Intersect Investment

Problem Solution: Intersect Investment Services.

One of the after effects of the 9-11 tragedy is the change in the financial service industry. Companies have been forced to make changes in their business models in order to survive. Intersect Investment is one financial services firm that has recently struggled during this post 9-11 period. After many years of resisting change, CEO Frank Jeffers has publicly announced a change to a customer intimacy model. Even though Frank realizes the vision change will be challenging, he failed to organize a formal plan or design to roll out the vision. The internal forces of the organization (employees and management) are going in opposite directions and there does not appear to be any synergy in the organization. Frank most recently had to fire his Executive Vice President of Sales and Marketing because he did not share Frank’s vision for the company. The new model can only succeed if the employees and management embrace the new vision. With proper preparation and understanding of change management, Intersect Investment can face this challenge “head on” and be successful. External forces such as customers must trust their advisors with their money and they demand results. This paper will explore the various challenges that a company encounters when making drastic changes to the company’s vision and culture

Describe the Situation

Issue and Opportunity Identification

Obviously with any change in organizational structure there will be some resistance. With the firing of the Executive Vice President of Sales and Marketing, Frank Jeffers has made it known that resistance to his mandate for change will not be tolerated. This has caused some concerned within the organization. Employees that do not share his views will surely be replaced Already rumors have been spread of potential layoffs and employee satisfaction is low. The company’s goals are not being met and there is a 25 % turnover with the sales department and customer satisfaction is down 10 %. Mixed messages from the company’s leaders have the employees totally confused concerning the sales strategy. The new vision is a positive step in the right direction for Intersect. If executed properly the new vision will allow Intersect to grow the business and be successful.

Stakeholder Perspectives/Ethical Dilemmas

The stakeholders in this case are the CEO and his executive team, management, customers, and employees. Beginning with the CEO Frank Jeffers, his dilemma is trying to roll out his new customer intimacy initiative. Frank’s my way or the highway approach is abrasive and has already caused some concern among the rank and file of the company. He has already replaced one senior vice-president and will not tolerate any failure or dissention. Frank also has placed some challenging expectations on the replacement Senior Vice President expecting her to have the new vision in place and everybody in line in 12 months. If she fails, the company could fail miserably and perhaps fall into bankruptcy.

The employees are caught in the crossfire. The political infighting amongst the management team has caused a great deal of turnover especially on the sales team. In the University of Phoenix simulation (2004), the company’s turnover rate is 25 % in the sales department alone compared with 7 % company wide. The turnover rate is costing the company $410,000 for small business and consumer combined. The employees are leaving because they believe that management is not communicating, poor work environment, and the employees do not believe the management team in the rare instances they do communicate.

The customers are also suffering too. The lack of communication has stifled the sales team. Marketing has advertised the customer intimacy model; however the products advertised are not available leaving the customer unsatisfied. As mentioned in the University of Phoenix simulation (University of Phoenix, 2004, pg 11.), Sy Miguel’s letter to Frank Jeffers complaining about his most recent experience concerning Intersect’s new portfolio of products and the salesman’s only concern about renewing the contract.

Frame the “Right” Problem

The decision to change the “vision” of the company is not the problem. The problem is the method Intersect is using to roll out this new vision. The company failed to communicate the new vision properly and failed to educate the employees on transformational change. The decision was made by the CEO Frank Jeffers without any feedback or involvement from the employees. The results speak for themselves,