Changing the game at Cherokee Nation Entertainment.

Carlin, Jason ; Dean, Anthony ; Kern, David 等

CASE DESCRIPTION

The primary subject matter of this case concerns building, communicating, and implementing a vision that will drive change in an organization. Secondary issues examined include overcoming resistance to change, building support in multiple stakeholder groups and powerful sponsors, the role of team leaders in the implementation process, acting with a sense of urgency and risk taking in implementing change. The case has a difficulty level appropriate for undergraduate seniors and graduate students, and is designed for courses addressing organizational change, leading change, and leading teams. The case may also be used to demonstrate strategic management concepts, including developing a vision and strategy implementation. It can be covered in a one hour class. Preparation for the case is expected to require 3-4 hours.

CASE SYNOPSIS

The case opens with Cherokee Nation Entertainment ("CNE") engaged in the process of evolving from a collection of low impact retail and bingo operations to a dynamic, growth oriented business employing current marketing and management concepts. Dave Stewart, CEO, is building a vision for CNE that embraces innovation and change in driving a transformation of the business' strategy and culture. The change in Oklahoma gaming laws provides the external opportunity. Stewart's vision encompasses a dramatic change in the basic philosophy of the business in attempting to integrate the edgy Hard Rock "culture" with the very traditional culture of the Cherokee Nation. The case follows Stewart and a Team of 8 key managers who navigate through multiple challenges and obstacles often encountered in transformational change in organizations. The vision and strategy provide the direction for change; however, the extent of the change provide significant challenges for Stewart and the Team of 8 in overcoming resistance to change, and building a sense of urgency so important to implementation. The case demonstrates one approach to building and implementing a vision and new strategy, and provides opportunities for students to analyze the key stages of organizational/strategic change. The case ends with the opening of the Hard Rock Hotel and Casino Tulsa; however, the change process is not complete. There are still important issues for students to ponder about the future of the Hard Rock brand and CNE.

The Case Synopsis and the Case Description should be removed before this case is assigned to a student or student group. This information could prejudice the minds of students.

INTRODUCTION

In 2006, Dave Stewart, CEO of CNE, was concerned about sustaining the strong growth and profitability that the company had experienced over the past several years. CNE's growth had made important contributions to the financial condition of the Cherokee Nation and had provided jobs for its people. The company had beaten the competition to the punch in opening Las Vegas style gaming in its casinos by anticipating and driving the change in Oklahoma laws. Advance knowledge of this critical external factor allowed CNE leaders to act aggressively, but they could not stand pat. Competition was increasing from other tribes, including the expansion of a rival gaming facility located only 20 miles from the flagship Cherokee Casino Resort in Catoosa, just outside of Tulsa.

Dave understood the necessity for change. There was little that differentiated CNE from the potential competition. In order to continue its growth, CNE sought a differentiation strategy that would separate it from other Native American gaming operations in the region, and help sustain the advantage realized by acting as first movers in the gaming expansion. His vision for continued growth by diversifying into new entertainment concepts and venues would evolve and develop.

A discussion with CNE's Vice President of Marketing, Molly Jarvis, about the Hard Rock organization in Las Vegas triggered a series of events that would drive change in CNE, its management team, and in its relationship with the Cherokee Nation--and provide definition to that evolving vision. While Dave clearly recognized the potential benefits the Hard Rock brand offered, he knew that he would face significant resistance in mixing the vibe of Hard Rock with the cultural conservatism and great traditions of the Cherokees. How could he convert the vision into reality? How would he overcome resistance to change and commitment to the status quo in his organization and in the leadership of the Cherokee Nation, who must approve any of his plans? How would he build a team that could implement the vision with urgency and effectiveness before the competition could act?

The task was not for the faint of heart, nor for those who favor the familiar and safe. It would require real and sustained leadership from Dave Stewart and his management team, and support from the Cherokee Nation Tribal Council and Principal Chief of the Cherokee Nation, Chad Smith.

BACKGROUND

The Cherokee Nation, headquartered in Tahlequah, Oklahoma, is recognized as a sovereign nation by the United States government. One of the Five Civilized Tribes, the Cherokee Nation has historically played a central role in the economic, educational and cultural life of the northeastern part of Oklahoma. A major objective of the Nation and its businesses is to maintain and enhance the traditions, culture and language of the Cherokee people who were forced to relocate to Oklahoma via the Trail-of-Tears from their ancestral homes in Georgia in the 1800s.

Inspired by its great scholar, Sequoyah, the Cherokee Nation plays a key role in education in northeast Oklahoma, founding the region's first institution of higher education, the Cherokee National Female Seminary in 1846, now Northeastern State University. The Nation and the university partner with area businesses and communities to enhance the culture, economic development and education for the region. The Cherokee Nation owns eight major companies involved in multiple industries. All efforts are directed toward improving and enhancing the lives of the people of the Cherokee Nation. The Nation is governed by a Tribal Council with an elected Principal Chief who is the chief executive in political and economic affairs of the Nation.

The tribal business entity which eventually became CNE, the focus of this case, was formed by the Nation in 1991. At the time of its creation, such business entity's sole source of revenue came from a bingo hall located in Roland, Oklahoma. Over the years, CNE expanded into a variety of operations, including casinos, gift shops, retail tobacco stores, golf courses, a racino facility, a travel plaza, a tourism group, and most recently, hotels. CNE was created in order to generate revenue for the tribe, to provide jobs for Cherokee citizens and to stimulate economic development within the Cherokee Nation, while concurrently supporting and enhancing the cultural goals of the Nation. CNE is required by the Nation to feature Cherokee culture and art in all hotels and casinos--a potential source of conflict and tension between "profit" and "culture". Over sixty percent of the employees at CNE are Native American. CNE is managed by a board of directors at its parent company level with CNE's chief executive officer having general supervision, direction and control of the business and officers of the company. Board members of the parent company and the CEO are appointed by the Chief, as the representative of the Cherokee Nation, and confirmed by the Tribal Council. Although the board of directors and the CEO predominantly handle the business operations of CNE, certain decisions must still be approved by the Tribal Council. The Cherokee Nation benefits financially by receiving thirty percent (30%) of CNE net revenues.

CNE: THE GROWTH STRATEGY--2002 TO 2007

Within a year of joining CNE as CEO in 2002, Dave Stewart launched an aggressive expansion at CNE with two goals in mind. The first was to expand the company's target market from the blue-collar guest ($20-30,000 income level) to include higher income guests seeking a broader entertainment experience. This initiative included the acquisition and renovation of a golf course, the construction of a 7 story/150 room hotel and an increase in the number of electronic bingo games from 700 to 1700. These "bingo" games have the look and feel of a slot machine, creating an environment similar to that of a Las Vegas style casino. It was an effort to make the "casino" more of a weekend get-away destination. What was not known to the public at that time was that Stewart was participating in an organization whose purpose was to make gaming, other than bingo, legal in the state of Oklahoma, a critical step in achieving the second goal--developing an entertainment center around a Las Vegas style casino.

On November 2nd, 2004, the citizens of Oklahoma passed a referendum allowing Indian tribes to enter into compacts with the State of Oklahoma to expand their gaming operations beyond bingo. Stewart had successfully expanded CNE, positioning it to open its doors to casino-style gaming as soon as the Cherokee Nation signed its gaming compact with the State of Oklahoma. While others scrambled to create facilities and provide the games the public was looking for, CNE was one of the first to enter the market.

In order to beat the competition, Stewart convinced the Nation to spend $80 million on renovations to the Catoosa facility, while working concurrently with the state of Oklahoma to legalize gaming. This involved a significant risk. If it had failed, the Nation would have had $80 million in improvements tied up in a bingo hall. But the gamble paid off as the first hand of blackjack in Oklahoma was dealt at the Cherokee Casino Resort in 2004. The transformation from bingo hall to "Las Vegas" gaming brought legitimacy to this enterprise, promoted the Cherokee name, and became a source of pride for many of the Cherokees involved, who felt like stakeholders in the enterprise. The Cherokee Casino Resort became a facility which was a far cry from the simple bingo halls marginally attached to Native American land sprinkled throughout the highways of rural America. Eventually a 3-4 star hotel was added to the casino and it became a facility that could have been on the Las Vegas strip. The electronic gaming electronic gaming machines were bringing in revenue that justified the $80 million outlay for the conversion.

By 2007, CNE had expanded to seven locations within the fourteen county territory of the Cherokee Nation. The Cherokee Casino Resort located in Catoosa had taken off. It garnered a reputation for service, friendly staff and a fun experience for its guests. As the first to market with a Las Vegas style gaming experience, CNE found that it held over 40% of the market and revenues topped $400 million in 2007. Many CEOs would have been satisfied with this, but Stewart saw how quickly his competitors had caught up after the initial state approval for "Las Vegas" style gaming. He instinctively knew that he would have to differentiate the casino while still being able to leverage the financial and political momentum from the successful 2004 conversion.

CNE worked hard to set its casinos apart from the competition in the minds of their guests by employing themes from different Cherokee historical periods, complemented by authentic Cherokee art. The incorporation of tribal art and culture in the gaming facilities was the most visible distinction between CNE and its competitors at the time. The guest and the Nation both benefited from this cultural integration. Unlike other tribes, CNE successfully built and operated casinos without outside management assistance. The Cherokee Nation's ability to manage its own operation and the promotion of Cherokee art and culture in its facilities (a Tribal requirement) provided a sense of pride for the Cherokee people. Pondering his next move, Stewart was quite aware that introduction of the Hard Rock into this traditional environment could create disagreement and concern.

So far, Stewart's actions had built upon the foundation of the Cherokee tradition, increasing revenue and adding jobs. He had risked $80 million with the conviction that Las Vegas style gaming would be approved by the State of Oklahoma, but this was purely business risk and did not involve cultural issues. Nor did it require a substantial shift in the way his organization had operated. That was about to change with the introduction of the Hard Rock theme to the Catoosa casino.

DAVID STEWART: EVOLUTION OF THE VISION

In 2002, Dave Stewart agreed to take the helm as CEO of CNE. Dave had started his career as a CPA, but had completed his MBA and gained executive experience with companies smaller than CNE, the largest of which had 100 employees. There was nothing obvious in Dave's history that explained Dave's commitment to strategic innovation and change, but it was clearly there, and was driven by a vision.

Dave Stewart's approach to business includes a focus on "touch points", the point of contact where employee actions and services affect guests. His philosophy embraces aggressive but sustained growth, leveling the peaks and valleys throughout the business's lifecycle. His focus is to anticipate the next valley or decline in growth well in advance, and alter the company direction to avoid the valley altogether. Dave put this philosophy into action at CNE. He consistently engaged the people at CNE and encouraged them to move out of their comfort zone and stretch their vision of what the company was and what it could achieve. He not only wanted to take on the competition, but change the landscape. The Hard Rock opportunity upped the stakes, and provided a vehicle for driving the vision.

The opportunity of incorporating the Hard Rock brand in the flagship casino/resort brought clear definition to Stewart's search for differentiation, and would act as a lightning rod for supporters and dissenters alike. Like many visions, developing support and overcoming resistance would involve engaging and convincing multiple stakeholders, making adjustments on the run, engaging and encouraging supporters at every step, and driving the process with a tremendous sense of urgency, lest it fail due to organizational inertia and commitment to the status quo. Dave would have to work on three major fronts. Perhaps the most critical of which would be the Cherokee Nation and its leadership, which had committed to the Cherokee brand. The second front would be CNE itself, including management and employees who would have to fight off the fear of the new and unfamiliar, and engage in, if not embrace, transformational change. The third front was the Hard Rock organization itself, which was involved in a major venture with a tribe located east of the Mississippi River, and may have been skeptical about licensing the Hard Rock Hotel and Casino brand to a Cherokee enterprise.

Dave Stewart was committed to pushing change in CNE and in the Cherokee Nation. It had to start with Dave himself. He was fully committed to a transformation for the Catoosa casino and for CNE. He was dedicated to do whatever had to be done to make his vision a reality in the face of significant obstacles. Looking back, one of Dave's key managers quoted Jim Collins, in his book "Good to Great" (Collins, 2001), when describing Stewart as a "level-5 leader" with the hallmark trait of great leaders--tenacity. Once the leader is convinced, there is no stopping him. Dave took all issues head on, not sideways or backdoor. He had to sell the vision, and he did. It did not matter whether it was engaging employees at the casino or a Tribal Council member. His message was consistent and persistent.

Dave would rely on his commitment to the vision, his tenacity, his willingness to engage anyone and everyone he could reach, and his understanding of building partnerships with tribal and CNE leaders. This could never be a one man job. Others would have to see the vision and embrace it or it would be doomed.

SELLING THE VISION TO THE CHEROKEE NATION

Stewart's first pitch for the Hard Rock brand was met with substantial resistance in the Nation. Upon hearing the idea of re-branding the first time, Chief Smith did not like it and was reluctant to get on board. The Catoosa casino was a business to be proud of. It advertised the name "Cherokee" and identified that name with a successful resort. Citizens and employees Chief Smith encountered had similar, sometimes negative and emotional responses. The Cherokee people identified with the Catoosa Cherokee Casino Resort, and felt a sense of pride in the association.

The substantial opposition among the Cherokee people to CNE featuring the Hard Rock brand and culture on their flagship resort would create a significant obstacle for partnering with the Hard Rock franchise. Chief Smith received questions, complaints and concerns from many of his constituents: "Are we not proud of our name?" "Why would we want to remove it from the sign?" "Why would we give our company away?" "Why is the Tulsa property to be called Hard Rock and not the other six facilities?" It was clear that many were proud that the Cherokee Nation operated a modern, successful enterprise that promoted its art and culture, and did not like the idea of diffusing that recognition and identification with the Nation. There was strong support in the Nation for combining business and cultural development without change!

On the other hand, Dave Stewart made a strong case for higher growth and profitability that would come with the Hard Rock strategy. This argument fit with Chief Smith's policy of letting business leaders run the business, while he and the Tribal Council led the Nation, keeping politics and business separate. In this case, however, that separation would be difficult.

Chief Smith continued to consider the issue for weeks until he ultimately came to the conclusion that the Cherokee name represents a great deal more than the image presented by a casino marquee. The word "Cherokee" should reflect the history, the capabilities and the successes of its people and its culture. Changing the name and theme of the Casino and Resort in Catoosa could actually enhance the reputation of the Nation. It should be recognized for developing successful and profitable businesses for the benefit of its people, and for providing a unique recreational opportunity for the people of Oklahoma. Moreover, the Hard Rock brand had the potential to provide significant financial benefit to the Nation and its people. Hard Rock could indeed change the game.

From that point on, Chief Smith supported the change in the face of substantial and vocal resistance. Chief Smith believed that some of the critics would eventually come around, while others would never support the change. But even months after the brand change, doubt still exists in some members of the Cherokee Nation as is evidenced in opinion letters written to the editor of the Cherokee Phoenix, the tribal newspaper.

Chief Smith's "conversion" to supporting the Hard Rock concept was not out of character. He believes in a proactive approach to change, and encourages initiative by the leaders of each of the Cherokee Nation-owned businesses. Chief Smith places priorities on tribal and individual self-sufficiency, elderly care services, better quality health care and education. He and his administration continue to focus on three essential initiatives: jobs, language and community. Chief Smith encourages autonomy in each business, as long as the businesses are operated to support the people and the community.

The Chief recognized that there would be opposition and resistance to utilizing the Hard Rock brand that would have to be overcome or simply lived with. He understood that "good business decisions are not often good political decisions; good political decisions are not often good business decisions." The role of the Cherokee Nation-owned businesses is to improve the economic condition of the people, and create an environment for change. The branding decision would be a means to an end. Chief Smith also believes that building a successful, multi-faceted entertainment complex with an effective marketing approach is "a positive" for the Cherokee Nation. People outside the Cherokee Nation would see a successful organization fully identified with the Cherokee Nation. Chief Smith's values and beliefs led him to lend his support to utilizing the Hard Rock brand.

With the Chief's support ensured, Dave Stewart would need the approval from CNE's board of directors and the Tribal Council. The board and Council were influenced by the Chief's logic, but required solid profit projections for the change to Hard Rock. Stewart responded by putting together a convincing financial report supporting the change, which was another element of the decision process put together as the project evolved. The board had other questions, which Stewart answered one-by-one. Dave's communication went beyond the formal meetings in answering questions, providing information and ensuring that all had a chance to discuss the issues. He individually met with each member of the Tribal Council to encourage buy-in and address individual concerns. This reflected Dave's style of engagement and communication, with a consistent focus on the end point.

With the questions addressed, the Chief's support assured, and a positive ROI projected, the board agreed to support the change, as did the Tribal Council.

BUILDING THE TEAM OF 8

One of the most difficult tasks was to overcome resistance and fear of change in CNE itself, and to transform an organization that could build and operate a Las Vegas style casino--a far cry from the bingo parlor approach of the early 90's. There were a number of underlying causes of resistance and fear of change inside CNE. These included concern over downgrading the Cherokee name, anxiety over different working conditions and requirements, questions over "why change was needed anyway", fear of moving outside employees' comfort zones, and general inertia.

Stewart understood that he could not do it alone; he would need talented leaders who shared his vision and enthusiasm, and who would work together under difficult, stressful conditions. Dave's solution was to look inside and outside his organization and select people with talent who would fully embrace the vision. No lukewarm leaders were needed. The core of this group was described as the Team of 8, but there would be others who made significant contributions. One of the team members compared Dave Stewart to the famed Oklahoma Sooner football coach, Barry Switzer, who always looked for the best athlete, or, in this case, the most talented and committed people he could find--the key players who would get the job done with a high level of urgency! It would be clear to those involved in the project that Stewart would not get into the details, but would be accessible and active in significant decisions, or in breaking down barriers that would threaten the urgency necessary to move quickly. Dave has been described as a master at being a champion of change, always encouraging and expecting collaboration, communication and risk-taking from his key people.

Dave would continue to sell the concept and engage employees and managers at CNE and in other Cherokee businesses whenever possible, but the greatest contribution would now shift to the Team of 8. The team included managers from different levels in the organization, and from different functions. They would be responsible for planning the project, executing the plan, and helping/convincing their colleagues and employees to join in the transformation. Moreover, they would continue to manage their existing responsibilities, requiring significant sacrifice and commitment. The Team consisted of:

* Molly Jarvis, Vice-President of CNE Marketing

* Bob Schooley, Director of Organizational Effectiveness

* James Carter, Tech expert and Construction Project Manager

* Jon Davidson, Sr. Director of Hospitality

* Michael Grim, Corporate Promotions Manager--driver of the Hard Rock "Vibe",

* Mark Fulton, Vice-President of Gaming

* Bob Zablonski, General Manager

* Brent Thompson, Vice-President of Administration

The Team of 8 was charged with the responsibility of building and implementing the plan, of bringing the rest of the organization along, of overcoming the natural resistance, and of training people who would make the Hard Rock a success. But first the eight individuals had to figure out how to work together, and still drive their individual responsibilities.

The Team of 8 would have to develop effective working relations among the team and with Dave Stewart, who was already miles ahead of the team in thinking, urgency and commitment to making it happen fast! Dave selected the eight with the idea that they would implement the project with little direct supervision, but with full communication on the big issues. The challenge of convincing a skeptical workforce and CNE managers would be a daunting task for seasoned change-leaders, and most of these eight managers had no experience in anything like the challenges of creating the Hard Rock environment, and engaging an entire organization in transformational change.

In building an effective team, they had to address the first form of resistance, which would come from the Team of 8 themselves. The team members had questions of their own. Are we ready to take on risk, move with an urgency that requires taking chances, of acting first then fixing it later if we make a mistake? Are we moving too fast? Will we get approval from the Nation and our new partners and when? How do we get things done and stay connected with each other? How will we deal with the conflict between Cherokee culture and Hard Rock marketing?

As important, the team of 8 would have to take risks most had never taken in their careers--with concern over their own success and jobs, and those of their associates. The natural aversion to taking risks by team members and others in the organization may have been the most important barrier to change and impediment to success that the team faced. Burying these concerns from key players could overcome opposition temporarily, but could ultimately jeopardize the entire project and undermine all other efforts. This kind of resistance could also be turned to a positive, providing important "checks" along the way and making the team stronger and more effective. This would be essential, because this team and each individual member would have to "knock down walls" to make the transformation on time.

Each of the team members had specific responsibilities, and was encouraged to act independently. This level of initiative was crucial to moving at the fast pace necessary to complete the project on schedule. Additionally team members had questions of their own about the direction, cultural tensions, risk level and pace. The team was informally organized, so the team had to develop mechanisms to stay in touch and deal with issues and road-blocks. Three team members provided coordination over spending, potential conflicts, and tracking the critical path through individual contacts with the Team of 8 and others who were involved in the process. Part of the informal process was to track spending, take different ideas and combine them, and work toward consensus among the members. As overall inspiration, Dave Stewart's commitment and passion set the stage and continually provided drive and overall direction to the team. However, members of the team still faced questions and problems along the way that required swift and conclusive agreement! Delay or disjointed efforts would jeopardize the quality and timing of the project.

To deal with these issues and continue to stay on track, the team met every Tuesday to review status and issues. James Carter took ownership of the critical path of activities and milestones, and kept it up to date and in front of the team at all times. Michael Grim drove the "vibe" concept and pushed the Hard Rock concept to its extreme. Mark Fulton acted as the anchor to keep the group grounded and avoid taking actions that would be considered too extreme. Jon Davidson was responsible for all furniture, fixtures and equipment, and the Hard Rock retail store and merchandise. Molly Jarvis directed all marketing activities. Bob Zablonski focused on running the facility and coordinating presentations to the employees. Brent Thompson organized employee orientations. Bob Schooley focused on the effectiveness of the organization and communication with Dave Stewart.

Not surprisingly, conflicts arose over different approaches and perspectives. Rather than allowing these to bog down the Tuesday sessions, the team adopted the "Parking Lot" concept. This is a group technique that "parks" an issue, idea or concern so that it does not disrupt the flow and progress of a group. The process requires a separate discussion with the right people outside of the normal meeting. The parking lot employed "offline" conversations to address questions and issues openly with other members of the team and Dave Stewart to get the answer and maintain momentum.

Although Dave stayed out of the day-to-day mix, his role in this process was critical, providing leadership at the critical points. He always took the issues head on, created a sense of urgency, and kept the team moving toward the goal. His leadership increased the efficiency of the team and streamlined the process for resolving conflicts and questions. Team members were able to vent their concerns openly and get answers--continuing to build trust among the team and encouraging all to keep taking risks! This process also encouraged the Team of 8 to act. It did not take long before the eight became agents of change themselves, spreading the word on their own.

THE TEAM OF 8: LEADING CHANGE AT CNE

The employees at CNE, largely Native Americans, would be concerned about the impact of changing the name from Cherokee to Hard Rock. How would they be viewed by fellow Nation members? Would they have to compromise the Cherokee reputation and name? Voices from other influential leaders in the Cherokee Nation reinforced this concern.

CNE employees would also be anxious about the uncertainty associated with the new theme and expectations about their roles. One associate wondered if he had to get a tattoo; another if she would have to wear nose rings; another if they were too old. This fear of the unknown created more problems than actually existed, requiring effective communication with those most affected. As in many organizations, there would be those who simply fight any type of change that affects their routines--and this would be one of those big changes that would turn many of those routines upside down. The team had to develop a plan to deal with all of these concerns and prepare the organization to execute all phases of the project. This process was included in the critical path.

A first step was to capitalize on the day-to-day contacts the Team of 8 had within their respective departments, a natural place to share information. The notion was to allow this information to spread through the company informally, encouraging those engaged to use their own informal network to spread information across the company. Dave Stewart set the stage by formally meeting with every supervisor in CNE, but encouraged the team to use a combination of structured and informal contacts. One of the team members created a cadre of 15 ambassadors who leveraged the communications efforts of the team. These ambassadors multiplied the efforts of the core group. All members of the team went out of their way to communicate with and educate their associates and friends. This "grapevine" approach proved to be very successful in motivating CNE employees. The more information that was "leaked", the more the excitement and discussion spread through the organization. In this way, the Team of 8 became champions of change and trusted sources of information, spreading the word.

The structured plan included a roll out to the employees that consisted of events designed to generate excitement and support from within. One of the numerous communication events was the give-away of 500 Hard Rock Tulsa t-shirts to employees who asked questions about the project. Not knowing how well the plan would work, the Team of 8 was surprised that employees were eager to get one of the t-shirts, producing a rush of questions. Winners wore the t-shirts, creating additional interest. Another series of events that assisted in spreading the word and excitement about the brand change was the "Catoosa Unplugged" meetings, which positioned the new vision as a license for employees to have fun, and encouraged them to interact with company leaders. The meetings also included a tour of the high-end suites and other points of interest within the complex significant to the Hard Rock theme. Dave Stewart personally met with almost every shift supervisor to explain the transition, emphasizing his excitement and support.

An internal newsletter called the "Vibe" was created where news of the transition was written, accomplishments were celebrated, and where music trivia could also be found. The shift in approach was designed to create a guest experience focused on music, fun and great service. The new employee orientation program was modified and all existing Catoosa employees, as well as new employees were encouraged to participate in "re-orientation". The program included a comparison of two identical presentations--one without music, the other set to music which dramatically reinforced the "vibe" concept. By developing a better understanding of the Hard Rock "vibe", employees were more effective in contributing to their guests' experiences.

Physical changes and guest contact were also important. Employee uniforms were changed to reflect the new theme. The employee entrance was redecorated to include light covers that adjusted the normal white light to red and orange. The walls were painted a standard Hard Rock color, purple, and adorned with examples of new uniforms, lyrics from songs and memorabilia from rock bands. Scripts were created and disseminated to front line employees complete with answers to nine questions that guests would likely ask. The employees would know how to answer these questions in a consistent way to deliver the right message. The script emphasized serving the guest, and focusing on the positive aspects of the Hard Rock brand.

As the opening day approached, the Team of 8 believed that over 70% of the employees had accepted or had committed to the change, but that they would need to continue to work toward a higher level of acceptance as an ongoing process. According to benchmark Hard Rock operations in other parts of the country, this could take another year or more to accomplish.

NAVIGATING THE DEAL WITH HARD ROCK

Internal resistance would not be the only major issue Stewart would confront. Planning for the expansion of the Catoosa location began in 2005 and although the expansion would be good for business, his vision required a higher level of differentiation. The affiliation with an international brand like Hard Rock would solidify the vision, and provide the edge CNE sought. Stewart felt that the upside would be four-fold: 1) Hard Rock would reach a new demographic, 2) Hard Rock would be a current, sustainable brand, 3) Hard Rock incorporates values such as environmental protection and individualism that are consistent with the Cherokee Nation, and 4) Hard Rock would be managed by CNE. The Hard Rock vibe and competitive advantage could not be duplicated by the competition.

In 2007, CNE utilized the services of an outside marketing agency based in Las Vegas. The President of this agency offered to introduce Stewart to the owner of the Las Vegas Hard Rock Hotel and Casino. It was at this meeting that discussions of a possible license agreement between CNE and Hard Rock began. The more Dave Stewart thought about it, the more he liked it. Quietly, he continued to work with the Hard Rock people on a potential agreement, but told no one of the impending contract and negotiations.

Unfortunately, a deal was not in the cards at that time. Negotiations came to a halt later that year due to negotiations between Hard Rock Las Vegas and a tribe located in Florida. Hard Rock International, the company that owns the Hard Rock Cafes, Hard Rock Hotels and Hard Rock Casinos world-wide was purchased by the Florida tribe but with important restrictions. Although the Florida tribe owned rights to all things Hard Rock, the agreement restricted their operation of casino facilities to locations east of the Mississippi River. The Hard Rock Hotel and Casino in Las Vegas was not part of the deal. The opening for CNE still existed in that the Hard Rock Las Vegas group had the right to operate and control the Hard Rock Casinos in substantially all states located west of the Mississippi River, including Oklahoma. Although the sale of the Hard Rock franchise had put the negotiations on hold, Dave had not given up the idea. He continued to work on the tribal and internal CNE issues while discussions were on hold, but would not lose sight of the ultimate vision.

Negotiations resumed in 2008 for a license agreement between CNE and the Hard Rock Las Vegas organization. Dave Stewart's first challenge was to sell the Hard Rock Las Vegas management on the Tulsa area. It would be only the seventh Hard Rock Hotel and Casino in the world, competing with locations like Macau! A compelling case was based on the market potential and the capabilities of CNE. The Hard Rock Las Vegas group already understood that Oklahoma represented the third largest Native American gaming market in the United States. CNE managers provided convincing information about the potential for the Tulsa market as a desirable location. Another critical element was CNE's capabilities and commitment. Stewart's vision was consistent with the Las Vegas concept. The CNE organization's initial success as the first mover in developing and managing Las Vegas style gaming in Oklahoma was another key factor in the decision. The two organizations intensified the negotiations.

With the negotiations going well, Stewart could not keep the idea a secret any longer. As he worked through the culture issues with the tribal leaders, research was initiated to determine if the Hard Rock brand was past its prime or whether it was still a viable brand. Focus groups were utilized and CNE found that the brand had a positive impact on CNE guests. Stewart personally attended these focus groups and when he saw the questions were not appropriately addressing the situation, he re-directed some of the questioning on the fly. Guests were asked to rate where CNE stood on a scale of entertainment in the Tulsa area compared to its competition. On a scale from 1 to 10, guest responses averaged out to an 8 for CNE with CNE's closest competition behind at a 6. Guests were then asked how they would rate CNE if it changed to Hard Rock and the responses averaged higher, some up to a 10 on the scale. These responses bolstered Stewart's confidence regarding the change and convinced him that such a change would give CNE an important edge over its competition.

Armed with positive results and prior to approval at the Cherokee Nation level, Stewart instructed the architects to design the Catoosa casino and hotel expansion projects with two potential outcomes, one themed for Cherokee culture and the other themed in accordance with the Hard Rock brand. Although Dave Stewart was committed to the concept and fully believed he could make it happen, there was still significant uncertainty in being able to satisfy both Hard Rock and the Nation. This would not be resolved until the new opening!

IMPLEMENTATION--THE CRITICAL PATH

By December of 2008, a lot of work lay ahead for the Team of 8. Concurrent with working out their individual issues and building support broadly across the CNE organization, each member had their own set of responsibilities and a tight schedule to meet. An additional issue was that the casino expansion was complete and the structure of the 19 story hotel tower was already built. With negotiations still ongoing and approval by the Nation pending, the team had to keep two options open, Hard Rock and traditional Cherokee theming. Time was short and there were numerous issues and tasks to be completed. The following examples provide some sense of the controlled chaos that they had to work through in the process. This controlled chaos reflects the often messy reality that exists in real change efforts--a stark contrast to the "orderly" models that attempt to capture the structure of change efforts.

Team members completed on-site tours of other Hard Rock properties in order to learn what it means to be Hard Rock, but also to understand that location would dictate some differences in approach. From those visits, the team was able to visualize how the Hard Rock experience could provide a unique experience to each guest, and how music and entertainment affects individuals differently. Consequently, each Hard Rock property was different, and so would the Hard Rock Tulsa. The Team of 8 recognized that they could retain that which was already working (including some elements of the established Cherokee brand) while adding music to make it a more fun experience for guests. The team also integrated two types of music, one consistent with Hard Rock theme, and the other, the very popular country-western music that many of their guests would expect. The decision to add country-western style music to Hard Rock may appear an odd choice; however, the team was careful to do their research with focus groups, thus increasing the likelihood of success, and avoiding unnecessary risk to the full project.

Another major effort was required to convert the list of currently branded items that required the new logo. The original list of 257 items quickly grew to over 400, requiring over 2500 art job changes. Room keys required new logos and artwork. Seven different key card designs were made, allowing for a variety of experiences for guests. Signage both exterior and interior to the property had to be redesigned and replaced. This required review and approval of artwork and design as well as construction and installation of new signage. When the large pylon sign adjacent to the highway was installed prior to the grand opening, floor traffic dramatically spiked and requests for the new Hard Rock Hotel and Casino Tulsa t-shirt increased.

The Hard Rock personnel from the Las Vegas hotel and casino agreed to come to Catoosa for a walk through of the facility, providing a list of suggested changes to be considered. This list was full of general statements, such as "upgrade the 'Twisters' bar." Often, these suggestions lacked specificity, creating additional work to develop options and the need to agree upon actual designs. The suggestions included a new design for the bar and many other interior features. This led to additional issues, obstacles and cultural conflicts that the team had to deal with even as the deadline rapidly approached. They continually had to balance their actions and changes with the desires and directions from the Chief and the Tribal Council.

One of the most critical changes was centered on the rock and roll memorabilia essential to the Hard Rock brand. The original plan called for rock and roll memorabilia and art to be used throughout the new casino and hotel, but there were still some issues on how best to integrate with traditional Cherokee art and culture--causing some concern over finalizing the details. Ultimately, the team worked through all of the issues in time for the opening.

THE FINAL DAYS

The team was stretched to the limit as the first deadline approached, and had to be delayed due to normal construction issues, causing problems in coordinating advertising and promotion, and booking acts for the grand opening. To add to the stress, greater uncertainty was introduced by the conflicts involving competing agreements that protected the rights of the Cherokee Nation as a sovereign Nation. This tension would continue to almost the last minute. The Cherokee Nation is recognized as a sovereign nation by the United States government. This sovereignty places the Cherokee Nation on the same legal plane as any of the fifty States. This sovereignty allows the Cherokee Nation to have its own laws, law enforcement and court system. Although Stewart was responsible for the contract negotiations and directing CNE's business, on this point Stewart could only influence people, not decide and thus needed the approval from the Cherokee Nation's Tribal Council. A "No" vote would create another obstacle and potentially could have changed the outcome of the negotiations. At no time was the business decision in the Tribal Council's hands, but the vote would certainly affect the ongoing negotiations. With the vote being public, the Cherokee citizens had an opportunity to have their voices heard regarding the change. Stewart ultimately won the support of the Tribal Council.

Even after the license agreement was executed by the parties, the agreement still had to be submitted to the National Indian Gaming Commission (NIGC) for review to determine whether the agreement gave the Hard Rock entities managerial control over the operations of the facility. The parties subsequently amended the agreement and eventually the NIGC determined that the amended license agreement did not constitute a "management contract", and thus did not require approval from the NIGC.

The announcement that the Cherokee Casino Resort in Catoosa would become Hard Rock Hotel and Casino Tulsa almost lead to a contract cancellation for a "Toby Keith's I Love This Bar and Grill" within the facility. Toby Keith is a well known country-western singer with roots in Oklahoma. The addition of his restaurant was important to the success of the facility expansion and complemented the dual musical theming. When Stewart heard of the impasse, he acted swiftly to retain this important part of the concept. He was quickly on the phone to explain that there would be no Hard Rock Cafe and thus no competition for the Toby Keith restaurant (other than those operated by CNE, which had been part of the original agreement).

Finally, on August 3, 2009, the final sets of agreements were signed, only hours before the grand opening. An exhausted and inspired team could relax for a moment as they looked back over the last year and a half of intensive effort. It had been a complex and consuming experience. There were times when success seemed illusive, but, ultimately, it all came together just in time for the grand opening.

THE CHALLENGE--WHAT'S NEXT?

The Hard Rock Hotel and Casino Tulsa was a critical building block in the growth plans for CNE. With the grand opening now accomplished, the focus must shift to maintaining the growth and profitability of the facility itself and for CNE in total. Standing still is not an option. Moreover, the competition is heating up. In the summer of 2009, a competitor completed a major upgrade of its Casino located on the south side of Tulsa, across town from the Hard Rock Hotel and Casino. Another competitor continues to build and upgrade its casinos in the region. Will this competition impact the revenue of the Hard Rock Hotel and Casino Tulsa? Will the novelty wear-off after a few more months, or will the revamped team continue to regenerate the "vibe" with innovative and fresh concepts?

Another challenge is organizational. Too often businesses go through a major change, and then "refreeze" at the new level, actually turning the new approach into the status quo. Key players move on. The team loses its edge, and may experience burn-out after the excitement and pace of the transformation diminishes. This is a real issue for CNE. The resort itself still requires some shaking out and will require a critical review of what is working well, and what is lagging. The team and Dave Stewart have discussed expanding the scope of the Hard Rock Hotel and Casino Tulsa facility to include other venues and entertainment/retail concepts. How can this evolve? What kind of venues and concepts are most likely to succeed? How can they leverage the success of the facility? How will the team keep the excitement up within the community and with their associates?

There are other population centers within the Cherokee Nation territory. One of particular interest is near the Arkansas border and in the Bentonville/Fayetteville population centers (Wal*Mart Headquarters is located in Bentonville). Can CNE capitalize on this void? How?

The tension created by changing to the Hard Rock brand instead of the traditional Cherokee theme still exists. How will Dave Stewart and Chief Chad Smith view this issue and its impact on future marketing decisions? Is there more work to be done with employees, tribal members, and the Tribal Council in accepting the Hard Rock brand?

REFERENCES

Collins, J.C., (2001). Good to Great: Why Some Companies Make the Leap--Others Don't. New York, NY: HarperBusiness.

Jick, T.D., Peiperl, M.A. (2003). Managing Change--Cases and Concepts. New York, NY: McGraw Hill.

Kotter, J (2007). Leading change: why transformation efforts fail. Harvard Business Review, 85(1); 96.

Kotter, J (1996). Leading Change. Boston, MA: Harvard Business School Press.

Jason Carlin, Northeastern State University

Anthony Dean, Northeastern State University

David Kern, Northeastern State University

Robert Searcy, Northeastern State University

J. W. Stanley, Northeastern State University