The Perils and Pitfalls of Leading Change: A Young Manager’s Turnaround Journey
©2014 by the Kellogg School of Management at Northwestern University. This case was prepared by Guilherme Riederer ’13, Nathan
Tacha ’13, and Rodrigue Ulrich Nselel Awanda ’12, under the supervision of Professor Karen Cates. Cases are developed solely as the
asis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or
ineffective management. To order copies or request permission to reproduce materials, call XXXXXXXXXXor XXXXXXXXXXoutside
the United States or Canada) or e-mail XXXXXXXXXX. No part of this publication may be reproduced, stored in a retrieval
system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or
otherwise—without the permission of Kellogg Case Publishing.
KAREN CATES AND GUILHERME RIEDERER ’13 KEL768
The Perils and Pitfalls of Leading Change:
A Young Manager’s Turnaround Journey
Daniel Oliveira felt like he was on top of the world and was having a great night at the 2006
Clothes & Accessories’ Annual Retreat party cele
ating store manager promotions. The air
crackled with excitement: twenty new store managers had been promoted that day, company sales
were soaring, and future prospects were
ight.
Just one year ago, Oliveira had been in his final year of business school in São Paulo, looking
for the perfect job after graduation. His top choice was a position in an extremely selective
management-training program at leading fashion retail company Clothes & Accessories. After a
grueling selection process, he was awarded one of twenty positions out of 10,000 applicants.
As part of the highly respected training program, Oliveira was assigned to a city in the
northeast of Brazil called Recife. The Recife store was one of Clothes & Accessories’ largest
stores in terms of both size and revenue, with more than 350 employees, a healthy culture, and an
effective manager. Over the next year, Oliveira gained experience in all aspects of the business:
he unloaded trucks, served as a cashier, led small departments, and acted as a store supervisor. He
even assumed a temporary store manager role when the full-time manager took a month-long
vacation. By working through each role and working side-by-side with the employees, he had
earned both the respect and the friendship of employees of all ranks in the store.
Because of his successful performance as a trainee, Oliveira was promoted to full-time store
manager and given a new assignment: leading and managing the turnaround of a store that had
een experiencing declining performance. He was excited and honored to be given such a
challenge.
At the Annual Retreat just before starting his new job, Oliveira gra
ed a caipirinha1 from
one of the open bars and decided to meet his future manager, Francisco Prado. Oliveira found
Prado after a quick scan of the room and walked over to introduce himself and express gratitude
for being given such a wonderful opportunity. Quick-witted and very direct, Prado did not care
for small talk. Without wasting any words, Prado advised Oliveira to speak with one of the
former store managers he had led some years ago, Douglas Fischer.
1 Caipirinha is a famous Brazilian drink.
For the exclusive use of S. Dossou, 2022.
This document is authorized for use only by Samuelson Dossou in SM1 2022 MGT301 AE taught by
ian powers, Suffolk University from May 2022 to Jul 2022.
PERILS AND PITFALLS OF LEADING CHANGE KEL768
2 KELLOGG SCHOOL OF MANAGEMENT
Like Oliveira, Fischer had been a very young store manager with a gregarious personality and
a thirst for challenge. After a long conversation about different topics, Oliveira asked him for his
est piece of advice. Fischer responded without hesitation: “The first and most important thing
you have to do is to get to know your people. Get closer to your team before you try to change
anything. Don’t fall into the same trap I got caught in!”
Oliveira reflected on Fischer’s words for a while, remembering his recent successes with the
employees at the Recife store during his training assignments. That store had done very well
during the month he had managed it, so he was confident in his abilities to manage people,
especially at a smaller store.
Clothes & Accessories and the Fashion Industry in Brazil
A European company that launched its Brazilian operations in the 1970s, Clothes &
Accessories was the national leader in the fashion retail industry, holding a considerable lead over
the competition. Its strong
and and economies of scale had driven the growth of the Brazilian
fashion industry during the 1990s. Overall revenues, number of stores, and same-store sales were
soaring. It was a golden age for the company.
The last two decades had been fantastic for the fashion retail industry in Brazil. The stable
economy and increasing access to credit after mid-1990s economic reforms had helped the
Brazilian middle class grow in both size and buying power. The poorest classes, which previously
had spent all of their income on basic needs, were now able to move up to the middle class,
increasing their consumption of discretionary products and services. The apparel and fashion
industry benefited greatly from this change in consumption patterns.
Significant economic growth and an evolution of the middle class seemed especially evident
in Vitória, a mid-sized city in the southeastern state of Espírito Santo (Exhibit 1). The growing
utilization of all city ports and the large investments from major corporations, such as Vale do
Rio Doce and Petro
as, had increased the population’s buying power and demand for consumer
products and services.
The Honeymoon Phase
Initial Excitement
Oliveira had been assigned to manage the Clothes & Accessories store located in the heart of
downtown Vitória. The store was the company’s ninth location in Brazil, built in 1983, and
staffed with more than a hundred employees. Since the late 1990s, the store’s performance had
een steadily declining, and it had dramatically worsened in the last five years. Clothes &
Accessories’ leadership expected Oliveira to not only stop the declining performance, but also to
increase performance to the levels of other stores with better locations.
To Oliveira, only twenty-two years old at the time, this looked like a career-making dream
and the path to success within the company. Oliveira’s confidence in his abilities was based on
his excellent performance evaluations during his training. In addition, Prado was known for being
For the exclusive use of S. Dossou, 2022.
This document is authorized for use only by Samuelson Dossou in SM1 2022 MGT301 AE taught by
ian powers, Suffolk University from May 2022 to Jul 2022.
KEL768 PERILS AND PITFALLS OF LEADING CHANGE
KELLOGG SCHOOL OF MANAGEMENT 3
a great mentor and catalyst of personal development. Prado was also on the fast track for future
top-management responsibilities.
Oliveira was excited about moving to Vitória. Passionate about extreme sports, he a
ived a
few days before his start date to explore the city and found perfect weather, amazing beaches, and
natural places to explore. Vitória offered amazing opportunities for parachuting, scuba diving,
and rock climbing.
Pandora’s Box
The morning Oliveira a
ived at his new workplace, he was welcomed by one of his future
direct reports, Roberta Santos. She showed him to his new office and informed him that the
outgoing manager, Sara Carvalho, was late due to a flight delay. Not knowing where to start,
Oliveira decided to wait for Carvalho.
Carvalho a
ived an hour later, apologized for her delay, and then outlined the two-day
transition plan. She had prepared a transition “package” that included several reports and
documents, including ready deliverables for short-term deadlines. The transition schedule started
with the “micro-market presentation”: walking around the area outside the store. In the middle of
the walk she said, “As you can see, downtown Vitória is in decline: several governmental
institutions and offices have moved away; the transit population has been reduced; the market is
against us—and the company is not recognizing that. We are always being compared to the
growth of stores that are not facing the same external problems.”
During the walk Oliveira saw vacant buildings that seemed to support what Carvalho was
saying. He decided to focus on factors inside the store before wo
ying about the issues outside
the store.
After their walk, they discussed the store’s human resources. With the organization chart
(Exhibit 2) and the supervisors’ performance appraisals in hand, Carvalho started describing the
two supervisors. “Roberta Santos is the store apparel supervisor. She has ten years of experience,
all of it here at this store. She knows everything there is to know about operating this store. She is
eally good at managing her team, and everyone loves her. I usually don’t stress over her team at
all because she always handles it. She is also a very nice person.
“Maria Almeida is the store financial services supervisor. She has eighteen years of
experience at Clothes & Accessories, spread across several different stores. She is very
knowledgeable and committed to the company. She will always be there for you when you need
her. She is a bit old to seek career advancement and can be rather tough to deal with at times, but
I think you should use her experiences and her tough personality to keep the team on track!
“I also consider the two department leaders to be crucial assets to the store. Mariana
Rodrigues, from the ladies department, and Laura Lima, from the service department, are very
experienced; both have more than ten years at Clothes & Accessories. They are key people for
store operations. Mariana is a very nice, friendly person, and Laura is very aggressive but
efficient.”
During these first couple days, Oliveira watched vigilantly for operational improvement
opportunities that he could leverage as he worked to turn the store’s performance around. The
For the exclusive use of S. Dossou, 2022.
This document is authorized for use only by Samuelson Dossou in SM1 2022 MGT301 AE taught by
ian powers, Suffolk University from May 2022 to Jul 2022.
PERILS AND PITFALLS OF LEADING CHANGE KEL768
4 KELLOGG SCHOOL OF MANAGEMENT
store was not crowded at all, but the few people he