Business Proposal for Eureka Marketing

Developed and Written by:

MA² Consulting

Mandy Maloney, Alison Tubay, Madlen Zamfirova, Ashley Borja

Elmhurst College

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Meet the Consultants!

MA² Consulting was formed in Elmhurst, Illinois in 2013. The firm began with four founding members, but has developed into a multi-facet organization that continues to grow. Each of our consultants specializes in specific areas of business, enabling us to have the best tools and knowledge to fill your organizational needs. Take some time to read below and get to know our consultants!

Consultant: Madlen Zamfirova

Madlen is one of the four founders of MA² Consulting. She received her undergraduate degrees in Applied Psychology and Sociology from The University of Illinois at Chicago. After working in an administrative role for a small organization, Madlen decided to further her business education by obtaining a Master’s in Industrial and Organizational Psychology from Elmhurst College. She has extensive experience in managerial and administrative positions, making her an excellent resource for people-management and effective leadership.

Consultant: Alison Tubay

Alison is one of the four founding members of MA² Consulting. She received her undergraduate degrees in Biology and Psychology from Augustana College and decided to further her education at Elmhurst College, where she received her Master’s in I/O Psychology, as well as her MBA. It is there she met her cofounders, and the plans for MA^2 Consulting began. She has experience developing training and development initiatives for over 100 companies and continues to build her reputation in the consulting world.

Consultant: Amanda Maloney

Amanda is one of the founding members of MA² Consulting. Amanda graduated with a Bachelor’s of Science from North Central College in 2009 and published her first research project on FMLA. She then spent the next 10 years in the business world through varies positions from store operations to an Associate Buyer at Kmart. Amanda then went on to obtain her Master's in Industrial and Organizational Psychology from Elmhurst College and developed MA^2 consulting with the cofounders. With her background in leadership and employee motivation, and she has applied her skills and knowledge to help over 100 companies to grow her reputation as a consultant. In her free time, she enjoys working in her garden and going to concerts with friends.

Consultant: Ashley Borja

Ashley graduated with a Bachelors of Arts from Franklin College in 2014. She minored in Biology and Sociology, and moved on to attend Elmhurst College to further her education by gaining her Masters in I/O Psychology. She lives with her boyfriend and their two dogs in the quiet suburbs of Chicago. Ashley has spent her time gaining knowledge and experience in the consulting industry, and greatly enjoys the work she has contributed to assisting companies with their issues.

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Executive Summary

Eureka Marketing was established in 2006 as a small marketing firm in Chicago, IL. Over the years, Eureka Marketing has grown and built five more remote firms throughout the United States. They have grossed over 5 million dollars in sales to major companies such as Frank's Beanie Weenies, Sriracha Fruit Leather INC. and Homeless Cartoon Industries. Eureka has developed commercials and advertisements that have aired during major television events such as the Super Bowl, FIFA, and the World Series. Many of these projects were Twitter trending topics within hours after airing, further reinforcing Eureka’s influence over the marketing industry. Due to this rapid and continuous expansion, Eureka has developed issues of increased turnover.

MA² was hired to look into the issue of turnover, and found that it was caused by the discrepancy in leadership styles throughout the company. MA² has decided to implement their Masters Acceptance Maintenance Academy (MAMA) to aid with unifying leadership styles throughout the company. This will ensure a decrease in the rate of turnover throughout the company, and therefore reduce expenses due to hiring and training new employees. MA² will look at different leadership styles to see how leaders can be best trained to understand employee work habits, therefore helping them to retain employees. The current cost of hiring and training each employee at Eureka is approximately 40 thousand dollars, but with the help of MA², we can reduce expenses and create a 100% return on the investment that can be applied to the bottom line.

Problem Statement

Bernadette Kenny reports in Forbes Magazine that any turnover rate below 15% annually is considered healthy and is no cause for alarm. This means that a company of 200 workers can lose 30 individuals within a calendar year without it becoming a significant problem. Unfortunately, Eureka is experiencing turnover rates of 35%, or roughly 1,750 of their 5,000 employees per year. Large and persistent percentages of turnover can be a leading cause of business failure. This is due to the financial strain it puts on the business when new employees are sought out and trained. There can also be emotional stress felt by other employees due to the constant change of faculty. This in turn can cause a "snowball" effect, and cause existing employees to quit as well due to stress levels. In order to prevent turnover, the root of the issue must first be determined.

For Eureka, the main reason for turnover is differences in leadership styles held by managers and other positions of authority within the company; Eureka employs twenty executives. Differing leadership styles have also caused a breakdown of goals within the company, which has ultimately prevented positive change and growth from occurring. This has contributed to a lack of commitment felt by employees, and has resulted in them leaving the company in large numbers.

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Project Summary

Key Questions

Given these concerns, MA² has been tasked with developing a system that will decrease Eureka’s turnover rate by training the company’s leader; several key issues were developed and assessed. First and foremost, we must determine which leadership styles provide the most understanding and stability felt by employees. Next, we must figure out how to implement this leadership style intervention so it can be used to aid in employee satisfaction and retention. Finally, we need to determine that the decided leadership style is working for Eureka in a way that is efficient for the company and for the employees' happiness as well.

Through empirical research, careful consideration of the company’s circumstances, and a thoughtful intervention plan of our own design, MA² aims to minimize financial losses of Eureka caused by turnover and unify the company.

Research

Leadership in today's corporate world needs be ready to adapt in the ever changing world of business (Kunkel et al., 2013). Leaders must be able to mentor and develop their employees to the highest potential. Additionally, effective leaders refrain from using the reason of "it isn't in the budget" as an excuse to not improve their employees (Kunkel et al., 2013). Executives need to spend time with their employees and create benchmark goals, specifically in creativity, productivity, education and communication. These goals will promote growth for each employee and reduce barriers that are created within the business world that can hinder an employee’s potential (Kunkel et al., 2013). Businesses that are considered high performers in the market place do not do this automatically. Instead they often have an executive coach to aid the organization (Subramanian, 2004).

Good executive coaching is an art that can unleash people's full potential and create meaningful objectives. Coaching does not only help the business as a whole, but the executive and employees alike (Subramanian, 2004). Executives can reach their potential through self-assessment; this can be obtained through the personal development provided by leadership (Subramanian, 2004). Coaching can be an effective means for developing leadership, enhancing well-being, and facilitating goal attainment within an organizational setting (Grant et al., 2010). Leadership styles can also affect organizational effectiveness and performance in different ways by influencing the social, economic and environmental contexts within a business (Franco, 2015). When leadership is neglected, the likelihood of mistakes are increased, and the success of the business is greatly reduced (Franco, 2015). There are the three leading styles of leadership: transformational leadership, transactional leadership, and passive-avoidant leadership; these are seen as the all-encompassing leadership styles of the last twenty years (Franco, 2015). Transformational leadership is defined as the leader’s ability to inspire their followers by adopting the organization’s vision and focusing all of their energy on reaching the business's collective goal (Franco, 2015). This type of leadership demands high commitment and identification of the leader and the business (Franco, 2015). Transformational leadership is labeled as pro-active in not only the development of the organization, but also in working individuals that express higher moral and ethical

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standards (Franco, 2015). Some of the personality traits that are exhibited by these leaders are courage, determination, responsibility, justice, empathy, passion, dedication and self-control (Franco, 2015). Transactional leadership is the exchange between the executive and the subordinates in order to obtain a goal (Franco, 2015). In this style of leadership, the executive would exchange rewards and punishments depending on the quality of the employee’s performance (Franco, 2015). Passive-avoidant leadership can be described as the executive avoiding responsibility and failing to follow up with employees, therefore avoiding leadership qualities all together (Franco, 2015). This type of leadership avoids following up on assignments and issues, therefore showing that goals and standards are not held in high regard throughout the organization (Franco, 2015).

Project Intervention

Approach

It is important that Eureka uses a leadership style that unifies the company. There must be excellent communication between branches within the company as well. Consistent structure must accompany the leadership style in order for there to be harmony and consistent progress. MA² will implement their Masters Acceptance Maintenance Academy (MAMA) method to help determine which leadership style is present and most successful in the company. They will then define it and implement that style throughout the rest of the company, developing and training leaders where necessary.

First, we are going to recognize the existing leadership styles from the employee’s perspective with the Multifactor Leadership Questionnaire. This is one of the best ways to measure the influence of different leadership styles (Franco, 2015). The reason for using this test is that it assesses a broad range of leadership types including passive leaders, leaders who give contingent rewards to followers, and leaders who transform their followers into becoming leaders themselves. This test is used to give insight into the leadership styles of the executives at Eureka.

We are also going to use the Authentic Leadership Questionnaire to understand where the leader stands on self-awareness, transparency, ethical/moral, and balanced processing. With the use of both questionnaires, we will be able to target the leadership style to each executive and limit the amount of down time that it would normally take to understand the leadership qualities. We will then coach the executives on a weekly basis, talking about these major points: self-awareness, transparency, ethical/moral, and balanced processing.

Methodology

Before the MAMA method can begin, a simple initial survey must be administered to employees to measure their current happiness and commitment levels. This survey will consist of 50 items on a 1-5 Likert scale (1 being strongly disagree, 5 being strongly agree) that focus on how currently happy an employee is at the company, and how strongly committed they are to stay at the company. This survey will be administered before MAMA is implemented, and again after the MAMA method has been

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completed in order to provide feedback that MA² can use to determine the effectiveness of the MAMA method in the company. This survey will act as MA²'s evaluation tool for the MAMA method implementation.

After the initial survey, MA² will have all 5000 employees take the Multifactor Leadership Questionnaire, which will take about 30 minutes to complete using computer software. Employees will be scheduled in 45 minute blocks, being instructed to meet in a general conference room where the questionnaire will be administered. Once we introduce ourselves as the third party consulting firm, employees will be briefed with the instructions and the purpose of the survey. All responses will be confidential. The results will populate one hour after an employee has finished the survey and will be grouped by department and sub-categorized by leader executives.

The executives of Eureka Marketing will also log into the system to first take the Multifactor Leadership Questionnaire, followed by the Authentic Leadership Questionnaire. Each executive in each branch of the company will be sent a specific login that will link their specific employees’ surveys to their own survey. Each executive will be given one hour to take both surveys, after which the survey will automatically close out and the login will no longer be valid. It will take approximately an hour for the executives to receive an explanation of their surveys.

The Authentic Leadership Questionnaire measures four main leadership traits: self-awareness, transparency, ethical/moral, and balanced processing traits. Self-awareness is defined as the degree to which the leader aware of his or her strengths, limitations, how others see him or her, and how they impact others. Transparency is defined as how well the leader reinforces a level of openness with others, allowing them an opportunity to be forthcoming with their ideas, challenges and opinions. Ethical/Moral refers to the degree to which the leader sets a high standard for moral and ethical conduct. Balanced Processing refers to how well the leader solicits sufficient opinions and viewpoints prior to making important decisions. The reasoning behind giving the leaders both surveys is to understand how the executive thinks they lead and how others view them as a leader. With the results from this test we will understand how authentic the leadership of the executive is and where it can be improved.

MA² will then take the results of all of the executives’ surveys and match them up to employees’ surveys. We will use these comparisons to evaluate and create a goal chart for each executive that MA² will be training so every executive will have the same leadership style. The Multifactor Leadership Questionnaire results will give a score for how the employee views the leader, as well as how the executive see themselves. The scores will report as the following:

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Multifactor Leadership Questionnaire:

Actual= Employees perception; Ought= self-assessment

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Authentic Leadership Questionnaire:

Evaluating MAMA Method's Effectiveness

As previously stated, turnover causes an immense increase in cost for a company. In this case, turnover occurs because of the many competing leadership styles within the company. MA² will implement tools to unify the company and reduce turnover rates, therefore saving Eureka money in hiring and training processes. To determine if the company has become unified with its leadership styles, employee happiness and commitment levels will be measured along with retention and turnover rates. Having steady retention and decreased turnover rates will level out the recruitment costs, therefore benefitting the company's overall financial and organizational stability. If unification is successful, money will not be wasted on unnecessary recruitment and training costs, allowing the company to have greater profits.

In order to determine if and to what degree the MAMA method was successful for the company, MA² will implement a series of surveys before and after implementation to compare employee commitment and happiness. One initial survey as mentioned above in the methodology will

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be given before the start of the MAMA method. Then, 4 months after MAMA's full implementation, the survey will be given again. This assessment process will be repeated every quarter, meaning every 4 months within the company, in order to assess progress and to determine if MA² needs to make further adjustments. Overall, the assessment process will catch any future changes in the unified leadership style, thus preventing the company from falling back into a long term turnover crisis. MA² will give the employees the survey that measures overall happiness and commitment within their own branch. MA² will aim to obtain information on how satisfied and committed employees are to the company before and after the MAMA method is implemented to gain insight on how effective the MAMA method is.

Mission, Goals, Objectives

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Miss

ion Establish

existing employee commitment and happiness levels

Goal Discover how

happy employees are, and how likely they are to stay in their current position.

Obj

ectiv

e ● Send out survey● Gather data and analyze happiness/commitment levels● Learn about company through employees and upper management● Move on to implementing MAMA method based on levels

Tim

e Ta

ble ● First and

Second Month

Miss

ion Implement first

level of MAMA: Multifactor Leadership Questionnaire

Goa

l

Gain existing leadership style perspective from employees O

bjec

tive ● Give Multifactor

Leadership Questionnaire to employees● Determine what leadership style is most successful and prominent from employees’ perspective

Tim

e Ta

ble ● First and

Second Month

Miss

ion Implement second

level of MAMA: Authentic Leadership Questionnaire

Goa

l

Discover where the leader stands on self-awareness, transparency, ethical/moral and balancing process

Obj

ectiv

e ● Give Authentic Leadership Questionnaire to executives● Find where leader stands on self-awareness, transparency, ethical/moral, and balancing process

Tim

e Ta

ble ● Third

Month

Budget Summary

Line item description In-kind contributions External costsPersonnel $698,375.97

Travel $85,332.22Equipment $275,375.96 $854,889.55

Materials and supplies $434,576.04Consulting (MA²) $8,167,731.00

Project totals $973,751.93 $9,542,528.81

The total cost for a year following the start of the year is $9,542,528.81 To put this into a different perspective, the monthly cost is $795,210.73. MA² is planning on spending about $1,908.51 per employee to help reduce the turnover. Eureka is average cost to hire and train a new employee is around 40 thousand dollars a year, per employee. With the turnover percent at 35, Eureka is spending 70 million dollars per year to hire new employees. With this proposal, we want to reduce the turnover to just 15% in the first year, or reduce hiring spending by 40 million dollars. This will give Eureka a 101% rate of return by hiring MA². The budget is made on a yearly cost to ensure funds are available for the duration of the intervention project.

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Miss

ion Analysis Data and

implement third level of MAMA

Goa

l

Analyze data from surveys and create a goal chart for executives.

Obj

ectiv

e ● Create detailed chart of goals for the executive. Create monthly meetings for executives to attend and what to work on

Tim

e Ta

ble ● Fourth

through ninth month

Miss

ion Evaluate MAMA’s

effects Goa

l

Re-evaluate how happy/committed employees after implementation of MAMA

Obj

ectiv

e Give employee satisfaction survey again to compare to prior survey● Implement follow-up meetings

Tim

e Ta

ble ● Tenth

through eleventh month

Timeline Summary

Dates Project launch Weekly Bi-weekly MonthlyObjective 1. Launch survey

to determine existing leadership styles.2. Implement MAMA method with existing style.3. Follow up with employee satisfaction survey

1. Individual meetings between management and departments.

1. Manager meetings between branches

1. Online survey and focus groups conducted by HR.

This project will be executed throughout the proposed timeline of one year. The MAMA method will take place immediately after the main leadership style has been determined, and will conclude one year from that starting period. Satisfaction surveys given every 4 months will determine if the MAMA method needs to be repeated at any time after initial implementation. There will also be weekly, bi-weekly, and monthly meeting interjections to ensure the MAMA method is smoothly integrated and understood during the executive training process. This will help the company become unified and open communication between the branches of the company. In order to ensure that the MAMA method had an effect, the surveys will be distributed a second time to follow up on employee happiness and commitment.

Conclusions

While there are many factors to consider when assessing financial loss in a given organization, turnover is one that can sometimes be a simple process that can mature over time. If an organization hires knowledgeable professionals that can implement a successful system, turnover can be significantly improved. One effective method of decreasing turnover is bettering leadership within the company. Unsuccessful leadership can cause a tremendous amount of turnover; therefore, leadership styles are crucial. MA² Consulting understands the importance of unity within a company, and has devised a plan to minimize financial losses due to low levels of employee satisfaction and commitment due to different leadership styles.

From the research, we have found support of a plan that includes a way to unearth a core leadership style, and a means of merging the distinct branches in the company. We have assembled this technique into a method that can not only locate that one leadership style already present that works, but also work with the company and employees to implement the one style so there is finally unity throughout the company. This in turn would save the company money that has been wasted on turnover effects, such as rehiring and training. Instead of wasting these funds year to year, MA² has made it possible to use these funds to implement a system that can stop turnover at its core, and use the evaluation tools of MAMA method to continue to prevent turnover.

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References

Franco, M., & Matos, P. G. (2015). Leadership styles in SMEs: A mixed-method approach. International Entrepreneurship And Management Journal, 11(2), 425-451. doi:10.1007/s11365-013-0283-2

Grant, A. M., Green, L. S., & Rynsaardt, J. (2010). Developmental coaching for high school teachers: Executive coaching goes to school. Consulting Psychology Journal: Practice And Research, 62(3), 151-168. doi:10.1037/a0019212

Hrop, S. (2004). Review of Coaching Across Cultures: New Tools for Leveraging National, Corporate, and Professional Differences.Personnel Psychology, 57(1), 220-223

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Kunkel, E. S., Lehrmann, J. A., Vergare, M. J., & Roberts, L. W. (2013). Leadership considerations for executive vice chairs, new chairs, and chairs in the 21st century. Academic Psychiatry, 37(4), 254-260. doi:10.1176/appi.ap.12010019

MLQ ALQ (Multifactor Leadership Questionnaire Authentic Leadership Questionnaire) - Mind Garden. (n.d.). Retrieved May 1, 2016, from http://www.mindgarden.com/185-authentic-leadership-questionnaire-multifactor-leadership-questionnaire

Subramanian, R. (2004). Review of Coaching Across Cultures: New Tools for Leveraging National, Corporate & Professional Differences. Academy Of Management Learning & Education, 3(4), 462-464. doi:10.5465/AMLE.2004.15112561

Team Multifactor Leadership Questionnaire - Mind Garden. (n.d.). Retrieved May 1, 2016, from http://www.mindgarden.com/149-team-multifactor-leadership-questionnaire

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