13 Jan A. Discontinue the line of

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WEEK 5: ORGANIZATIONAL DEVELOPMENT THEORY AND PRACTICES
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JetBlue Airways is a company which has embraced the OD theory and allowed OD’s vision of emotional intelligence, value proposition, positive reinforcement, and change through improvement and culture to drive much of its results over the past years. The airline industry is one in which external influences have had an unbelievable impact on the bottom line of all of the companies that fly. Thus, it may defy imagination at first that in an industry of barely controlled daily chaos, Jet Blue has found a way to make OD work to control that chaos. Interestingly, in 2010, JetBlue was one of only three domestic airlines to turn a profit, and their CEO, David Barger, is the lowest-paid CEO among the 10 largest publicly traded U.S. airlines in 2010. (Potkewitz) Doing research online, use a Google™, Bing™, or other search-engine-style search, and find case analyses or articles discussing JetBlue’s OD approach. After the crisis, CEO Neeleman was terminated and Barger was put in his place. The company has grown since Barger’s implementation. Their focus on organizational development, and company values and culture, continues to this day, which is why it is not a surprise to see that JetBlue Airways was one of the main case studies presented at the 2011 Customer Experience Strategies Summit in Toronto, where Vicky Stennes, VP of Inflight Experience presented on their inside-out approach to motivating employees by creating a customer-service-centric business model.

We’ll begin with these questions:

1. How does a company with an OD approach differ from one without that approach?
2. Which company would you prefer to work for – one with an OD approach or one without?
3. Do OD companies offer a higher value proposition to their customers than non-OD companies? And if so, why don’t all companies take this approach?

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WEEK 5: NSTEP PRACTICES
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Class, you will be the “change agents” for this change. Your professor will be the CEO, issuing dictates, orders, suggestions, support, ideas, and thoughts. However, you, as class members, will need to take each new piece of information and determine how it will fit into your plans for change, as change agents. Keep an eye on the new information as well as how your colleagues are addressing it. Innovation, creativity, and level headedness is key to making this week’s solution succeed. Good luck!

Here’s the change: BubbleBath Inc. is a privately owned company with approximately 2,000 employees whose make up is primarily line workers. Management makes up about 20% of the company, with the remaining 1,600 people working to produce the line of bathtubs, hot tubs/spas, and designer fixtures for which the company has become famous. The company started 10 years ago working out of the initial founder’s garage, and quickly increased in size when Jacuzzis became a standard fixture in many middle-class remodels and new constructions. Due to excellent marketing strategies, BubbleBath Inc. has not experienced a downturn in sales despite the recent economic downturn in construction. Instead, they have parlayed the middle-class flight from tourism to encourage the “staycation” and the upgrade of the home as the new spa of the 21st Century. Profits last year were up 15% and everyone is feeling cautiously optimistic. Nevertheless, the CEO is concerned with market analysis reports that despite the staycation mentality, growth over the next two years is predicted to be stagnant to declining. Last week, as per the original exit strategy of the founding investors, the company will be restructured into a limited partnership of three people from an incorporation model of 15 shareholders. 12 of the shareholders will be paid a return of 8% on their investment, and the remaining 3 shareholders will form a limited partnership. As a result, the CEO has received word from the new partners that they want to change the operations model as follows, effective in three months:
A. Discontinue the line of designer fixtures and focus solely on hot tubs and bathtubs. (This will mean eliminating two lines of 30 employees each.)
B. Move the entire operation from the city of Atlanta, GA to a town 25 miles south of Atlanta called McDonough, where all 3 of the partners reside. No relocation packages will be offered, but those employees who choose to “retire” at the time of the move will receive a 4 weeks’ severance package. A new building which was originally intended to be a “HottubsRUs” factory is sitting vacant and the partners bought it for a steal. They already have a buyer for the old factory in Atlanta.
C. For the first time, include a sales office right in the new production building where a showcase with sales staff will be located. Along with supplying retail stores, the company will now also sell directly, both in the office and online. Initially, 5 sales people and one sales manager will be hired.

Your CEO has asked you, the managers, to come up with a change plan using Kotter’s 8-step model. What are the first things that you will do in order to create a plan for change which will maximize efficiencies, utilize current processes, and ensure that profits continue? Who wants to start?