This case describes how leaders at Mud Bay, a chain of pet products based in Pacific Northwest, changed the way they operated their business from 2014 to 2017. They adopted a framework that included heavy investment in people with operational choices that leverage that investment by increasing productivity and contribution of employees. Changes included raising wages by 24 percent, increasing percentage of employees who worked more than 30 hours a week—and hence received benefits—from 69 percent to 82 percent, implementing employee stock ownership program, eliminating offerings that weren’t consistent with value proposition, reducing product variety, cross-training employees, and smoothing workload. These changes resulted in lower employee turnover, higher productivity, and increased customer satisfaction and sales. The case describes why Mud Bay’s co-CEO’s adopted this framework and how they implemented change. The decision point of the case is whether Mud Bay should reduce its hours in 2017. Reducing the hours could increase productivity and employee experience but it may also hurt sales.
To discuss why strategic focus and operational simplification enable a company to offer a differentiated customer experience and good jobs; highlight pay as a necessary, but not sufficient component of offering good jobs and ensuring high productivity; and, discuss two important ingredients of implementing system change: conviction and courage, and smart sequencing of changes.
Appropriate for the Following Course(s)
strategy; service operations; operations management
*An educator (non-watermarked) copy of this case is available only to individuals who hold teaching positions at academic institutions and want to use the case in a course.