Harvard Case - Canadian National Railway Company: Culture Change (A)
"Canadian National Railway Company: Culture Change (A)" Harvard business case study is written by Stewart Thornhill, Ken Mark. It deals with the challenges in the field of General Management. The case study is 8 page(s) long and it was first published on : Sep 6, 2013
At Fern Fort University, we recommend a comprehensive culture change initiative for Canadian National Railway Company (CN) focusing on fostering a more collaborative, innovative, and customer-centric environment. This initiative will be implemented through a multi-pronged approach involving leadership development, employee engagement, and a shift in organizational structure and decision-making processes.
2. Background
Canadian National Railway Company (CN) is a major North American railway company with a long history and a dominant position in the Canadian market. The case study focuses on the company's efforts to adapt to a changing industry landscape and address challenges related to employee morale, innovation, and customer satisfaction. CN's CEO, Hunter Harrison, implemented a 'precision railroading' strategy, emphasizing efficiency and cost reduction, which led to significant layoffs and a decline in employee morale.
The main protagonists of the case study are Hunter Harrison, the CEO, and his team, who are responsible for implementing the new strategy, and the employees, who are impacted by the changes and struggling to adapt to the new culture.
3. Analysis of the Case Study
To understand the root cause of CN's cultural challenges, we can apply the following frameworks:
- Organizational Culture: CN's culture shifted from a more collaborative and employee-centric environment to a highly centralized and performance-driven one. This shift, driven by the 'precision railroading' strategy, led to a decline in employee morale and a lack of trust in leadership.
- Leadership Styles: Hunter Harrison's leadership style, characterized by a focus on efficiency and cost reduction, created a culture of fear and anxiety among employees. This top-down approach stifled innovation and employee engagement.
- Decision-Making Processes: The centralized decision-making process under Harrison's leadership limited employee input and stifled creativity. This led to a lack of ownership and accountability at lower levels.
- SWOT Analysis: CN's strengths lie in its dominant market position, extensive infrastructure, and experienced workforce. However, weaknesses include low employee morale, a lack of innovation, and a centralized decision-making structure. Opportunities exist to leverage technology and analytics to improve efficiency and customer service. Threats include increased competition from other modes of transportation and regulatory changes.
4. Recommendations
To address CN's cultural challenges and achieve sustainable growth, we recommend the following:
1. Leadership Development:
- Leadership Training: Implement comprehensive leadership training programs for all levels of management, focusing on building trust, communication, and collaboration skills. This training should emphasize empowering employees, fostering a culture of innovation, and promoting ethical decision-making.
- Leadership Coaching: Provide individual coaching to senior leaders to help them adapt their leadership styles and create a more inclusive and supportive environment.
- Succession Planning: Develop a robust succession planning program to ensure continuity of leadership and identify potential leaders who embody the desired cultural values.
2. Employee Engagement:
- Open Communication: Foster open and transparent communication channels to address employee concerns and provide regular updates on company performance.
- Employee Feedback Mechanisms: Implement regular employee feedback mechanisms, such as surveys and focus groups, to gather insights and address issues proactively.
- Employee Recognition Programs: Establish robust employee recognition programs to acknowledge and reward individual and team contributions, fostering a culture of appreciation and motivation.
3. Organizational Change:
- Decentralization of Decision-Making: Empower employees at all levels by decentralizing decision-making processes, allowing them to take ownership of their work and contribute to innovation.
- Cross-Functional Teams: Encourage collaboration by creating cross-functional teams to address complex problems and leverage diverse perspectives.
- Performance Evaluation: Implement a performance evaluation system that aligns with the desired cultural values, focusing on teamwork, innovation, and customer service, rather than solely on cost reduction.
4. Technology and Analytics:
- Data-Driven Decision Making: Implement data-driven decision-making processes to improve efficiency and customer service, leveraging technology and analytics to gain insights and optimize operations.
- Digital Transformation: Embrace digital transformation to enhance customer experience, streamline operations, and improve communication channels.
5. Basis of Recommendations
Our recommendations are based on the following principles:
- Core competencies and consistency with mission: The recommendations align with CN's core competencies in transportation and logistics, while promoting a culture that supports its mission of delivering safe, reliable, and efficient transportation services.
- External customers and internal clients: The recommendations aim to improve customer satisfaction by fostering a more customer-centric culture and leveraging technology to enhance service. They also prioritize employee well-being and engagement, recognizing that a happy and motivated workforce is essential for success.
- Competitors: The recommendations are designed to help CN maintain its competitive advantage by fostering innovation, improving efficiency, and enhancing customer service.
- Attractiveness ' quantitative measures: The recommendations are expected to lead to tangible improvements in key performance indicators, such as employee morale, customer satisfaction, and financial performance.
6. Conclusion
By implementing these recommendations, CN can foster a more collaborative, innovative, and customer-centric culture, leading to improved employee morale, increased innovation, and enhanced customer satisfaction. This will ultimately contribute to CN's long-term success and allow it to thrive in the evolving transportation landscape.
7. Discussion
Alternative approaches to culture change could include hiring external consultants to facilitate the process or implementing a more gradual and incremental approach. However, these options may be less effective in driving rapid and meaningful change.
The key assumptions underlying our recommendations include:
- Commitment from leadership: The success of this initiative hinges on the commitment of senior leaders to embrace the new culture and actively champion the changes.
- Employee buy-in: Employees need to be engaged in the process and feel empowered to contribute to the cultural shift.
- Effective communication: Open and transparent communication is crucial to ensure that employees understand the rationale behind the changes and feel involved in the process.
8. Next Steps
To implement the recommended changes, CN should:
- Form a task force: Establish a task force composed of senior leaders and representatives from various departments to oversee the implementation of the culture change initiative.
- Develop a communication plan: Create a comprehensive communication plan to engage employees and keep them informed about the progress of the initiative.
- Pilot programs: Implement pilot programs to test and refine the proposed changes before rolling them out company-wide.
- Monitor and evaluate: Establish a system for monitoring and evaluating the effectiveness of the changes and making adjustments as needed.
By taking these steps, CN can successfully navigate the challenges of culture change and create a sustainable and thriving organization for the future.
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Case Description
The executive vice-president and chief operating officer (COO) of Canadian National Railway Company (CN), wants to change the culture at his organization. The COO has been promoted to his current position after CN purchased Illinois Central, and his first task is to review CN's operations across the country. He notices that employees are leaving work early, a practice called "early quits" that is supposed to reward employees for working harder during the day. He also notices there are other practices, such as late starts that encourage lower productivity. With the goal of improving productivity in mind, the COO elects to tackle the issue of late starts before fixing the early quits problem. This case introduces behavioural science as one of the many management tools that can be used to influence behaviour.
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