Seagrams

Edgar Bronfman's value system is in jeopardy of not being sustained due to his failure to fully transition from charismatic to instrumental leadership as evidenced by the employee questions following the values program training.

Analysis

Seagram's is currently undergoing strategic, anticipatory changes in the company's value system to competitively reposition the company to take advantage of future growth opportunities, diversify the company globally, effectively manage business processes, and increase profits. Bronfman has successfully guided the development and introduction of this new value system. However, Seagram's is lacking the instrumental leadership necessary for this reorientation to be successful. Specifically, the questions raised by management at the end of the values training program suggest that the three critical elements of instrumental leadership - structuring, controlling, and rewarding - have not been fully addressed. Without these, the new value system will not be "reinforced and institutionalized" and may fall victim to becoming "another program of the month".

Bronfman has not structured a sufficient mechanism to ensure the value system is sustained over time. No processes are in place to handle the recommendations for action raised by participants in the training program. Good ideas are being generated, but will be wasted if there is no system to ensure they are heard and implemented. Failure to provide this process will hurt employee morale and limit the long-term relevance of the value system because old ideas will never be replaced by newer, more representative values. Additionally, employees have voiced concern about sustaining momentum and attention on values after the training program. However, there is no process in place that enables employees to keep the focus on values through meetings, additional training or a communication network. Without this mechanism, the momentum created at training programs will slow and the sustainability of the value system will be put at risk.

In addition, Bronfman has not created a controlling and rewarding system to measure the results and reward or punish the behavior of individuals. Employees are concerned that those who are "living" the values will not be recognized and rewarded. They are also concerned about how to deal with values "violators". It is difficult to create buy-in to the values if compliance cannot be determined. Further, without an incentive to adhere, individuals will most likely be indifferent to the values. Clearly, you get what you reward and if Bronfman wants people to live the values, then he must find a way to measure and reward that behavior.

Recommendation 1 & 2 - Structuring Processes to Sustain Seagram's New Values

The lack of structuring processes has led to questions on how new recommendations concerning the values will be handled and how the current momentum of the program can be sustained. To create this process, we recommend that Bronfman continue to leverage its existing managerial structure by creating a "bottoms-up" feedback mechanism. Each individual employee will be told that they have the power to submit recommendations concerning the Seagram's Values. A mechanism will be put in place that enables viable suggestions to filter upward through management and ultimately reach the Seagram's Values Committee (SVC). The SVC will be comprised of two executives