Center For Leadership And Change, Inc. Makati City center for leadership and change, inc.
Center For Leadership And Change, Inc. Makati City center for leadership and change, inc.

A. COMPANY BACKGROUND

The Center for Leadership and Change, Inc. (CLCI) is the authorized distributor for FranklinCovey products and services in the Philippines. Franklin Covey Co. (FCC), the global leader in effectiveness training, productivity tools, and assessment services for organizations, teams, and individuals, was brought about by the synergistic merger between Covey Leadership Center and Franklin Quest Company in 1997.

CLCI started as Covey Leadership Center, Philippines at the Ateneo De Manila Central Guidance Bureau (CGB). In June 1993 it was granted licensee status of Covey Leadership Center together with Australia, England, Japan, Singapore, and other licensees. September 1996, Covey Leadership Center, Philippines is incorporated and finally spun-off from CGB. When Franklin Quest and Covey Leadership Center merge to become FranklinCovey Co. in 1997, Covey Leadership Center, Philippines changed its name to Center for Leadership and Change, Inc. or CLCI.

Through the years, CLCI has continued to plant the seeds of positive change by providing unique, integrated solutions to its clients, many of whom are leaders in the manufacturing, food, finance, pharmaceutical, BPO, and service sectors, as well as in government and educational institutions. More than 75 percent of CLCI’s clients belong to the top 1000 institutional and individual leaders in the business, private, government, and education sectors all over the country.

CLCI continues to help individuals and organizations achieve better results today in ways that sustain even better results tomorrow. Included in the company’s wide array of products and services are the 7 Habits of Highly Effective People, Leadership: Great Leaders, Great Results and Great Teams, 4 Disciplines of Execution and Leading at the Speed of Trust. Most of CLCI’s programs concentrate on four areas of expertise: Individual Effectiveness, Great Leaders, Institutionalized Focus and Execution and Education. Two things set us apart from everyone else: the world class, principle based solutions and the transformational impact we have on people and organizations.

Since the company’s inception, it has successfully brought in speakers and facilitators from FranklinCovey like Dr. Stephen R. Covey himself, Dr. Blaine Lee and just recently Stephen M.R. Covey, among others, to conduct programs, fora, and workshops for clients or the general public. As CLCI continuously nurture the growth of organizations, it is also expanding its own growth which can be seen in its revenue of 70 million with a profitability of 2.1 million in 2012. The company employs about 49 employees and has its own pool of experienced, accredited facilitators who conduct the different workshops for the clients. Today, CLCI still continues to grow and embark on the new challenges that the business world faces. B. COMPANY’S VISION AND MISSION
MISSION STATEMENT
We, the Philippine licensee of the FranklinCovey Co., ignite leadership potential and enable greatness in individuals, organizations, and communities through integrated and principle-based processes, solutions, and tools.

VISION STATEMENT
We are a team of engaged and competent people who live the principles we teach. We value innovation and continuous learning. We invest in our development, and nurture work-life balance.
Ours is a great, fun place to work – where mutual respect, trust, and concern prevail. We operate effectively and efficiently through technology-enabled, seamless systems and processes. Our organization is financially healthy; thus, we share more because we have more.
We are the workplace of choice in our industry.
We are continually relevant and responsive to the needs of our customers, and are known for service excellence. We help customers achieve their highest priorities. Thus, we are top of mind, premiere business partner in leadership development and organizational greatness.
We contribute to nation building.
We make today better than yesterday.

C. PROBLEM

CLCI, just like all the international licensees of FranklinCovey worldwide, has been mandated in 2008 to double the business in 4 years and triple in 8 years. The company has to gear up for increase in revenues and profitability in next 5 years. There is a need to optimize and beef up the current structure of the company vis-à-vis the future strategic direction of CLCI.

In 2012, the company failed to reach its initial goal of doubling 2008 sales level necessitating the need for CLCI to target of PhP 100 Million to compensate for the shortfall. FranklinCovey’s focus is on business growth and have cascaded several best practices on strategy, structure, and people that it hopes each country licensee adapts to at the soonest possible time. CLCI is yet to adapt to this mandate and should seriously consider addressing the challenges at the soonest possible time. CLCI’s failure to shape up can result to painful implications like losing licenses on FranklinCovey signature programs and conversion into a direct office thereby losing the CLCI name.

CLCI having a leadership training program as its main product relies a lot on the ability and quality of service it provides its customers. Given the mandate stated above, the most critical area that seems to be logical to address as soon as possible is the organization optimization and growth (by increasing productivity of the workforce, particularly the sales and marketing, establishing an internal trainers pool and creation of a business development team.
CLCI has to live to its VMG which is the “we are top of mind, premiere business partner in leadership development and organizational greatness” and make it a point that premiere business partner in leadership development and market leader in leadership training.

Development of facilitators in the pool has also taken a back seat for the past years. But given the growth mandate, it has finally delegated a manager (in 2012) who is supposed to be in charge of facilitator engagement and development --- ensuring the pool has competent and ready facilitators to assist in client interventions. Although this was the plan, currently the facilitator manager, who is incidentally the master facilitator, is also caught up in the whirlwind of facilitating for clients and has not focused on managing the pool.

To further discuss the negative implication of the neglected facilitator pooling, it’s a natural consequence that the sales revenue will be affected. The sales people are starting to experience postponement of trainings due to lack of facilitator availability --- due to schedule conflicts or inability of available facilitator to conduct the requested program.

D. ASSESSMENT I. EXTERNAL ANALYSIS

STEP

Social – The company’s dedication to provide continuing quality training programs and development of employee competence is a plus factor in contributing to the social and moral upliftment of the employees in general.
Increasing working population of county is helping business opportunity for the company.

Technological – Widely accepted principles on manpower training and development are accessed by the company through exchange of time tested and researches based data and are continuously adopted with high degree of success.
Social networking service will help the company`s marketing strategy also It can help them developing new training program. (Ex E learning)

Economical – The improving economy works in favor of all types of businesses but more impact on programs that will enhance their business. Such programs are not basics but are such that will set the difference to be a market leader.
The lucky 7 Sunrise Industries that are identified is considered a lucky number and for the next two years, there are 7 sectors that are bound to experience strong growth.At the briefing of local think tank Institute for Development and Econometric Analysis Inc. on Friday, November 23, 2012 by former Finance Undersecretary Romeo Bernardo and Management Association of the Philippines President Eduardo Francisco talked about the sectors to watch out for in the next two years are Business Process Outsourcing (BPO),Equity and bond markets, Construction ,Consumer-based manufacturing, Banking sector, Real estate and Retail.

Political – The company’s business is not politically sensitive and there are no governmental regulations that threaten business validity or restriction but come 2015 when the ASEAN Harmonization happens. This will be an opportunity to expand the current market or a threat as CLCI competes with other FC licensees both in local and regional markets.

Porter’s Five Forces

Rivalry among Competing Firms – Strong
Companies involved with consultancy are becoming more innovative in order to go ahead of their competition so that clients would make a decision in their favor. Hoping that they are chosen by the clients despite the difference in price due to the uniqueness of the programs offered. Difficult show to customer the differences compare to other competitors and normally customer does not want to change service provider so often.

Potential Entry of New Competitors - Moderate
The barriers to entrants in the management consultancy industry is considered moderate since there are very minimal legal barriers to entry in the industry but since the industry is knowledge based and an expertise on the subject matter requires years of education and experience, new competitors are not increasing at a high pace. Clients still look for the credibility of the consultants offering the program. Some would even rely more if the consultants have a foreign affiliation and offers foreign subject matters. This can be associated with Filipinos’ colonial mentality where we perceive the reliability and competence of foreign products over local. The company is perceived to be a strong player in the market and has clients that wants consistency in the training program and is not easily swayed to change service provider.

Potential Development of Substitute Products – Moderate
The substitute to the management consultancy industry is moderate due to the increasing use of information technology or electronic data interchange. Information technology or the use of EDIs changes the face of different industries due to the growing diversity of different industries. The management consultancy firm as it sees new opportunities, tried to adapt by incorporating the EDI in its medium of services. This was easy for organizations with global affiliations as the technology development becomes easier. Trainings done through electronic data interchange offers advantages for the client like savings on travel, venues and food. A lot of information can be obtained using the internet including trainings but the traditional classroom and workshop type sessions is still preferred because of easier communication which aids feedback for participants and is still a cultural fit for Filipinos.

Bargaining Power of Suppliers – Strong
The bargaining power of suppliers is strong in the management consultancy industry. As mentioned, some of these firms are globally affiliated therefore they rely on materials supplied by their foreign mother organizations. The suppliers have a very high command with regards to the cost, success, development and improvements of products and services offered. Relatively, the consultancy firms also rely on foreign exchange rates which they don’t have much control with. Another major supplier considered in the industry is its individual consultants. As clients rely on knowledge-based products, they require individuals with higher education and expertise in different key areas.

Bargaining Power of Consumers – Strong The bargaining power of consumers is strong in the management consultancy industry. The clients looking for consultants specifically qualify them through their track record, reputation, expertise, price and relationships. Clients have a high regard for the expertise that are based on the consultants’ specialization and area of discipline. Reputation is based on the credibility and character of the consultants which are often developed over time. The client organizations won’t necessarily give a specific project without referral of performance or trust in the image portrayed by the company. Pricing is also critical as this can easily make or break a client’s decision in getting a consultant. II. INTERNAL:

STRATEGY FORMULATION A. STRENGTH, WEAKNESSES, OPPORTUNITIES, THREATS (SWOT) MATRIX | Strengths | Weaknesses | | 1. Strong capability, credibility and expertise of training consultants. 2. World class products that are based on principles. 3. Empowered and highly motivated loyal employees | 1. Weak capability of marketing team to supply marketing strategies, research and lead generation 2. CLCI is not identified as a leadership training company 3. Lack of alignment in roles between sales, support and marketing teams. 4. Dependence on need basis for client prospecting | Opportunities | SO Strategies | WO Strategies | 1. Presence of sunrise industries (eg. Business Process Outsourcing (BPO),Equity and bond markets, Construction ,Consumer-based manufacturing, Banking sector, Real estate and Retail) 2. Increasing demand for strengthening leadership teams in organizations. 3. ASEAN Harmonization in 2015 (market expansion) | 1. Leverage and utilize the credibility of the training consultants in this sunrise industries (S1, O1) 2. Identify companies with leadership challenges and promote FC products base on the leadership principles (S2, O2) 3. Capitalize on the strong training/facilitating capabilities of the consultants when their services are required by other regional offices (S1, O3) | 1. Creation of a business development and analytics team to data mine opportunities and establish market opportunities (W1, O1) | Threats | ST Strategies | WT Strategies | 1. ASEAN Harmonization in 2015(regional competition) 2. Competition of price | 1. Clear differentiation and competitive advantage of CLCI vs. regional players thru strong training/facilitating consultants (S1, T1) 2. Impress upon the potential customers the value proposition of the FC leadership training program (S2, T2) | 1. Focus on new markets by finding new opportunities in potential territories (W1, T1) |

E. DECISION

OBJECTIVES, STRATEGY FORMULATIONS AND ACTION PLANS
Financial Objectives
To create a consistent business that is capable to double the business in 4 years and triple in 8 years. Translated to numbers, this amounts to PhP 180 Million come 2016.

Strategic Objectives 1. Develop a strategic direction of market dominance in the Leadership Training and Organization change segment (top of mind in Leadership Development) 2. Maintain the 7 Habits practice superiority and develop Leadership and Execution as major practices. 3. Establish operational excellence to sustain achievement of revenue targets by strengthen the marketing role and sales management process.

PLOC Framework
To be able to pursue these growth opportunities, we need to evaluate CLCI’s current organization and determine its future organization. Using PLOC shows CLCI’s current and future organization.

F. EXECUTION

STRATEGY EVALUATION, MONITORING AND CONTROL

The balanced scorecard is a tool that can be used by the organization to be able to monitor and evaluate the strategies being implemented in four perspectives, financial, customer knowledge, internal business processes and learning and growth. This helps the organization to ask the necessary questions in order to know the current effectiveness of the strategies applied. Below is the scorecard for Center for Leadership and Change, Inc. based on the strategies and departmental plans laid out in the previous part of the paper.

| Strategies | Measures | Financial PerspectiveMarket PenetrationPrice Competitiveness | Sales Revenue GrowthAchieving a gross profit margin | * Achieve at least 25% increase in sales revenue on identified territories * Achieve a gross profit margin of 50% | Customer PerspectiveCustomer IntimacyMarket Development | Customer LoyaltyMarket ShareCustomer Satisfaction | * Achieve at least 40 face to face hours per month per client partner * Maintain current share of 7 Habits solutions * Increase the solutions share of Leadership and Execution practices by at least 10%. | Internal ProcessesValue Added InformationOperation EfficiencyMarket DevelopmentMarket Penetration | Improve sales and marketing process managementLaunch a lead search engineTask substitution and clearer accountability process | * Improved task efficiency of sales team and achievement of face to face hours targets * Increase of lead and sales pipeline by at least 10-15% per identified territory. | Learning and GrowthPeople DevelopmentRetention and engagementEnabling of resources and tools | Empowered employeesIncreased working efficienciesContinuous improvement | * Clear structure of sales process and key role identification. * 100% training participation for product knowledge * Roll-out of task substitution |

G. CONCLUSION

After considering all factors, it is hereby recommended that the company undergo the following changes: a. Increase sales by penetrating the Camanava and Calabarzon areas. These are strategic areas that have huge multinational companies that value training. b. Create strategic alliances with training and academic institutions outside of Luzon to optimize sales reach. Given the limited available capital of CLCI, partnering with organizations or institutions familiar with this line of business can easily adjust and cope up with the demands as a partner distributor. These partners are expected to have existing client networks and infrastructure such that the partnership can start immediately. c. Hire a human resource manager. This is rather common sense considering the absence of one. But since part of the recommendation is to restructure and reorganize, it is important that a Human Resource Manager be available to help implement such changes to be in line with the new strategies of the company to achieve its goals. d. Have a succession plan. The concurrent president of the company is 74 years old and other members of the executive team are in their 60s and 70s. For someone nearing or should be in retirement, the risk appetite for expansion becomes progressively more averse as the years progress. As such, in order for any change and improvement to happen, certain risks and planning must be undertaken. There is a need for a General Manager to make sure that the new strategies are implemented and targets are met. A young and dynamic General Manager (without prejudice to the existing Executive members) will assure the continuous operations of the company. e. Redefine the characteristics of the sales team. While CLCI’s primary products include leadership training and behavior development, it should be clear that the company’s main business is sales and marketing. This is in line with the strategy of hiring new sales people but the problem is, CLCI has been tapping Psychology and Communication Arts graduates to do the selling. The question, however, is does this fit the profile of the sales team? Perhaps, what the company should consider hiring are business and marketing major graduates who may be in a much better position to sell considering they have been trained for this. f. Create a spin-off company for the non-FranklinCovey products.