Philip Cooper became the CEO of a small, family-owned plant nursery business called Green Haven, which had been run by his father. He had taken over the reins of the business about six months ago. He came on board after his father, Adam Cooper, the founder of the business, retired due to ill- health. Philip, who was 43 when he became the CEO, was an accountant by profession and had worked at an accounting firm since his graduation over 20 years ago. He was also familiar with the business, especially since he had set up its accounting system and helped the company accountant whenever his expertise and knowledge was required.
Managing his father’s business was very different from his work at the accounting firm, but Philip was very happy to make this career move as he felt very proud of his father’s business achievements. Green Haven, which had started out as a small nursery in a leafy suburb of Melbourne, had grown over the last 30 years to become a business that owned 11 nurseries across different regions of Melbourne. It had taken Adam a lot of hard work over the years to expand his business. Adam was very proud of the quality of the plants and seedlings available at his nurseries. He made sure that the gardening tools, equipment and decorative items for sale at Green Haven were exclusive and of the highest quality. He was also committed to keeping the profit margins low, as gardening was a passion for him and he was very happy that this passion also provided him with a living. The workers that he had hired at his nurseries were chosen because they too shared his passion for gardening. Adam was very fond of the people who worked for him, and he had an individual connection and relationship with each one of them.
These relationships had come about because of his tradition of holding monthly staff meetings that everyone attended. Over the years, the tradition had grown so that the venue for the monthly staff meetings was rotated around the 11 nurseries. On the day of the meeting, the business was closed down and everyone got together and discussed their work issues. Those meetings were normally very fruitful for all the staff; they learned new practices from each other and exchanged gardening tips, which they could later share with customers. It was also a time for discussing new ideas that people had come up with, new information or knowledge about plants or gardening techniques that someone had come across, or anything of interest that related to the staff’s shared passion for gardening. The meetings were like picnics, where everyone got together to discuss the business but also to have fun together and socialise with staff from other branches. All the staff looked forward to these meetings, and everyone tried to bring something new to the meeting to share and to discuss. This was also a forum for anyone to raise issues, and for Adam to share his views, receive feedback from his staff and then make a decision on the issue at hand based on consensus. Adam found that because everyone knew and understood each other very well, he usually did not have problems with reaching a consensus even when there were differences of opinion between staff members.
Another practice that was very dear to Adam was that he would visit all of the 11 nurseries every quarter and would work at the nursery along with the staff at the nursery. He loved interacting with the customers and helping them to select the right plants for their gardens or backyards, and was always very keen to share his knowledge and expertise. Adam would often give a free plant to customers, especially if they were new home owners and were trying to find plants to start a garden—a tradition that he encouraged his staff to continue. Adam was known to spend hours with a customer trying to find what plants would best suit their needs. He would give them information and advice until they were fully satisfied and were able to make decisions about what to buy. The staff at the nursery saw Adam as a role model, and they followed in his footsteps in providing information and education to their customers.
Adam also produced a quarterly newsletter that was sent out to all customers or visitors to the nurseries who registered their names and addresses on the registration book kept at each nursery.
He was very proud of the newsletter and would usually write an article on a particular plant in every edition. For example, he had in the last few years researched and written about plants that were drought resistant and about ways of conserving water while keeping the garden healthy, in line with the drought being experienced in Melbourne. The newsletter was then printed, copied and mailed out to a list of over 5000 people.
As Philip took over the management of Green Haven, he began to notice that there were some practices that existed which he immediately picked up as unnecessary and a cost to the business. He felt that even though the business was doing extremely well, there were some things that needed to change as they were adding to the costs of doing business. For example, he discovered that each nursery regularly gave out plants for free and it was not uncommon for each nursery to give out plants worth a total of $200 to $300 a month as gifts to various customers. On his rounds to the various nurseries, Philip also found that staff were spending two hours, on average, with each customer, which he felt to be a waste of time and money. Within the first quarter of taking on the CEO role, he sent out a message to all nursery managers to stop the practice of handing out free plants to customers with immediate effect. He argued that customers needed to buy plants, since that was what they came to the nursery for, and that there was no real benefit in handing out free plants—in fact, it was an unnecessary cost to the business.
At the next staff meeting, Philip announced that there were some changes in processes that he wanted to introduce. He told everyone that he had made some observations, and based on these he had decided that they would no longer have day-long monthly meetings, but that there would be fortnightly meetings held with nursery managers at his office and that the nursery managers would then institute a system of meetings within their individual nurseries. He then announced the introduction of computers at each nursery, which would serve as information points for customers on any plants or gardening questions that they might have. Philip informed the staff that he had made this decision based on his observation that individual staff members were spending, on average, a very long time with each customer and that this was not a very efficient way of working. He also mentioned the high cost of the production and mail-out of newsletters, but said that he had decided to continue with the newsletter as this was something that he felt his father could work on and it would give him a way of staying connected to the business. Philip then asked if anyone had any questions, but he got none. He felt that the meeting had gone very well and he was happy that no one had raised any objections to his decisions. However, the staff left the meeting very puzzled and confused, as they felt that so many things had changed instantly and they had no idea why.
A few weeks after the meeting, the new processes were put in place. Free plants were no longer being handed out to customers and the meetings were now held at Philip’s office. These were now very formal processes, following an agenda that was circulated to all nursery managers two days before the meeting, with an option to include additional agenda items. The managers began to get used to this new way of working, but they yearned for their monthly meetings and associated social events. They felt that they had stopped learning from each other and that their jobs had begun to stagnate. They also felt that their staff were displaying signs of lost enthusiasm for their work.
Generally, the morale at their nurseries was low.
Six months later, Philips was sitting in his office trying to figure out what had gone wrong. He was looking at the quarterly reports and was surprised to see that, despite the cost-cutting measures that he had implemented, revenues were substantially lower than when he had taken over from his father. He had also learnt that five of their nursery staff from across the various nurseries had quit their jobs, and he had just received a resignation letter from one of the oldest nursery managers. He was very puzzled and also worried.