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Part I: Laws of the Fifth Discipline and the Value of Systems ThinkingRead the scenario as well as the Introduction and Chapter 1 of the Meadows text, the Cathon article on the Learning Organization, the Zemke article on Systems Thinking, and the other material required, and then respond to the prompts that follow.ScenarioAs an expert in systems analysis, you’ve received an e-mail from the chief financial officer (CFO) of XYZ Manufacturers to discuss a potential consulting project. The CFO is vaguely familiar with the concept of systems thinking but isn’t sure it could be successfully applied to her fast-paced, global business.
Based on your knowledge of systems thinking and the learning organization, reply to the CFO’s enquiry by explaining at least three challenges of managing complex organizations and how and why effective systems thinking can help improve their performance. Support your response and reasoning with explicit and appropriate references to the readings and with at least two other theoretical frameworks or academic references about systems thinking and practice. (2 -3 paragraphs)
Having learned about systems thinking and the learning organization, and reviewed at least one other theoretical framework or academic reference about general systems thinking and practice, give at least two examples, from your experiences in organizations, in which the application of systems thinking could have helped the organization become more effective. Be clear in explaining which specific principles and concepts from systems thinking could have helped in the examples you choose, and explain how and why. (4 – 5 paragraphs)Part II: Gap Analysis Using the 5-WhysRead the “Opportunity Consultants, Inc., Case Study” and then respond to the following prompts:
Using a systems approach, analyze the performance of Opportunity Consultants, Inc. and develop a case-specific “effect-cause-effect logic” tree diagram using the 5-Whys analytic tool. See the Rubric for details on what this diagram should contain.
Write a summary description of your diagram with specific recommendations for improving the club’s performance that are linked to your diagram analysis. (1–2 pages)Part III: Gap Analysis With Causal Loop ModelingRead the “Baria Planning Solutions Case Study” and “Facilitating Systemic Thinking in Business Classes” documents, and then respond to the following prompts:
Using a formal systems diagramming approach, analyze Baria’s performance and develop a robust “effect-cause-effect logic” tree diagram using the 5-Whys tool, as in Part One.
Create an appropriate, simple causal loop diagram (CLD) that incorporates relevant and logical feedback loops to capture the fundamental system behaviors, outcomes, and causes in the “Baria Planning Solutions Case Study.” See the Rubric for details on what this diagram should contain.
Write a summary description, including specific recommendations, that links directly to your 5-Whys and CLD analyses for improving Baria’s sales support operations and organization as a whole. (1–2 pages)Part IV: Robust Causal Loop ModelingRead the “Bayonne Packaging, Inc., Case Study” and “The System Archetypes” documents, and then respond to the following prompts:
Using a formal systems diagramming approach, analyze Bayonne’s organizational performance and develop a robust “effect-cause-effect logic” tree diagram using the 5-Whys tool, as in Part One.
Create a robust causal loop diagram (CLD) that incorporates appropriate causal loop logic in the analysis and that also identifies common system archetype patterns within the diagram. This diagram should describe fundamental system behaviors and outcomes.
Write a summary description, including specific recommendations, that links directly to your CLD analysis (which includes embedded archetype relationships) for improving the packaging company’s operations and the organization as a whole. (1–2 pages)
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4568
MAY 19, 2011
STEVEN C. WHEELWRIGHT
WILLIAM SCHMIDT
Baria Planning Solutions, Inc.:
Fixing the Sales Process
Christy Connor looked up from her computer and gave a weary sigh. As the recently hired
director of North America Sales Support for Baria Planning Solutions (BPS), a consulting firm serving
manufacturers, Connor knew that she would be very busy trying to improve the disappointing
performance of her team. The Sales Support group’s difficulties were having a direct negative impact
on the performance of the entire company. The importance of her mission was highlighted by the
constant stream of calls, meetings, and emails that she had been fielding since she joined the
company last month. The urgency and critical nature of the problem was summarized by a recent
email from her boss, Brandon Ali, the President of North American Sales:
From:
To:
Subject:
Sent:
Brandon Ali
Christy Connor
2010 Performance
Mon 2/21/2011 4:23 A.M.
I have again looked at the win-loss report for 2010 and I am very concerned. Of the 271 qualified new
sales opportunities that arose in calendar year 2010, our win rate is now projected to be a dismal 15.5%.
We had originally forecast a win rate of 17.5%. Since our customers typically sign 3-year contracts, we
will be struggling for the next couple of years because we’ve missed our forecast sales productivity
target. Even more worrisome is the drop in our renewal rates. We had consistently achieved a renewal
rate of around 91% to 92% over the last few years, but in 2010 it is 84%.
The Sales group directors are complaining that salespeople don’t get the timely assistance that they
need from the Sales Support group. While your team is partly organized along the same industry
divisions as the Sales group, some of the directors are suggesting that your entire team be organized
into industry-specific divisions in order to provide sharply focused and fully dedicated support to each
Sales division. I know your people work hard, but we have apparently missed proposal deadlines for
several opportunities, and each time it undermined the customer’s impression of us.
I realize that you have inherited a bit of a mess, but it is critical that you get your arms around this
situation and resolve it quickly. We appear to be digging ourselves deeper into a hole with every
passing week. Please have a proposal to me by next week with recommendations on how we can turn
________________________________________________________________________________________________________________
HBS Professor Steven C. Wheelwright and writer William Schmidt prepared this case solely as a basis for class discussion and not as an
endorsement, a source of primary data, or an illustration of effective or ineffective management. This case, though based on real events, is
fictionalized, and any resemblance to actual persons or entities is coincidental. There are occasional references to actual companies in the
narration.
Copyright © 2011 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685,
write Harvard Business Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. This publication may not be digitized,
photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School.
This document is authorized for use only in Laureate Education, Inc.’s CMBA SP004-Systems Thinking for Organizational Improvement course at Laureate Education – Baltimore, from
September 2017 to November 2018.
4568 | Baria Planning Solutions, Inc.: Fixing the Sales Process
this situation around. As part of this effort, I want you to quantify the staffing, utilization and costs
from your proposal based on the sales support requests for 2010 and compare it to our actual staffing
and utilization in 2010.
When Connor was in business school, she had learned about analyzing service operations
processes using production management techniques. Believing she could apply those techniques to
the challenges at hand, she decided to investigate the scheduling and work processes for her team.
Company and Industry Background
BPS, a publicly traded firm with $95 million in annual sales, helped its customers reduce
procurement costs and improve the performance of their suppliers. Through a combination of
software, data analysis, project management, and consulting, BPS scrutinized its customers’ spending
categories, identified sources of potential savings through initiatives such as supplier consolidation
and purchase standardization, and implemented procurement and change-management projects to
realize those savings. Companies offering this type of solution—sometimes referred to as spend
analysis or spend management—had experienced relatively rapid growth over the last few years.
BPS, founded in 1997 to take advantage of the nascent popularity of similar tools and analysis
methods, was considered an early mover in the field.
Spend analysis was once the near-exclusive domain of smaller, specialty solution providers like
BPS. During the past several years, however, several large software and consulting firms, including
SAP and Accenture, have entered the market, leading to consolidation among smaller firms. BPS,
which originally served the U.S. energy sector exclusively, had survived by expanding its industry
coverage and capabilities through the acquisition of other narrowly focused industry-niche
providers. In 2007 BPS acquired a firm that primarily served the government sector, including
federal and state agencies and some large municipalities and nonprofit organizations. In 2008 BPS
acquired two more firms, one serving a range of manufacturing companies and another that
primarily served the retail sector.
While BPS initially allowed the acquired firms to continue operating semi-autonomously, the
company had since worked hard to integrate parts of each operation where synergies could be
achieved. The amount of effort required had not been trivial. While all four firms provided solutions
that addressed the same types of customer needs, the similarities ended there. In addition to serving
different industries, the firms had entirely different technology platforms, service delivery processes,
and even different fiscal year end-dates. Most of the pressing integration work was complete by the
end of 2009, although some technology migration projects were still in the works. By 2010, BPS
commanded a respectable 18% share of the market, but in a highly competitive market BPS could not
afford to lose any momentum in sales growth.
Recent Performance
The company’s performance in 2010 was extremely disappointing in both new client attainment
and existing client renewals. Exhibit 1 identifies the original and latest forecast for the sales
opportunities that were qualified in 2010. BPS categorized all sales opportunities into one of four
types:
1.
2
New Sale: a new opportunity with a company that is currently not under contract with BPS.
BRIEFCASES | HARVARD BUSINESS SCHOOL
This document is authorized for use only in Laureate Education, Inc.’s CMBA SP004-Systems Thinking for Organizational Improvement course at Laureate Education – Baltimore, from
September 2017 to November 2018.
Baria Planning Solutions, Inc.: Fixing the Sales Process | 4568
2.
Renewal: a renewal of a contract with an existing customer. The terms of the contract can be
materially different from the original contract, but there is often a significant amount of
overlapping scope between the two contracts.
3.
Expansion: an expansion of the services delivered to an existing customer even though the
customer’s current contract is not near its renewal date.
4.
Pilot: a special type of New Sale in which a company engages BPS in a short-duration pilot in
order to get more exposure to the BPS solution in the context of an actual project. Pilots often
enter the New Sales pipeline at the completion of the pilot project.
The most recent update to the sales forecast in Exhibit 1 was mid-February, 2011. By this time BPS
knew with certainty the outcome of all of the Renewal opportunities from 2010 and could make a
very good forecast of the outcome of the New Sale, Expansion, and Pilot opportunities. The total
number of opportunities in 2010 was higher than originally estimated, but the win rate was now
projected to be much lower than anticipated in most opportunity categories. Although the Sales
Support group was not entirely to blame for the lower win rates, it was widely recognized that the
team had difficulties meeting proposal deadlines and this had prevented BPS from putting its best
foot forward in several selling situations.
Organization of North American Sales
Although BPS served customers on a global scale, its direct sales force focused on companies in
North America. BPS had several sales partnerships that allowed it to penetrate foreign markets, and
many of BPS’s North American customers utilized the BPS solution outside of North America. BPS’s
sales partners typically required very little support during their sales cycles, and when they did it
was delivered by the product management team, leaving the North American Sales organization to
focus on its primary objective: drive new sales and renewals in North America.
The North American Sales organization was structured into three groups—Sales, Sales
Operations, and Sales Support (see Exhibit 2). The Sales group, led by Chuck Dee, had four units
organized by the four major industry sectors that BPS served:
1.
Energy, including oil and gas companies and utilities.
2.
Government, including all federal, state, and local government agencies, as well as a handful
of large nonprofit organizations.
3.
Manufacturing, covering companies in chemicals, construction, diversified manufacturing,
electronics, high technology, and transportation.
4.
Retail and Other. While this sales division consisted mostly of large retail and wholesale
operations, it was also used as a catch-all for any sales opportunity that BPS pursued which
did not fit neatly into the other sales divisions
The industry alignment of the Sales group was a legacy of BPS’s acquisition strategy, but the sales
leadership believed that it was extremely useful to maintain this industry orientation.
The Sales Operations group, led by Jane Albright, was responsible for competitive intelligence,
win-loss analysis, sales training, staffing, and managing the sales force compensation plan. While this
group was not directly involved in any sales opportunities, it served a pivotal role in building the
infrastructure for a successful sales force. Albright and Dee were sometimes at odds over how the
sales force should be structured. Dee felt that all of the teams in the Sales Support group should be
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This document is authorized for use only in Laureate Education, Inc.’s CMBA SP004-Systems Thinking for Organizational Improvement course at Laureate Education – Baltimore, from
September 2017 to November 2018.
4568 | Baria Planning Solutions, Inc.: Fixing the Sales Process
aligned by industry sector, effectively providing fully dedicated support for the Sales group. Albright
believed that such a structure would require a large increase in staff. She and the former director of
Sales Support—Christy Connor’s predecessor—had successfully lobbied for the current hybrid
organization of the Sales Support group.
Organization of the Sales Support Group
During BPS’s acquisition spree it initially maintained the structure of each firm’s sales team and
sales support functions. Since these predecessor firms were industry-focused, the sales force and
support staff were originally organized by industry as well. In 2008 BPS hired Albright to serve as the
director of Sales Operations and provide a consistent administrative and organizational
infrastructure that each sales team could leverage. One of Albright’s first contributions was to help
streamline the Sales Support group, consolidating some sales support functions into teams that
served all industries and leaving one function, Proposal Support, with staff dedicated to each
industry. When Connor asked Albright about the rationale for this structure, she replied:
After BPS completed its string of the acquisitions the firm was under tremendous pressure
to get costs under control. Of course the market downturn that began in 2008 added another
level of urgency to the situation. We felt that it was imperative, however, to maintain our
industry-centric, consultative sales process. The only way we could hope to legitimately
achieve this was to keep critical elements of our sales organization organized by industry so
they would continuously be immersed in industry issues. After looking hard at the sales
support function we decided that we could streamline the team and maintain an industry
focus with the hybrid model that exists today. Data Engineering, Data Analysis, and Pricing do
not require any meaningful industry-specific expertise, but there are some real benefits to
having Proposal Support staffed with experts in the customer’s industry. There may still be
issues that need to be ironed out, but I remain convinced that the hybrid structure is critical for
us to effectively balance staffing constraints against the requirements for industry expertise.
Exhibit 3 provides a diagram of the process flow for the Sales Support group. The four teams in
the group have the following responsibilities:
1.
Data Engineering: collect data from prospects, transform data into a standard format,
examine data for consistency and quality, and resolve any data irregularities.
2.
Data Analysis: process data through BPS spend analysis software and identify
opportunities for cost reductions and supplier performance improvement.
3.
Proposal Support: validate, quantify, and prioritize cost/performance opportunities;
develop configuration of software, project management, and consulting to address the
identified opportunities; and assist the salesperson in developing and pitching proposal.
4.
Pricing: develop a pricing proposal in accordance with sales strategy, including options for
risk-sharing pricing, which tied the payments that BPS received from the customer to the
results BPS delivered to the customer.
This type of hybrid team structure did appear to be unique in the market. Most companies
roughly the same size as BPS in the spend-analysis space had organized their sales support teams
entirely by geography. Having an industry focus allowed BPS to distinguish itself from other midsized competitors through a deeper understanding of industry-centric issues, and put the firm at
parity with small single-industry and large diversified competitors.
4
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This document is authorized for use only in Laureate Education, Inc.’s CMBA SP004-Systems Thinking for Organizational Improvement course at Laureate Education – Baltimore, from
September 2017 to November 2018.
Baria Planning Solutions, Inc.: Fixing the Sales Process | 4568
Dee took a different view on the situation. He felt that a hybrid structure didn’t go far enough and
was adamant that his team was losing opportunities because the Sales Support team wasn’t able to
meet its deadlines. He made his position clear when Connor met with him, saying “Since some of the
Sales Support teams are shared across sales divisions they don’t feel the urgency or the ownership
that is necessary to push proposals across the goal line.”
Solution Selling Process
BPS had adopted a solution-selling process several years ago as customers—who had recently
come to enjoy unprecedented competitive choice in buying business solutions—began demanding
greater assurances that any solution that BPS proposed would achieve its promised cost reductions
and performance improvements. The new selling process was supposed to meet this demand and
thereby lead to significant increases in sales and renewal rates by providing tangible performance
guarantees to customers in a timely fashion.
Solution-selling was essentially a consultative sales process. It shifted a considerable amount of
effort from the post-contractual to the pre-contractual stage. Clients provided BPS with detailed data
for analysis, and BPS invested significant resources to gather and properly analyze the data. Typically
both parties signed nondisclosure agreements prior to data collection and often a letter of intent. The
end result was a highly detailed and execution-ready proposal that explained the services BPS would
deliver, the precise projects that BPS would implement, the timing of the project milestones, the
resources required from the customer, and any risk-sharing pricing or performance guarantees BPS
would provide.
If the solution-selling process proceeded as intended, customers gained by having a clear
understanding of the benefits of the BPS solution and guaranteed performance targets. BPS gained by
having clearly communicated expectations, which increased the customer’s confidence in the BPS
solution and dramatically improved the likelihood of attaining the guaranteed performance targets
(which are costly to BPS if not achieved). Assuming the customer agreed to move forward to a
contract, the process also benefited both parties in all but eliminating the need for further extensive
contract negotiations.
The solution-selling process required the Sales Support team to devote substantial upfront effort
to develop a proposal. Team members tracked the time they spent on each sales opportunity.
Exhibit 4 provides a summary of the time required for each Sales Support function across the
different types of opportunities. Regardless of the large workload associated with the process,
everything had to be completed in a timely fashion. Customers and prospects were unwilling to
significantly delay their solution selection choice due to the vagaries in the selling process of a single
vendor. The competition in the market was stiff and vendors had to be responsive with a high quality
proposal or risk early elimination.
Feedback on the process from BPS customers and prospects varied widely. While some companies
greatly appreciated the in-depth analysis and the greater confidence that it engendered in the BPS
solution, others complained that BPS “didn’t have their ducks in a row” by the time of the sales
presentation. In some cases, the BPS sales team has had to delay the presentation by days or even
weeks. Dee shared a recent experience with Connor:
I was on a call just last month with one of my salespeople trying to convince a prospect to
give us more time on a proposal review session. The prospect was polite but made it clear that
they were on a strict schedule and we had to either present on time or drop out of the running.
He was willing to give us a day or two, but we needed two more weeks. Unfortunately the
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This document is authorized for use only in Laureate Education, Inc.’s CMBA SP004-Systems Thinking for Organizational Improvement course at Laureate Education – Baltimore, from
September 2017 to November 2018.
4568 | Baria Planning Solutions, Inc.: Fixing the Sales Process
Sales Support team just couldn’t pull all the moving parts together in time. We presented what
we had, but it was not well received. This was not a last minute project either…we had a full
four weeks of advance notice.
Members of the Sales Support group were all too aware of the criticisms that had been leveled
against them. While they believed that the solution selling process could be quite effective in helping
the company win sales opportunities, they also believed that the expectations placed upon the team
could be unrealistic. Connor had one-on-one discussions with each member of her team in order to
better understand …
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