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Scenаriо 2: Mixed Signаls аt Summit Medical Supply Summit Medical Supply is a regiоnal distributоr of medical equipment with approximately 300 employees. For several years, the company performed well and developed a reputation for reliable customer service. Departments frequently worked together to solve customer problems, and employees generally understood the company's priorities. Eighteen months ago, Summit hired a new CEO, Robert Chen. The board recruited Robert because of his reputation for improving efficiency and delivering results. When he arrived, he told employees that Summit needed to become "faster, more accountable, and more competitive." Robert quickly began making changes. He set ambitious performance targets for each department and began holding weekly meetings with department heads to review results. Managers whose departments miss targets are expected to explain the reasons directly to Robert. He frequently reminds managers that "results are what matter." At the same time, Robert has become closely involved in many operational decisions. Department heads who previously had considerable authority are now expected to obtain his approval for major expenditures, staffing decisions, and changes to important customer processes. Robert sometimes reverses managers' decisions after they have already communicated them to their employees. Several managers have responded by becoming more cautious. Rather than making decisions independently, they increasingly wait for direction from senior leadership. Employees have noticed. One supervisor explained, "I've stopped telling my team what we're going to do until I know Robert has signed off. Things change too often." Communication from senior leadership has also become less predictable. Robert frequently discusses new initiatives with individual executives before the plans have been communicated throughout the organization. Employees sometimes learn about changes through coworkers in other departments rather than from their own managers. For example, the sales department recently told several large customers that Summit would begin offering expedited delivery. Operations employees did not learn about the commitment until customers began requesting the service. Operations managers responded that they did not have sufficient staff to meet the new delivery expectations. Sales managers said they believed expedited delivery was one of Robert's priorities. When employees asked for clarification, different managers provided different answers. Employees have also become increasingly reluctant to raise concerns. During one leadership meeting, an operations manager warned Robert that a proposed cost-cutting measure could create delivery problems. Robert responded, "I need people who find solutions, not reasons we can't do things." The proposal went forward. Several months later, delivery delays increased. Managers now tend to discuss concerns privately with one another rather than during meetings with Robert. One department head explained, "Before I bring something to Robert, I want to know that I have a solution. You don't want to be seen as the person who is always bringing bad news." Employees have also become uncertain about Summit's overall direction. Robert continues to emphasize cost reduction and efficiency, but he has also told employees that Summit must provide "the best customer experience in the industry." Managers are unsure what to do when these goals conflict. Operations recently rejected a costly special request from an important customer to control expenses. Sales complained that the decision undermined the company's customer-service strategy. Over the past year, Summit's organizational results have deteriorated. Customer complaints have increased by 30 percent, order-processing errors have risen, and the percentage of deliveries arriving on time has fallen from 94 percent to 82 percent. Several important customers have moved some of their business to competitors. Revenue growth has stalled despite continued growth in the regional healthcare market. At a recent executive meeting, Robert expressed frustration with the results. "We have good people and clear performance targets," he said. "I don't understand why this organization isn't executing."