A mid-size human capital services firm with substantial revenue from rapid transaction services was struggling to effectively and consistently deliver their product according to their standard protocol. The organization was decentralized and was comprised of nearly fifty offices nationwide. The organization was lacking a strong identity or culture among its dispersed team members. Each business unit was functioning independently and was not effectively leveraging the centralized resources that offered the company efficiency and higher profitability. The organization also suffered from lack of good business information because of the inconsistency across the organization. The company’s leadership was unable to diagnose and address issues. Additionally, partly due to lack of visibility to management, the effort being expended by many of the sales and delivery teams was not sufficient.
In particular, many of the business units were not keeping their database of daily activity and production current so that they had accurate information to conduct business effectively. Furthermore, regional and national-level report roll-ups were not accurate which slowed management decision-making. Lack of data integrity allowed those business units that were expending too little effort to hide because their information could not be viewed nor compared to comparable units. Company policy stated that all information about clients, activities, and transactions was to be entered into the corporate database in real-time. There were minimal mechanisms for enforcing the policy and the local teams were not self-motivated to follow protocol.
The organization was under-performing and dysfunctional.
Operant created a multi-faceted solution that included behavior modification to achieve standardization and efficiency as well as a sales and production contest to entrench the new behaviors and increase output.
The behavior modification solution was specifically designed to focus on a single core activity metric. This kept the organizational change initiative clear and simple for maximum success. Additionally, the sole metric selected provided key information that was needed to understand the current situation in order to identify the proper course for moving towards management’s strategic goals.
The behavior modification was sophisticated yet “elegantly simple” in that it required a single action by each business unit daily. The plan called for each business unit report the number of new transactions that began and ended at the close of each day by calling into a designated corporate reporting line. Each call took less than one minute, so the request was certainly reasonable. This change appeared small on the surface, but was very powerful for several reasons:
- The call was made at the end of the business day, which addressed one of the issues the organization faced–local business units closing earlier than the published hours. This was a cause of under-performance and lost revenue.
- Production levels became highly visible instantly – the full company production stats were published each morning based on the information called in from the night before – which put under-performing units in the spotlight and gave top-performing units the visibility they deserved. These teams instantly became self-motivated to move their teams into better positions. Additionally, the CEO provided daily commentary on those business units who were doing particularly well or who were improving. Only positive feedback was provided. There was no chastising of underperforming business units.
- The centralized management team now had finger-on-the-pulse information on a daily basis, which allowed for quick action to assist teams that were struggling. The focus of the initiative was helping not penalizing.
- Lastly, the called-in information was mapped to system-generated information to identify where data integrity issues were prevalent. Any discrepancies between manually supplied information and system-derived information were non-confrontationally addressed through training support.
- The ultimate goal of the re-engineering solution was to instill compliance with a standard protocol as the normal course of doing business—a building block of a high-performance culture.
The contest component was added to the solution to entrench increased productivity and data integrity as well as showcase the importance of local team production to corporate strategy. A kick-off contest was designed around the new reporting system and three corporate goals:
- Increasing the number of clients
- Increasing the number of transactions
- Increasing revenue and gross margin
- The contest included 5 ways to win during the 6-week contest:
- The business unit with the most transactions during the contest period (increasing transactions).
- The business unit with the greatest increase in gross margin dollars per week relative to gross margin dollars per week during the six weeks preceding the contest (increasing profit).
- The business unit with the greatest increase in gross margin percentage for all business as compared to the prior period (increasing transaction value).
- The business unit doing business with the greatest number of clients during the contest (growing client base).
- The region (comprised of 15 branches each) with the greatest number of transactions (existing or new) during the contest.
Operant added some basic elements to “level the playing field” and to entrench the new process. They were:
- All points were adjusted for individual team size so that large teams did not have an inherent advantage. All final results were reported per “team member.”
- Points were calculated daily. Teams did not receive points earned on days they failed to call in their numbers. No outbound calls were made to collect missing information. The teams were responsible for calling their information in each day without prompting.
- Points were deducted if system-derived data did not match called in data.
- Team-members on winning teams won various non-cash prizes that matched the contest theme. For instance, the business unit servicing the most number of clients won the title of “most well-rounded branch” and each member of the team received a high-quality watch or a manicure and pedicure at a spa to keep hands in proper shape for closing more business deals in the future.
(Note: The value of the prizes was appropriate for this contest, given average transaction and the company resources. Contest prizes can be of much greater value for different organizations and contests-such as trips or big-screen TVs).
The contest stats were reported daily on the company intranet. Additionally, the CEO sent e-mailed commentary multiple times per week, company-wide. The messages highlighted teams who were moving up the scoreboard. Again, only positive feedback was provided. Operant also worked with regional leaders to effectively communicate with their teams to encourage healthy competition.
- Before the behavior modification event, many offices were not staying open through published hours. Once the call-in process was introduced, offices were required to stay open. Calls had to be made from the office phone, and not from mobile phones or home offices. The call-in system tracked phone numbers and time-of-call. The number of transactions increased immediately because clients often called in late in the day to place orders for the following day. Simply staying open as published generated revenue that went to the competition prior to the initiative.
- Before the contest, some business units failed to call in production numbers at the end of the day. However, after the contest began, 100% compliance was instantly attained. No one wanted to be the cause of their team failing to earn points or lose based on a technicality.
- The positive feedback provided by the CEO was extremely motivating. The business units that were earning points soon began to earn more points. The acknowledgement created competitive mindsets, momentum and camaraderie. The event was making work more fun.
- Accuracy and timeliness of transaction information into the corporate database improved as well. The training provided to those business units who were having difficulty maintaining real-time information proved to be effective. Productivity increased. That is because good information was primarily for the offices and secondarily for management reporting. With good information, the local teams were able to more effectively sell and deliver and production quickly improved.
- Due to the success of the contests, another contest was launched shortly after the first contest was complete.
Today the company continues to benefit from this cultural transformation.