This memo is in response to the research study that you presented on behalf of the Board of Directors. Prior to making any business decision, it is imperative that all facts are clear and that there is absolutely no chance for error. Based on the information laid out in the study and related analysis, I would like clarification on a number of points. Clarification of these issues will enable me to make the best business decision for Hewlett Packard.
You indicate that your research involved face-to-face discussions with our 1,000 named accounts. Also included were the findings from the questionnaires sent to 1,000 unassigned accounts. The results indicated that the named accounts did not utilize the inside sales organization as it was originally designed to function. Instead, it was being utilized as a “back-up” system when the outbound representatives were not available. With regards to the unassigned accounts, the data clearly indicates that these accounts yield significant revenues for Hewlett-Packard. The research also showed that yearly sales data was collected via our internal sales tracking system (SASY). Additionally, the results of the study did indicate that the sales volume of the organization was declining slightly year over year.
While the design of your study is, at once, sound, it appears, nonetheless, to be incomplete. Consider the following points:
- Why did this study focus only on the inside sales organization? There are many facets of Hewlett-Packard that may duplicate functions within the company. Are there other organizations within the company that are not achieving their revenue goals? This is an important variable that must be considered.
- Are there organizations that duplicate functionality that could possibly be merged? If so, HP would not have to include an entire organization in the work force reduction program; instead, only those positions which overlap would be eliminated. In this way, the integrity of each organization would be maintained, while at the same time HP would recognize cost savings.
- The field is the backbone of Hewlett-Packard Company. Without the field, we do not have the resources to sell our products and remain competitive. Researching the value add of organizations that do not directly contribute to HP’s revenue might be worth looking at. For instance, HP employs Business Administrative Managers to act as the liaison between the executive assistant and the manager that they support. These assistants could conceivably report directly to the manager they are assigned to. Researching the cost savings of eliminating the Administrative Managers would be another variable to consider.
Considering the points listed above would require a change in the sample design so as to include all organizations within each of the disciplines. It would, in turn, require a restructuring of the research design. Such changes would demand an examination of internal job functions. Customer surveys would not be required.
Performance is a key aspect of any organization, and yet it was not considered in this study.
Overall performance studies of all disciplines should be considered. It is possible that the decline in revenues is a result of poor job performance of specific individuals as opposed to an inadequate aspect of the organization.
It is important to note that the initial survey instrument was not only appropriate, but valid given the variables assessed. The manner in which the original study was approached was logical. Utilizing face-to-face interviews, questionnaires and the internal revenue tracking system was the most viable means for collection of the necessary data. However, taking the points listed above into consideration would require changes in data collection methods.
In order to effectively analyze the data required when researching these new variables, alternate forms of collection are necessary. I would suggest the following data collection formats:
- SASY would remain a viable data collection source. However, it would need to be expanded so as to include revenue information from all of the disciplines within HP. This would provide an analysis of the revenue power in terms of all internal contributors rather than focusing only on inside sales.
- To maintain the integrity of our organizations, exploring the functions of each sales representative is another variable that must be considered. This could be done by surveying the various job descriptions in order to discover any duplication of effort. For instance, our generalists focus on selling our entire portfolio of products. It would make sense, then, to look at the specialist sales representatives who only focus on selling one product.
- To properly evaluate company-wide performance levels, it would be necessary for individual managers to conduct employee evaluations. At the same time, managers would need to rank each employee, using the already established ranking scale. In this way, accurate information concerning overall performance could be compiled and analyzed. Organizations are affected by low performers. It is this variable that must be researched. Removal of low performance employees would achieve cost cutting goals, without requiring the elimination of an entire organization.
In conclusion, it is clear that while the original study indicated that a problem existed within Hewlett-Packard, it did not adequately address the issue. When conducting a study, it is important to consider all the variables, even though some may not be essential in the problem’s final solution. Far too many variables were excluded in this study. For this reason, not only does the study’s reliability come into question, but also the study’s validity.
While you were careful to use a reliable research design, as well as data collection instruments, your study is, nonetheless, incomplete. The conclusion that inside sales needed to be eliminated was an easy solution to a complex problem. That, in itself, is reason enough to give pause.
Conducting new research may, eventually, lead to the same conclusions concerning the inside sales organization. However, until all the variables are examined more inclusively; it is impossible to determine the overall validity of the conclusion drawn. There appear to be aspects of the equation that have not yet been figured in. I recommend, therefore, that a more extensive study be conducted before any further actions are taken concerning this issue.