Organizational Behavior and Leadership

Muhammad Bin Abdullah

ERP ID 18349
Answer 1) Shelly sun identified a gap in the health care sector after struggling to find quality
homecare for her husband’s grandmother. This inspired her to help families who needed quality
health care and hence she decided to open a startup (BrightStar) providing home care services. This
startup soon turned into a full grown business which attained a lot of success with time. The success
of Brightstar and Shelly Sun go hand in hand, it was Shelly Sun’s business knowledge that led her to
realize that in order to grow and expand its imperative for the company to adopt a franchising model.
It was her financial acumen that helped her sell her first franchise and this where the success/growth
of the company started.
Shelly sun had seen the health care sector from the consumer perspective so she knew that the need
of the hour was to ensure that quality service was delivered to clients/customers. BrightStar key
success factor was that it differentiated itself from its competitors by emphasizing on exceptionally
high standards of service. The other thing that made BrightStar unique was it offered skilled medical
care in addition to personal and companion care. With 14.5% of the US population being over the
age of 65 years in 2014, BrightStar had tapped the right market segment resulting in exponential
growth.
As a part of their quality focused strategy, BrightStar set a higher bar for entry than its competitors.
It shows that Shelly Sun was not interested in quick growth rather she was interested in sustainable
growth, hence franchises were awarded to those people who had sufficient business experience and
liquidity so that they can match the standards set by BrightStar. Moreover, she distinguished her
company by requiring all franchises to earn accreditation from the Joint Commission and to staff the
position of Director of Nursing with a registered Nurse. Shelly Sun wanted to make BrightStar a
trusted name by delivering its unique selling point to its customers ‘quality and customer
satisfaction’ rather than competing on prices with its competitors.
Sun had a clear vision to expand and grow BrightStar. She had strong understanding of the things
that would help the business expand. She had realized that expanding the company’s marketing
reach would be key to competing effectively. In order to do so she not only hired a Vice President
for Marketing but soon the company’s advertisement were on national television. She knew that
brand awareness is imperative for growth. Also the importance she gave to marketing is evident
from the fact that when she realized that there were certain weaknesses in Marketing she hired a
Chief Marketing Officer who not only had the ad- agency experience but was also familiar with the
health care industry.
In 2008 after the economic crises when franchisees were having difficulty to maintain the pre
economic crises pricing and after her realizing that she had not been able to keep in touch with the
franchisees she decided to maintain a close connection with the Franchisee Advisory Council. Shelly
was committed to focus on the bottom line i.e. to understand and resolve issue faced by franchisees
due to the lower demand of health care services in the economic crisis era.
However there were certain issues which Shelly had not been able to do well which are as follows:
 One thing that the company lacked and failed to plan is the development of strong
managerial team that could manage and align the goals between the company and the
employees.
 She was not able to devise a strategy to reduce employee turnover.
 Though she has been able to establish her company as a superior service provider however
she have failed to focus on optimizing its prices.
 She used a lot of precious time in realizing that some people were at wrong jobs.
 There was huge potential in government programs, however Shelly continued her focus on
individual payees.
 Shelly should have been more aggressive in succession planning of its employees.
 Shelly was too compassionate and struggled to let people go and backfill them with new and
right people.

Answer 2) Mentioned below are the industry dynamics and characteristics that affect BrighStar:
Ageing Population:
Around 46 million or 14.6% of the Population in United States was over 65 years in 2014. These
numbers are projected to grow by 21.7% by 2040. Concurrently, home health care spending was
strong and predicted to accelerate. BrightStar was unique among home care agencies because it not
only provided home care services but also offered skilled medical care. It can be said that BrightStar
has correctly targeted the right market segment and which has helped the company to grow. The
future need for such services is also quite encouraging given the ageing population of the country.
The company should be able to catch on the opportunity, they should consider opening more
franchises. But the decision to open new franchises shall be made after looking at the demographics
of the particular City/State. BrightStar should first focus on those areas where the ageing Population
is expected to increase. Brightstar shall also focus on target marketing such areas in order to gain
advantage over its competitors.
Stringent Competition:
The home care industry had a lot of competition, while BrightStar was growing with each passing
day it was faced with intense competition with some of the giants in the industry. Customers/Clients
had a choice of choosing among several competing companies in the industry, hence BrightStar
always had to be a step ahead than its competitors to attract customers/clients. With the industry
expected to grow, BrightStar should not only stay ahead in terms of quality over its competitors but
should also try and reduce the price they charge from their customers. In order to do that they might
adopt a flexible royalty payment scheme, areas where there is potential of growth should be charged
less, if that is done it will give franchisees to reduce their prices and hence attract more customers. If
not proactively dealt with the above mentioned issue, competitors might take advantage and gain
market share.
Regulations and Other Labour Problems:
Despite BrightStar franchises’ favorable performance, labor supply was a challenge for owners, as it
was throughout the home-care industry. The median turnover in the industry exceeded 60% which
meant it was very difficult to retain home-care workers. BrightStar was one of the highest in paying
its workers in the market, however still it hadn’t made a big difference in recruiting.
Changing labor regulations also impacted the company. In 2015 the National Labor Relations Board
(NLRB) assigned joint-employer status to companies with authority over “essential terms and
conditions” of employment, such as a company that subcontracts staffing to a temporary agency.
The implication of this decision would be that BrightStar would now be considered a joint employer.
Seattle’s new minimum-wage law, which raised the minimum wage to $15 an hour, classified
franchises as large employers rather than small businesses, subjecting them to more stringent
requirements to comply with the law also affected the hiring of quality workers.
The high turnover should be a point of concern for the company, if the issue is not addressed the
company might face difficulties in retaining quality man power in the future. Hence either it should
adopt the approach of signing bonds from its workers so that they do not leave the jobs or should
attract them through some kind of fringe benefits that would help improve the retention rate.

Technology
The home care industry was largely paper based and hence there was a massive room for
technological advancement/automation. BrightStar had understood the need for technological
advancement and hence introduced Athena Business System which helped the headquarter to track,
analyze and report care giving patterns and outcomes. Going forward, the company decided to adopt
a paperless approach, which will help to manage and attain essential information about the
caregivers and customers. For a company like BrightStar that focuses on quality, the right data is
imperative which will help them to outshine from its customers. The hiring of the new CTO, Jim
Kearns is also evident of the fact that the company perceives technological advancement as essential
for future growth. In this day and age if BrightStar is successful in implementing the technological
changes it has planned to it will be easily able to have a strategic edge over t=its competitors and
will hence give it another unique selling point apart from its quality servicing approach.

Answer 3) Shelly Sun was a visionary individual, she would see opportunities and would pounce on
them. After the demise of her husband’s grandmother, Sally decided to open her own business of
home care. This was her vision that showed her the opportunity to tap in the market. She started the
company as being one of the investors of the company with her husband being the other investor.
When her husband stepped away from the company she became the CEO and decided to expand the
business using the franchise model.
It is imminent to note that she started her entrepreneur journey not only as the CEO of the company
but as an investor and the business development lead for the Company. She initially not only
managed the company herself but also struck the deal to strike the first deal of selling the franchise.
Sun soon realized that she needed to build a leadership infrastructure and a formal advisory team
which will help the company to grow. She herself picked positions for the aforementioned roles. She
was the one who was driving the company with her vision since the initial days.
As franchises began to sell, she realized the importance of Franchisee Advisory Council (FAC)
which will help to create a liaison between headquarters and franchisees. This give her the window
onto what franchisees were experiencing, so she kept a self-check on the operations and the business
of franchisees. Though she stepped back from her role in the FAC but soon she realized that this is
creating a disconnect between headquarters and franchisees, so she decided to step back in the FAC.
Shelly Sun pictured herself as a female entrepreneur who was not a paid CEO but rather someone
who believed in her idea and vision. In 2009, she hired Vice President of Marketing, the company’s
first executive-level marketer and in 2010 she hired Dean Ulizio to lead technology at BrightStar’s
headquarters.
Shelly was somebody who would always ready to take up challenges, so when her husband was not
giving proper time to the company she not only terminated him but decided to take over her
husband’s responsibilities too. Shelly was a committed individual she would do whatever it takes for
the betterment of the business. She not only reduced the board members but was also open to
understanding things of strategic importance. This is the reason that she listened to Thom Gilday
(CFO) who believed that she was not the best manager but rather someone who was visionary. She
gracefully acted on the CFO’s advice and gave the role of managing the company to the CFO. This
allowed her to adopt a more external-facing role and to focus on guiding BrightStar’s strategic
direction. This gave her the time to explore international markets and attend franchising and health-
care conferences.
Shelly was not reluctant to take some bold decisions she Sun decided to hire Jim Kearns as chief
technology officer and move Ulizio into a new role as executive vice president for global strategic
development. Shelly Sun used to talk her decisions and was able to convince people about her
decision due to which she was able to retain Ulizio.
Jayson Pearl, hired to lead marketing in 2009, also moved into a new role, as executive vice
president for franchise operations. Shelly hired a Chief Marketing Officer considering the
importance of marketing. However, the thing to note here is that the decisions she took was not only
for the growth of the company but also for the growth of individuals who were assigned new roles.
As BrightStar had matured and brought in more executive-level talent, Sun had tried to hand over
more and more of the day-to-day operations to her management team; this had proven to be an
elusive goal. So what started from managing everything by herself has now come to specialized
people for specialized jobs while she try to follow her vision of expanding business rather than being
involved in it operationally. She empowered her senior leadership to manage the day to day
business.
Answer 4) Sun’s action plan for the next five years should be as follows:
 One of the most important factor of the growth strategy is to analyze the competition.
BrightStar should analyze its competition strategy while pursuing the growth strategy. This
will help BrightStart to focus on its competitive advantage and hence grow.
 The company should not consider to move into non-health care business in order to diversify
its portfolio, the company shall stick to health care industry and look to diversify instead.
 The company should focus on technological advancement not only to get customer feedback
but also to help attain competitive advantage over its competitors and hence provide services
which other competitors fail too.
 Human skills are the core for the growth of any organization, we have seen that the entire
case study does not mention anything about the HR Lead/HR department. In order to avoid
high turnover, BrightStar shall have a functional HR department.
 The company should delay its plan for going international until they have attained
technological consolidation. Without technological consolidation it will get very difficult to
expand and run their business in the international markets.
 The company should also have a strong managerial team, one that can align the vision of Sun
and the goals of the company to that of its employees.
 The company is currently charging higher prices than its competitors, they should focus on
cost reduction strategies.
 The company should strictly monitor the performances of its franchisees both in terms of
volume and profitability. There should be KPI’s and targets that shall be given to franchisees
based on that the company shall target high performing and low performing centers and
hence plan it strategies accordingly.