Three years ago a new, North American CEO was appointed at Clayton's Paints. He promptly set about changing the way the longstanding Australian company produced paint, his aim being to make Clayton's Paints more responsive to the needs of its customers and to gain a competitive edge over its rivals in terms of both price and quality. The new CEO decided that Clayton's Paints needed to establish what he called Customer First Teams (CFTs). He was convinced that the formation of CFTs would improve Clayton's paint-production processes, and moved to restructure the existing workforce and production lines accordingly. The CFTs were established by middle management, with members selected on the basis of their technical ability. Members varied from recent hires to longserving employees, from three days experience to 30 years. CFT leaders were also selected by middle management. At first the CFTs seemed to very successful: the average time it took to produce a batch of paint reduced from 155 to about 56 hours. It was soon noticed, however, that the computer-based figures that the accountants were relying on seemed to be unreliable – some employees appeared to be unwilling to use the new computerised batch-logging system properly. Repeated efforts to encourage the logging of data by employees into the computers failed. Other problems also soon emerged. The new CEO was innovative, dynamic and a good communicator. Several of the middle managers at Clayton's noted that his drive and enthusiasm was an essential ingredient in achieving change. One commented that "He was the absolute key driver of the CFTs ... if he had not been here nothing would ever have happened." On the other hand, the CEO's managerial style had limitations. According to one senior manager he was "an optimist who believed anything could be achieved ... but it was a very quick change, a very dictatorial change ... we were not given a lot of time … the CFTs had to struggle." Another commented: "He would give you a broad guideline of what he thought should happen and then just leave it to you." The official new managerial policy at Clayton's Paints was: "when we Page 2 of 3 empower our teams to be self-managing we will be able to realise the full potential our people offer." One of the workers who liked the new system commented: "you know you're responsible for a paint product from the time production starts to the time it finishes – its got to be at the warehouse by a certain date." Tension at Clayton's Paints had grown considerably since the new CEO had arrived, however. As another of the employees remarked: "one manager would say this is what is going to happen ... Then a couple of weeks later something completely different happened." Another, still, stated: "One day we were working normally, and the next they came up and said to us: 'now we are going to do CFTs' ... It's been going on now for three years and they still have not got their act together." The CFTs were themselves the subject of a considerable amount of criticism. Part of the system adopted at Clayton's was the idea of job rotation – that all the employees would be progressively trained so that they would become multiskilled. The response to the training was overwhelmingly negative, however. Workers thought that the best way to learn was from another employee – different employees learnt different ways to do a job depending upon who taught them. As one employee noted: "a lot of things in the new instruction manuals they gave us had no relevance to what we were doing." There was also friction within the teams. As one long-serving employee commented: "sometimes you get people who think we'll let the other person do all the work and ... then you get heaps of trouble." Another complained that he often found that the person doing the job before him left the equipment dirty and not properly adjusted. He also remarked: "you do not know where to continue from the last person ... You do not have a set job to come to and say 'tomorrow I am going to be doing what I was doing yesterday'." Another argued that with the introduction of CFTs the range of paints he was involved with had narrowed and as a result he thought that job rotation had become necessary simply to avoid boredom. One member of a CFT commented positively noting: "If you find a procedure is too long winded or you know a better way of doing it, you can go and say: 'why can't we do it this way?' " But CFT meetings generally occurred only about once a month, and very little problem-solving seemed to happen at them. Most leaders of the CFTs argued that they were too busy to spend time talking about things – management kept lifting production targets, and the CFT leaders were spending most of their time worrying about how to keep up with the new targets. So when Page 3 of 3 job rotation did occur, it was largely done only to fill gaps caused by other employees taking leave. Three years after the implementation of the new system, over 40% of the workforce had left Clayton's Paints. Even the new CEO had decided to return home by that time. As one CFT leader noted: "I think he came and did what he had to do and got out, and now a new mob have been hired to clean up all the mess." TASK: Critically analyse the case and then answer the following questions. 1. What management theories and approaches seem to be reflected at Clayton Paints? Describe both positive and negative aspects of the management approaches at the firm. 2. Which management approaches would you recommend that the company adopt in order to meet the challenges it current;ly faces? 3. What outcomes would you expect these approaches to have?