Problem Definition: Intersect Investment Services Company
Situation Analysis and Problem Statement
The financial service industry was rocked by the terrorist attacks of September 11, 2001. Intersect Investment Services was no exception. Once enjoying top status is now struggling to maintain client trust and credibility on Wall Street. The leadership at Intersect Investment Services realizes that they must offer a large variety of innovative products along with expert advice to maintain top ranking within the industry.
Situation Background (Step 1)
Intersects CEO Frank Jeffers came up with a new vision, ¡§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.¡¨ (Company overview, 2006, P1)
Mr. Jeffers realizes that implementation of his plan will necessitate radical change within the organization. He already relieved one Executive Vice President (EVP) of Marketing and Sales because he did not support the vision or lead his staff to follow it either. Mr. Jeffers has brought Janet Angelo on board due to her expertise in implementing a customer intimacy model in her previous positions. She improved customer loyalty and sales in those positions and therefore is expected to do the same at Intersect but within a 12-month time frame.
Intersect has also fallen short of revenue targets, sales employee turnover is up 25% and customer satisfaction is down by more than 10% all within the past year.
Issue Identification
One of Intersects more obvious issues is the internal forces for change such as decreased job satisfaction, productivity and conflict. Employees are leaving, according to Annie Sorrento ¡V Director of Sales Operations, because they do not understand the new direction; are not confident in upper management¡¦s ability to implement the new strategy and are not being kept informed enough to get their jobs done. Due to the increased employee turnover, there is a loss of revenue. Tom Hardy ¡V Senior Vice President of Human Resources, has briefed the senior leadership team that it would take three months to fill a position, four months to train the new employee and another eight months to ensure that he or she is properly trained. There is a revenue difference of approximately $110 thousand for consumers and $300 thousand for small business between new employees and average employees. Other employee issues include rumors of layoffs; concerns of being told what to do and not why it is being done; getting mixed messages from leadership; not having access to the proper information to conduct their jobs nor the confidence in the managers¡¦ support for the vision.
Broadway Broker’s management team is faced with the challenging task of downsizing and consolidating the organization. A thorough investigation as to how to execute proposed changes will need to occur before the organization can forge ahead. Change processes must be executed in a fashion that portrays compassion and consideration for all involved. For change to be successful the management team must have understanding and empathy for the psychological impact of imposed change and how employees will react. Most humans are fearful of change and do not embrace change in a positive manner. The road ahead will be difficult for the management team at Broadway Broker’s, however; with proper planning and understanding positive change can sustain the future of the organization.
Soman,D & Marand, S (2009). Managing Customer Value: One Stage at a Time.: World Scientific Publishing. p9-14.
Mr. Nardelli could have spent more time demonstrating why the changes were necessary and why the urgency. Taking a look at the communication strategies (discussed later in this paper), there appeared to have been a great deal of one way communication, but less collaboration and some employees could have felt their opinions did not matter. As such, not everyone agreed with the changes, however, he did place a sense of urgency.
This paper will be broken down into six sections profiling each critical part of implementing and managing change in an organization. The sections included are; outline for plan creating urgency, the approach to attracting a guiding team, a critique of the organizational profile, the components of change, and how to empower the organization.
Being the lack of career development programmes the main reason for employees to leave the company more in detail issues were identified:
Overall, this six-step process allows obtaining renewal without imposing it. When the employees see that the new approach is more effective, they don’t oppose resistance to the ongoing changes. A virtuous circle effect also happens, since those problems solved by the improved coordination help to reinforce team behavior and produce a desire to learn new skills.
Peak, Martha H. Time for a change. Management Review. 84(9): 25. 1995 Sep. Organizational change.
Wiersema, M. T. a. F., 1993. Customer Intimacy and Other Value Disciplines. Harvard Business Review, p. 92.
-Customers: The company felt the importance of being customer-centric and innovate by adapting to customer
Voluntary and involuntary turnover have an effect on organizations. Rapid changes in job descriptions, organizational structures, and inter-organizational competitiveness increase the importance of studying turnover and its relationship with organizational change. According to Leana and Van Buren (1999), "the loss of key network members can severely damage an organization 's social fabric and perhaps eradicate its social capital altogether." When businesses lose a high number of employees, problems can occur, costing the company time and money. Some of the costs incurred are associated with training, drug testing, physicals, and orientations to hire replacements that may take several months to learn the job and to achieve competency. There is a saying, “Good help is hard to find---and harder to keep”. This saying refers to good organizations trying to reduce turnover when the competition for retaining good employees is intense.
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More than just a sale promotion strategy Lisa and her team have built lasting relationships
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