Quaker Steel

Maureen Frye wants to change the call patterns of salespeople responsible for selling extruded titanium alloy products at Quaker Steel. If she is able to successfully implement her plan, she would then like to extrapolate this process to other sales functions at Quaker. Frye's initial attempts to change the call patterns yielded negligible results; she has currently been tasked by senior management to develop a successful implementation strategy. Management has afforded Frye the latitude to propose radical changes to Quaker's organizational philosophy to help achieve her targets. Frye believes that a 20% reduction in Class 6 accounts can yield an increase in sales revenues exceeding 30% annually.

The primary problem facing Frye is lack of incentive for salespeople to adopt her plan. Salespeople are paid on a straight salary basis; incentives were typically not afforded for performance metrics. Though a modest cash bonus system exists for performance, one district sales manager (DSM) indicated that it was never utilized. Internal research by Quaker indicated that a sales representatives' primary motivation was the experience of a successful sale. Secondly, they enjoyed working with customers to solve problems. Monetary rewards was the lowest ranked motivator. This lack of incentive is especially problematic from senior management's perspective. Whereas senior management would like to implement this call pattern strategy by Frye in order to increase revenues, the actual salespeople have no explicit or implicit incentives in order to actually achieve such results. Given their motivation, it should be expected that the salespeople would maximize opportunities to make smaller sales and to work hands-on with customers instead of within the bureaucracy of larger company. Currently, salespeople have very little reason to sell to larger customers, as it would result in a lower absolute number of sales, despite the fact that total sales and sales per order would likely increase dramatically.

Additionally, the sales representatives behave like independent, salaried contractors. Though they formally report to the DSM, the DSMs indicate that they allow the sales representatives to make their own decisions. The DSMs merely provide general direction, and see their role as helping to manage the relationships between the sales representative and other Quaker Steel department personnel. In this sense, the DSMs do not provide any clear and consistent leadership as to their managing of the sales representatives. When an organization is attempting to alter its processes, it needs a firm leadership structure in place to help facilitate the organizational change.

Furthermore, Frye's initial attempt at instituting this new call pattern strategy included no involvement of the personnel who would be impacted by this change. This was a clear and significant error on Frye's part, and it will negatively impact her ability to persuade the salespeople to accept this change prospectively. Although Frye may have included various sensitivity analyses, Frye never solicited any thoughts, ideas or feedback from either the DSMs or the sales representatives. This strategic blunder alienated Frye from the sales representatives. Frye only knew a handful of titanium extrusion sales representatives well when she issued her memo. Thus, Frye had little persuasive leverage in convincing the sales representatives to perform their jobs differently; no representative reported to Frye directly, and some may not have even known her. Additionally, as the sales representative's supervisors, the DSMs, were not aware of the background and reasons for instituting this organizational change, the sales representatives had no formal network available to answer their questions and concerns regarding this strategy change. It is no surprise that most representatives thus paid little heed to the suggested changes. The memo failed to convey a message of upper management buy-in, as the sales representative saw no direct supervisor signing-off on this change.

Finally, Frye's memo also enabled salespeople to independently determine which of the small accounts to eliminate. Unfortunately, this strategy facilitated the unintended consequence of providing no strategy or incentive for a salesperson to eliminate any of their customers. As most of the salespeople are classified as self-motivated individuals, it stands to reason that none of them think they are wasting time on any customers. Representatives are the least objective in assessing which customers to divest. Though they can certainly provide detailed information that may facilitate an informed decision by management, their call pattern strategy has not changed because they each value all of their individual customers.

Presently, Maureen Frye wants to reintroduce her strategy and achieve effective implementation.