Jess Westerly’s Analysis of Kauflauf GmbH Case Study

Situation Analysis

Kauflauf GmbH is a European organization that offers software as a service. It was founded in 2002 and reached success by the beginning of 2011. Headquartered in Heidelberg, Germany, the company continues developing applications for computer and office supply and working with mid-sized and top-tier small facilities of classes 5 and 6 (Gabarro & Kaftan, 2012). The growth of the company is explained by its attention to stakeholders who use cloud-based subscription software and need consultant-like services. Customer relationship management (CRM) applications are largely created for German auto parts manufacturers. This approach allowed opening new platforms where clients develop their applications and identify services. The chosen software-as-a-service business model helped disrupt potential competitors and enter the service market. Managers and leaders believed in their success due to a properly selected target market and a differentiated approach to sales (Gabarro & Kaftan, 2012). Besides, employees are well motivated, with a strong recognition of their autonomy, mastery, and goals. Kauflauf has a solid organizational background and knowledge about its clients and their needs.

The Chief Executive Officer (CEO) is proud of a team and determines the company’s progress by available human resources. The first Kauflauf team consisted of former SAP (a global provider of turnkey hardware/software solutions) employees and several computer engineering graduates. They created a friendly atmosphere, defined the scope of services, and offered high-quality products. With time, the role of private investors increased, which resulted in structural changes and controls. Several experts were invited, including Klaus Kristoff, the director of sales, Heinz van Hoorn, the director of marketing, and three regional sales directors (RSDs), one of them was Robert Lin from the Asian-Pacific division. A new Director of Development/Customer Support was hired, as well as Jess Westerly as an assistant product owner. All employees enjoy their respectful relationships with customers and colleagues, a loose hierarchical style, and effective leadership.

When Westerly joined the team, she analyzed the current situation in the company and offered several improvements, relying on quantitative factors. Westerly was an American who lived in Germany with her family since her childhood. Before Kauflauf, she got her bachelor’s degree in computer science, master’s degree in system design and marketing, and worked as an assistant product owner at one American company. She achieved success in market share, and Tim Roeder, the CRM division product owner at Kauflauf, noticed her analytical capabilities and offered her a job. Westerly spent several months analyzing and reshaping her change initiative to optimize the company’s design, sales, and revenues. However, her first e-mail with a proposal to redirect call patterns from mid-sized customers to larger sales classes was negatively accepted by the RSDs from all three regions. Employees were not ready to follow new directions but wanted to continue developing their current relationships proved as successful. The key people in the case are Westerly (change developer), Roeder (Westerly’s chief), Kristoff (director of sales), and Lin (one of RSDs), whose decisions contributed to a rather problematic situation in the company.

Problem Analysis/Diagnosis

When Kauflauf employees saw the message from Westerly, a number of concerns and offenses emerged. It was offered to apply new guidelines for allocating employees’ time with customers, going away from classes 5 and 6, and switching to classes 1, 2, and 3 (Gabarro & Kaftan, 2012). However, the company believed in its properly established organizational culture that brought success and benefits for the team and customers for a long period. There were three main aspects in the work of any department, known as a three-legged approach to focus on client needs, understand current and future product capabilities, and deliver the right programs and updates (Gabarro & Kaftan, 2012). Well-trained and highly motivated employees cooperate with field consultants and respect each other’s skills and responsibilities. There was a common purpose for all sales managers to complete their tasks, get fair rewards, and promote Kauflauf’s growth. In one letter, employees learned that their methods were ineffective, and they had to change their clients and their communication strategies to improve potential profitability for each segment. The main problem is Westerly’s intention to change organizational culture that she does not understand.

The above-mentioned problem is not a single action but a combination of several poorly made decisions about a proposal and its implementation, which caused negative feedback. When Westerly learned her responsibilities of understanding markets and establishing new service priorities, she began gathering the material and communicating with RSDs and managers as a part of her orientation program. However, she did not participate in any working process and did not get a chance to learn organizational culture and the worth of cooperation and employees’ support. Thus, the first problem of this case is Westerly’s limited knowledge about the company in relation to her substantial responsibilities.

The second problem is rooted in the inability to organize change in a correct way. Westerly took the steps to make sure her thoughts and recommendations were delivered to the staff. In June 2011, she sent a letter with an idea of consulting effort redeployment and her initial proposal in three attachments. Then, negative feedback from RSDs was received, and the proposal was not accepted during the next several months. In November 2011, Westerly tried to reshape her innovative strategy and offered a revised plan again. She introduced her goals, including the necessity to increase profits, improve market segments, and shift customer focus (from small size to large size). The approval from the Director of Sales was obtained, which met the requirement of Kauflauf democratic leadership. However, Westerly tried to change organizational culture relatively quickly without consulting a team and collaborating but sharing a new plan of action. Thus, another problem is a poorly organized change intervention by a single employee.

Alternative Solutions

Solutions to Problem One

One of the critical problems in the case is a lack of the employee’s knowledge about the organization’s culture in relation to huge responsibilities and intentions. In other words, Westerly failed to learn Kauflauf and its employees from the inside but concentrated on some quantitative data instead of examining qualitative data and mutual opinions. There are three alternative solutions for this problem, with its pros and cons:

• Cooperation and engagement allow Westerly to meet the representatives from different departments. Experienced employees share their opinions and participate in decision-making, promoting respect and trust (Kim & Mauborgne, 2003). Westerly may observe and participate in working processes to recognize organizational culture.
  • Well-defined expected outcomes.
  • Creative work.
  • Increased work capacity.
  • Time-consuming processes.
  • Diverse opinions’ management.
  • Additional training and expenses.
• Extended research includes a variety of activities for Westerly to gather information about the company. Her previous proposal was based on quantitative analysis only, and she needs more ideas about what employees have already done.
  • More qualified information.
  • Recognition of multiple perspectives.
  • Solid background for change implementation.
  • Unpredictable deadlines.
  • Work with large amounts of information.
  • Less time for other activities.
• The explanation of working processes is an obligatory task for all departments. It means that employees should understand how and why decisions are made (Kim & Mauborgne, 2003). They participate in various working processes and get enough information to see what the company does and why.
  • Establishment of trustful relationships.
  • Confidence among employees.
  • Mutual involvement in all working processes.
  • Various backgrounds of employees.
  • Different experiences and goals.
  • Many departments to be examined by one person.

Solutions to Problem Two

Another problem that challenges the Kauflauf staff is the wrong strategy for change implementation. Westerly did not use a credible model or theory but relied on fragmented information and missed vital steps. To improve the situation and help employees understand and accept a new recommendation, managers have to make some preparations and support the team in understanding the task. Alternative solutions with their pros and cons are as follows:

• Change model implementation is a necessary step for employees to get a clear way to introduce and promote new ideas. Kurt Lewin offered one of the most effective change models when the first perception that the needed idea is created, then the implementation occurs, and, finally, change analysis proves the effectiveness of the intervention.
  • Easy understanding of what should be done.
  • Focus on human behaviors.
  • Time-saving practice.
  • No clear recommendations.
  • Restrictions and orders, not education or nurture.
  • No attention to human feelings, emotions, and knowledge.
• Employee motivation is required to demonstrate Westerly’s interest in the Kauflauf team. She explains her reasons for change and inspires people to take her side and implement new ideas.
  • Improved job performance.
  • Increased job satisfaction.
  • Positive client outcomes.
  • Workplace conflicts.
  • Unmotivated employees.
  • Persistent need for incentives.
• Expectation clarity helps to identify all the necessary rules and conditions of change. Employees ask questions, give enough information, and discuss their responsibilities with managers and colleagues.
  • Focus on the job.
  • Awareness of standards.
  • Equal distribution of responsibilities.
  • Favoritism.
  • High demands.
  • Additional time.

Recommended Solution

Solution to Problem One

Each alternative solution has a reason for implementation, as well as certain drawbacks. However, the effectiveness of these decisions in Kauflauf’s case cannot be ignored or diminished. Promoting cooperation and Westerly’s engagement in the company’s activities is one of the best solutions. According to Kim and Mauborgne (2003), engagement is a part of a fair process when decision-making and problem-solving are promoted to address basic human needs. When a person joins a new team, it is expected to impress as many employees as possible and demonstrate confidence and experience at the highest level. Westerly used her background knowledge and latest achievements in market share. However, she was interested in gathering information instead of cooperating with employees. She had to work at different departments for some period and observe how the team made decisions, communicated, chose customers, and organized their calling time. Every employee had already defined their role and a set of expectations in the workplace. Westerly missed a step to pay enough attention to employees’ roles at the moment before change introduction.

The solution to the poor knowledge of a new employee about organizational culture is to enhance engagement and cooperation with the departments. The task for Westerly is not only to observe and gather information but to promote the involvement of co-workers in mutual decisions. Organizational culture is how all employees see the company and what they do to support its values and mission. As soon as Westerly participates in several calling activities and discusses the outcomes with a team, she will understand the heads of the departments, ordinary managers, and Kauflauf as a whole.

Solution to Problem Two

Another problem in the company was a poorly implemented change intervention. As a developer of change, Westerly did not follow a specific model or theory according to which particular preparations and evaluations were offered. Lewin’s model of change consists of three processes, namely unfreezing, change, and refreezing. In the beginning, Westerly must recognize the need for change and deliver this urgency to the team. When the replacement is encouraged, and support from management is obtained, the change is planned, and employees receive the necessary knowledge. A final step is the reinforcement of the workplace and the development of effective ways to sustain change. Such thorough attention to detail promotes good leadership and employees’ engagement with questions and contributions. Westerly gets a chance to avoid unpredictable casualties and find support from leaders and managers who directly participate in a working process.

There are several reasons for choosing this solution as the best recommendation for Westerly to try her calling time innovation again. First, the company gets a clear plan of how to introduce and develop a change process. Employees do not receive a single letter with new instructions and recommendations to advance another organizational culture. All people are equally involved in all working processes and learn why modifications are required. Second, Westerly could find enough support from different departments and define how to share her guidelines. She will be not the only developer of a new idea but a leader in a specific process who respects employees’ autonomy and creativity. Finally, the implementation of Lewin’s model does not take much time or many extra resources. The company should create a team and exchange information under the guidance of one person, Westerly, who possesses authority.

Implementation Steps

Regarding the recommended solutions for the two organizational problems at Kauflauf, a specific implementation plan will be developed to demonstrate what steps should be taken and in what order. There are four stages to help Westerly solve the problems and achieve positive results:

• Knowledge improvement:
  • Westerly visits various departments in all dimensions personally.
  • Employees share their experiences and knowledge about the company and working processes.
  • Interviews with the heads of departments and senior managers are organized.
  • Westerly reads past annual reports and compares qualitative and quantitative data.
• Change introduction:
  • Staff meetings are regularly scheduled during a month.
  • Westerly prepares illustrative tables and graphs to explain the current situation in the company.
  • A new image of a company is created with respect to the existing organizational culture.
  • Questionnaires are conducted to inform employees and learn their opinions about possible changes.
• Change implementation:
  • All departments participate in a change process.
  • Clear instructions are given to every employee personally or via e-mail.
  • Obstacles and recent achievements are reported.
  • Communication and collaboration are organized at all levels 24/7.
• Change analysis:
  • A general meeting is organized one month after the change implementation.
  • People are encouraged to share their opinions and suggestions.
  • No penalties or punishment are imposed on those who do not accept the change.
  • Client outcomes and sales are compared before and after the intervention.

References

Gabarro, J. J., & Kaftan, C. (2012). Jess Westerly at Kauflauf GmbH. Harvard Business School. Retrieved from Harvard Business Publishing database.

Kim, W. C., & Mauborgne, R. (2003). Fair process: Managing in the knowledge economy. Harvard Business School. Retrieved from Harvard Business Publishing database.