Maureen Frye is an assistant product manager at Quaker Steel and Alloy Corporation. She is asked to roll out an action plan for adjusting the call pattern of the sales staff. Currently, the staff spends too much of their time on small business accounts. While an earlier attempt by Maureen Frye was not successful, the express call mandate of top management urges her to present an implementation plan that will work.
John J. Gabarro
Harvard Business Review (496024-PDF-ENG)
December 15, 1995
Case questions answered:
- Does shifting attention to larger accounts make sense?
- How is the plan viewed by the various stakeholders in the organization?
- Question any organizational assumptions, policies, systems, or practices that have impeded the successful implementation of the first attempt (case p. 9).
- Develop an implementation plan that will work (case p. 9).
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Case answers for Maureen Frye at Quaker Steel and Alloy Corp.
Does shifting attention to larger accounts make sense?
First of all, one has to question if there is a general need for a change. In early 1994, Maureen Frye was faced with statistics showing a decline in the total tonnage of titanium extruded products sold in 1993 (p. 7). Additionally, competition from Japanese manufacturers had become particularly keen (p. 2).
Hence, a change is essential to secure a competitive advantage. However, it is questionable whether such a change should be translated into changing call patterns of salespeople to larger customer accounts. This will be analyzed below:
First, as of today, the distribution of sales effort is unbalanced. Only 35% of the field sales effort for 1994 was planned for customers who produced 85% of the dollar volume (p. 8).
Second, Maureen Frye’s simulations show that a systematic reallocation of sales force’s time as small as 20 % [could result] in an indicated minimum increase of 30% per year in sales revenues.
Third, the sales force will be able to focus more on selling since the time-consuming support-role will be executed by the technical support services.
Fourth, spending more time on larger accounts will improve the networks (e.g. with technical support services) of younger sales representatives within the company.
First, working with customers on problems as the next greatest source of motivation and satisfaction (p. 6) for sales reps. Since problems posed by the largest accounts [are] more technically complex (p. 7), sales representatives will lose the aforementioned incentive since they are not able to solve such problems without help from technical support services.
Second, the transition phase will be costly: On the one hand, the current organizational structure isn’t properly geared towards responsively developing and serving large customers (e.g. the lead time could range from 3 to 18 months, p. 7). This is especially problematic since large customers lose interest (p.6) if they don’t get a fast reply to their requests. On the other hand, secure sales from divested small customers will be lost.
In conclusion, one can say that the need for change is inevitable in order to secure the competitive advantage of Quaker Steel and Alloy Corporation. However, carefully preparing managing the change process will be of paramount importance.
How is the plan viewed by the various stakeholders in the organization?
Product manager, Titanium (Hugh Salk):
Salk is convinced that Maureen Frye’s concept will yield significant benefits for titanium and subsequently other alloys as well. He is supporting Frye in challenging the robustness of the concept and is convinced by it. After the first failed implementation he concluded that she had not done a careful enough job in planning the change (p. 9) and motivates her to improve her preparation and getting acceptance from Israel and Bethancourt.
VP Sales (L. Israel), VP Corporate Marketing (J. Bethancourt):
Both are, like Salk, convinced that the change in call patterns of salespeople is beneficial. They both believe that titanium extruded products are a good testing bed before proceeding further. The conviction of both is essential to show top-management buy-in.
Generally, DSMs seem quite receptive to the idea. First DSMs (Evans in Chicago, p. 7) already had positive experiences and expressed their consent. However, since the nature of the first attempt seemed arbitrary to sales representatives, DSMs had a hard time convincing them. Hence receiving enough data and explanation is crucial for them in winning their sales reps for the proposed change.
The sales reps do not like Maureen Frye’s concept. They are neither incentivized (e.g. straight salary compensation) nor prepared (they don’t know the company, p. 6) to follow her concept. Additionally, sales reps did not fully understand the rationale behind her plan and since she has only little persuasive power they won’t burn their hard-earned relationships.
Question any organizational assumptions, policies, systems, or practices that have impeded the successful implementation of the first attempt (case p.9).
In accordance with M. Beer’s Leading Change article managers need to consider four critical dimensions when imposing organizational changes to a corporation: Dissatisfaction, Model, Process, and Cost of Change. The effects of dissatisfaction, model, and process must be stronger than any cost of change. Maureen Frye didn’t manage to create enough change momentum since she didn’t carefully include such dimensions in her first attempt.
I will now describe the specific reasons in more detail: