Changing the game at Cherokee nation entertainment.(Instructor's Note)

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.

INSTRUCTORS' NOTES

Discussion Questions

This is a complex case that can be viewed primarily from an organizational change perspective and leadership perspective. There are a variety of resources for developing understanding of organizational change; however, this review employs John Kotter's Eight Phases (Kotter, 1995; 2007). The article noted is available through Harvard University Press. Additionally, summaries of Kotter's concepts are readily available on the internet. A review and discussion of the eight phases in class prior to assigning the case will prepare the students for the Organizational Change questions presented in this case.

Directions:

Analyze the case employing John Kotter's eight phases of change. Students should focus on the transformation to the Hard Rock brand in their analysis, but should integrate relevant facts from the background and the 2002-2006 period of growth at CNE. Although the questions are relatively simple and straight-forward, the eight phases provide the structure for a comprehensive analysis. More advanced analyses will integrate the discussion of the different phases where they overlap. The 8 phases include:

1. Establish a Sense of Urgency.

2. Form a Powerful Guiding Coalition

3. Create a Vision

4. Communicate the Vision

5. Empower Others to Act on the Vision

6. Plan For and Create Short-Term Wins

7. Consolidate Improvements and Sustain the Momentum for Change

8. Institutionalize the New Approaches

For the first 6 phases:

* Identify the key players, the actions they took, and the result--positive and negative.

* Did Stewart and CNE follow the same order as Kotter's model? For those that were in a different order or overlapped, explain why Stewart and/or the Team of 8 varied from Kotter's sequence.

* Each of the phases may be addressed in order; however, a deeper understanding of the case suggests that some of the phases overlap, warranting an integrated approach. For example, establishing a sense of urgency overlaps with several of the other phases. Building the vision, communicating the vision, and forming a powerful guiding coalition can be considered integrated activities in this case.

For phases 7 and 8:

* Identify the situation at the end of the case and the major challenges and issues Stewart and the team will have to face. Provide three solid recommendations for CNE management to consider in addressing these two phases.

CASE ANALYSIS OVERVIEW

The case starts at a pivot point, where Cherokee Nation Enterprises (the name subsequently was changed to "Entertainment" in 2009) has already developed a growth strategy by expanding entertainment types and venues in 2006. The case briefly reviews the progress up to that time, and introduces the challenge facing David Stewart to sustain growth and profitability. While searching for new approaches, Molly Jarvis, Vice-President of marketing, introduces him to the Hard Rock concept.

From this point forward, the case takes the student through the process of developing the vision, the strategy, analyzing the market, selling the vision in the face of significant resistance within the tribe and in CNE, putting together a team to implement the initiative, and keeping up a sense of urgency throughout. At the end of the case, there is an open ended challenge that allows the students to evaluate and develop their own approaches to sustain change, build on change, address inertial forces, and explore new growth opportunities.

The case provides an excellent venue for students to apply concepts they have been studied or been exposed to in Policy and Strategy courses, Organizational Change, and Leadership courses. This case can be analyzed from a comprehensive change process standpoint, or it can be used to demonstrate issues and approaches to major aspects of change, including developing and communicating a vision, overcoming resistance to change, and empowering people to lead change.

A comprehensive analysis can employ any of several models of change. In these notes we will address John Kotter's eight phases in his book Leading Change (HBS press: 1996). Note that there are other comprehensive models that also could be applied (e.g., Jick and Peiperl, 2003). In advanced classes, the instructor may assign additional readings, incorporate concepts from the course, or ask students to find other articles that address elements of change and integrate into their analysis.

CASE ANALYSIS

John Kotter's eight phases of change:

1. Establish a Sense of Urgency.

2. Form a Powerful Guiding Coalition

3. Create a Vision

4. Communicate the Vision

5. Empower Others to Act on the Vision

6. Plan For and Create Short-Term Wins

7. Consolidate Improvements and Sustain the Momentum for Change

8. Institutionalize the New Approaches

For the first 6 phases:

1. Identify the key players, the actions they took, and the result--positive and negative.

2. Did Stewart and CNE follow the same order as Kotter's model? For those that were in a different order or overlapped, explain why Stewart and/or the Team of 8 varied from Kotter's sequence.

3. Each of the phases may be addressed in order; however, a deeper understanding of the case suggests that some of the phases overlap, warranting an integrated approach. For example, establishing a sense of urgency overlaps with several of the other phases. Building the vision, communicating the vision, and forming a powerful guiding coalition can be considered integrated activities in this case.

ANSWERS TO QUESTIONS FOR FIRST 6 PHASES

Phase 1: Establish a Sense of Urgency:

A sense of urgency is evident in multiple parts of the case, particularly in selling the concept internally and with the tribal leadership, and in the work of the Team of 8, which faced deadlines and impending competitive actions.

Stewart himself believed that more significant changes than had been realized by 2006 had to be made in order to sustain or accelerate growth. He was only too aware that organizations often start to grow, but then retreat to the comfort of fine-tuning the operations recently created. Moreover, he understood a deep sense of conservatism in CNE that would make it difficult for people to take the risks necessary to engage in real change, and sustainable growth. The early stages of the Hard Rock initiative were off and on, but Stewart seized the opportunity when it arose, and continued to push the concept, getting approvals on the run. Note that he had to develop a financial justification to satisfy the Council, indicating that this had not been done in the early stages. His sense of urgency involved risk taking.

Coupled with the ongoing expansion project, Stewart created a sense of urgency within the company to facilitate the change. The continual focus on construction deadlines and milestones allowed the team of 8 to coordinate their change efforts. The new Hard Rock theme elements had to be tied to the new bars, hotel and casino features. This meant that as the milestones and new features were completed, the change in the decor and themes for each area had to be changed as well. The Critical Path and the Parking Lot mechanisms are examples of how a leader can encourage autonomy and individual initiative, but still keep a group of manager focused and coordinated, and maintain the momentum necessary to overcome obstacles and resistance to change.

Other factors that aided in the creation of urgency included the competition. Several competitors announced expansions and new facilities while the Hard Rock conversion was in progress. Stewart had already beaten them to the market place, but it did not take long for the competition to react. In an effort to minimize the impact of the competition's new facilities, Stewart pushed both the construction schedule and the licensing efforts to allow for the opening of 5 hotel floors. The announcement of the availability of these floors came within the same month of the competition's major opening. The effect was dramatic. CNE had braced for a dip in their financial performance, but due to the accelerated efforts, the impact was negligible. Once again, they beat the competition.

It is clear throughout the case that Stewart and the Team fully embraced Kotter's urgency concept. Kotter (2007) emphasizes the importance of overcoming inertia and comfort zones of management and employees alike. In the case, it was clear that Dave Stewart clearly saw the need for change and provided clear leadership from the beginning. The vision of growth and profitability were lightning rods for managers in the organization who bought into the vision. They would bring the rest of the organization along.

The make-up of the Team of 8 was critical to building momentum and driving the sense of urgency throughout. There could be no lukewarm players on this team. They grabbed the baton from Stewart and drove the process themselves. In concert with Kotter's encouragement to bring in outsiders, Stewart embraced the outside concept introduced by Molly Jarvis, the Hard Rock. The team benchmarked other organizations through on-site visits and promoted the application of market and customer surveys.

One difference from Kotter's view is that the leadership of the organization did not face obvious threats, but saw opportunity instead. In many ways, this approach represents a more difficult challenge. People often recognize threats once they are obvious, but are often frightened by the uncertainty associated with opportunity. Many organizations are restricted by a commitment to the status quo, and are held back by inertial forces. This is in stark opposition to the current thinking on change, and the drive behind Stewart's actions. It is not surprising that emails from Dave Stewart's secretary include the following quote from W. Edwards Deming, the father of TQM: "It is not necessary to change. Survival is not mandatory." This spirit is evident in Dave's philosophy and in the actions of the Team of 8. Stewart's commitment to sustained growth and competitive advantage drove him and the organization to invest in innovative ideas and to search for opportunities.

A concern at the end of the case is whether or not the sense of urgency can be maintained after such a significant change. This is a real issue. It is likely that the tribe and the CNE organization will want to absorb the changes enacted before moving to the next opportunity.

Phases 2, 3, 4: Create a Vision--Communicate that Vision--Form a Powerful Coalition:

Phases 2, 3 and 4 are clearly integrated in the case. These three phases set the stage for the empowerment phase. Rather than begin with the powerful coalition, the early vision came first and evolved over the life of the case. Selling the vision was accomplished concurrently with building coalitions at the tribal level and at the CNE level, typified by interactions with the Team of 8.

It is clear from the case that Dave Stewart started to build the vision of a high growth, profitable business in the first year he became the chief executive at CNE. His initial approach fit well within the stated policies of the Cherokee Nation, but it was obvious that CNE was far from a dynamic, growing company in 2002. Stewart started with a philosophy of consistent sustained growth even in times of economic decline. This is a significant challenge for any company, but it may explain the level of drive and urgency Dave Stewart exhibited throughout the case from 2002 to 2009. The vision evolved, building on the early successes, and was significantly impacted by change in gaming laws. Stewart actively worked on the gaming change and was fully prepared to take advantage of the opportunity. It was no accident that the vision would ultimately lead to the dramatic change in pursuing the Hard Rock license. Stewart was committed to significant differentiation, consistent with current marketing and strategic management theory and practice. He was fully committed to his convictions, but knew well that the Cherokee Nation and CNE were traditional and conservative and that something as radical as Hard Rock would face stiff resistance. As it evolved, the vision incorporated differentiation as a key strategy, eventually focusing on the Hard Rock concept.

In many ways the Hared Rock evolution of the vision started in a discussion with Molly Jarvis, Vice-President of Marketing. This is instructive about how visions start and take form. Dave had a problem (how to continue to grow and overcome historical conservatism) matched to an external opportunity (the legalizing of gaming) that could be capitalized on by acquiring the Hard Rock license. He quickly grasped the potential of the Hard Rock idea, and how it could provide meaningful competitive differentiation. He embarked on a campaign that involved urgency and commitment, and that had to deal with a conservative culture and organization. It is an understatement to suggest that Dave Stewart attacked the vision with passion.

Kotter notes that the vision must be clear, easy to understand and motivating. The early stage of the vision was all of this. The vision of growth and profitability provided inspiration for aggressive managers in CNE, and was consistent with the Cherokee Nation's commitment to building the economic strength of the tribe, creating jobs and providing funds for necessary services. The differentiation element of the vision was realized in introduction of the Hard Rock theme, which really changed the game. The transformation to the Hard Rock vision was clear and easily understood, but was considered so radical by many that even Chief Chad Smith was slow to lend his full support to the change.

For Stewart, arriving at the vision and evolving it to incorporate significant differentiation was in some ways the easy part of the change process. Motivating an entire organization and convincing the leadership of the Cherokee Nation presented a huge challenge. Many leaders would have chosen a slower, more evolutionary approach, with less personal risk. Stewart tackled it head on, but waited until the talks with Hard Rock had made significant progress. His commitment to the concept was full and unreserved. As noted by one of the Team of 8, Stewart's approach was fully consistent with Jim Collins' level 5 leader (Collins, 2001). He was fully committed and tenacious, and smart enough to know that communicating the concept was one of his most important tasks. The communication process had to be completed prior to and concurrently with Kotter's phase 2, building a powerful coalition.

The Hard Rock vision had to be sold on multiple fronts in the face of resistance from members of the tribe, the Tribal Council, and his own organization. Dave Stewart recognized immediately that he had to have the support of Chief Brad Smith, whose influence could make or break the project. This demonstrates an important confluence of several stages in the process. Not only was the vision created, but allies had to be found, especially when significant action required approval by the Tribal Council. Without this support and approval, the vision could have gone no further.

As importantly, the Hard Rock concept had to be sold to CNE employees and the Cherokee people. There were three critical elements to this task. The first was choosing the right people to lead the effort. The second was the structured communications and training program. The third was the one-on-one and informal networking communications program.

The formation of the Team of 8 was crucial to success. These were the people who would carry the project forward on two fronts: directing the actual work of the project and brining the rest of the organization on board. Stewart chose only those who could and would commit fully to the concept and to the urgency required. He did not use the existing hierarchical structure, but chose a mix of people from different management levels, augmented by outside talent structured as a team. This proved to be very successful. This team took responsibility for organizing the project and selling the vision to their CNE colleagues and members of the Cherokee Nation.

The formal communications program is outlined in the case. It involved a series of meetings and training sessions that was reinforced by the t-shirt giveaway program. The Vibe newsletter provided information. Detailed training and "walk-throughs" by CNE employees prepared them for the change. Their fears and concerns were answered in open discussion forums. The team made every attempt to gain the support of the management and employees of CNE.

A series of management meetings and informal information networks were crucial as well. Stewart met with every key manager, just as he had done with the members of the Tribal Council. He worked with the Team of 8 without interfering in their day-to-day operations. The Team of 8 and other managers who embraced the vision, constantly engaged colleagues and friends providing information and building trust. One of the Team members created a group of ambassadors to supplement the efforts of the Team. As reported in the case, these communication activities gained acceptance or buy-in by at least 70% of the CNE people directly impacted.

It is evident from the case that selling the vision and building coalitions were integrated processes. Stewart had to sell the vision to build the coalition. The coalition of Chief Smith and the Team of 8 enhanced the selling and built more support. Selling and coalition actions clearly built on each other. Chief Smith's support was crucial. He is the most powerful individual in the tribe and the clear leader of the businesses. Once his support was gained, the job of selling the Tribal Council and the Cherokee people became much less difficult.

Students could note some concerns over the aggressive "campaign" orchestrated by Stewart. His vision was still in the development stage when he had to show a strong financial picture to the Council. These projections were not fully developed until they became critical to the approval process. Stewart's vision also led him to take risks that could be questioned. The fact that approval was received at the last moment created substantial anxiety among the Team of 8. Was Stewart good or lucky or both? An ongoing concern is that leveraging the Chief's influence without winning over other important leaders in the tribe could lead to some blow-back even after the initial success.

Phase 5 and 6: Empower Others to Act on the Vision--Create Short-Term Wins:

The previous section outlined the selection of the Team of 8, and their actions in communicating the vision. Although critical, this was only part of their job. These managers were given the task of organizing and directing all tasks necessary to finish the building, convert all elements of the physical operation, put together entertainment programs, and market the concept on an accelerated basis. Each individual had their specific area of responsibility and were empowered to get the job done. There was no question that they had authority and responsibility. Stewart was careful to stay out of the details but to stay close enough to monitor progress and deal with problems.

The empowerment of the Team is consistent with Kotter's guidelines. Managers were allowed to take charge of their specified area of responsibility. They developed the critical path to keep all on schedule. Coordination was a team responsibility. The Tuesday meetings and the Parking Lot mechanism provided opportunity for the Team to discuss issues and build support for the vision. Although not specifically addressed in the case, the fact that they were set up as a team indicates that time and money resources were adequately provided. The team was clearly able to focus on the task.

The urgency and the real time issues of getting the job done make the issue of creating short-term wins less important for this case. The change was so focused and so dramatic that specific tasks had to be scheduled and completed for the entire project to be successful. The key was that each person was competent to get the job done and had the authority to do it. The fact that the team moved fast and organized the transformation through the rest of the organization provided more than enough evidence that the change was going to happen and be successful. There would be no option but to move forward.

Phases 7 and 8: Major Challenges and Issues; Three recommendations.

Consolidating Improvement/Sustaining Momentum for Change:

The case ends at the grand opening of the Tulsa Hard Rock Resort and Casino. The changes in the theme and the physical property are clearly evident, but to what extent has the culture been changed at CNE? Kotter's statement (2007), "Do not declare victory too soon", applies to this case. One concern is that three of the Team of 8 left CNE as of early 2010. This could mean that the business will pause to absorb the huge change before considering future aggressive projects.

From Stewart's standpoint, he will have to balance the need to stabilize the business, and to keep the organization moving so that they do not regress back to safe and sound actions (Kotter's "powerful forces of tradition"). Stewart would be well served to follow Kotter's advice to delve more deeply into what has truly changed in organizational capabilities and culture. One place to start is with the senior management of CNE. Which of the top management team embraced the change, and have increased their capacity and willingness to initiate innovative concepts? Which middle managers have shown the capacity for leadership, and can be counted on to lead the next project or bring new ideas to the table? Stewart must ensure that his top management team can lead change in the future, and that mid-range managers are rewarded and promoted for appropriate risk taking. The "pause" for the organization in general should not be applied to the top management and emerging middle management leaders.

Kotter indicates that it takes years for a culture of change to take hold in an organization. CNE started their changes in 2003, and accelerated the rate of change in 2008 and 2009. With almost eight years of involvement in change, a number of people in the organization should have developed skills that can be applied to future change. Clearly, most people will have grasped the message that effective change is important and will not stop. The estimate that 70% have accepted or embraced the Hard Rock concept is a good start. Now the challenge is to engage the employees more deeply into the change process. How the management engages them is an important issue.

Institutionalize the New Approach:

This phase may be a future issue, allowing the organization to consolidate the improvement and sustain momentum. Still, it should be one of Stewart's long range issues to be addressed in the next year or so. While the bulk of the CNE organization focuses on consolidation and sustaining momentum, this should not be the case for the leadership. Kotter calls for the next generation of leaders to commit to the new ways, to innovation, continued differentiation, and growth. This should be Dave Stewart's focus for the near term--identifying and building leadership strength in the organization.

Three Recommendations:

Three ideas that could contribute to the future success of the organization are:

1. Keep a smaller multi-level team to fine-tune and maximize the success of the new Hard Rock operation. This will ensure that any minor errors or overlooked opportunities could be dealt with. Moreover, it could be a first step in employing continuous improvement concepts into the Hard Rock culture, and keep employees at all levels engaged in making it better. A key element is their ability to engage employees at all levels of the organization in the improvement process.

2. Start a new team to look at spin-off opportunities for other casinos or entertainment venues. Look at the area around the Tulsa Hard Rock for other types of retail and entertainment concepts, capitalizing on the current success. Look at the area near Northeast Arkansas and review other casino locations for opportunities. In the early stage it should be investigative, but keep a sense of urgency by requiring an initial plan within 6-12 months.

3. Identify and challenge 2-5 potential change leaders who could serve in rolls similar to that which Dave Stewart served as the organization identifies new opportunities and takes on new change projects. At least two should be assigned to the teams identified in points 1 and 2. This approach ties to Kotter's guidelines in phase 8, where developing new leadership is critical to institutionalizing the commitment to change.

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

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