Case Method for Students of Business, Administration, Etc: Copper Ridge, Inc.: In Search of a New Culture A.C.

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Winter, 2011        BCJ        50

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Society for Case Research

COPPER RIDGE, INC.: IN SEARCH OF A NEW CULTURE

A.C. Lampe, Rockhurst University Craig Sasse, Rockhurst University

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This case was prepared by the authors and is intended to be used as a basis for c/ass discussion. The views presented here are those of the authors based on their professiona/ judgment and do not necessarily reflect the views of the Society for Case Research. The names of individuals, the firm, and its /ocation have been disguised to preserve anonymity. Copyright© 2011 by the Society for Case Research and the authors. No part ofthis work may

be reproduced or used in any form or by any means without the written permission of the Society for Case Research.        

Introduction

In his inbox, Steve Hartman found the Culture Audit Team's final report that he hoped would provide sorne keys to addressing performance shortfalls of the long-successful manufacturing company, Copper Ridge, Inc. Hired only 10 months ago as the Chief Human Resources Officer, Hartman had an inkling of what would be in the report but was now preparing himself for the difficult task of sharing the report with his boss Andrew Gladstein and with the subsequent hard work that would be needed to implement the changes in the organization.

Gladstein, the CEO of Copper Ridge, had tapped Hartman for the job of Chief Human Resources Officer in the wake ofthe brand's weak performance. Overa seven-year period, the company's premier brand, Copper Ridge, had failed to meet severa} of its performance targets which included return on assets (ROA), return on equity (ROE), return on investment (ROi), earnings before income and taxes (EBIT), revenue, profitability, and market share. In fact for its most recent year, it had failed to meet all performance targets except its revenue target. On the other hand, Salt Creek, the company's mass channel brand, had met all of its performance targets.

Gladstein was baffled as to how two brands that were designed, manufactured, and distributed in the same buildings could perform so differently. Toe previous work his senior management team had done including refining the company's reordering systems, redesigning merchandising fixtures, and restructuring had not made a positive difference on the Copper Ridge brand's performance. Gladstein had turned to Hartman to help and Hartman's first step was to form the Culture Audit Team to help identify the key issues that were hurting brand performance. Hartman picked up the report and, immediately turned to the summary of findings.

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Hartman's Entrance

Toe Copper Ridge senior management team usually met quarterly with Gladstein. However, today- three weeks before the regularly scheduled  meeting-Gladstein stood at the podium  in  the front of the Timber Room-the room where all the senior managers historically met. The Timber Room wtls also where Ted Hansen, Copper Ridge's former Chief Human Resource Officer, announced his retirement two weeks earlier. Out of respect to Hansen, Gladstein had chosen not to discuss business-specifically, missed targets and lagging results-that day.

Today was different. Gladstein stood at the front ofthe room and looked sternly at the nearly 75 men and women who made up his senior management team.

Although our performance in the past has been good, in fact enviable by sorne measures, it has not matched the growth of sorne of America's best companies. Frankly, we aren't all that we can be. Either the company has set poor targets or we need to change the way we do things around here.

His senior managers knew all too well that the company had missed many performance targets over the last several years. Their bonuses had reflected it.

Gladstein stood at the front of the room, smiled, and continued,

I' d like to introduce to you our new Chief Human Resources Officer, Steve Hartman. Prior to Copper Ridge, Steve spent 15 years with Tek, a company known for its leading position in the mid-range computer industry. Steve spent six ofthose years as the Vice-President of Human Resources where he faced very similar challenges to what we are facing today. As a corporate officer, Steve leda cultural initiative that turned around the company's business. Within four years  of the initiative, Tek met nearly all of its performance targets and continues to sustain them. Please help me welcome Steve Hartman.

After Hartman stood up at his chair, Gladstein ended the meeting by saying, "All of us will be part of a similar cultural initiative led by Steve. He will share that plan at the next Senior Management meeting scheduled in three weeks."

Poor financia! performance was nothing new to Hartman. As the Chief Human Resource Officer at Tek, he had tackled a culture that had become too rigid to change. Sorne of the cultural problems at Tek seemed symptomatic of Copper Ridge based on his initial interviews with Gladstein and his early read of the company. In a nutshell, people were stymied by unwritten rules that had been established through the company's previous success. These rules were very likely making it hard for the employees to respond to the challenges in a competitive environment and rapidly changing demographics among its customers. While neither Gladstein nor Hartman knew the specific reasons for underperformance, they knew the company was having a hard time adapting to changes in the company's business environment. Hartman's job would include finding out what problems there were in the culture and, specifically, answering the question: "What behaviors are impeding the company's performance?"

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Winter, 2011        BCJ        52

Company History

Copper Ridge, Inc. was the world's leading social expressions company and produced products in nearly two dozen languages for consumers around the globe. From roots in the Midwest, Copper Ridge prided itself on family values, traditions, and stability evidenced by the fact that the company had only two chairmen in its history, and about a fourth of its U.S. work force had been with the company at least 25 years. A mirror of 21st century American popular culture, this manufacturing company produced more than 12,000,000 products each day in 20 major product lines and sold them in 100 countries. Its products included greeting cards, wrapping paper, ribbon, stationery, memory-keeping books and small gifts that helped people relate, communicate, and celebrate. Card shops, drug stores, grocery stores, and big box stores sold its products.

Bom in the late 1800s, Birger Widman, the founder of Copper Ridge, spent his childhood in the Midwest. Like other children of that era, he had a number of odd jobs including handing out papers on prohibition, selling soda at the circus, and helping in the family store. While working in the store, Birger became enamored with postcards. Although only 13 years old, he believed he could sell the postcards as well as any salesman he had met.

With that attitude, Birger opened his own wholesale postcard company, named it Brandenburg Cards, and invited his siblings to join his business. One brother helped sell the cards, the other ran the office, and the 13-year-old entrepreneur filled the orders. Brandenburg Cards flourished as long as women collected postcards and kept them in scrapbooks and drawers. However, when Birger saw the postcard hobby start to decline, he quickly replaced his inventory with greeting cards.

With his family in tow, Birger moved his small business to the larger market of Indianapolis. He also changed the name of the company to Copper Ridge to reflect the copper plates used to make greeting cards. Business was good, and Birger began to hire more people not only to sell the cards but to design them, as well.

Although Birger had no formal education, he was an adherent of Frederick Taylor's system of scientific management, which ensured efficiency by providing a right way to do every job. In 1911, Taylor's writings abounded with prescriptive statements indicating in moralistic terms what a manager should do to improve effectiveness (Miner, 1978): develop a best way for each man's work; scientifically select and train him in the procedures he was expected to follow for the job; cooperate with the man to ensure that the work was done in the way prescribed; and divide the work so that activities such as planning, organizing, and controlling were the prime responsibility of management rather than the individual worker (Taylor, 1911). Like Taylor, Birger determined the best way to do each job in his company. Birger published over 50 manuals in just one year, and each one precisely defined what each job entailed and how to do it. These directives provided a formula around which Birger structured his organization, and efficiency and control became integral parts of the culture for future generations of leadership.