Quaker Steel and Alloy Corporation (“Quaker”) is a US based producer of specialized metal alloys. It predominantly addresses the high margin, high quality segment of the market, with little exposure to low margin, high volume segments. Quaker is known for providing high quality sales, post-sales and technical service. This niche position has allowed it to maintain an ROE almost twice as high as its nearest competitor.
Maureen Frye is an assistant product manager within Quaker’s Titanium Alloys division. Based on her analysis of this division’s sales data she concluded that revenues could be increased if sales staff allocated more time to winning larger accounts (and less to smaller accounts). Having received management approval, she attempted to implement this change but failed.
This report aims to:
1) Identify and analyse the mistakes made by Maureen Frye in the process of implementing her plan for change (c.f. infra.,Section II) 2) Outline possible solutions and recommend the course of action we recommend Maureen Frye take (c.f. infra., Section III).
II. Mistakes Maureen Frye made while trying to implement change
Her implementation plan did not take into account the corporate culture
Quaker has a strong and distinctive culture. The company has friendly ‘small-town’ feeling, it places a large emphasis on personal and informal relationships and encourages employees to discuss differences of opinion. Fry failed to take account of this culture in developing her implantation plan. She did not fully engage those who would be directly affected by the change, the front-line sales staff. She did not actively solicit their opinion of her analysis, or seek their buy-in to the planned change. As a result, “The sales reps apparently did not accept the recommendations, and a great imbalance in sales effort still exists.”
When making her diagnosis of the situation and determining the direction of change, Frye “(…) had spent much of her time in 1994 and early 1995 developing and refining the model and running the simulations.”. However, she had interacted with the DSMs, and one of the senior sales representatives, she had not involve in her planning the person directly concerned by the change. Indeed, her plan affected directly the Sales Representatives who had not been given the opportunity to discuss the change of their daily routine. In result, “The sales reps apparently did not accept the recommendations, and a great imbalance in sales effort still exists.”
b. She did not consider the cost/benefit of change to front-line sales staff i. Ignorance of the Salespeople value pattern of relationship with their clients Research conducted on the motivation of sales representatives in the Chicago and New York offices came to conclusion that their greatest motivator was the experience of a successful sale. Frye did not take into account the “long lead time needed to sell a large account, which could range anywhere from 3 to 18 months. And “The problems posed by large accounts were also more technically complex, often requiring extensive (…).” Therefore, the time needed to get a larger account and to coordinate with other departements will undoubtly lead to diminish the number of successful sales which motivated the Salesperson.
ii. No aknowledgement of the Salespeople reduction of power on decision DSM leadership style had used the Salespeople to make the majority of their own decisions. Indeed DSM states: “We see ourselves more as coaches than bosses.”. With her plan, Frye ignored that working with big account will imply Salespeople to get support and control from the Headquarter to seal and maintain the deal. Which an employee expressed in those terms: “Big accounts are much harder to crack. You need an appointment and you have to see a lot of people—the purchasing agents, product engineers,...
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