Case: Campbell and Bailyn’s Boston Office: Managing the Reorganization
Executive summary: This case was about issues that Ken Winston, the regional office manager Campbell and Bailyn’s Boston Office faced with as a result of the two recent changes in organizational structure and performance management system to react to the dynamic of the industry and market. The issues created by these two changes were process complication, limitation in competitive advantages, and discouragement on internal collaboration. We recommend Winston to engage KAT and sales specialist team, define measureable goals to each individual, set up one common organizational goal and make it as part of the performance assessment and hold more company events to encourage collaboration and relationship. With this solution, Winston will be able to ease the process, build stronger sales team, maintain market share, gain sales, maintain profit and create good and healthy working environment within the organization.
1. Situation analysis
Campbell and Bailyn (C & B), found in the early 1900s and based in New York, was one of the five largest investment bank in the worlds. The firm has good reputation and was doing well in all segments of the investment banking industry. Within the firm, the bond division, which had been the fastest growing unit, had eight regional sales offices around the world. After New York, the Boston office was the largest. Due to the size and the revenue volume, Boston sales group was often used as a bellwether not only for new products but also for management ideas. Ken Winston, the office head, had a long history and profound experience in bond sales, was appointed in 2003 to be the Boston regional manager with the belief by the senior manager to be the supporter and coach to build and grow the local sales team. During the past 10 years, the banking industry changed dramatically. More players came. More products were created to cope with different demands in the market place. It was harder to sell to maintain volume. It was required more bandwidth and better understanding on a more complicated debt instrument to survive. In addition, margin was shrunk due to entrance of low-service, low-price brokers. For those higher-margin products, it was required deep knowledge and expertise to market and make the sale. In early 2007, the financial crisis and the meltdown in the mortgage-backed securities market directly impacted to the sales force in the C & B and Boston office. Winston had to make two strategic changes in order to maintain the sales growth and operate more effectively. The first move was to create the “key account team” KAT. Legacy, the five generalists in the taxable bond division sold the entire product line and managed their own list of customers. Winston had combined these generalists and assigned each of them to a specialty sub-segment of the firm’s product offerings. The goal was to enhance the sales team expertise on product details and focus each individual on just one area with in-depth knowledge. Changing from maintaining their sales on customer wise to product wise, they shared their customers, for the first time. For the past several months, there are certain number of customers enjoyed this new change as they see the new sales team more invaluable. Yet there were customers unhappy and perceived it as more complication. Also, some sales people found it complicated themselves on those large and multiproduct trades given the number of people that needed to be involved. Another bigger concern of Winston was the limitation on the natural salesmanship of his people due to this specialization. The second change was to implement new performance management system, called “multisource” appraisal. The performance review was no longer the combination of sales volume and own manager assessments. It was then a mixture of several factors which included peer review and feedback from traders, product...
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