complicated resistance to
change. According to Steyn and Schmikl (2021:310 - 311) et al, individuals require a certain amount of stability and predictability in their lives,
and change, particularly major change, may threaten this basic need. To overcome resistance to change is frequently critical in ensuring the
success of any organisational change effort. They reason that before an organisation can use a specific approach to overcome resistance to
change, they must be ready for the change. An organisational behaviour survey can test the readiness for change. The authors believe that
organisational change is less successful if top management fail to communicate with its employees about the change process. Moreover,
employees’ perceptions and interpretations of a change affect resistance significantly. Employees are less likely to resist when they perceive
that the benefits of change overshadow the personal costs. The authors advise management to:
The abovementioned recommendations highlight the importance of communicating with employees throughout the process of change.
Employee participation in the change process is another generic approach for reducing resistance. The authors regard every change situation
as unique, each one must be carefully analysed to determine the specific forces that may be operating to create resistance to a particular
change. The authors then proceed to identify six general approaches dealing with the problems of resistance to change:
Provide facts and information through increased communication about what has changed.
Allow those affected by the change to have a voice in how the change will occur by allowing and encouraging participation in the change
design and implementation. The authors continue to state the, Steyn and Schmikl (2021:312)
Providing training to and socio-emotional support for dealing with the change.
Use information to influence individuals selectively so that desired changes receive maximum support.
Use power and threats of undesirable consequences to resisters if they do not comply with changes.
In conclusion, Steyn (2010:9) et al, affirm that to succeed, executives must come to realise that value creation opportunities of
organisations are shifting away from managing tangible assets, such as inventory, plant, property and equipment, to managing knowledge-
based strategies, deploying the organisation’s intangible assets. These intangible assets include, inter alia, strategy-focused leadership, a
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healthy organisational climate, innovative products and processes, employee knowledge and competency, and excellent customer
relationships and service. This means that the organisation of the future will be compelled to shed old ways of leading and managing in
favour of a knowledge-based approach that embraces innovation and learning.
Bibliography
Steyn, P. P. (2010). THE NEED FOR A CHIEF PORTFOLIO OFFICER (CPO) IN. PM WORLD TODAY, 14.
Steyn, P., & Schmikl, E. (2021). Programme Managing Organisational Performance and Innovative Improvement. Cranefield College.