Gap Analysis: Intersect Investments
Intersect Investment company is an organization losing ground in the financial services industry. The company executives have identified that a major change initiative is necessary in order for the organization to survive as a key industry player. The following paper will identify key issues and opportunities the organization must address in initiating change across the organization. This author will also address key stakeholder issues and concerns and how they all affect each stakeholder group. Stakeholder perspectives and ethical concerns will be addressed. This document will formulate an end state vision statement that will be developed in detail. The new vision will lead the way to formulating key end state goals that the organization will attain as the transformational leadership change plan is implemented. A gap analysis will be performed and discussed to bridge the ravine between where the organization is today and how they will get to where they need to be tomorrow. Lastly, this paper will conclude with a summary of the findings highlighting key components for institutionalizing transitional leadership change.
Issue and Opportunity Identification
Intersect Investments is a company within the volatile financial services industry that is struggling. The organization has fallen from being an industry leader and is plummeting further as new players have taken the competitive advantage. Customer and employee retention have declined to historic lows, and customer satisfaction is down 10% (Intersect Investments, 2008).
In order for the organization to rebound and get back on track, the company has promoted a new EVP Marketing and Sales to carry out the new corporate vision. Janet Angelo’s plan of implementing a customer intimacy model that will prove results in 12-months will be a challenge. The organizational culture has been ingrained for 15 years and the resistance to change will be hard-fought. “Managers need to learn to recognize the manifestations of resistance both in themselves and in others if they want to be more effective in creating and supporting change” (Kreitner & Kinicki, 2003). Angelo must learn her new organizational culture and the individuals who shaped it. In order to drive a change process, she must align the people through communication and participation. “Managers who trust their employees make the change process an open, honest, and participation affair. Employees who trust management are more willing to expend extra effort and take changes with something different” (Kreitner & Kinicki, 2003).
A barrier for Angelo to overcome is the organizational culture and resistance towards change. The culture is hardened and struggling to maintain a leadership position within the industry. Resistors to change say the company is lean and that the goals are too high. The naysayers state that sales goals can not be attained since customer call times have been reduced in order to establish new clients. In the mean time, existing clients are not being serviced and customer retention and satisfaction are on the downslope.
The new vision for the organization will be difficult to achieve if change is not combated properly. Transitional leadership, or transformational change, will be necessary for the organization to reach their goal of becoming the customer’s most trusted financial advisor. The vision calls for providing customer value through new services that demonstrate client value in their investments. The new strategic focus is an initiative that must be lived by each employee in the organization. Transformational leadership must prepare the employees that change is necessary and is good for the future of all stakeholders involved with the corporation. “Resilience to change is a composite characteristic reflecting high self-esteem, optimism, and an internal locus of control” (Kreitner & Kinicki, 2003).
Stakeholder Perspectives/Ethical Dilemmas
Janet Angelo must be focused on the key stakeholders to the organization. First off, the employees that are resistant towards change do not see the lofty goals as being attainable. She must communicate clearly the new vision and implement a plan that will motivate and unify the teams to drive forward with the new initiatives. Angelo can provide new employee value in terms of rewards to the team members. “Pay for performance is something extra, compensation above and beyond basic wages and salaries” (Kreitner & Kinicki, 2003). Employees become more motivated when there is more money involved on their paychecks. Rewards motivate people to perform higher because the extra incentive demonstrates higher employee value. “Proponents of incentive compensation say something extra is needed because hourly wages and fixed salaries do little more than motivate people to show up at work and put in the required hours” (Kreitner & Kinicki, 2003).
Disgruntled shareholders also need to be satisfied since their stock value has been reduced as the company loses ground to competitors. Not only must Angelo’s change processes work, they must deliver in a relatively short time frame of 12 months. Shareholders tend to be impatient and unforgiving stakeholders. This stakeholder group will make their voices heard in short order if results in terms of share price are not realized. If the Intersect Investment organization fails to deliver progressive results in the months leading up to the one year deadline, key executives could lose their positions. Shareholders care about one thing and that is their stock price. Stock price is reflected in a couple of key areas, primarily in customer sales, customer retention, and customer satisfaction. If all 3 goals are met, the stock price will go up. Each goal has an overwhelming effect on corporate social responsibility (CSR) towards all stakeholders. Financial service providers make sales and retain clients because they provide the services that customers want and need. The stock price of course, will reflect this.
The customers need quality service, respectful interactions, and immediate attention to their financial needs. They seek new and innovative services that work and will be delivered on time. Customers need their investments protected and the Intersect Investment organization must demonstrate value to their clients in terms of return on investment (ROI). The customer does not want to feel like a number and made to feel unimportant. This is a critical element of the institutional change process for the organization. A key to customer satisfaction is delivering services, providing results, and building an intimate relationship that makes every customer feel that they are the most important client the company has.
Intersect Investments will, “Provide a broad set of products and services to consumer and small business customers using a model of customer intimacy that will build long-term relationships based on trust and value to the customer” (Intersect Investment, 2008).
The two areas that senior leadership defines in leading to the success of the corporate mission are strategic capability and transformational change. Transformational change is “the ability and process that leaders use to transform the very nature of an organization in order to help ensure its success in the marketplace” (Intersect Investment, 2008). In order for this transformation to occur smoothly and effectively, leaders who have vision, passion, and focus, will be needed to help the change process be successful. Strategic capabilities are “the few beliefs, skills, knowledge, and processes that create the ability or capability of an organization to continuously act and do what is needed to realize its strategy and succeed in its markets” (Intersect Investment, 2008). Angelo and key executives must make these two critical areas of organizational concentration a priority in order for the company to realize mission value. “I believe that executing our new strategy will require we make these two factors strategic priorities for us” (Intersect Investment, 2008).
Top transitional leaders must teach and train lower-level leaders to duplicate their efforts and become aligned to the new strategy. “It will be important for us as a company, and each one of us as leaders of large organizations, to ensure we have leaders who can lead the transformational change needed to realize our new strategy” (Intersect Investment, 2008). Transitional leadership will be the driving force behind the change process at Intersect Investment. “Commitment to change is defined as a mind-set that binds an individual to a course of action deemed necessary for the successful implementation of a change initiative” (Kreitner & Kinicki, 2003). With the new alignment towards a unified change strategy, their customers will experience a new bond with the Intersect organization. “And as we look at our new vision and strategy we can consider our new sales and marketing model based on customer intimacy as a strategic capability” (Intersect Investment, 2008).
“Customer commitment does not happen overnight. It must become a value we all believe in and live everyday. Each time we talk to a customer we must begin by understanding their needs, long and short-term goals and what they value” (Intersect Investment, 2008). Transformational change, leadership, and strategic capability on a unified cultural level is required for the Intersect Investment company to realize long-term mission and vision value through the implementation of new processes. Whether change is organizationally or individually orchestrated, it requires a dedicated manifestation of a goal-oriented vision commitment that supports and aligns itself to harmonize with the new processes. This change does not come easily and will not happen overnight. It can be done quickly however, when transitional leadership is prevalent across the organization. When the transitional leaders are able to motivate the staff to live and believe in the new corporate vision, success will soon follow. “Thus, customer intimacy is a strategic focus. It is a personal value and priority for each of us” (Intersect Investment, 2008).
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