cirque du soleil_final case analysis

Running head: CIRQUE FINAL CAPSTONE

Cirque du Soleil

Final Capstone Case Analysis

Joshua R. Norris

California Baptist University

CIRQUE FINAL CAPSTONE

Creating the Company

According to the Harvard Business Review (HBR) “Cirque du Soleil was formed in 1984

by a troupe of street performers known as ‘Le Club des Talons Hauts’ (The High-Heels Club)”

(Delong & Vijayaraghavan, 2002, page 1, para 2). The main purpose of the newly found

company was to reinvent the circus by eliminating animals and combining street performers,

clowns, acrobats, and gymnasts in order to provide both amazing feats and to create theatrical

and dance infused dramas. “The music of Cirque was in a Latin-sounding language designed to

transcend cultural boundaries. Even when Cirque started out with its first small-scale shows in

Canada, it was mindful of globalization, both in staffing and content; eventually, it achieved

globalization in audience too, leaving Canada for the first time in 1987.” (Delong &

Vijayaraghavan, 2002, page 2, para 2). It was the circus for adults; what the circus wished it

could grow up to be like.

The company was originally founded by Guy Laliberté and Daniel Gautier. Guy

Laliberté was a musician and fire breather when they first began performing, but is now

president and chief executive officer of Cirque. Daniel Gautier was tasked with managing most

of the business side of things, especially external partnerships and financing. “In 1998, when

Laliberté bought out Gautier’s half, Canadian Business Magazine valued the company at $800

million.” (Delong & Vijayaraghavan, 2002, page 1, para 3). Since taking full ownership of

Cirque du Soleil, Guy Laliberté wanted to grow the company quickly, but not at the expense of

losing control of the creativity and originality to a board of stockholders. A number of things

kept Cirque du Soleil in a world of their own, but the key was that the company created its own

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market and eliminated its need for competing because there was no one else like them at the

time.

Cirque du Soleil has a lot of praise when it comes to its product and market share, but

there are some critics who are concerned about the company’s ability to maintain growth while

staying true to its original likeness and feel. Employees are the main proponents to this matter

because they are not always confident that the owner of the company has their personal best

interests at heart. One employee, the conductor Oberacker, said that they perform two more

shows a week than ordinary Broadway shows and that they are “unemployed for a fourth of the

year.” (Delong & Vijayaraghavan, 2002, page 3, para 2). To some, that could be a good thing,

but it seemed to be discerning to Oberacker, who also mentioned that his starting pay was

significantly lower than that on Broadway. This begs the question though, why did he join if that

was an issue?

On another note, Gonzalo Munoz, a clown by trade, reported that he originally only came

on with Cirque in order to work with one of their clowns, but now loves working with the

company. According to Munoz, he is receiving three times more income than he used to in other

performance jobs and that Cirque takes wonderful care of the performers. It was noted that

Cirque provides onsite language training in six different languages in order to help bridge the

communication gab of its performers who come from all walks and cultures of life. Munoz also

mentioned how Cirque brought in outside talent to train its performers in addition to auditioning

for new, preexisting talent. Things like this may be an extra cost to the stakeholders (the

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company), but they are the kind of things that make good employees (performers) stay around

long enough to get that short term investment back in the long run.

Statement of Core Problem

The core problem for Cirque du Soleil is whether or not their comparative advantage is a

sustainable one and whether they can keep up with their own growth before it all collapses.

When Cirque du Soleil was founded in 1984 it had an edge that created their own market. At

that time they had no real competition because they were in a league of their own. What put

them there was the enormous length on their talent roster and that talent is not cheap. The other

issue is that they are a large business now and they are still growing. There was mention as to

whether or not they were growing too fast; so fast that they may out grow their very soul.

Murielle Cantin was worried that Cirque was growing too fast for its own good, according to the

study. “There was the chance of wearing out its welcome in the North American market, of

running low on original talent, and of doing something less than Cirque quality in its creation of

entertainment complexes.” (Delong & Vijayaraghavan, 2002, page 11, closing para).

Cantin also wondered if Cirque had a strategy at all and it was noted that she felt that

Cirque should perhaps just focus on their performers instead. Earlier in the problems section of

the study it was mentioned that there were more and more business men popping up in Cirque’s

upper ranks and that Pouliot felt that they needed to “find the right mix” and that they “must not

kill the soul of Cirque, yet we are a big business, we make a lot of money, so we have to make

good decisions and we have to protect the assets.” (Delong & Vijayaraghavan, 2002, page 10,

para 4). Cirque is a company that was built on diversification and flashy showmanship. They

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need to continue this constant state of flux in order to remain in their own blue ocean arena and

they are seeing like-competitors now that they have paved the way in this new market of theirs.

The company needs a plan that will allow them to continue to change with the times and to keep

its competitors off of their coat tail.

Both Pouliot and Cantin had good points for the executives to consider. Pouliot was

concerned about staying true to the soul of the company and Cantin wondered if they should

continue to focus more on the performers. The whole point of this course is to understand how to

find the right employees for the job that they are needed for and how to keep those employees

happy and on task. With Cirque exists a lot of positions that need to be filled and some of the

tasks for those employees have never been done before; some have yet to be conceived by the

producer too, which means that the employees don’t always know what they are in for. This

giant needs a strategy for its human capital expansion and retention and whether they should

continue to pursue markets other than the North. In any case, Cirque needs to solve one problem

before branching out to the next.

Secondary Problem

The secondary problem for Cirque Du Soleil is their human resource practices;

specifically the retention and growth of existing talent. On the bottom of page three of the case

study (2002), Murielle Cantin admitted that it was “a constant challenge to find the right artists.

‘We are trying to find in a desert the pearl that will fit the perfect ring,’ she said.” (Delong &

Vijayaraghavan, 2002). Though searching for and finding new talent is important, keeping that

talent becomes even more so. The less that one needs to replenish when it comes to an

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employer’s talent pool, the less that company must do to fill its slots. Finding talent to add to the

company and finding talent within the existing human resources of the company are two separate

animals all together. It goes without saying that it is easier for employers to rate and compare

talent within one’s organization than it would be to find and rate outside talent.

Solutions

Maintaining a company’s competitive advantage relies on many factors; one of which are

the resources available to the company. Human capital is the biggest asset at Cirque’s disposal

and they need to recognize that. That also means that they need to evaluate how much more it

costs to find new talented employees than it would to just train the ones that they already have.

In chapter seven of Managing Human Resources (2013), the authors suggest that “an

organization’s revenues and overall profitability are positively correlated to the amount of

training it gives its employees.” (Snell, & Bohlander, 2013, page 292). On page 293, Snell and

Bholander (2013) also imply that the goal of training in an organization should be to contribute

to the overall goals of that organization, which is what Cirque should be focusing on at this stage

of their business goals. Using person analysis or the process of determining “the specific

individuals who need training” (Snell & Bholander, 2013, page 299), Cantin and Cirque’s upper

management team can establish what the strengths and weaknesses are in their existing talent

pool, allowing them to focus more on fine-tuning those talents. By doing so, they can then create

new shows around what they are already equipped to do and adversely, they can train those

talented individuals in accordance with ideas that they may envision for future shows that Cirque

would like to try.

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Once Cirque has created the platform for internal training and fine-tuning they need to

incorporate the understanding of trainee readiness and trainee motivations. But they need to

remember that if their employees do not see the correlation of the training to the goals they may

be less receptive. If employees see better retention practices they might see more benefit in

accepting and exceling in the training that they are to endure. To complement the idea of

employee retention through training it is also important to continue to consider payment and

compensation practices that are realistic in enticing the employees to stay. Otherwise, they will

likely take the training that they have received internally and leave the company for better

benefits elsewhere. Cirque must consider the cost benefit of compensating their employees well

in exchange for the company’s freedom from having to continuously find and train new

employees from the ground up. This means finding strong forms of direct and indirect

compensation that attracts the kind of talented people that they are attempting to obtain and of

course; keep. In this case the link between compensation and Cirque’s organizational objectives

is to lessen the burden of having to find new talent by keeping that which they already employ.

The last thing that I would recommend to Cirque is that they consider incorporating their

employee retention strategy with their long-term corporate goals and the continuity of their

business. According to Jean Martin and Conrad Schmidt (2011), one of the best ways to keep

good employees is to include them in corporate plans and to tell them how they fit into the

scheme of things within those plans. In a company such as Cirque Du Soleil, they have many

performers, planners, and directors for the various shows that they hold across the globe. A good

long-term plan for Cirque would be to look for the stars of their productions and use them as

advocates for their younger talent. This will establish those stars as being more crucial to the

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operations of the company and less on the performances that they give during a given show or

production. Though good wages and benefits go a long way, some people would rather feel

important to something bigger than themselves and artistic performers are no exception to that.

Constraints and Limiting Factors

With a diversified environment such as Cirque du Soleil there are a lot of variables that

need to be considered and traversed in order to maintain balance; certainly so if they intend to

grow at a stable rate. The entire composition of the company itself is fluid and ever changing,

which means that it is not always so obvious what kind of talent the human resource recruiter is

going to be looking for. It was noted by Snell & Bohlander (2013) that gauging the knowledge

and skill base of international employees was a constraint of globalization on human resource

management in itself and Cirque has a number of culturally diverse employees. Criteria for the

company’s talent needs change as the acts diversify as do the acts change in conjunction to the

newly integrated talent(s), too. In truth, the only constants within the company are change and

volatility; both hard waves to brunt. When such an environment exists, a company like Cirque is

more susceptible to reactive changes versus proactive change that is strategized and implemented

intentionally.

One solution to Cirque’s problem of finding new talent was to keep the talent that they

have. According to Cantin, Cirque’s casting director, it is difficult enough to find talent, let

alone to give them what is needed in order to assimilate into the organization. In the second

paragraph of page four, Delong and Vijayaraghavan (2002) state “Traditionally trained artists

learned, often for the first time, to perform in an intensely multicultural background. Cantin said,

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‘The artist has to trust someone to catch them in a dance routine. This can’t happen if the artist is

prejudiced against Arab people or Japanese people.’ Cantin tried to evaluate what the artist’s

needs were in coming to Cirque and how much support that would require. Some artists were

integrating an established solo act and were autonomous, while others were joining for a career

and needed much more artistic guidance.” (Delong and Vijayaraghavan, 2002). This makes long

term talent retention difficult by anyone’s standards. Cirque already has a lot of great non-

monetary investments in place for the alleviation of their highly cultural environment; but, is it

enough? At the end of the day, one cannot make someone who is so out of touch with their

working environment and culture, so out of their element, to feel as though they belong. Biases,

racism, and prejudice are not easily cured.

As mentioned from page four of the article, the performances put on by Cirque are reliant

on talent being brought in and incorporated for that new production that Cirque’s customers are

looking for. The idea of minimizing the incoming talent and training existing talent could also

mean that they may miss out on something new. Something that competitors may find in their

oversight and thus, use against Cirque as a competitive edge. In order to overshadow the lack of

new incoming talent, Cirque would need to have such outlandish training methods in place in

order to foster their own internal talent to do things that they had never before done on their own

or with their original training. This in itself could pose a more expensive burden, making the

recruitment of new talent almost more affordable; with the right research of course.

The last recommendation proposed was that Cirque should consider incorporating their

employee retention strategy with their long-term corporate goals as well as the continuity of

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their business. However, the majority of their lower-level, up and coming stars are artists and

performers; individuals who hunger for the performing arts and all of the fun and excitement

that it has to offer. Unfortunately, such employees may likely have little interest in transitioning

from being the stars of the show to becoming managers and upper level corporate employees.

That would make the method of long-term employee retention less effective for the majority of

their employees. As far as having those high performing employees begin to take on a role of

fostering new talent, there may be a bit of jealousy and animosity toward the new coming talent

and up and coming talent that they would be hoped to nurture.

Implementation of Best Solution

If Cirque is going to invest in their employees for the purpose of keeping their talent, the

first step needs to be finding out what makes their employees tick. What are their goals and what

are their talents? This all is needed in order to be able to figure out how to keep key players.

Conducting a person analysis (Snell & Bholander, 2013) on every individual from their available

talent pool will help to see whether or not they need to hire more people and if not, which

employees may benefit from special training. In the case of Cirque du Soleil, the needs of the

company are so extraordinary and off the wall, that it will be difficult to create some form of

company standard. Because of this, I would first have Cirque initiate a survey to their employees

that asks them what their core talents and experience is in, what they feel they wish to fine-tune

about those talents, and what interests them that is outside of their normal scope of expertise. By

doing so, Cirque not only receives lower level feedback on the existing talent pool, but rather it

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also gives them a smaller focus group of individuals who not only need training; they want it

too. This would be a good time to encourage input from lower-level employees as well.

Next, the company needs to figure where they are with their current production

obligations and what slots need to be filled by their employees. Cirque should keep in mind that

just because an employee is known to have specific talents does not mean that there are not

unknown talents that individuals have not yet been able to express to the company. This means

that Cirque may have a current employee who could be lateralled into another needed position

while others who could fill their old slot are already on the bench, ready to jump in too. With an

intact talent pool roster, the company has effectively reduced and possibly eliminated the need to

recruit new players in such a scenario. In this step, the company could also implement a portion

of training for those who projected an interest in new things, but that said they did not yet have

training or experience. Such offers would be a value added, non-monetary incentive for

employees to remain in the company and because the training was already offered to current role

players, it may cost nothing extra to the company to have others sit in.

After filling all the pieces in their current production’s needs, the upper level producers

and writers can begin to strategize new shows based on the newly reported talents and interests

of their current employees. When the crew has an outstanding, one-of-a-kind production

concept, they can readily refer to the talent pool information that they now have available and

see whether or not they have people who may already be equipped to pull off what they

envision, whether anyone has the desire to train in such needed categories, or if they will need to

go ahead and recruit this new piece of their future puzzle.

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With this implementation the company would have effectively tightened up their ranks

with employees who see other options within the company and who feel as though the company

cares about them and their own personal aspirations. When enacting their goals by promoting

and utilizing their existing employees the company can better see the rising stars who may

become important in the managing and training of current and future talent as well. Both of

those ideas are mentioned in the main text as non-monetary perks and benefits within a company

that build wealth and stamina within employees; making them happier and less likely to jump

ship. Now that such a foundation is present within the company, Cirque will be able to use this

as a recruiting tool by telling their prospects that they will pay for their training and that they

encourage personal growth; both within the company and in their personal careers and goals.

Finally, this may help Cirque to focus more on the talent in front of them and less on keeping

their sights ahead for the next best thing; they can better create the next best thing(s) within

themselves and become united as a well-knit group. Besides, the less outside elements that are

introduced to the company culture, the less likely they are to lose the comradery that they

already enjoy.

Justification for Solution

Implementation of the proposed solution is important because it bridges the gap between

three major long-term issues surrounding the overall success of Cirque du Soleil. Those three

areas, in no official order of importance, are: fostering internal talent; employee and talent

retention; and succession planning. According to the authors of Growing Talent as if Your

Business Depended on It “Companies whose boards and senior executives fail to prioritize

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succession planning and leadership development end up either experiencing a steady attrition in

talent or retaining people with outdated skills.” (Cohn, Khurana & Reeves, 2011, page 106).

This, the authors said, would leave such companies vulnerable to their competitors in such an

event that they need to shift direction quickly in order to stay ahead of the game (Cohn, Khurana

& Reeves, 2011). In the same article it was also noted that integrating management succession

training and including employees in the goals of the company were great ways to keep

employees motivated, which gives them incentive to stay and grow with the company. Cirque du

Soleil is no different; they are a large company and they need to have methods of retaining their

talent while also being prepared to have players step into management roles when the time

comes about.

Employees are individuals who fulfil a task within an organization in order to earn a

living as well as to find a career path that is fulfilling to them. If one is unhappy with their job,

they are not going to stick around when better opportunities arise. Offering employee incentives

such as internal training and internal promotions are a great way to keep talented people happy

with one’s organization. In the article How to Keep your Top Talent, Jean Martin and Conrad

Schmidt (2011) visited the concept of linking employee goals to those of the company early on

in their careers in hopes that the organization could find and foster their rising stars so that they

will not jump ship down the way. On page 133, they even suggest “letting them help solve the

company’s biggest problems.” (Martin & Schmidt, 2011) by including the employees in the

organizational goals from inception to implementation. Here is where the recommendation of

individual person analysis from Snell & Bholander (2013, page 299) comes into play, as well as

creating the internal training programs for using up potential within the talent pool.

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Employees may be standoffish at first during the individual analyses, but once they begin

to see their place within the future of Cirque, professional studies supporting these actions

suggest that they will become more self-fulfilled in the work that they do. They will even begin

to sense that the company holds their talent in high regard and the company will benefit by

having a strong, talented work force that will become a more coherent team. Rising stars will

eventually be conditioned for their future roles in management and the competitive advantage

that Cirque has enjoyed over the years due to their broad talent base will flourish. After the final

proposals have been implemented, Cirque du Soleil will have successfully reinforced their

organizational foundation through capitalization and advancement of existing talent, increased

retention of talented employees, and by having succession plans in place so that the machine

keeps running strong in the future.

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References

Cohn, J., Khurana, R., & Reeves, L. (2011). Growing Talent as if Your Business Depended on

It. In Harvard business review on finding & keeping the best people (1st ed., Vol. 1,

pp. 105-127). Boston, Mass.: Harvard Business Review Press.

Delong, T., & Vijayaraghavan, V. (2002). Cirque du Soleil. Harvard Business Review,9-403-

006.

Martin, J., & Schmidt, C. (2011). How to Keep Your Top Talent. In Harvard business review on

finding & keeping the best people (1st ed., Vol. 1, pp. 129-147). Boston, Mass.: Harvard

Business Review Press.

Snell, S., & Bohlander, G. (2013). Chapters 7-9. In Managing Human Resources (16th ed.).

Mason, Ohio: South-Western.

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