Assignment - Case Study 2 - Compound UK

In response to changes in organisational structure, Compound UK decided to implement a software package called Lotus Notes to improve knowledge sharing across the organisation. Essentially, the new software would improve teamwork and communication throughout the business, which in turn would lead to greater success. However, from reviewing the case, it is clear that Lotus Notes could have been introduced, implemented and operated in a more effective way. This is discussed in detail below.

Introduction stage changes

Although the case does not include details of employee training pre-implementation, there are clear indications of conflicts of interest between employees. Basically, Compound should have ensured that all employees fully understood the importance of using the new system in an ethical and appropriate manner before it was put into operation. For instance, it became apparent that many of the sales reps were recording irrelevant contact visits to make their performance seem better. Strict guidelines of use pre-implementation would have helped to avoid such an outcome.

It was clear that many of the sales reps were unhappy with certain elements of the new system. Compound should have actively communicated with sales reps before implementation in order to establish employee opinions and suggestions relating to the new system. By doing this, Compound would have identified possible problems at an early stage, as opposed to encountering issues after the introduction stage. Through such consultation, employees would have felt more comfortable with the new system. As well as this, obtaining and implementing employee suggestions would highlight that Compound value the contributions of its staff, which in turn would likely improve morale and performance.

Similarly, senior management should have communicated to sales reps the purpose and intentions of the new system at the introductory stage. This avoids an upset and subsequent reduction in morale, which did in fact arise when sales reps discovered at a later stage that one of the objectives of the system was to gain tighter control of employees by monitoring their activities profusely.

Operational changes

During usage of Lotus Notes, it became clear that many sales reps were abusing the system's performance measurement element. Compound UK could have managed such occurrences more effectively if they had controls in place to monitor exactly how the system was being used. For example, a team could have been set up to ensure sales reps were using the system appropriately. In conjunction with this, regular feedback sessions could be held to help discover and thereafter rectify any issues which the sales reps raise.

On reflection of the case, it is clear that sales reps fall into two distinct categories: career-orientated and non-careerist. In terms of organisational culture, Compound should have tried to ensure as best as possible that all employees were equally highly driven and motivated individuals, all intent in selling as much possible. This could have been achieved through feedback sessions, morale building exercises and a bigger emphasis on managing people as keeping staff motivated and enthusiastic is key to success within any business. With such changes, all reps would be working towards a common goal, and would thus be more likely to utilise each other as a team through knowledge sharing. After all, this was one of the main objectives of Lotus Notes.

On the whole, performance measurement was not effectively managed. As detailed above, league tables were abused by staff to achieve better apparent results. Area management and sales office staff should not misinterpret these results as they are not an accurate reflection of performance. For instance, contact rates are not necessarily a true indicator of selling performance, especially when reps were able to inflate their true levels of contact through inappropriate recording.

Again with regards to performance measurement, not all sales staff should be measured equally since primary care reps do not service an equivalent client base to specialist care reps. The system implemented favours specialist care reps who had more complex sales situations in their territory, which they could subsequently add to the strategic selling database. This made them appear more willing to make use of the knowledge sharing system and gained them credit from management. Obviously, this is unfair on primary care reps.

In general, the e-mail function provided by the package could have been utilised more effectively by managers. In particular, a uniform feedback process providing reps with constructive advice on improving performance could and should have been initiated through e-mail. This would ensure that reps are aware of areas which need improved on, thus helping improve the overall success of the business.

One area which we definitely feel would benefit from change was the reward system employed by Compound senior management whereby individual managers to decided whether or not sales reps should be awarded a bonus. This was problematic since managers in different areas measured success in different ways. A uniform reward system which measured success in the same way across all regions would be much fairer, as well as less time consuming since each individual manager would not have to consider which staff deserved bonuses.

System changes

What is most surprising is the fact that Lotus Notes does not include a figures based on actual sales. Surely the quantity and financial value of sales achieved by reps are the most significant measures of performance. The system would benefit from including such indicators, since management would be able to assess more easily how the reps are performing, discovering instantly who the poorer performers who need to improve are.

The inclusion of league tables is a factor which undoubtedly affects the morale of certain staff. It is commonly known that league tables can have an undesirable effect since staff become de-motivated – surely an outcome Compound wish to avoid. However, it is important that staff see how they are performing in comparison to the rest of the organisation. Therefore, we suggest that sales rep performance be included in a table which organises reps in alphabetical order. Using a sort function, the league table view could still be obtained. In implementing this idea, poorer performers would not feel pressurised to the same extent.

With reference to the discussion databases, Compound UK would benefit from giving all employees, including senior managers, access to the discussion databases. The role of a manager is to help lower level employees, and by implementing this system change, the company would have removed the barriers implicit within the organisational hierarchy, thus creating a more efficient team-working environment.

Finally, to ensure reps make sufficient use of the contact records, we would suggest that each contact record consist of a number of mandatory fields to guarantee that each rep puts in roughly the same effort when completing them.

Knowledge sharing can be a highly effective business tool if implemented in the correct manner and ran efficiently. If Compound UK can refine their system with the aforementioned recommendations, we believe that they can not only experience the full benefits of knowledge sharing, but also improve overall business performance.

This report was prepared in collaboration with Robbie Innes.