Leadership Changes at Alcoa

Introduction 

Alcoa is one of the largest firms, with forty-seven locations, was ranked in 2005 to be the 79^th largest firm in the Fortune 500. The firm is a magnesium firm and employed approximately 129,000 people and in 2004 had an annual sale of $23.96 billion. The proper management and the strategic decision made by the top leadership plays a key role in ensuring the continued success of the firm (Evans & Lindsay, 2013). The plant suffered a crisis that almost brought down the company, a scenario that led to making significant changes in the leadership that saw the company drastically improve in the service delivery, safety, efficiency in production and increased revenues from its operations. This essay seeks to summarize the crises that took place during the time, the leadership changes made and the significant changes that the whole process brought about.

The leadership of the firm had been in the front line driving the quality and excellence in performance through the organization. The management cared for the welfare of their employees thus treats them well and avoids unnecessary tensions brought by such things firing the employees. However, in the late 1980s, the firms suffered two severe problems, the serious injuries that averaged 12.8 per years and operations that made losses for five years. It was suggested that a hundred employees be laid off as a measure of cutting operational cost. The unit selling of the magnesium had significantly dropped, and a unit selling for 1.45$ in the open market cost the Alcoa plant $1.48 (Evans & Lindsay, 2013). With only seventy-two of the raw material being processed in the firm, Alcoa plant lacked the quality control to handle the market forces.

The problems that the plant persisted for a long time and the cause was linked to lack of accountability, poor quality control and lack of proper leadership strategies. There was, therefore a need for change in the management of the plant, a decision that saw Don Simonic; a former college football coach takes up the plant manager position. The plant manager a good managerial team behind him including the personnel manager Tom McCombs and Robert and Patricia Crosby outside consultants (Evans & Lindsay, 2013). The new leadership in the plant brought about significant changes in the system, culture and socio-technological models that led to redesigning of the plant organization.

The plant adopted advanced technology in the production of magnesium, research and innovation were highly encouraged and invested in, and the restricting of the team to meet the goals and targets of the firm. The organizational structures supported teamwork and self-directed teams that need no supervision, a well-designated team of trained employees and shift coordination between the shift coordinators, supervisors, and team coordinators. Employees were highly empowered, and the top management involved them in the decision making, goal setting and major changes in the plant. 

Simonic decided to lay off workers from the plant, starting with those that were on contract. This decision was justified as the best option to reduce the downtime required to melt the furnace around the magnesium. The hours were thus cut from the usual one and a half hour turned around to one hour and ensured that the process is adopted in all the nine furnaces in the plant. The move helped the company to save up close to $ 10 million. Strategic meetings were held with all the employees with the aim of explaining how decisions could be influenced, who would be making these decisions and communicate the importance of making decisions. The decisions that team members could make which were different from those made by the supervisors and the superiors in the organization was well analyzed. Unlike the team approach was the only way to perform projects in the firm, this critical change was effectively made as it everyone aware of their responsibility. Thus individual focused on increasing their efficiency and improved accountability to succeed. In addition, the employees applied their creativity to meet the plant goals. The organization made enormous positive changes as they started achieving most of their goal and targets. The unit cost reduced from $1.48 to $ 1.18 with a five percent increase in the recovery of magnesium. In addition, the serious injuries fell from 12.8 to 6.3 per year.

The case study is enough proof that leaders in the organization play an important role in making decisions that are value-driven, transparent, and responsible for fostering a passion for making a positive difference in the organization (Pater, 2015). Leaders in the organization focus on the performance improvement, making strategic decisions, coming up with processes of performance management, improving firm`s operations, and committed to excellence (Payne, 2005). A good leadership team can positively influence people and bring meaningful culture and systems that impact extraordinary results.

The new leaders of the Alcoa plant demonstrated excellence leadership. The adoption of  consultative decision making, and the `cadre` approach played core roles. Cadre, a group of people that were chosen to observe and evaluate the new changes and effectiveness in the organization and  participating in the process  of  leadership development, bringing change in the firm, conflict solving, and controlling the quality  and processes of work in the firm. According to Cox (2001), a leader with a strong dynamic personality and a strong leadership style help them to successfully manage a group of people, build teamwork and provide a clear direction of the company. Unfortunately In 1992, when  Simon and  McCombs left, the corporate management continued to reduce the workforce, eliminated department heads, employees now reported to shift managers thus confusing the leadership and authority which affected the process of decision making. In the end, Andy plants its competitive edge in the magnesium production and 2001, the plant closed down, and more than 350 employees lost their jobs.

References

Cox Jr, T. (2001). Creating the multicultural organization: A strategy for capturing the power of diversity. Jossey-Bass.

Evans, J. R., & Lindsay, W. M. (2013). Managing for quality and performance excellence. Cengage Learning

Pater, R. (2015). Recasting Leadership to Change Culture. Professional Safety, 60(4), 22-24.

Payne, V., & American Management Association. (2005). First-level leadership: Supervising in the new organization. New York, N.Y.: American Management Association.