Change Management

Change Management FutureCom Böhl, Fischer, Friebe, Gantenberg Change Management Plan for the CRM implementation at FutureCom

Platin Consult Int.

I

Table of Content 1.

MANAGEMENT SUMMARY ............................................................................................................................. 1

2.

STATUS QUO IN FUTURECOM ......................................................................................................................... 3 2.1

AS-IS SITUATION AND TARGET STATE ................................................................................................................................. 3

2.2

THE EFFECT OF CHANGE ON EMPLOYEES............................................................................................................................. 4

2.3

ANALYSIS OF THE CRM PROJECT’S STAKEHOLDERS .............................................................................................................. 5

2.3.1

Analysis of the Operational Settlement and Invoicing Department .............................................................. 6

2.3.2

Analysis of the IT Department ........................................................................................................................ 6

2.3.3

Analysis of the Marketing Department .......................................................................................................... 7

2.3.4

Analysis of the Sales Department ................................................................................................................... 8

2.4 3.

TRANSITION CONCEPT .................................................................................................................................. 11 3.1

RAISING THE LEVEL OF COMMITMENT (LOC) .................................................................................................................... 11

3.1.1

Raising Operational Settlement and Invoicing Department’s LoC ............................................................... 12

3.1.2

Raising IT Department’s LoC ........................................................................................................................ 12

3.1.3

Raising Marketing Department’s LoC .......................................................................................................... 14

3.1.4

Raising Sales Department’s LoC ................................................................................................................... 15

3.2

4.

ORGANIZATIONAL ANALYSIS ............................................................................................................................................ 9

TEAM ORGANIZATION .................................................................................................................................................. 16

3.2.1

Composition of the project steering committee ........................................................................................... 16

3.2.2

Composition of the project team .................................................................................................................. 16

TIME SCHEDULE ............................................................................................................................................ 19 4.1

DESCRIPTION OF EACH PHASE IN THE TIME SCHEDULE ......................................................................................................... 20

4.1.1

Initial Speech ................................................................................................................................................ 20

4.1.2

Team building process .................................................................................................................................. 20

4.1.3

Gain support and reduce resistance ............................................................................................................. 20

4.1.4

Requirements Engineering ........................................................................................................................... 21

4.1.5

Technical realization..................................................................................................................................... 21

4.1.6

System Changeover ...................................................................................................................................... 21

4.1.7

Reinforcement .............................................................................................................................................. 21

4.1.8

CRM Monitoring ........................................................................................................................................... 21

5.

MEASUREMENT WITH KPIS ........................................................................................................................... 22

6.

REFERENCES ................................................................................................................................................. 25

List of tables and figures TABLE 1: DIFFERENT TYPES OF LEADERSHIP ........................................................................................................................ 4 TABLE 2: DIFFERENT LEVEL OF COMMITMENT ....................................................................................................................... 5 TABLE 3: LEVEL OF COMMITMENT FOR EACH DEPARTMENT ............................................................................................... 11 TABLE 4: FINANCAL KPIS ..................................................................................................................................................... 23 TABLE 5: NON-FINANCIAL KPIS WITH FOCUS ON EMPLOYEE .............................................................................................. 24 TABLE 6: NON-FINANCIAL KPIS WITH FOCUS ON CUSTOMER.............................................................................................. 24

FIGURE 1: ROLES IN A TEAM ................................................................................................................................................ 17 FIGURE 2: COHESIVENESS/PERFORMANCE NORMS .......................................................................................................... 18 FIGURE 3: TIME SCHEDULE ................................................................................................................................................. 19

-Platin Consult Int.Böhl, Fischer, Friebe, Gantenberg

1. Management Summary The present document deals with a change management concept regarding the new strategic positioning of FutureCom as a premium brand in the telecommunication market with a focus on the introduction of the CRM system as a major step to achieve the strategic goal. The

D. B.

project requires some radical changes in current business processes and affects a huge amount of employees in their daily work routines. A critical success factor is the support of these employees. Our analysis has shown that the actual attitude of most affected parties is quite negative, which means that the success of the project is really threatened.

D. G.

This document gives practical advice to overcome these problems to ensure the successful completion of the project and to build the foundations to maintain the position of a leading company in the telecommunication market. Based on an analysis of the current situation that illustrates stakeholder’s interests and the impacts of the change on the organization, it is discussed how to reduce resistance and gain support for the project to accomplish a successful implementation within the constraints of time, financial resources and quality. Moreover we provide a detailed plan how to establish the needed changes in daily business to gain the expected benefits. The project plan is provided as well as controlling means to assure its compliance. FutureCom suffers from market saturation, high costs and innovation pressures. While the company has been struggling to gain a competitive advantage, its competitors already have developed a clear value proposition. The new strategy is to position FutureCom in the premium segment, which promises to be highly profitable for the next years. Attaining the goal includes the introduction of a COTS CRM system that affects a major part of the employees in IT, Marketing, Sales and Operational Settlement and Invoicing Department. Due to a lack of communication there is a high level of uncertainty. Rumors have been spreading, the workers council is contacted and some departments show heavy resistance. IT staff fear of losing their legitimacy, because they think COTS will replace in-house developed software completely, if once successfully introduced. The plans of establishing a Business Application Services department even enhance their fears. As a result, they show resistance. By officially communicating the logic of change, envisioning the chances and opportunities of the change for software developers, emphasizing their future importance and giving them appreciation, IT employees will likely reduce resistance and potentially even show support. Integrating the opposition leader Mark Propinski in the communication of change is advisable to quickly deescalate the situation. Sales Department’s attitude toward the change refers to performance, reliability and stability concerns of Rita Cox. Because the existing software SettleStar is integrated in optimized processes and has a great performance and reliability, it will be used in

-Chapter: Management Summary-

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future, too. The IT department will develop interfaces to the CRM, as they have already successfully realized the software itself. Employees of sales fear of transparency regarding their sales and management interfering in work-life-balance as a consequence. By paying fixed salaries as before and additionally paying bonuses per sale higher than the given target, successful sales employees will have the chance to choose between free time and bonuses. This approach provides flexibility, safety and reduces resistance to the change. Steve Rosenberg as the head of marketing has a positive attitude toward the introduction of the CRM system. He is not satisfied with the given situation and sees a lot of potential in the new system to improve the situation in his department. The establishment of a help desk for employees regarding questions to the CRM system has to be communicated to reduce uncertainty and resistance. Additionally, the importance of the change has to be emphasized to gain support by Rosenberg’s subordinates for his vision. The implementation of change is realized by a project team that consists of 17 members and is headed by John Wiley as the contact person for the steering committee.

-Chapter: Management Summary-

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2. Status Quo in FutureCom J. F.

2.1 As-Is situation and target state As-Is Situation The successful introduction of the CRM system is very important for FutureCom, because the project is meant to contribute to the implementation of the new business strategy. Without a change the future of the company is at risk. The current situation of FutureCom is characterized through following problems: 

Market is considered saturated



Competition has become rather fierce



Costs of innovation pressures are increasing



Some competitors have already developed a clear value proposition



FutureCom is struggling to create a competitive advantage



Business customers demand lower costs and rapid deployment

To counteract these concerns there are several goals, which have to be pursued with the implementation of the CRM system to ensure that FutureCom is able to maintain its leading position. These goals can be structured in external and internal ones.

External target states 

FutureCom is positioned as a premium brand delivering reliable telecommunication products and has therefore a clear competitive advantage



The market potential of becoming a premium seller is high enough to keep the strategy for the next years



Margins are very profitable



Increased sales due to a higher repurchase rate



Increased customer satisfaction and therefore loyalty due to increased customer communication, customer transparency and knowledge about the customer needs

Internal target states 

Better cost-benefit ratio



No layoffs



Lower marketing costs due to mass-individualized marketing campaigns



Business Application Services Department is set up and fully integrated with John Wiley as its head, responsible for the selection, introduction, and functional maintenance of COTS.

-Chapter: Status Quo in FutureCom-

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

All interfaces to the CRM system are developed and the CRM system is completely integrated into the company’s IT infrastructure



All marketing and sales processes are completely redesigned and integrated with the CRM

D. B.



A stable and reliable running CRM system



Employees are well trained in the usage of the new CRM system

2.2 The effect of change on employees The planned introduction of the CRM system can be considered as a radical change, because it affects a lot of people, requires changes in business processes and leads to organizational restructuring. Past experience has shown that changes in organizations are almost always connected with resistance

[1].

Reasons for this can be found on individual as well as

on organizational level. On an individual level, the main problem is the fact that a change always means that there is a decrease of safety. A natural reaction to upcoming change in conjunction with uncertainty of the future is the occurrence of fear to experience a worsening of the current situation

[2].

From an employee’s perspective, this could mean the decrease of one's power or in the worst case, the loss of one's job. There are problems quite similar on an organizational level, because some changes do not only affect single employees, but whole departments. Of course organizational groups or departments are not willing to accept threats to their status. For example, they might fear a decrease of their expertise

[3].

Another fact that indicates that

there will be resistance is the current style of change leadership. In literature, there are four different types of change leadership, which are defined as follows: Table 1: different types of leadership

Type of leadership Description Collaborative

The affected parties are actively involved

Consultative

The affected parties are informed and asked for their opinions

Directive

The affected parties are informed about the change and enlightened about the reasons

Coercive

The affected parties gets informed about the change

Golembiewski (2000), p. 299

1 Cf. Lawrence (1969) 2 Cf. Watson (1975), pp. 51f 3 Cf. Robbins and Judge (2012), p. 616


4


The chosen style has impact on the probability of acceptance of the affected parties. A rule of thumb is: the greater the active participation, the greater the willingness to accept the change. Another variable, which has influence on the acceptance, is the degree of change. People are more likely to accept small changes then radical ones

[4].

Until now, employees

could not participate in the process at all. The decision was made without informing and involving employees officially. As you can see, there is every indication that the employees of FutureCom will show resistance. We will investigate the current and the potential occurrence in the stakeholder analysis. D. D. B. B.

2.3 Analysis of the CRM Project’s Stakeholders In this section we will determine the stakeholders of the project through analyzing which departments or groups are affected by the project and in which way. After identifying a stakeholder we will investigate the attitudes toward the project through examination of the perceived risks and benefits. This information is used to categorize the stakeholders according to their level of commitment to the project. We will use the four categories resistance, let it happen, help it happen and make it happen.

Table 2: different level of commitment

Level of commitment

Description

Resistance

Members of this group do not want the change to be successful and try to work against it.

Let it happen

Members of this group have a neutral opinion. They won’t fight for or against the project.

Help it happen

Members of this group will support the project and do what is expected of them.

Make it happen

Members of this group are drivers of the project and are willing to initiate change actively.

Benjamin and Levinson (1993), p. 30

4 Cf. Wallace (2007)


5


J. F.

2.3.1 Analysis of the Operational Settlement and Invoicing Department The Operational Settlement and Invoicing Department of FutureCom has its own settlement system called SettleStar. This system is needed to process the large amounts of data that incur in the department. With the introduction of the new system, it is necessary that interfaces are implemented between the new CRM system and SettleStar because the department will definitely keep its old system. The task of these interfaces is to exchange large amounts of data between the systems and therefore they have to work stable, reliable and with high performance. There are no big changes for the employees of the Operational Settlement and Invoicing Department due to the fact that they will keep their old system and that they are not willing to change their processes because they are known for their high efficient processes. Only additional work, resulting from faulty interface implementation could worsen the work moral, so it's Rita Cox's biggest need to prevent this. The departments as well as Rita Cox have a neutral attitude towards the project and therefore they belong to the group “Let it happen”.

D. B.

2.3.2 Analysis of the IT Department The actual project is the first time FutureCom is using COTS software, instead of setting up an in-house development project, so the project has a special importance for the IT department. On the one hand they were not needed to develop the system on their own. Through this fact all of the employees are at least affected in a passive way, because there is a change of responsibility which conflicts with their expectations to be in charge for all IT projects. The novelty of this situation will make them pay special attention to the project and its progress. On the other hand at least some of them will be affected directly, because it will be necessary that they become acquainted with the interfaces of the purchased COTS to ensure the proper integration in the existing IT landscape. In addition, the project provides career opportunities for them, because they will have the change to join the “Business Application Services” department. These direct types of involvement are not perceived until now by most of the employees, because these plans were not told to them yet. Currently, they perceive the project as a threat only. They are obviously irritated about the plan and they have developed a negative attitude toward the project. The current plan to use COTS causes fears at the IT department. Most employees think that the project could affect their department the most, because they see it as a test case for further COTS projects and consequently as a decision about their future. The degree of uncertainty is really high, because they were still not informed officially right now, but through rumors, which are in circulation. Most of them are scared of losing their legitimacy and as a consequence their job. An-


6


other problem is that the IT department thinks that their knowledge and experience is depreciated. This reaction can be described as an emotional one. Feelings related to these thoughts represent a wound of pride. Negative emotions like this can lead to oversimplification, loss of trust and negative interpretations of other party's behavior

[5].

The fact that the

employees of the IT department think, that the management does not appreciate their work anymore and is trying to get rid of them, reflects these findings. As a result they start showing resistance, which is directly reflected in the fact that the employee Mark Propinsky has contacted the workers council. A more indirect way of resistance is the fact that many employees have started to spread rumors. This can be considered as an informal attempt to influence the introduction of the CRM. Rumors have negative consequences, such as lowered moral, loss of trust between management and employees and increased stress at work

[6].

Because

the employees have started spreading rumors deliberately, we can see that they are trying to avert the introduction of the CRM. This type of behavior can be allocated to the category of political behavior. On account of the perceived importance of the project for the IT department, it is likely that they will tighten their resistance, when the project becomes more concrete. The reason for this is that there is currently, as we have seen above, a very negative attitude towards the project. Research has shown that attitudes can arouse related behavior. An important factor which influences this relationship is the attached importance

[7],

which is,

due to the existing fears, very high. As we have seen the IT department clearly belongs to the group “Resistance”.

J. F.

2.3.3 Analysis of the Marketing Department Till this point, the Marketing Department uses a legacy system, which is proven as inflexible, error-prone and limited functional to the department's requirements. This leads to a lack of customer understanding which handicaps sales success. The big benefit of the CRM project for the Marketing Department is the Business Intelligence functionality. It allows an analytical CRM approach that gives the Marketing Department a better understanding of the customer behavior and bigger sales revenues. This requires a restructuring of all processes in the Marketing Department to conform to the processes provided by the CRM system to enable all of the analytical CRM benefits. Their uprising success experience in their daily work will enhances their motivation and job satisfaction. The overall change of the Marketing Department’s processes on the other hand involves a risk for the CRM implementation. Employees may fear the restructuring because they could

5 Cf. Robbins and Judge (2012), p. 486 6 Cf. DiFonzo and Bordia (2000), p. 179 7 Cf. Robbins and Judge (2012), p. 107


7


get obsolete or they fear problems in using the new processes. They have to move away from their usual work routines and have to get used to the new ones. The adverse effects included an unwillingness to adhere to corporate standards when these were perceived as inefficient or interfering with established work routines. But this uncertainty is just normal when it comes to big changes in a company. The changes lead to political behavior to influence or worst stop the CRM project. Employees respond to political behavior with prevention of change and self-protection, for example protecting one's personal interests even it does not correspond to the projects goals, are the most probable attempts by the marketing employees

[8].

Unlikely to the head of marketing,

which wants to make the project happen, they just see the advantages, e.g. better work processes that compensate the personal disadvantages. However, this may change when the new processes have been introduced. The Marketing Department is therefore located between the two categories “Let it happen” and “Help it happen”.

J. F.

2.3.4 Analysis of the Sales Department Sales Department’s representatives manage themselves and their work totally independent as long as they reach certain sales targets. The representative Hans Wilkendorf as well as most of his co-workers have never worked with an integrated CRM System. They hope that the CRM system will enable the possibility to use mobile devices and apps, which simplifies the Sales Department's work for example through facilitating on-site sales activities. In addition, there are side effects of the Marketing Department's use of statistical CRM methods. This influences the Sales Department's work positively to obtain more contract conclusions which would provide feelings of success and as a result increased job satisfaction. However there is no extrinsic motivation for the sales representatives because they don't get a result-oriented salary. The disadvantage is, that all the sales processes need to be adjusted to the CRM provided processes. The representatives may fear the adjustment because they can get obsolete and they have to move away from their old work habits and learn new methods. Another problem is, that the representatives fear the upcoming transparency. Every employee will be able to directly compare his results to other employees and the management will get a better overview as well. The employees fear, that the management will monitor their work and engage when a successful salesman reduces his workload after he reached his monthly target. The lower trust in the management can lead to less risk taking, less information sharing, less group effectiveness and less productivity in the department [9].

8 Cf. Robbins and Judge (2012), p. 465 9 Cf. Robbins and Judge (2012), p. 423


8


It is likely that the Sales Department representatives try to prevent the CRM system from being implemented in a correct way through political behavior or on a formal way because they think their personal disadvantage overweight their advantages. As described before the Sales Department belongs to the category “Resistance”.

D. B.

2.4 Organizational Analysis As we have seen in the stakeholder analysis, there are different positions toward the introduction of the CRM system. In this section we will analyze selected relationships between different stakeholders. The analysis will focus on existing and possible conflicts.

The IT has the most oppositional standpoint and perceives the project as a threat. In contrast, Steve Rosenberg of the Marketing Department is one of the strongest proponents and his employees are likely to accept the change because of their dissatisfaction with the current situation. Although the project has the potential to promote a conflict between these two departments, the project exemplifies a more general problem of FutureCom: An increasing amount of Bruce's business customers demand a more rapid deployment of new software at lower costs. In addition they think that there are some software vendors, which offer COTS that meet business requirements. According to this they start wondering if it is necessary to develop software in-house anymore. As can be seen from this statement and the fact that they are willing to replace the IT, the IT is perceived as ineffective and inferior to existing alternatives. In this judgment the other departments focused on the two characteristics costs and time to deployment. This foundation is limited and neglects other variables such as the advantages of the individualized systems over COTS and the quality of the obtained software. This shortcut in judging is called Halo Effect

[10].

This behavior is on the one hand very

assertive, because they try to solve the problem actively and on the other hand very uncooperative, because they do not regard the impact on the IT department. In literature this conflict handling style is called competing

[11].

This approach shows that there are some serious

problems in cooperating and communication. The lack of communication has obviously been present in the past too and is one reason for the situation of the Marketing Department. Right now, their systems can not support their daily work adequately which leads to dissatisfaction. The fact that their systems are inflexible and error-prone is contradictory to the ambition of the IT department to focus on reliability and functional quality. Other systems, like SettleStar of the Operational Settlement and Invoicing Department show, that there are successful col-

10 Cf. Rosenzweig (2007) 11 Cf. Thomas (1992), p.688


9


laborations and that there is the capability for creating efficient and optimized processes and workflows. The problem of limited functionality is either a problem of missing communication or due to the complexity of the new requirements, because they require majors changes in existing processes and therefore in the IT systems. An objective reason for the problems is that the previous business philosophy of developing software only in-house implicates that there are higher costs and longer development times. So, the underlying problem is structural in nature. Considered with an interactionistic view of conflict we could assume that the occurrence of this conflict can be constructive, because it helped exposing a problem and solving it will help to enhance the company

[12].

The interactionistic view of conflict divides conflicts, depending

on their focus, into three categories: relationship conflicts, process conflicts and task conflicts. The discussion of using COTS could be considered as a process conflict, because the employees try to figure out how the work, in this case the procurement of software, should be done. Low levels of process conflicts can be functional, but only in very specific cases

[13].

Unfortunately, the actual discussion can not be considered as a low leveled process conflict, because the IT fears being replaced, which means the level of this process conflict is very high. In addition it has also aspects of a relationship conflict, because other departments have ignored the IT through their attempts to find solutions for their IT related problems on their own. Relationship conflicts are almost always dysfunctional [14]. Conflicts have various negative consequences for the affected parties, for example they produce stress

[15]

and can have a negative effect on team performance and team member sat-

isfaction [16]. Some of these negative consequences are already present, as we have seen in the stakeholder analysis.

12 Cf. Robbins and Judge (2012), pp. 481 13 Cf. Robbins and Judge (2012), p.482 14 Yang and Mossholder (2004) 15 Penny and Spector (2005) 16 Swah et al (2011)


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3. Transition Concept D. G.

3.1 Raising the Level of Commitment (LoC) As mentioned in the stakeholder analysis, almost all employees of Sales, Marketing and Operational Settlement and Invoicing Department are affected by the introduction of the new CRM system. Table 3: Level of commitment for each department

Employee group

Level of commitment

Operational Settlement and Invoicing Department IT Department

Let it happen Resistance

Marketing Department

Let it happen / Help it happen

Sales Department

Resistance

The table above gives a short overview of the relevant groups of employees and their current attitudes toward the CRM system classified in the levels of commitment. Most groups show resistance to the introduction. Resistance to change is nothing unusual, because change provides uncertainty and therefore potential danger

[17].

There are several ways to overcome

resistance, i.e. by education, communication, participation and more

[18].

It is important to know the reasons for resistance of each group as they are described in the stakeholder analysis to find suitable solutions to handle conflicts related to the introduction of the CRM system and make them productive to achieve better outcomes. Furthermore it is necessary to raise employees’ motivation to lift their level of commitment to at least “let it happen”. This proceeding tries to ensure that nobody hinders the introduction process. The following sections cope with the challenge to overcome resistance in the different departments.

17 Cf. section 2.2 18 Cf. Robbins and Judge (2012), pp.616-618

-Chapter: Transition Concept-

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3.1.1 Raising Operational Settlement and Invoicing Department’s LoC The Operational Settlement and Invoicing Department is known for its optimized processes and efficiency. Rita Cox is not willing to change her processes very much, because she is concerned that performance, reliability, and stability could suffer with the new system. Therefore she is very risk averse, which is a well-known bias

[19].

Although FutureCom has already

decided to continue using SettleStar, she faces the new system with concerns. This decision to keep the in-house system SettleStar should be presented as an example for very good collaboration between a department and the IT. On the one hand it gives approval to the IT and the Operational Settlement and Invoicing Department, on the other hand it works against fears of the IT that COTS will replace all systems. Rita Cox’s fears of performance and reliability are not unjustified, but all interfaces will be developed by the IT department that has also successfully realized SettleStar. So it is possible to convince her by rational persuasion that the new system won’t have negative effects on the performance, stability and reliability of the system. If there will be any technical issues, IT staff will be available to correct it. Because her goals go with the goals of the company, and to please her, it is set as an official basic condition that the CRM system must not have negative influences on existing processes regarding performance, reliability and stability.

3.1.2 Raising IT Department’s LoC To convince the IT workforce is more challenging. The good thing is that they immediately and openly express their fears, which is the best case for management to handle

[20].

A large

percentage of the IT workforce is very skeptical about the CRM project. Software developers fear they might lose their legitimacy in the organization, if COTS software is once successfully introduced and proven to work as good as in-house developed software at lower costs. So IT staff generally refuses the introduction of COTS software, whereas employees from the business side see COTS software as a means to overcome cost problems

[21].

To handle the

conflict between both sides and to find the best solution for the company as a whole, there are several things to do that are discussed next. The concerns of the IT workforce are comprehensible and justified on the first view, especially if they informally got to know of the new Business Application Services department that will be in charge of COTS software. It is a very high risk to the successful implementation of an IT based change, when a major part of

19 Cf. Robbins and Judge (2012), p.214 20 Cf. Robbins and Judge (2012), p.615 21 Cf. section 2.4


12


the IT workforce is not content with it. A decrease of satisfaction is often strongly related to a decrease in productivity high productivity most

[22],

[23],

which would harm the company to a point in time when it needs

because a change requires much more effort than stable opera-

tions. So it is necessary to communicate the logic of change to reduce resistance

[24].

It has

to be communicated that COTS software will be introduced in cases that these software fits customer’s requirements at lower costs, but will never be seen as a general solution to all organizational IT systems. On account of the change, nobody in the IT department will lose his job. Instead, IT workforce is needed for all existing and future projects and systems. FutureCom acts in a market with high costs and innovation pressures that are further increasing. To cope with cost pressures COTS software has to be used where it is rational to use it, which will be intensively checked in each case. But FutureCom is to be set as a premium brand. Therefore there will always be a need for innovations. Due to the fact that almost all innovations are enhanced by IT systems and because there will never be COTS software for innovations, IT-staff will always be needed and sure enough more than ever before. Furthermore FutureCom’s software developers will be in charge of realizing the interfaces between COTS and in-house software solution. Another important aspect is that the new Business Application Services department, provides new working opportunities for IT employees, because a lot of IT knowledge about processes and systems is needed there. Further education will be provided. So the idea of its creation doesn’t have to threaten them, but rightly communicated it can motivate them instead, because “interesting jobs that provide training, variety, independence and control satisfy most employees”

[25].

To communicate these ac-

tions and possibilities to the IT staff also gives appreciation to the IT department, because it emphasizes its importance, which again motivates employees even more. According to a recent survey most employees perceive appreciation as the most motivating factor at work

[26].

Mark Propinski is a key figure in the conflict. He knows how to mobilize the masses and is able to make employees stand up against company's decisions. He has already contacted the workers council, because he fears layoffs and deteriorating working conditions. Due to the fact that Mark Propinski had always been loyal to the company, there is a good chance to get him on our side. On the one hand it is necessary to get along with the workers council. It is advisable to convince it by rational persuasion, because the advantages of the change strongly outbalance and there won’t be real disadvantages for the employees. So its arguments can be invalidated. If necessary, further negotiation should only be done by integrative

22 Cf. Judge et al (2001), pp.376-407 23 Cf. M. Fugate et al (2008), pp. 1-36 24 Cf. Robbins and Judge (2012), p.616 25 Cf. Robbins and Judge (2012), p.115 26 Cf. Akst (2007), p. D9


13


bargaining to ensure a win-win situation for a good long-term relationship

[27].

On the other

hand, it is a good idea to get Mark Propinsky on our side, because he has a lot of influence on the employees. The main reason why he is dissatisfied with FutureCom is IT management’s communication strategy. In this point we should let him participate in spreading information about the project in the IT department. Due to the fact that he is integrated in the communication strategy, he will likely support it. The company will additionally make an official announcement about the project so that Mark Propinski is not given preferential treatment by giving him exclusive information and other employees don’t perceive they are treated unfairly. So we can create a win-win situation for FutureCom and its employees. The company will have time to improve the communication concept and there is a temporary solution to reassure employees. Mark Propinsky will be satisfied and employees needn’t have to cope with uncertainty. Although this course of action can be seen as cooptation that can backfire, if recognized, in this case it is an appropriate means to quickly de-escalate the situation and solve the problem rationally then. It is very important to stop the reasons for rumors as early as possible in the mentioned way to avoid an escalating situation.

3.1.3 Raising Marketing Department’s LoC The Marketing Department is the least problematic considering the attitude toward the introduction of the CRM system. Employees don’t show resistance, because the given systems don’t meet their current requirements, but they don’t show support for a new system, because they fear the change. Additionally they have no idea about its usage. Steve Rosenberg is also not satisfied with the given situation in his department, but he is very optimistic for the future. He has already occupied himself with CRM and sees much potential in it. He is open to major changes to lead the marketing department to success. According to his extrovertedness, assertiveness, which refers to his willingness to fight for a goal and his conscientiousness to achieve it, we experienced Rosenberg as a visionary leader. According to a study vision is one of the most important success factors of entrepreneurial firms

[28].

But he

didn’t have the power to fulfill his visions, yet. Therefore he feels that the CRM system introduction is a unique opportunity to initiate the required changes. Concerning his motivation and leader abilities, he will be able to play an important role in gaining support of a great majority of the marketing employees. Another fact that supports the willingness to change is that FutureCom has always been a company with entrepreneurial spirit, which means that its employees are generally open to innovations. Steve Rosenberg is a perfect example for this characteristic, which gives him referent power to influence his subordinates. Now, he has to spread enthusiasm about the possibilities of the new system in his department to motivate 27 Cf. Robbins and Judge (2012), pp.494-495 28 Cf. Baum (2000)


14


employees. They can be motivated by promising better achievements in their job through the new functionalities the system provides, which is the strongest job satisfaction factor according to a Harvard Business Review [29]. It has to be communicated that the CRM system has a major impact on the company’s strategy to make it competitive. To point out the importance of the project is an important factor for motivation, because it helps providing recognition and responsibility for employees. But Rosenberg has to take care that his employees won’t get overstrained. Therefore he should ensure there will be workshops and enough time for employees to cope with the CRM system. Additionally, there has to be the possibility that employees can easily get help among others by CRM consultants. These initiatives have to be communicated within the department to provide safety and reduce anxiety.

3.1.4 Raising Sales Department’s LoC The Sales Department has to be handled with caution. On the one hand there is the obvious challenge that nobody is used to a CRM system. Therefore there is a natural resistance, because of the change and its uncertainty. On the other hand, there are fears that are not obvious on the first view. During our meetings with Sales Department representatives, we experienced that they are concerned that their sales activities will become transparent with the new CRM system. Some successful sales employees enjoy a good work-life balance as soon as they recognize that they have performed well in the relevant month. It is important to know this real reason to find a solution to break the resistance and facilitate acceptance and support. Although not everyone admits this behavior, they will invent other reasons to not accept the system. To act in advance and avoid a situation as it is in the IT department, we suggest, beyond additional educational arrangements to give employees the possibility to handle the new challenges, to introduce a bonus system. Employees should earn their normal salaries and success orientated bonuses. The money for the additional bonuses is a share from the additional sales. So there is a win-win situation for the company and for the employees. The good thing is, that employees are given the flexibility to enjoy the work-life balance as before or to chose the new incentives to earn more money for them and the company. So this approach has many advantages in flexibility, comes with the same safety for employees as before, because they have their fixed salaries, and additionally provides a solution to the resistance of the CRM system.

29 Cf. Herzberg (1987), p. 8


15


J. F.

3.2 Team Organization 3.2.1 Composition of the project steering committee As the CRM system will affect all departments in FutureCom, the steering committee, as the leading unit of the project, has to be a cross-functional team to handle all possible arising problems. Therefore we recommend that the steering committee consists of the head of sales, Steve Rosenberg (the head of marketing), a partner from CRM Consult, Bruce Meyer (head of IT), John Wiley (a former IT consultant and project manager), and the head of finance to ensure the best solution for all involved departments. John Wiley is supposed to be the head of the new Business Application Services department that will be in charge of COTS software. Although the head of IT is located under the head of finances, Bruce Meyer is absolutely necessary in the steering committee, as he is in charge of the IT solutions in general and the upcoming tasks belonging to the CRM system. Furthermore John Wiley will have the task to directly communicate all important facts of the CRM project to the CEO as the project has a strategic impact on the company and the future orientation and development.

3.2.2 Composition of the project team In the project team, John Wiley will represent the steering committee and therefore he has to be the manager of the project team. If he is reasonably able to be the leader of this team is left open. On the one hand the extensive knowledge with CRM projects and extraordinary planning, controlling, and organizing skills are reasons for John Wiley’s manager role in this team. During a meeting with John, it turned out that he is very motivated about his new job. The chance to become the new head of the Business Application Services department gives him a great career opportunity. On the other hand his new colleagues describe him as detached, which can influence the decision making behavior of John Wiley in a negative way because good leaders are usually more extraverted [30]. It is very important to ensure that John is accepted as the head and he is able to build a proper team with his new colleagues. Due to the fact that he is described as a very productive team-player by his former colleagues, he just needs some time to form a new team. The stages of group development

[31]

will need some extra time because it cannot be expected to

form a performing team within hours.

30 Robbins and Judge (2012), pp. 403 31 Robbins and Judge (2012), pp. 309


16


To support the team building process we suggest an informal event where the new project team can get to know each other to create a climate of trust and increase the cohesiveness. This leads to less relationship conflicts

[32].

Additionally, FutureCom’s reward system has to

support cooperative efforts rather than competitive ones to ensure that a working team can be built efficiently. Team bonuses for a successful project would be a good incentive. John’s project team includes 17 members. Despite the fact that this is a large number of members for one team, we strongly recommend to keep this kind of team, but internally work in two separated groups on different parts of the project, because the teambuilding process and effective working phase is reached earlier with smaller teams. To avoid group thinking pressure it is important that every opinion and idea has to be evaluated. The general decisions should be found with all members, as this composition is more creative and can find better solutions. FutureCom is a company with a high number of employees, that makes several contact partners for employees necessary. To access the advantage of all employees’ process knowledge an open and transparent communication is necessary. Furthermore, there have to be certain roles and clear performance norms for the project within the teams. A responsible person for the different important roles inside the team has to be chosen. Furthermore the tasks have to be transparent to avoid a dissonance between the own perception and the expectations of others.

Figure 1: Roles in a team

Robbins and Judge (2012), pp. 351

32 Robbins and Judge (2012), pp. 482


17


We recommend using the role of the Maintainer, the Linker, the Organizer and the Assessor. The Maintainer's task is to fight external conflicts that will occur. Fighting the internal conflicts is the task of the Linker and the Organizer. The organizer should be John Wiley, as he is the head of project team. The Assessor's role is to analyze the different alternatives to figure out the best-fitting solutions. To ensure high performing teams the performance related norms have to be clarified and the team’s cohesiveness has to be high [33].

Figure 2: Cohesiveness/Performance Norms

Robbins and Judge (2012), pp. 322

To avoid other upcoming problems we suggest working teams with flat hierarchical levels because too steep hierarchies lead to less performance and the members should interact on the same level to have the possibility to talk freely [34].

33 Mullen and Cooper 1994 34 Robbins and Judge (2012), pp. 311


18


4. Time Schedule

D. F.

For the change management project we suggest using these eight phases to work through the whole processes, to reduce risks of too much change, losing the view for the temporary target, reduce employees resistance, make the change happen, and do not forget important tasks [35]. The phases are based on Kotter’s eight step plan [36]. Figure 3: Time Schedule Q4 13

ID

Task

Start

End

Dez

1

Initial Speech

01.01.2014

01.01.2014

0w

2

Team building process

01.01.2014

31.01.2014

4w 3T

3

Performing project team

03.02.2014

03.02.2014

0w

01.01.2014

28.11.2014

47w 3T

01.12.2014

01.12.2014

0w

03.02.2014

03.04.2014

8w 4T

04.04.2014

04.04.2014

0w

4 5 6 7

Gain support and reduce resistance Level of commitment – staus let it happen Requirements Engineering Decision of concret vendor

Q1 14

Q2 14

Q3 14

Q4 14

8

Technical realization

03.04.2014

31.10.2014

30w 2T

9

CRM roll out

03.11.2014

03.11.2014

0w

10

System Changeover

04.11.2014

28.11.2014

3w 4T

11

Reinforcment

01.12.2014

01.12.2014

0w

12

CRM Monitoring

03.04.2014

31.12.2014

39w

13

Chang Management Project Closeout

01.01.2015

01.01.2015

0w

Jan

Feb

Mrz

Apr

Mai

Jun

Jul

Aug

Sep

Startingpoint of the CRM project

CRM Project Closeout

35 Burnes, (1996) 36 Robbins and Judge (2012), pp. 620

-Chapter: Time Schedule-

Q1 15

Duration

19

Okt

Nov

Dez

Jan


4.1 Description of each phase in the time schedule 4.1.1 Initial Speech In a first step employees have to be informed about the current plan to minimize the degree of uncertainty. The CEO has to speak to the staff and explain the problems of FutureCom, to create a sense of urgency. His visionary speech has to emphasize the new strategic goal to position FutureCom as a premium brand. The reason why the CEO has to speak is that inspirational appeals work best as a downward-influence tactic [37]. Milestone: Sense of urgency created

4.1.2 Team building process During the planned events the John Willey will support the team building process through moderating the interaction, so that the discussions will lead to a clear organizational group structure, common objectives and expectations of the project. It is important that all parties can participate in goal setting, because this fosters their acceptance

[38].

After consolidating

the structure the CRM consultants will introduce the other team members to the advantages and possibilities of CRM in general, so that they have the required know-how for the project execution. Milestone: performing project team that is able to lead the change

4.1.3 Gain support and reduce resistance There are dedicated approaches for each stakeholder. The correspondent representative of the project team will use rational persuasion to convince the employees of the advantages of the project. Furthermore they will offer the participation in the requirements engineering process. This consultation will also help to shift the level of commitment in the desired direction [39].

Milestone: level of commitment on at least “let it happen”

37 Robbins and Judge (2012) 38 Erez et al (1985), pp. 50-66 39 Robbins and Judge (2012), p.452


20


4.1.4 Requirements Engineering The correspondent business representatives and IT staff of the project team will figure out the requirements for the CRM system in collaboration with the affected departments. After the clarification of the requirements, the IT representatives choose a concrete vendor which offers the best fitting and the best adaptable solution. It is very important to identify the needs of the stakeholders carefully, because the perceived usefulness of the new system is a very important variable for the acceptance of the IT [40]. Milestone: Decision for concrete vendor

4.1.5 Technical realization The CRM system is set up and interfaces to the existing systems are realized. This process should be designed iteratively, to achieve a continuous improvement process. Milestone: the CRM is ready for roll out

4.1.6 System Changeover The roll out of the new system will replace the old ones. In this phase the use and the adaption to the new system has to be promoted and rewarded to lay the foundation for the organization’s benefits realization. To support the employees there will be organized trainings and the initiation of a help desk. Milestone: employees know how to cope with the CRM and use it as a commodity

4.1.7 Reinforcement To tighten the implemented changes, there should be a demonstration of the relationship between new behaviors and organizational success, which will become apparent sooner or later. Milestone: A major part of the employees is convinced of the CRM system’s benefits

4.1.8 CRM Monitoring The CRM Monitoring starts very early. With the help of the defined KPIs the CRM system's benefit are measured during the whole stage.

40 Davis (1989)


21


D. F.

5. Measurement with KPIs The Key Performance Indicators (KPI) we defined, make it possible to control the correct work and success of the CRM project after developing and introducing it. They are divided in two big groups, on the one hand the financial based KPIs which can easily be calculated from the CRM system’s information. On the other hand there are the non-financial KPIs. These cannot be calculated as their focus is on the customers and employees working with the system. We choose the following financial KPIs as they can give a direct linkage between the value of the project and the salaries of the company, we are able to control the strategic goals as premium seller, and can get information about future actions as advertisement for different types of customers. Therefore we should use clear defined and best practice proofed KPIs for a CRM System to evaluate it

[41]

and a KPI to measure the strategic goal to become a

premium-seller in the market: 

Customer business value



Rebuy rate of products



Total revenue



Total income



Response time



Number of sold premium contracts (strategic goal)

With these KPIs we have a total overview about the CRM system and the company itself. On the one hand we can measure the economic success, with help of the total revenue and total income. On the other hand we measure the quality of services provided to the customer, with indicators as the rebuy rate of products. The non-financial KPIs are as important as the financial one as they have a big influence on the success of the CRM project for several reasons: 

Working with data, representing customers



Employees are one of the critical factors of n CRM project o

Direct influence to the success of the project

o

Employees belong to the directly influenced group of the company

o

Acceptance of the CRM system is the most important fact

o

Resistance is a major problem for the project

41 Anne Schüller (2011)

-Chapter: Measurement with KPIs-

22


These KPIs target on direct human behavior measuring the performance and mood of the employees. Therefore target fields of the non-financial KPIs are perception, satisfaction and acceptance which will be measured with a survey of each employee.

In the following chart it will be described how we measure the KPIs, how they should look like, the basis of the KPI, how we create, and how we can influence the KPIs. The financial KPIs are: Table 4: financial KPIs KPI

Unit

Description the amount of money we expect the business customer could and would pay the rate of count of a product divided buy all purchases of the customer

Basis

Influence factor

living place, historical purchases, expected earnings

the customer

Customer business value

€

Rebuy rate of products (customer satisfaction)

%

Total income

€

all earnings subtracted costs and earnings from the total costs

all sales

Number of sold premium contracts

count

count how often the product is sold in a time period

product x

product x

Total revenue €

all earnings

sold products multiplied with the price

product costs

Response time

time duration from first customer contact till historical timestamps the solving

h

the count of a specific product x, all bought product and of all purchases of products the customer

incident, employee

Although these monetary success factors are the important factors and thus the important KPIs for controlling and monitoring the economic success, we can directly control and influence in a short period of time, there is a strong relation between project or system success and employee attributes as satisfaction, motivation, acceptance, willingness, and identification. To have a clear idea of these, measure them and try to guide these in the target direction, we have to work directly with the employee. Therefore on the one hand we can influence them with organizational conditions, as payment systems, reward systems and hierarchical structure, on the other hand the employees personal traits cannot be changed but the personal perception and behavior of the employees. They can be changed by individual trainings or working environment [42].

42 Robbins and Judge (2012)


23


Strong attributes we have to be aware of are measured with these non-financial KPIs. They are divided in customer and employee orientated KPIs. To measure these we will use a representative survey with scales from 1 to 10. Thus we get an overview about the direct selfevaluation and opinion of the employees and customers. KPIs related to employees: Table 5: non-financial KPIs with focus on employee

KPI

Unit

Description

Basis

job satisfaction

scale

The positive feeling about the job the employee does

rep. survey

job involvement

scale

empowerment

scale

organizational commitment

scale

The identification with a particular organization and its goals

rep. survey

perceived organizational support

scale

The believe in organization values and cares about their well-being

rep. survey

engagement

scale

The involvement with, satisfaction with, and enthusiasm for the work

rep. survey

acceptance of the system

scale

The acceptance and degree of liking the system

rep. survey

The degree to which the employee identifies and actively participates with the job The believed degree of affecting work environment, meaningfulness of the job, and perceived autonomy

rep. survey

rep. survey

Customers are an important group for us so we have to measure them as well. KPIs related to the customer are:

Table 6: non-financial KPIs with focus on customer

KPI

Unit

Description

Basis

customer satisfaction

scale

The measure of how products and services supplied meets or surpass customers’ expectations

rep. survey

service quality

scale

The perceived quality of the used service or product

rep. survey

This set of KPIs is suggested for monitoring and controlling the CRM software in the future. If these KPIs work together in one big KPI system, a total overview of the most important facts for the CRM System and Change Management Plan is provided and can be used for the future.


24


6. References Akst, D. (2007) „The Rewards of Recognizing a Job Well Done,“ The Wall Street Journal (January 31, 2007) Benjamin, R. I., & Levinson, E. (1993). A Framework for Managing IT-Enabled Change.

Baum, J., Locke, E., & Kirkpatrick, S. (1998). A longitudinal study of the relation of vision and vision communication to venture growth in entrepreneurial firms. Journal of Applied Psychology. Benjamin, R. I., & Levinson, E. (1993). A Framework for Managing IT-Enabled Change. Davis, F. D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of information technology. MIS quarterly, (September). De Dreu, C., & Van de Vliert, E. (1997). Using Conflict in Organizations. DiFonzo, N., & Bordia, P. (2000). How top PR professionals handle hearsay: corporate rumors, their effects, and strategies to manage them. Public Relations Review, 26(2), 173– 190. doi:10.1016/S0363-8111(00)00039-4 Erez, M., Earley, P. C., & Hulin, C. L. (1985). The Impact of Participation on Goal Acceptance and Performance: A Two-Step Model. Academy of Management Journal, 28(1), 50. doi:10.2307/256061 FUGATE, M., KINICKI, A. J., & PRUSSIA, G. E. (2008). EMPLOYEE COPING WITH ORGANIZATIONAL CHANGE: AN EXAMINATION OF ALTERNATIVE THEORETICAL PERSPECTIVES AND MODELS. Personnel Psychology, 61(1), 1–36. doi:10.1111/j.1744-6570.2008.00104.x Golembiewski, R. T. (2000). Handbook of Organizational Consultation, Second Edition, (Google eBook) (p. 1045). CRC Press. Herzberg, F. (1987). One more time: How do you motivate your employees. (J. S. Ott, Ed.)HBR, 6(5), 76–86. Judge, T. A., Thoresen, C. J., Bono, J. E., & Patton, G. K. (2001). The job satisfaction-job performance relationship: a qualitative and quantitative review. Psychological bulletin, 127(3), 376–407. Lawrence, P. R. (1969). How to deal with resistance to change. Journal of Occupational and Environmental Medicine (Vol. 12, p. 191). doi:10.1097/00043764-197005000-00027 Mullen, B., & Copper, C. (1994). The relation between group cohesiveness and performance: An integration. Psychological Bulletin; Psychological …, (February). Penney, L. M., & Spector, P. E. (2005). Job stress, incivility, and counterproductive work behavior (CWB): the moderating role of negative affectivity. Journal of Organizational Behavior, 26(7), 777–796. doi:10.1002/job.336

-Chapter: References-

25


Robbins, S. P., & Judge, T. A. (2012). Organizational Behavior Global Edition (p. 710). Prentice Hall. Rosenzweig, P. (2007). The Halo Effect: ... and the Eight Other Business Delusions That Deceive Managers (p. 256). Free Press. Ross, S. L. (1977). Advances in experimental social psychology. 10 (1977). Schreögg, G., & Koch, J. (2010). Grundlagen des Managements - Basiswissen für Studium und Praxis (2. ed.). Wiesbaden: Gabler Verlag. Shaw, J. D., Zhu, J., Duffy, M. K., Scott, K. L., Shih, H.-A., & Susanto, E. (2011). A contingency model of conflict and team effectiveness. The Journal of applied psychology, 96(2), 391–400. doi:10.1037/a0021340 Schüller, A. M. (2011). Die sieben Kennzahlen im Loyalitätsmanagement. Retrieved from http://www.crmmanager.de/magazin/die_sieben_kennzahlen_im_loyalitaetsmanagement. html Thomas, K. W. (1992). Conflict and negotiation processes in organizations. Wallace, S. (2007). The ePMbook. Retrieved from http://www.epmbook.com/orgchange.htm#stylevsdegree Watson, G. (1975). Widerstand gegen Veränderungen. Änderung des Sozialverhaltens. Yang, J., & Mossholder, K. W. (2004). Decoupling task and relationship conflict: the role of intragroup emotional processing. Journal of Organizational Behavior, 25(5), 589–605. doi:10.1002/job.258

-Chapter: References-

26

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