Problem Solutions: Intersect Corporation

Running head: INTERSECT CORPORATION: PROBLEM STATEMENT

Problem Solutions: Intersect Corporation

Shane Jennings, Jacob Kingston, Joann Link

University of Phoenix

Transformational Leadership (MBA 520)

Russell Anderson

July 5, 2006

Problem Solution: Intersect Investment Corporation

For many years, the financial industry has received negative publicity for inappropriate practices and unethical services. Intersect Investment Corporation is attempting to distance itself by redefining the products and services to be more inline with the needs of demanding consumer and small business customers. To do this they are moving to a Ѓgcustomer intimacyЃh model, which does not come without some issues and concerns. This paper will use the nine-step problem based learning model to explore Intersect Financial Services.

Situation Background

Intersect Investment Corporation is a financial service company operating in the consumer and small business sector. Like many companies in the financial services industry, Intersect has struggled recently and their Chief Executive Officer [CEO] feels the company is ripe for change. His proposed vision calls for a broad set of products and services offered on the model of Ѓgcustomer intimacyЃh. This new model requires revolutionary organizational change particularly in sales. The hiring of a new Executive Vice President of Marketing and Sales [EVPMS] who has experience in organizational restructuring will support the transformation of Intersect. For this assignment at Intersect, the CEO has given her only 12 months to make drastic changes.

Issue Identification

Previous practice at the company was to handle more clients in order to sell more products. The attention was on goals directed sales and the sales department believes this is the best way to make quotas. Since bonuses tie into sales on a pay for performance basis, employees are not willing to change their current sales practices, which they feel will make them lose money. Extrinsically motivated rewards for employees may be out of line with a company trying to offer relationships based on value and trust. However, removing bonuses may cause employees to feel negative inequity.

The unwillingness of employees to accept the Ѓgcustomer intimacyЃh model has prevented valuable information from reaching current and future customers. Employees are more willing to keep customers under the old policy than to take the time to explain new policies. According to Kinicki & Kreitner, resistance to change is an emotional/behavioral response to real or imagined threats to established work routines. The leadership team must address this or they risk losing valuable customers.

The high cost of employee turnover is taking a large toll on the companyЃfs profits. They are currently losing 25% of their sales team each year at a cost of over $110K for consumer and $300K for small business per employee. Employees are leaving because they do not believe that senior leadership has the direction or ability to pull of the new strategy. They also feel that their leaders are not providing the proper amount of feedback as to what their new function will be. Conflicts among senior leadership and between marketing and sales have compounded these beliefs.

Intersects CEO and EVPMS have conflicting ideas about how to handle current employees. The CEO would like to eliminate any source of conflict quickly to prevent future issues. The EVPMS feels that they should work with all current employees and try to make them understand the value of the Ѓgcustomer intimacyЃh vision. The EVPMS also feels pressure due to the time constraints set by the CEO.

Opportunity Identification

Intersect has the potential to define itself as an ethically operated company in an industry with lacking credibility. Long-term relationships built on trust and value supports this vision. They are trying to ensure that Wall Street never has to question their motives, as they are doing what is best for the customer.

Intersect is fortunate enough to have a wealth of experience in the financial industry and within the company. The addition of the EVPMS is an excellent move as she has successfully enabled a Ѓgcustomer intimacyЃh model at three previous locations and has a positive outlook on Intersects ability.

Benchmarking data received by the company on the Ѓgcustomer intimacyЃh model shows promise. The data suggests that businesses are successful in all areas including faster growth for the company and higher revenue per employee. Longer call times result, but customers are happier and therefore, the business is more successful.

Stakeholder Perspectives/Ethical Dilemmas

Senior leadership at Intersect comprises all long-term employees, each having been with the company for several years. The team is very experienced in the industry but the company has not changed much and leadership has grown to accept the status quo of the industry. If the company is to grow, the CEO may need to reorganize his senior leadership team to ensure the success of his vision. If employees feel that there is no clear vision for success, they will not put their trust in their leaders.

Intersect employees in the sales department face a major dilemma in this transition phase. The sales employees currently have their bonuses tied to product sales. They will need to change their sales practices to call fewer customers and make long lasting relationships. This practice goes against previous thinking and the Vice President of Sales does not believe the Ѓgcustomer intimacyЃh model works. The employees are in a situation in which they will initially make less money by making fewer sales but will profit in the future. Intersect is having a problem convincing the employees to follow through with this practice which is causing them to lose customers.

Customer satisfaction is down 5% over the last year. Intersects goal is to increase customer satisfaction by adding value beyond what account managers normally provide. EmployeesЃf sales tactics not in line with the Intersects new vision will not allow the company to achieve higher customer satisfaction rates. Intersect must make the change of sales tactics a priority in order to