November 17, 2016

Case Study Analysis: Southfield Packaging

I've decided to share some of the individual work I did to complete my MBA from IE Business School. Below is the paper I submitted for our Human Resource Management class in response to the Harvard Business School Case Study Southfield Packaging.

The Context

Southfield had always differentiated itself by focusing on custom packing and cushioning for its Clients. Because of this, client service has always been a key component of their strategy with their industry leading 60% annual client retention rate, 25% higher than industry average.

The two central characters in the Southfield Packaging case find themselves in a special situation during the time that the case is written. On the surface, it appears that both men are aligned in their goal to do what is best for the growth of the company, however, a gap can be seen between the two men in how they think this can be best achieved.

There are a few reasons for why this gap exists. Immediately, what stands out to me is the leadership style of Mark Sanders and the different working styles of both men. I would classify Mark Sanders as a mix of pace-setting and democratic. He likes to have constant communication with his team and is not overly involved but at the same time he sets a very high standard and pace for his team and expects his team to follow his lead. This can be evidenced by his feeling that that annual review process is redundant and his mild frustration that Frank Belby reports to work 3 hours after him. On the other hand, I think that Belby is a mix of coaching and a little bit coercive. He likes to teach people about the business and even encourages internal transfers but is a bit set in his ways in how he does things and can get easily frustrated when things do not go as planned (as evidenced by his outburst towards the sales executive in front of the Client).

In terms of personality and working style, my analysis (Exhibit 1) also suggests some differences. Looking at the popular Myers-Briggs model[i], Sanders is a person who is more of an introvert who prefers intuition, thinking and judging as evidenced by his emphasis on time management, being objective, following protocol and need for further education. Belby, however, is most likely on the opposite end of the spectrum. One who dislikes formal education and prefers a more practical approach, who is popular with the community and likes to get things done using his senses.

Also, it can be further argued that there is a generation gap that exists. If we use the Iceberg Model[ii], even though on the surface both men are aligned with wanting what is best for the company, their age gap suggests that they have different values and beliefs. Belby is part of the baby-boomer generation while Sanders is part of Generation X and this results in different set of values and beliefs. This can be evidenced by the numerous interruptions during the performance evaluation that Sanders did not think too much off but Belby took some offence to. Belby is also extremely loyal, something that Gen X may not value as much.

Looking back and remembering the class on performance management and the discussion on why not all good performers are high potentials, I realized that Belby is most likely an “engaged dreamer”. He is one with great engagement and aspiration but limited ability and vision. The probability of success at the next level is close to zero for him. Belby himself doesn’t realize this because he has always encouraged the people he managed to try and perform higher-level tasks if they want to try. I think that this a very crucial point in the case. The responsibility is on the manager to use the performance evaluation mechanism to openly discuss this and to map out an action plan or manage expectations.

Bottom line, the alignment on company goals may be good for both men, but there is an obvious misalignment in terms of personal objectives and goals. The misalignment is likely the result of the factors discussed above: difference in leadership style, difference in personality, difference in values and difference in expectations. All of which contributed to an environment where in there was actually very little real communication being done despite the frequent conversations between the two men.  

Evaluation of the Appraisal Process

The performance review at Southfield or SPRs are conducted annually and employees were scored on a variety of key metrics which included technical knowledge, mental energy and decision-making capability.

I am generally in agreement with characteristics measured which are listed in detail in Exhibit 1 of the case as it appears to me that it is aligned to the overall company strategy. Looking at it using Kaplan and Norton’s Balanced Scorecard[iii], all key aspects: internal business process, organizational capacity, customer and financial are measured. I elaborate more on this and match each characteristic to the scorecard in Exhibit 2 of the appendix of this paper. The overall reward system is also aligned. A bonus is only given based on total company performance which should give employees a “big picture” view while salary raises are based on individual performance giving employees ownership of their own specific tasks. The scale used to score is also simple and straightforward. What is lacking are two key things:

1. It appears that all employees are measured against the same set of criteria. The case doesn’t go on to elaborate on this but the characteristics and description seem quite generic and fails to outline specific behavior that should be measured in relation to the role and responsibilities of Belby as a manager.
2. The evaluation design also doesn’t give specific weights to each of the characteristics measured. Which characteristics are more or less important? If the characteristics are weighted equally, the score of Belby should actually be a 7 (81 total points divided by 11 characteristics). Without this transparency in weighting, it opens up the final score to include the biases of the manager to give more weight to a particular aspect (say a small negative trait) than another.

As a manager, it is the responsibility of Sanders to use the appraisal process (and constant communication) to bridge the job competency profile with the specific individual’s competency profile. Even though Sanders thinks he is clearly communicating to Belby on a regular basis, the case reveals that Belby thinks otherwise. In fact, Belby thinks that he is outperforming many of his peers (and it can be argued that key business measures like customer retention rate will back this up) and has little or no idea of what Sanders thinks of his long-term career prospects. It is quite possible that the frequency and depth of appraisals needs to be increased.

Aside from some deficiencies in the design of the appraisal form and appraisal frequency, looking into the actual performance interview that happened between Sanders and Belby, some things immediately stand out to me as things that did not follow protocol: evaluation interviews should be done at least once a year, it should last at least two hours and should be completed while “undisturbed”. In the case, all three protocols were broken. To me, this sends a strong negative signal that Sanders did not take the appraisal seriously and if put in Belby’s shoes, I will feel like Sanders did not care enough about me to take the time to do the appraisal properly.

In addition to this, I think that there is clear miscommunication between both sides brought about by the generation gap and different values. Sanders did not feel like he needed to explain any of his decisions to Belby if not asked about it while Belby didn’t feel like confronting Sanders if the topic was not brought up. Because of this, there is a definite gap brewing between the two men and the appraisal interview would have been the best time to clear the air and bridge the gap.

It is also quite possible that Sanders fell into some interview “bias traps” such as stereotyping and the contrast effect. Maybe the reason why Sanders did not feel like he needed to spend more time trying to develop Belby was that he had stereotyped him as someone from the older generation who would not be willing to learn and adapt. That he cites the lack of use of email and lack of exercise as big negatives could be because of negative perception and lack of understanding of Belby’s personality (cannot express himself well in writing) and situation (little free time to exercise because of late Client meetings) instead of actual negative performance.

With all the above pros and cons to the appraisal process, there are a few challenges and difficulties. Challenges include getting managers to take the appraisal process seriously and not just as a waste of time (as how Sanders feels about it), making the appraisal interview process conducive to open communication between manager and subordinate (to avoid one-way conversations) and to empower managers to set aside any biases that may sway their objectivity. The main difficulties to address the issues with the current process include the lack of time to conduct proper appraisals and quite possibly the lack of support from management to making the appraisal process an integral part of the company strategy.

Limits and Ethical Issues

The case revolves mainly around the appraisal process at Southfield and the biggest ethical dilemma that I can see is one of transparency and the subsequent motives that drive the appraisal process. Cross referencing with the Borealis Decision Tree[iv], one can get all the way through the first four roadblocks (is it legal, is it consistent with values, people principles and policy, would I be happy to explain it to colleagues, family and friends, would the company be comfortable if it appeared on a newspaper) relatively easily. As it is a question of whether to be completely upfront and honest with one’s subordinate about his chances at getting promoted, the first four roadblocks are easy hurdles as the appraisal process is legal, consistent with policy and can easily be explained to colleagues, friends, family and the general public. It is the last hurdle that is most difficult to answer: is it the right thing to do?

In dealing with a subordinate’s future career path and at the same time balancing with the company’s objectives, the answer can get quite difficult. On the one hand, not being transparent and leading the subordinate to believe that a promotion is in the horizon (even if it is not) will benefit the company in the short term. The employee continues on his role and works hard (possibly even harder) thinking he will advance in the near future. Being transparent and honest will most likely negatively impact the company in the short term. The employee will most likely leave and a hole in the organization then needs to be filled.

By taking the long-term view, the answer becomes much clearer. Being transparent may have some undesirable short term effects, but in the long run the hole he leaves behind will eventually be filled and there will be an option to fill it with someone who will have better long-term prospects. Not being transparent is not a sustainable solution and can only last for so long. Eventually the person will catch on, feel betrayed and most likely leave more unhappily than if he had been told the truth from the beginning.       

Proposal, Action Plan and Reflection

My main recommendations will revolve on improving the current appraisal process and creating an environment where real communication can transpire between manager and subordinate.

First, I think there is a need to review the actual characteristics being measured. Adapting and borrowing from the Hay Point Method[v] and grouping the characteristics into three main groups (Know How, Problem Solving, Accountability) that are weighted accordingly would make final scoring more transparent and remove the element of managers being able to manipulate the final score by “bumping up or down a notch”.

Second, I would develop a different set of criteria for each role instead of using a generic list of characteristics for everyone. This will be helpful in guiding people in different roles on the specific actions that are key to their success at their position. This will help bridge any gaps between job competency and individual competency profiles.

Third, I would include SMART goals into the review. In my mind it is unacceptable that Sanders had placed “unknown” when asked by when the promotion can be given. This type of vagueness doesn’t help in any way to develop and challenge the candidate. Having SMART goals puts a concrete timeline in place provides a real and tangible goal that can be aspired for and worked towards. I have provided some sample SMART goals for Belby in Exhibit 3.

Fourth, in terms of how the SMART goals are set and measured, I would follow the model proposed by Peter Drucker in The Practice of Management: jointly plan, individually act and jointly control. This makes both manager and subordinate responsible for setting and measuring and gives ownership to both parties. It is important for managers to be part of the process to make sure that goals are aligned to the company strategy.

Lastly, I would adapt the performance management process discussed in class wherein there is consistent and frequent planning, follow-up, review and coaching. It is the responsibility of the manager to manage his team and become engaged with the process. Open lines of communication where Sanders should listen, coach and give constructive criticism would help a lot more than becoming impatient and cutting off Belby. Taking the time to get a better understanding of how to work with an individual who has a different personality and different values would show that Sanders has the needed soft skills and empathy to become a Level 5 leader. Educating managers on the value of giving importance to the performance appraisal mechanism will be key to the success of any of the other changes proposed above.

I am of the school of thought that we always need to continue learning and developing. If the person has shown a willingness to learn, then his potential will always be improving and increasing. Being honest and transparent, having consistent and relevant feedback and being humble to know that even managers can learn something from their subordinates would help bridge the gap we see between Sanders and Belby. This is an interesting case for me because majority of us will be moving on to management in the near future and many will have subordinates who will be just like Belby. It is good to learn now about the best way to handle the situation in an ethical, respectful and appropriate manner.

In my opinion, there is a future for both Sanders and Belby at Southfield Packaging. There is a chance that Sanders has misjudged Belby and the lack of proper communication between the two men is not helping. Sanders needs to take the time and effort to provide Belby with the opportunity to develop and succeed. The first step is to do a proper performance appraisal, one that shows how much Sanders respects and values Belby.

Keeping Belby happy and engaged will likely lead to big dividends in the future given how Belby is a key respected figure in the organization. He brings not just business but several intangibles including being a good mentor and coach for future managers. The business he brings can be replaced if he leaves. What will be more difficult to replace will be his contribution to the overall company culture. He is after all a long time employee who rose up the ranks which others can aspire to emulate. He lives and breathes the company culture and is the poster child for putting the customers and customer satisfaction first. Unless Southfield wants to shift away from this, it would be good to keep Belby on board.

            Providing Belby the tools and opportunity to show he can do the job he aspires for would be a low risk move that could pay high rewards. In my current company, we often do this. We allows high performers to take on additional responsibilities associated with the next level as a test to their adaptability and readiness. I’ve seen several promotions done this way providing a win-win situation for both the employee and management.

I hope that in the future, when put in a position similar to Sanders, I am able to be objective, fair, and transparent and properly balance both the needs of my subordinates and the needs of the company. I am sure that in reality, this is a balancing act that is much more difficult than it seems. J


Exhibit 1: Personality Analysis for Sanders and Belby Using Myers-Briggs


Exhibit 2: How Performance Review Characteristics at Southfield Fit Into the Balanced Scorecard


Exhibit 3: Sample SMART Goals for Mr. Frank Belby
SMART: Specific, Measurable, Attainable, Realistic, Timely

            More exposure to company strategy by participating in cross-departmental endeavors such as business planning sessions to be conducted in the first quarter of 2012.
      Develop management skills further by attending training modules for corporate strategy and strategic planning at a university level by the end of 2012.
      Prioritize development of Physical Energy by attending health and fitness classes with the intention of improving overall health (suggested measure is weight loss) by the end of 2012.


[i] The Myers & Briggs Foundation. “MBTI Basics”. Accessed on December 11, 2014.
[ii] Institute of Organization Development. “The Iceberg Model: Theory and Practice”. Sherisa Franklin. Accessed on December 11, 2014.
[iii] Balanced Scorecard Institute. “Balanced scorecard basics”. Accessed on December 12, 2014.
[iv] Borealis Ethics Policy. “It’s a Question of Ethics”. Accessed on December 12, 2014.
[v] Hay Job Evaluation. Accessed on December 12, 2014.