Change is an inevitable part of business, whether to meet the challenges of new technology, customer requirements, changes in legal atmospheres, or to meet the needs of buyouts and mergers. Every organization will struggle with the need to meet the challenges of change at some point during their operations, and understanding how to overcome these challenges is a goal of college students striving to obtain their degrees. Many students will compare previous experience with information they are learning and develop new solutions based on these previous perceptions. Understanding the key points to leadership’s involvement in change, leading successful change, and developing strategies that will achieve goals are the reason that students will seek answers from past experiences during their college courses. Here is a problem solution for Intersect Investment Services – a company invented for the purposes of business students in the University of Phoenix – and how to best address change that must occur within the organization.
Intersect Investment Services
Intersect Investment Services is a financial services company which has recently seen declines in both customer and employee satisfaction. These changes are reducing the company’s effectiveness in becoming industry leaders. In order to combat the problems with developing strong customer relationships and reduce churn, the company has moved forward with a “customer intimacy” model which will help lead the company in building trust with the customers and will inevitably decrease the amount of consumers who leave for reasons such as price (Intersect Investment Services, n.d.).
To aid the company in the changes that they hope to bring about, the leadership team has developed a vision statement: “Provide a broad set of products and services to consumer and small business customers using a model of customer intimacy that will build long-term relationships based on trust and value to the customer.” (Intersect Investment Services, n.d.). The development of the new leadership philosophies brought changes in the leadership team, as well as opportunities and challenges that will be addressed to help grow Intersect Investment Services into a financial industry leader.
Growth and development will enable ISS to become an industry leader. The success of the implementation of the customer intimacy model and new services for small businesses will enable Intersect Investment Services to reach this goal and continue to develop using transformational change practices that keep the organization moving with changes in the industry. With the careful planning of the change, implementation, and monitoring, ISS will realize their potential as an industry leader.
Intersect Investment Services will develop a strategy of change that enables the company to put forward best practices of the customer service industry in a way that develops both the customer intimacy model and the needs of the employees. In order to focus on this strategy, the leadership team will need to develop clear communications, supported by evidence that demonstrates the new goals of the company and how it will benefit the stakeholders involved. Each step of the strategy must reiterate the needs of the company to become an industry leader.
Industry leaders in the financial sector have found that customer trust is a primary factor in continued growth and develop of customer loyalty and commitment. Intersect Investment Services has the potential to realize their goals of industry leadership by implementing strong leadership commitment to their teams, employees, and customers through the customer intimacy model. While challenges do exist with the company’s stakeholders, these challenges are opportunities which can lead to stronger employee commitment, increased customer trust, and higher value to other stakeholders.
Opportunities & Challenges
The first opportunity presented is the model of customer intimacy. Marketing is challenged with discovering the needs of consumers to help lead changes in industry which better suit the needs of consumers. Recent marketing studies demonstrate that financial institutes would be more successful if they catered not only to the product needs of a consumer, but also for their need to trust the company to do what is best for them. The customer intimacy model provides the opportunity to address the trust issues that consumers have by developing relationships with the customers and building contact teams who are both knowledgeable and caring. Current examples to our leadership team include customer interaction studies which have shown that the customer intimacy model increases customer satisfaction ratings and decreases churn. Decreasing churn and increasing customer trust will greatly benefit the goals of ISS to become an industry leader.
One of the challenges facing a customer intimacy vision statement is inevitably the direction of productivity in the customer facing departments of the company. Years of hands-on experience demonstrates that increased sales are best accomplished by increased volume of consumers. This is shown in call center goals to have a low AHT (Average Handling Time) and the bonus ratings of sales department quotas. Many times these departments have goaled for quantity instead of quality. For good reason, it is true that most customers will only “spend” with their needs; therefore, once their needs are meet it is time to move on to the next customer.
In order to develop the opportunity of customer intimacy, we would need to show how the sales staff and customer call center can use the information available to them to build a relationship with each customer individually. Many sales associates already demonstrate a relationship persona just by asking a customer how their work/family/ schooling/etc. are going. Understanding the consumer and their needs offers a company the ability to offer products and services which fulfill the needs of each individual and demonstrate a trust atmosphere by not randomly offering products/services which serve no need or are considered to be “upsells”. Additionally, increased customer contact time provides the opportunity to reduce churn, decrease call backs from repeat customer issues, and allows for preventative sales (the ones that are needed to decrease problems in the future, or resolve little problems that can become bigger over time).
In current trends towards successful change management, the study of leadership has grown proportionate and in many ways has become more popular than many of the social sciences. For instance, transformational leadership is described as a process which “occurs when a leader transforms, or changes, his or her followers in three important ways that together result in followers’ trusting the leader, performing behaviors that contribute to the achievement of organizational goals, and being motivated to perform at high levels.” (George & Jones, 2005, p. 394). These definitions are derived from both history and constant study of how human cultures – organizational and social – respond to different types of stimuli found in their leaders.
A very good example of how drastic change can be productive and successful is Avon. Andrea Jung became CEO in 2000, and faced challenges in many aspects – the primary aspect being that Avon needed a complete overhaul – from vision to sales (George & Jones, 2005). Transformational leadership aspects can be found in the progress that Andrea Jung made, because she revamped the outdated image of Avon, brought in new products, and brought to life the online atmosphere that has increased sales and taken Avon into the future. Target marketing developed ways to target younger generations and a focus on constant remaking/remodeling to fill the needs of the consumer has increased sales and prevented the decline of the customer base. As CEO, this was a success – as a company, this was a life saver. Who wouldn’t want to develop a process that enables all potential leaders to demonstrate these strengths and abilities?
Lewin’s change model focuses on “three stages…unfreezing, changing, and refreezing” (Kreitner & Kinicki, 2004). Kotter’s eight step process focuses on a company’s need to demonstrate strong and consistent leadership, while working closely with the change objects to bring them into the organizational practices. While examining Organizational Development, we learn that companies – like those who work in them – need to have a method in which they can implement changes, measure the success, and correct errors as they go. The methods developed should fit well into the transformational leadership models that inspire developmental change that understands growth and industry changes can be quickly implemented into a company.
In order for Intersect Investment Services to completely develop the changes within the company, they will also need to consider best practices and develop principals which will enable the company to continue to move along the path to productive change. The 12 Principals of Organizational Transformation focuses on solid best practices that all change should involve:
1. [Understand the external environment in which your company operates, and you will never be blindsided by your customers or your competitors again.
2. Enlist people’s passion and energy to support your company’s mission and strategy.
3. Remember that while charismatic leadership may grab the headlines, it is steady and consistent leadership that actually results in changes to the bottom line.
4. To change an organization’s culture, you must first change people’s
5. Let service to customers drive your company’s structure.
6. If you implement the right systems to support people in their work, that
will help create the “climate of alignment” you need for success.
7. Managers must give employees what they need to succeed or, in some
cases, get out of the way.
8. Teamwork may be un-American, but it’s essential to your success.
9. A productive employee is a happy employee–not the other way around.
10. Strive for a good fit between the skills people have and the everyday
jobs they do.
11. Remember, employees are people, too.
12. Beware the false indicators of success. Recognize that a broad and
balanced approach is the only way to successfully sustain organizational performance.] (Trahant, Burke, & Koonce, 1997).
ISS Change Models
The best change methods are usually developed from the success of crisis; however, crisis is not required to make change a success (Day & Jung, 2000). Instead of crisis to create the motivation and desire to conform to change we must implement other methods which will inspire employees and stakeholders to develop. ISS will see greater success using a cascade model for implementing the change process. While this process must be carefully implemented it does offer the most opportunity for involvement by all stakeholders. The cascade model is a process for change which involves the sharing of the new vision with more people with each new interaction. This enables the “new” participants to move the vision along the chain to engulf all members of the organization. Careful planning can enable this change model to envelope everyone successfully in the new goals of ISS.
While this model is not the only model ISS can consider for implementing the necessary changes, this model does provide things that other models do not provide. For instance, this model expands on the information provided by Kotter’s eight step process. Kotter’s eight step process could be used as an outline that demonstrates the needed direction which change should develop, and will help us to examine the methods to determine if success has been found in the process. Additionally, many change models developed include communication as a primary function of the change.
There are other directions which ISS could develop; the first is to remove any members of the teams who are not supportive of the process. This direction would lead to concern for individual positions and eliminate needed communication that could warn of possible breakdowns in the change progress. Additionally, members of teams who are not supportive of the change are often helpful in preventing group think and developing measurements of success and progress. While ISS would not benefit from members of the team actively engaging in activities which could harm the growth of the company, members with differing opinions can help keep things realistic.
Another direction would be to simply implement training programs that are brought to employees to engage them in the new vision. This method should be part of the overall game plan; however, developing training programs exclusively will not motivate employees to gain a complete knowledge of the plans. Finally, most of the models available do not have the same focus on the people aspect as is needed to drive change in a stable environment which is not in a crisis.
Communication as a Success
When developing changes for a company, Kotter identifies eight errors that often occur in developing the change, one of which is “Undercommunicating the vision by a Factor of Ten” and can be considered a major obstacle to the success of any intended change (Kotter, 2007, para. 26). Cellular One is in the process of developing multiple changes to the company, at the same time. These changes are both responsive to industry changes and outside forces. Recently, Cellular One has announced the acquisition of Dobson Communications by AT&T. This change has come with limited communication, due to government restrictions. Additionally, the FCC release of the CPNI regulations has increased security of call details for all cell phone customers. These changes require a great deal of communication and will bring about many changes to the company as a whole.
Ultimately, Cellular One has two visions that require communication to all staff members. Everyone has to be onboard or the changes will become a challenge that could ultimately demoralize thousands of customers and employees. In order to successfully manage communications for the AT&T acquisition Cellular One has developed a section of the company website which is constantly updated as information comes available. In addition to this, a hard copy of important information is mailed to the employees affected by the notices and customers have been sent out a separate letter that explains that the acquisition is to take effect. Successful communication has not completely disrupted the pattern of rumor and the resistance to change; however, it has encouraged the development of trust and decreased the number of employees and customers who were willing to “jump ship”.
While ISS does not intend to introduce a merger or acquisition as a business strategy, all change faces resistance even when carefully planned out. One of the methods that can be implemented is an employee website which thoroughly describes the vision and goals of the company. In addition, the website could provide more information for employees interested in learning more about how the customer intimacy model was designed, studied, and what marketing strategies have been used involving this model. The new small business products and services can be featured on this website as well. An information portal is often very successful in maintaining communication between the upper levels of management and the employees that are required to implement and use the information.
CPNI regulations were developed to increase security and privacy for cell phone customers. These changes require a change to how customer contact points respond to the needs of the customers as well as how we protect their information. In order to respond to this change, Cellular One has created an extensive communication of the new regulations to insure that all employees are aware of the needed changes to operating within the company. In order to implement this change successfully two forms of training were developed – classroom and “e-learning” .Aiding these forms of training was also two contests which involved CPNI tests that could be entered and submitted for a chance to win prizes. In addition, channels for discussion and questions were reiterated – ability to discuss concerns with training staff, supervisors, management, and human resources. Finally, more information was made available to all employees through the company web portal and various links to outside sources which discussed the process and decision further. While these changes are still facing some resistance, and may still find complication in practice, it has been completely successful in full communications and awareness in all employees throughout the company.
CPNI does not directly impact the financial industry; however, the need to take careful care with customer information has always been a part of this industry. Just like the development of CPNI as a new industry standard, the customer intimacy model is also being implemented throughout the financial industry and other customer forward industries. Involving employees is as important in this endeavor as the others; therefore, it could be very successful to create training programs that involve the sales department and the customer care departments. These departments will be directly responsible for the success of the changes. Other departments will need to involved, but ultimately these departments will need to show complete support for the plans to be successful. Games, training, and awareness will help to develop support amongst these groups.
Importance of Communication
“Undercommunicating the vision by a Factor of Ten” is a risk that ISS takes unless clear communication channels – even when they may appear to be repetitive – are developed to engulf all aspects of the company and stakeholders (Kotter, 2007, para. 26). In order for any new vision to be successful, it must have the support of nearly every employee in the company, but especially all management who need to show support for the new vision. At Cellular One, the supervisors and management demonstrate nothing but support for the changes, even though they may not always agree with them. This needed support derives more support by a resistant staff understanding that this is necessary for continued employment, and for continued growth within the company.
Similar to Cellular One, ISS must encourage the support of all levels of management in order for the vision to be successful with all members of employment. In addition to support, the members of the leadership teams must be able to recognize the advantages of the upcoming changes. This would include support of the customer intimacy model. Some members of the management teams may be reluctant to support the new changes; however, in order to successfully promote the change, these members must be “converted” to the vision. This change will come with showing each level of the company how these changes will benefit them. In some cases, this may include changes to how commissions work, pay rates, or other incentive programs.
Risks and Stakeholders
In order to determine the direction which ISS will develop their strategy for change, it is important to determine the risks and opportunities involved with the change. The first stakeholder to consider is the customers. In order to create a welcome environment in which to continue to grow value for the consumer, ISS must develop new strategies that involve increased services for the small business owner, and a customer intimacy model that demonstrates the dedication to the needs of the individual. Value for consumers will increase if the change is successful within ISS. The resistance that may be come from this stakeholder will be minimal.
The next stakeholder to address includes investors, board members, and stockholders. These members are concerned for the value of their investment in the company and how these changes will increase their value. These stakeholders will need disclosure of how the changes to the company will impact the costs to the company, such as the cost to implement the plan, and especially the cost should the plan need to have changes while in progress. To assure that the risks posed to these stakeholders are minimized, a detail plan of execution will be needed to gain their support.
The primary stakeholder that will both benefit from the changes and be the most resistant to them is the employees. If the change model is not carefully chosen, methodically organized and implemented, this stakeholder group will resist the changes and ultimately cause its failure. As the risk of the changes is also most likely to impact this group – with a decrease in income or even possible layoffs – this group must be intimately involved with the changes at all levels. There is no level of this stakeholder which can be left out of the “hands-on” approach.
Directions of Change
In order for Intersect Investment Services to successfully implement change into their organization they will need to develop a strategy that implements the customer intimacy model into the organization using Kotter’s eight steps of change along with a cascade model, and integrating the 12 principals of change. The success of this strategy will be measured by three things: increased sales, decreased churn, and employee awareness. Communication channels will involve a company portal with information regarding the company’s vision, information about the customer intimacy model, and all the tools that will enable the employees to become familiar with the changes that will occur. In addition to the company portal, there will be planned training classes that include a question and answer session. Leadership members will also meet with employees of ISS to share their vision and encourage sharing of customer intimacy success during the change process.
To successfully combat resistance, a strategy will be developed to encourage employees to communicate problems and questions directly with the leadership team. Additionally, employees will be involved with test groups who will work together to determine the tools needed for each department to be successful with these changes. Other items that will be used to help combat employee resistance will include motivational techniques and full involvement from the human resource department. At each stage of the change, employee satisfaction will be measured by the human resource department to better enable the development of incentive programs that will encourage continued growth and success. While the sales and customer care departments must be completely supportive of the changes implemented, they must also be completely trained, and have creative incentive programs that motivate success.
Increased sales and decreased churn will be measurements of how successful the new model and employee motivation plans are during the process of change model. While these changes will be primarily seen after the completion of the change is fully underway, their numbers should begin to change as each department works within the new model. Additionally, measurements can be obtained with customer service surveys and small business sales increases. As the ultimate goal is to increase value for all ISS stakeholders, the satisfaction of consumers and employees are the two measurable sources to show the success of the change within the company.
Ultimately, Intersect Investment Services will be able to reach their goal of industry leader by implementing successful transformational change models which enable the company to grow with the industry changes. “Industries don’t stand still waiting for companies to transform themselves.” (Day & Jung, 2000). ISS will meet the challenges of a changing industry with increased communication that shares the goals and visions of the company leaders and successfully enables employees with tools and information. These changes will create value for all stakeholders that will continue to grow throughout the changes in the industry in the future.
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