Managing change and diversity at EasiYo
FROM A MANUFACTURING base in Auckland, EasiYo enables over a million homes in New Zealand, Australia, the UK, Italy and China to enjoy fresh yoghurt every day of the year. It supports home production through the supply of powdered bases and culture and a plastic incubator in which the yoghurt ferments.
Paul O’Brien joined the company as CEO in December 2009 and has overseen sales growth of around 30 per cent a year, on the way to a target of sales in excess of $50 million to 20 plus countries. It is part of the New Zealand success in dairy products but for EasiYo business growth has also been about managing the transition from humble beginnings into a multinational enterprise with a product that relies on strict compliance to high standards of food quality and safety.
EasiYo started in the early 1990s as a husband and wife team working from their garage. The business succeeded through research and development, firstly into yoghurt making, then finding the right milk powder and freeze-dried culture to ensure 100 per cent setting of the incubated yoghurt at home.
Partnership with the Westland Dairy Company, who purchased the company outright soon after Paul O’Brien took charge, gave EasiYo R&D capacity. Recent growth has been based on marrying corporate management with the strengths inherited from the original family business. Paul joined
a company that had grown rapidly with NZ$25 million sales, three quarters from exports, but lacking in the formal management systems to maintain high performance and build a platform for continued growth.
Paul’s first four days with the company were unusual for a CEO. He spent them working on the shop floor, introduced to the production team as just another recruit. This experience combined with his early period in the manager’s office led to two main observations: management needed to be more measurement based; the workforce was a great asset but exposed the business to some unacceptable safety risks.
Partly reflecting church links of the original owners, the first workers came from Auckland’s Tongan community and were employed to do manual packing and loading work. Subsequent recruitment frequently involved the original recruits introducing family members to the company, so that at one stage around half of the 24 predominantly Tongan production workers were related to each other. This produced a loyal and hardworking workforce that followed instruction but with little priority to collecting data to monitor production efficiency that, for example, would show how manual operations compared with automation options.
Automation was needed to eliminate quality and food safety risks, reduce manual handling and to give greater capacity to handle product variety efficiently. Determining
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112 PART 2
THE ENVIRONMENTAL CONTEXT OF MANAGEMENT
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automation priorities needed insight into how effectively work was getting done and for Paul this included getting a suite of measures in place, such as those showing ‘direct labour recovery’ and ‘direct labour efficiency’. With these measures in place a mix of automation and manual handling was opted for alongside the upskilling of the production staff.
Any incidence of food contamination has implications for the larger reputation of New Zealand’s food production as well as being potentially devastating for the company itself. This brings an absolute importance to quality management which in turn implies that all employees are motivated and able to manage
risks.
As Paul says, the key to motivation is to put
staff in a motivating environment. Attempting to motivate through individual incentives and target-setting is exhausting of management’s time and not as effective as getting staff’s ‘inner motor’ in tune with the company’s goals. Getting the environment right is partly about making sure employees can be productive and have their contributions recognised.
When Paul joined the company literacy and numeracy to maintain quality systems could not be guaranteed among the production workers. They were reliable, hardworking and respectful but not as productive as they could be. Rather than automate people out of the company it was decided to invest in literacy and numeracy training for production workers who indicated their interest in helping the company achieve its goals.
Two years later, only two production workers had left and 20 had graduated from literacy and numeracy training. Provided at the workplace, it results in nationally accredited
Source: Adapted from EasiYo website, www.eas1yo.com
certificates and typically the first formal qualifications obtained. With the company’s continued growth some production staff now have supervisory or leading hands roles. Appetite for more training has been sown giving the company production flexibility alongside capacity for further automation.
Production staff are not simply responding to the training. Paul practises MBWA- management by walking around-believing that it is important to be interested in the issues that concern and motivate employees. Having people’s trust helps get staff to participate in the workplace, whether through celebrations when production goals are met or through formal planning meetings. And if the boss is visible around the workplace it should encourage other managers to do likewise.
Being visible is part of Paul’s VIM approach to leadership-vision, inspiration and momentum. Vision establishes goals and strategy and articulating a purpose for the company that can motivate staff to see value in their work. Inspiration relates to getting staff to share the vision and act upon it within the scope of their work. Momentum is about injecting energy into the workplace through ensuring a pipeline of new projects, relating short-term actions to longer term goals and maintaining an active presence across the workplace.
The diversity benefiting EasiYo goes beyond the Tongan production team. Out of the total workforce of almost 60 only a handful are New Zealand born. Most are migrants to New Zealand and this is seen to fit well with a company that exports to Europe and
Asia and that is seeking to further expand its geographical footprint.
Questions to be answered
Question 1) identify and briefly discuss key management challenges presented in the case study. (200 words) 5 marks
Question2) select one management challenge and draw out all relevant contextual profits from case study by describing them and/or using direct quotes as supporting evidence that they are indeed elements of one, common, challenge. (200 words) 5 marks
Question 3) use your knowledge of management theories derived from lectures and/or the textbook to address a management challenge identified above. (200 words) 5 marks
MANAGEMENT CHANGE AND DIVERSITY AT EASI YO
Q1. There are management challenges that a company maybe be faced with; to begin is having to motivate the employees, this is seen as time-consuming on the part of the managers. Secondly, is lack of the illiteracy and numeracy training to the company’s workforce which is a prerequisite for continuous improvement; it is even more of a challenge in identifying the employees fit for the training i.e. those with the company’s interest at heart. Third, is responding to a crisis in this case the probable low product quality and the looming product health risk, this necessitates the automation of a company which would render the employees redundant; the manager therefore needs to come up with a plan where product quality will be ensured and the associated risks averted without having to lay off the employees. Fourth, is maintaining employee diversity in the corporation, diversity is synonymous with high benefits associated with reduced immigration formalities and increased export returns. This might not be viable since the international relation is a federal role and not a personal or corporate duty as it were. Lastly is having to be dictatorial to ensure productivity (formal management); this is not quite tenable since the employees will work under pressure.
Q2. Motivating employees: there are many contextual fits in the case study. First is motivating employees through provision of individual incentives, target setting and synchronization of the inner motor of the employees with the company goals. Second is the appreciation of outstanding employees through conferment of certificate and/or awards at the completion of a training provided by the company. In addition, the excellent employees can be inspired through promotion and entrusting the employees with leading or supervisory roles in the company so long as their contributions are recognized. Third is through articulation of vision (entails articulating the company’s goals and strategy and establishing the purpose of the company), inspiration (involves having the staff share the laid down vision and working towards it within their work scopes) and momentum (involves maintaining zeal among the staff, introducing inventive projects, setting out short and long-term activities and the manager maintaining a hand on physical presence among the employees. Next, is showing an interest on the issues affecting the employees on the side of the manager, showing that they trust them and perhaps celebrating with them when the set goals have been achieved; all these ensures an active participation by the staff and the managers.
Q3. The classical theory comes in handy in addressing the challenge, it clearly highlights the division of labor, unity of command and will create a sense of direction which automatically motivates the staff. In addition, the scientific method theory will specifically put emphasis on efficiency and optimal productivity along monitoring the utilization of time and the environment which are the goals of motivation. Furthermore, the human resource management theory will go a long way in creating: a sense of belonging on the employees, trust between employees and the managers and ultimately initiate and sustain motivation among the employees at individual and group levels. Fourth, the bureaucratic systems of the company will be effective in establishing a set of corporate principles and regulations among the staff; this unites the employees within the confines of the authority in place. The contingency theory will efficiently help the manager identify the unpredictable problems within and without the company and involve the employees in solving the so discovered contingencies which inspires them in corporate research and critical thinking. Finally, the system management theory will mobilize all the employees in the company and consolidate their day to day contributions among the inherent resources towards the achievement of the company goals which motivates employees to high productivity.