The Campbell And Bailyn Case Takes Place During A Time Of Significant Change In Thefinancial World.docx

The Campbell and Bailyn case takes place during a time of significant change in thefinancial world, especially within the investment industry. The trying economictimes had created a different sort of demand in the market place that required theapplication of complicated debt instruments. Additionally, the shrinking of high-profile sales had influenced the organization to restructure the sales compensationin such a way that required sales teams to work more closely with product managerand research staff located in a different geographic area. The case details theseactions, but it is important to remember that the catalyst for this new behavior wasthe changes in the environment. Here, we can see the application of Lewin’s Field Theory at work- the firm was in a state of quasi-equilibrium until forces in theenvironment (namely, the macro economic recession and mortgage crisis) createdforces that altered that state. According to Lewin, changes in the environment (thefield) result in changes in the behavior of the group within the field, and in this casethe pressure was enough to warrant a re-organization of the firm in order to bettercontend with the changes in the environment. When analyzing the case through Lewin’s lens, it is also important to note the elements of group dynamics that are at play. The changes in the field subsequentlyled to a restructuring of the organization and a redefinition of tasks and the team began to take a different behavioral shape. Previously, the “generalists” had been satisfied with their work and had healthy relationships with their clients; but aschanges in the field created changes in the workplace, the behavior of groupmembers began to change. John Oates became distant and averse to his new, non-local team of product and research

professionals, Callahan began displayingpessimism regarding general affairs, and Jen Ulin expressed satisfaction with thenew world order. This disparate state of group opinions and behavior wasdetrimental to the effectiveness and formation of a high-performing team, but according to Lewin it would not be possible to change the behavior of the negativeinfluencers in isolation – rather, the forces surrounding the team would need to beaffected and the team would need to traverse through the three-step-model as aunified whole. Without collective change, the temporary behavioral changes influenced by “pep talks” or other managerial pressures would ultimately be fruitless. Open-Systems The environment as described in the case is one of significant difficulty, and members of the firm may well feel as though that they are in “survivalist” mode. Winston needs to be acutely aware of this, as such a prolonged state of existence canlead to defensive behavior, combative dynamics between groups, and rivalry withina group. There are several factors that are contributing to this state in the case; 1)the KAT team is getting backlash from clientele regarding the inefficiency of the newstructure 2) calls are coming in that require a higher level of knowledge dexterityand a greater degree of risk should the wrong instrument or advice be utilized 3)salespeople are now being scrutinized by other functions as part of theirperformance management review. All of these elements can very quickly lead to aclosed-system environment where the KAT team becomes unwilling to continuouslylearn from the rapidly changing economic environment and instead reinforces each other’s defensive behavior, creating an “us and them” mentality within the team.

The threats to the team are such that the members have very little control overthem, and all of the threats originate externally; factors which exacerbate thedevelopment of defensive and anti-learning behaviors. This could backfire in anumber of ways; 1) the new compensation system could lead to inner warfareinstead of the intended purpose of bridging the knowledge gap between sales andproduct 2) salespeople could become less connected with the personal needs of their clients, preferring instead to just “get the job done” without the element of customer service that was a prior differentiator 3) the Boston office could becomeincreasingly siloed with unhealthy working relationships developing between theKAT team and the remaining specialists. Internal Fit and Nadler’s Congruence Model Another very important theme concept that surfaces in a variety of forms in this case is that of “fit.” The field changes that took place, which influenced the work environment, have rendered several previously well-fit elements misaligned. Let usexamine the most relevant fit segments of Nadler’s congruence model independently;1) Individual-Organization: the members of the KAT team are now viewing theorganization through a very different lens than they did before the change.We can assume that the members of this team are type A, gregariousindividuals who enjoy a high-income lifestyle and who are experts inrelationship management. This assumption is valid because these are thepersonality and motivational characteristics that create excellent salespeoplein the investment business. Now, in the new organization, t he salespeople’s

individual needs to be self-managing and independent are impeded by thefact that they have to rely on their other team members to assist in the careof their customers. Additionally, the new compensation structure has created a dissonance between the individual salesperson’s goal to earn a high commission and the organization’s goal to create products that better serve the clients. On the surface, it would seem that these two goals are aligned-the better the product and the more expertise the salesperson has regardingthe product, the more sales he should be able to make. However, when thecompensation structure is abruptly changed to incorporate feedback fromcoworkers instead of being based solely on financial performance, theindividual can feel that the organization is not supporting him in his goals.2) Individual-Task: In the new world order at C&B, salespeople that hadpreviously been generalists and functioned as singular and dedicatedrepresentatives of the firm for their clients, were now boxed into specialistsroles. Part of why these people were such high performers was due to thefact that they were able to build relationships with their clients above andbeyond the details of the job. This ensured loyal and lasting relationships,and it is in this arena that these particular salespeople were most suited. When they were forced into specialist roles, they lost their places asthe only salesperson assigned to particular accounts, and so theserelationships began to be diluted. Instead, they were required to sell andmaintain accounts with only the merits of their investment acumen in aparticular area of expertise. This suggests that the new roles thesesalespeople were in were no longer a great fit for them as individuals, as thejob focus shifted from relationship to technical knowledge.3)

Task-Organization: At Campbell and Bailyn, the organizational changes andtasks changes go hand in hand. In order to better meet the changing needs of the firm’s clientele, generalists had to become specialists and so their task definition was radically altered. In order to help support this change, theKAT team was introduced and implemented. These two sides of the samecoin were designed as a means to reinforce the other, and to create a socialsupport system. However, because the individuals in the roles exhibit signsof taskmismatch, it is difficult to tell whether or not the task/organizationrelationship is effective. If Campbell and Bailyn, as a larger company, decidedto implement the KAT organization across the company, it might experiment first to see if a team comprised of salespeople who had been specialists in thepast might be better suited. Part II: Action Resear ch Implementation and Winston’s Next Steps 1) Research and Data Gathering: In the case, Winston did perform a bit of research before approaching his team for a feedback and brainstorming session.However, this data was based solely on financial performance- Winston did not takethe time to gather additional qualitative data that could have aided in the ideationprocess. Now, I would recommend that Winston go back and spend timeunderstanding the personalities and social dynamics that makeup the office environment. For example, he could issue personality tests to generalists andspecialists alike to determine if there are thematic traits that permeate eachemployee group. In addition, he could ask a skilled, objective party (consultant orotherwise) to interview members of the team in order to discern pain points anduncover underlying issues that have arisen since the added pressure of theeconomic crisis. Armed with such insight, Winston would then be better equippedto utilize his workforce in such a way that would both address the needs of

themarket and take into account the individual needs of the employees. 2) Feedback: Winston did a good job in the case of taking the problem to hisgeneralist team in a meeting designed for that purpose. However, he neglected toinvolve any other office members- most notably, the specialists. By not gettingfeedback from over half the office, Winston and his team did not have theopportunity to get valuable insight from people who were already operating in a jobsimilar to the new one being designed. This insight may have brought to light theindividual/task misalignment that was previously noted, as the specialists werefamiliar with both the personalities of the generalists and the nature of the job.They could have contributed to the discussion in such a way as to ideate aconfiguration that was more conducive to multi-dimensional needs. In this regard, Irecommend that Winston take a step back and meet with the generalists andspecialists independently to get feedback on the process change. Then, he shouldconduct an office wide meeting where he delivers key insights uncovered at theprevious meetings to the greater team as a catalyst for constructive conversation.The greater team can then begin a brainstorming session to figure out someexperimental processes- these ideas would not only incorporate the combinedknowledge of the entire staff, but would also garner an element of buy-in fromeveryone instead of leaving a significant portion of the group completely out of thedecision. 3) Diagnosis: Here, Winston also did a good job of ensuring that the diagnosis of theproblem was collaborative. However, he did not go through a structured diagnosticmodel to ensure that important considerations were taking place. He showed theteam quantitative evidence of recent poor performance, and this technique waslikely well chosen for a team of professionals who are influenced by data as part of their day-to-day jobs. But Winston was lacking insightful qualitative data withpersonality descriptions and cultural norm information. Armed with the

properresearch, Winston could have gone much deeper into the stage of the Action-Research model.Specifically, when the team thought of the KAT, it could have examined theproposed team with the following questions:A. Does the group have measurable goals? Is its purpose clearly defined and agreedupon by all members?B. Do the group members have the proper experience to be able to accomplish theexplicit goals? C. Is there a process to handle conflict that might arise as a result of the new teamdynamic? Should this be informal or formalized? What types of conflict can wepredict, and can we agree on some terms on how to objectively view and analyzesuch conflict?D. How will the group receive feedback? Will this be left up to the customers andthe new performance management program? Or will the team be able to doperiodic self-assessment and adjustment? If so, what should be the proper cadenceand format for these assessments?E. What is the impact of the new tasks on other members of the KAT? Othermembers in the office?F. What potential downfalls can we see? Are there mechanisms in place that canhelp mitigate?G. Do we feel, as individuals, that we are well suited to complete the new job as it isbeing outlined?These questions are tough to answer- but now that the KAT has been in effect forsome time, Winston might find it very helpful to run through a session designed toanswer these questions. Recalibration based on the outcome might be necessary.Based upon the reading in the case, I would propose (if I were a member of theKAT), to keep the specialization on the team, but revert back to single-handledaccounts. Meaning, only one member of the team would actually converse with aparticular client, but if the client needs something that is outside his realm of specialization, he would consult with that specialist to determine the best course of action for the client. This would need some process analysis in order to be effective,but an experimental approach could be taken wherein the team opens itself up toadaptation based on the learning it gains in the new format.

4) Planning and Intervention: There was not much discussion regarding action planning in the case beyond “after lengthy discussions with senior managers in NewYork…Winston had introduced the ‘Key Accounts Team.” Although not stated in the case, it seems apparent that Winston used his clout and influence to garner buy-infrom other management members for his idea. This did not necessarily follow anysort of OD/C recommended approach to this step.Some steps that Winston could take now in order to plan for the future of the KATteam are 1) Determine measurable goals for the team to achieve 2) Discuss tactics inorder to reach those goals 3) implement regular inspection and feedback sessionsfrom both the team and major clients. Encourage recalibration in order to foster anexperimental environment instead of one where high-performance is the onlyoption.Another element in the case that deserves further scrutiny by Winston is the newPerformance Management system. Although this was not his idea, if he did his duediligence in data collection and observation, he would probably find that the new program was contributing to the KAT’s collective defensiveness and he might see it as a threat resulting in heightened closed-system thinking. Essentially, the company took one of the job’s most convincing motivators (compensation) and turned from a completely self-propelled mechanism to one that was subject to the control of others. For a highly independent, self-motivated team such as the KAT, it is easy tosee why this would not be well received. It is a viable threat that the relationshipbetween this sales team and the product/research teams will begin to erode overtime, ultimately working against the goal of the program (although the case said it has had moderate success so far).This business is built on relationships, and

the KAT are relationship experts. It stands to reason, then, that a more appropriate way to elicit communication andcollaboration between the sales team and other departments is to encouragerelationship building between them. Granted- further analysis would be necessaryto determine whether this is the right course of action for the product/researchteams, but in taking the initiative to dig deeper, ideas would most likely begin tosurface. From reading the case, I thought a potentially more feasible way for theseteams to communicate would be to organize retreats- weekend, multi-departmentalgetaways that were half debriefing sessions and half relationship-building activities.By tapping into the natural tendencies and skill of the sales team, the company couldbegin to organically grow collaboration that happens willingly, without threats to one side and undue pressure on another to take on a “managerial” role.

CAMPBELL AND BAILYN’S BOSTON OFFICE: MANAGING THE REORGANIZATION Dear Mr. Ken Winston,

First, thank you for hiring Miracle Consulting to assist you in the next few months to improve Campbell and Bailyn’s. The changes that your company has implemented have both positive and negative aspects to them. The establishment of the Key Accounts Team and the New Performance Management System are great ideas. We feel that your KAT team was implemented much better than your performance management system since the KAT team followed most of Kotter’s eight-step plan for implementing change, while the Performance Management System didn’t. It’s obvious that the Performance Management System is a good idea because the results were positive based

on annual sales. However, the ideas could’ve been implemented better since there are several key issues. Even though we believe that the issues are detrimental to your company’s well-being, they aren’t impossible to resolve.

Issues and Analysis

Issue 1: Fears of Job Specializations It has been expressed by your team members that they’re worried about the new team structure limiting their future career prospects. Managers often neglect to further develop skills of employees that are in a specialized role since the managers are satisfied with their employee’s current role and performance of their employees(Tucker). However, if your team members start to believe that their current role has no advancement opportunities, they may leave your company to find a career that provides better opportunities to learn transferable skills and the possibility to advance further in their career. Therefore, this may lead to your company seeing a higher turnover rate.

Issue 2: An increase in customer dissatisfaction It’s obvious that, because of specialization, trades have become more complicated for your clients since they would have to communicate with several different departments rather than dealing with just one generalist. This made trading more complicated and tedious for your clients and about half of them didn’t believe the change was necessary. Also, by forcing your clients to deal with more than one person, the personal connection between client and generalist is lost.

Issue 3: Resistance of Performance Management System Currently, there’s tension and resentment within your sales staff due to the rash implementation of this system. Unlike the introduction of the KAT team, we noticed there’s little communication during the transition period. Employees are less likely to accept change when there is a lack of communication and they feel excluded from the process (Langton 551). According to the cognitive evaluation theory, the increase in working pressure to make higher profits has also shown to be an ineffective method of encouraging employees in the long run. If your employees continue to be dissatisfied with the new management system this may lead to a continuance commitment or an increased turnover rate.

Alternatives

Alternative #1: Resign of Evaluation System. With the new system, the bonuses are solely based on feedback; however, we don’t think this is the best solution to judge a person’s efforts. We advise you to redesign your effectiveness evaluation system by considering both sales volume and feedback in the evaluation. Financial

incentives are still necessary, so that employees are rewarded both intrinsically and extrinsically. It’s common that people may focus too much on getting the compensation. However, the new performance management system may destroy the work environment and cause them to lose their target while they’re chasing the sales figures.

Alternative #2: Unlimited Vacation Days

We initially thought of offering your employees unlimited vacation days. Not only will your employees feel recharged from the extra time off, they may also enjoy the feeling trust that’s bestowed upon them since they’re asked to take time off at their own discretion. However, this policy can be both underutilized by employees, when they’re too scared to take time off and abused by employees who don’t care about the company. Therefore, we believe our recommendation of communication and setting team goals would be more beneficial.

Recommendations and Solutions:

Recommendation 1: Problem-Solving Team and Job Rotation

We recommend that your company should develop a problem-solving group consisting of members from the Key Accounts Team and hold weekly meetings. We believe that this would provide your employees with more opportunities to develop their personal soft skills. The purpose of each meeting would be to increase communication within the company, so all members are well informed of any major decisions.It also allows group members to express any dissatisfation with the company and therefore, would be in the “Voice” quadrent of the Job Dissatisfation Response Chart. Also, a job rotation system should be implemented with quarterly rotations. We believe that your organization should still have specialized roles since it increases productivity (Tucker). Not only will job rotation increase motivation, it’ll reduce the fear of future job prospects since employees can learn a wider range of skills (Langton 189).

Recommendation 2: Conference Calls

Due to specialization, the process for in-house traders to receive information is now more complicated. Therefore, your company should utilize conference calls that would include the client and all the members of the KAT team. This would allow the client to receive all the information they’re looking for at one time, rather than having to make three different phone calls. This could also please the clients since they’re now receiving more facetime with the employee that they’d initially worked solely with.

Recommendation 3: Team Goals and Increasing Communication

Currently, the biggest concern is the loss of customers due to specialization. In order for the performance management system to resolve this we suggest increasing lunch visits, dividing the customers amongst the specialists, and integrating customer satisfaction into the performance evaluation. Through this, close working relationships will be maintained and your company will be able to keep their personal connection with clients which can build trust and loyalty. Another crucial change needs to be an increase in communication.By allowing your employees to provide feedback, it gives your employees a voice and is a good indication of how well the new system is working. Furthermore, just as you had shared sales figures from a competitor you should continuously share valuable information regarding your company’s position compared to competitors to motivate employees. The feeling of purpose and meaningfulness to the company are high intrinsic motivators for employees (Langton 190). Not only will this improve the overall satisfaction of the employees but studies show this will increase customer contentment and loyalty (Langton 101). Lastly, by creating small goals for the team and rewarding these short-term “wins”, this will increase both teamwork and the likelihood of the new system being accepted by employees.

Conclusion

After a careful analysis, we strongly believe that our recommendations will be highly beneficial for your company. Not only will they decrease the fears about job specialization, they will also increase communication between employees. We also believe that they will solve the problems that your clients face, especially having to make several calls to receive the information that they need. Attached to our analysis, we have included an implementation plan that will give you the initial steps of using our recommendations.

The image above is our suggested implementation timeline. We believe that, immediately, you should implement conference calls since it takes very little effort to implement it. Also, by using conference calls, you are also increasing communication immediately. After one month, we believe you should have set goals for your team and extrinsically reward them for being able to work as a team. By month 3, we suggest that the problem solving team is implemented and that you begin the quarterly job rotation. We wanted to introduce the problem solving 3 months in rather than immediately so that you are given an opportunity to communicate the idea to your team members.

Campbell and Bailyn was founded in the early 1900 s. The company has been based in New York. C & B has been one of the largest investment banks in the market. The company has been performing reasonably well within the investment banking market. Along with this, the firm has had a bond division which has been the fastest growing unit for the company. The most productive division for C&B is in Boston. It has eight regional offices in the world. Moreover, after the New York office, Boston was the largest office for C & B. In terms of the revenue model and the size, the Boston office was often used as the bellwether because of its management ideas. Ken Winston who is the regional sales manager for the Boston office has been an experienced individual in bond sales. He was appointed in the year 2003. The idea behind his hiring was to actually grow and expand the local sales team. In the recent past, the banking industry has changed dramatically. The market has grown and new players have entered the market. Product scope has increased and the demand has also been diversified. The companies have been facing issue where they find it hard to sell and maintain the volume. The margins have also decreased and the market has been affected with the entrance of low price and low service brokers. To actually gauge in reasonable profits, the brokers have been made to understand the market deeply. In the year 2007, the financial crisis melted down the mortgage backed securities market which also affected the sales for the firm C & B. In the current situation, Winston had to actually make two strategic changes to operate efficiently and maintain the sales growth for the firm. To actually fulfill the strategic goal, Winston created the “key account team” KAT. The five major generalists in the taxable bond division sold the entire product line and also managed their respective customers. Winston combined the generalists and also assigned each one of them to sub segment of the firm. The major goal or the objective for Winston has been to enhance the sales team expertise for the product details and also focus on each individual respectively. Along with this, for the past several months, the customers have also enjoyed the change and they see the new sales team more valuable. However, in spite the efforts made by Winston, some customers have been unhappy and have perceived it more complicated. Moreover, some sales people also found the new method a bit complicated because of the multi product trades and large number of people. Another concern for Winston has been the limitation on the natural salesmanship for the people due to the specialization. Along with this, the second change implemented by Winston was called as the multi source appraisal. This method did not include the combination of sales volume and own manager assessment. The change was aimed to actually improve the collaborations between the cross functional teams and the regional sales force and also encourage the team to improve upon the profits and gross margin. The major risk that has been associated with this plan is that the method might lose upon the gross margins and the sales volume. The sales team was also frustrated with the change. Problem Analysis and Diagnosis

Winston had to present the two changes for the annual year end meeting. Since Winston has been in touch with the customers and the sales team, he was rather clear with the pros and cons of the new changes. Since the KAT team provided value to the customers, it also created confusion, extra burden and complications for the sales team and also for the customers. The major issue was that the customers had to deal with multi people now instead of an individual who handled them in the past. Along with this, more people were engaged depending upon the size of the deal. Number of meeting and calls also increased. The decision to actually introduce KAT team had missed the input and the engagement from the specialist team who had experts working on specialty products. Similarly, the fail process believed that the engagement not only helped in communicating management respect for the individual but it also encouraged the refutation which cleared the thinking and the vision. It also lacked smooth process and collaborations. Furthermore, the sales team has been spending extra time in house to figure out the new process

Campbell and Bailyn’s Boston Office: Managing the Reorganization

C&B is one of the five largest investment bank in the world, with strong presence in all banking segment industry including: corporate finance,

investment management, mergers andacquisitions, securities sales and trading.The Boston office, which is C&B largest regional

office, is undergoing a major reorganizati on to address the loss of business to competitors because of its assumed lack of detailed

product expertise.The Boston office used to spit its portfolio of customers between 5 Generalists, who managed75% of

the total taxable bond sales and 7 Specialists, who managed 25% of taxable bondsales. The former earned up to a million dollars in salaries by making

multiproduct tradeswith large accounts, which often required the assistance of one of more specialists, whereasthe later earned twice less

by making smaller trades with smaller accounts.Followin g the reorganization in June 2007, the Boston office is now structured in

key accountteams (KAT). The former 5 Generalists are now heading KAT that are specialized by product. Each KAT interact with

the top 60 customers for their respective product of expertise.In addition, C&B introduced a new performance management

system (PMS) to address the practice of salespeople to only focus on deals that generated the highest margins. The oldPMS used

to assess salesman on annual sales volume and regional sales managers ownassessment. The new PMS includes softer measures, such as

salesman responsiveness to theneeds of traders in New York and the level of motivation in learning new product.The outcome of these

2 major changes is contrasted. On one hand the new KAT organizationonly pleased half of the Boston Office customers. Half of the customers

dislike the constrainto deal with multiple specialist to close a trade; whereas members of the KAT were worriedof being to specialized and to

limit their career prospects....