Jess Westerly at Kauflauf GmbH

Organization development and change

Group 1; Sec- A

Submitted to: Prof. Ranjeet Nambudiri

Submitted By:
Arok Priyadarshan S

Hariprasad B

Kajal Modi

Mathan Kumar V

Nirmal S

Poonam Pawar S

Suthitha Raj Palaparthi

Tigiripalli Hemanth Raj

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 Executive Summary
Kauflauf GmbH was started in 2002 with “software as a service model”, providing
disruptive software solutions (CRM applications created largely for auto part manufacturers)
mainly targeting mid-sized and top-tier smaller firms. The founders of Kauflauf GmbH
recognised the potential for subscription-based software service model and the company
was hugely successful. The founders are also responsible for the anti-hierarchical, youth-
oriented culture which is considered as an important part of the professional image for the
employees. Field representatives of Kauflauf GmbH take pride in the service they provide
and the professional relationships they have with their customers.

Jess Westerly was the newly joined assistant product owner of CRM applications and
was responsible for optimising design, sales and profitability. After extensive research, she
found out that the firm will get more profitable if they focus more on larger, more
established potential purchasers instead of the firm's usual target segment. After getting
approval from her boss, Tim Roeder, she emailed a memo detailing the plan of action. Her
new proposal was received with outrageous negativity. They stated that the new proposal is
against the company culture and will won’t work. She was taken aback but with further
research and after considering various scenarios she was still confident that the new
proposal will work and wants to try it out. She got support from Heinz van Hoorn, the
director of marketing. However, she needs to effectively communicate the new proposal
with different stakeholders involved in the company. This report analyses this situation and
gives recommendations with associated action plan.

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 Table of Contents

Sl. No. Topic Page No.

1 Situation Analysis 4
2 Problem Definition 5
3 Options Available 5
4 Criteria for Evaluation 5
5 Evaluation of the options 6
6 Recommendation 6
7 Action Plan 6

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1. Situational Analysis

 Kauflauf GmbH Was started in 2002 with “software as a service model”, providing
disruptive software solutions (CRM applications created largely for auto part
manufacturers). The earliest developers and sales specialists comprised of former
SAP employees and computer engineering graduates.
 The company had grown quickly by targeting mid-sized and top tier smaller firms
that could benefit from cloud-based subscription software and by its differentiated
approach to serving this market with highly qualified sales representatives who
offered consultant like services to clients.
 CRM software services constituted two third of sales in 2010 (30% coming from
computer & office supplies customer segment).
 Early competitors were established firms like SAP and Oracle but now the firm is
competing directly with subscription software competitors located mainly in Silicon
Valley and Bangalore.
 Kauflauf’s sales force used client education, hand-holding and customization to win
customer accounts and loyalty.
 Allowed customers to develop their own applications alongside company’s releases.
 Firm’s culture is Anti-hierarchical, youth oriented with emphasised norms on
collaboration, technical excellence, and mutual respect.
 Informal networks were a key to getting things done across divisions and Field
consultants were given complete liberty to plan their own activities.
 Jess Westerly was the newly joined assistant product owner of CRM applications and
was responsible for optimising design, sales and profitability.
 She had experience of working with CRM based software service provider and
helped them in increasing their market share.
 Jess analysed sales figures against the field consultants’ time allocation reports. She
found that only 35% of the consultants’ time went to customers which resulted in
85% revenues. She concluded if time spent with large revenue generating clients is
increased by 20%, there will be 30% increase in overall annual revenues.
 According to her, the product had all features which would fit with every type of
account. It will be adopted by large accounts if user experiences are shared with
them.
 Her analysis was even more strengthened by recent events happened with Dart. Dart
was one of the world’s largest suppliers of computer parts, supplies, and equipment
and the Original contact with Dart were made through one of the small U.S.
distributors.
 The applications immediate success led to a further adoption of a tailored version of
the product. Slowly the product was replaced globally by Dart and Kauflauf had
displaced three major competitors.

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 After extensive research, she found out that the firm will get more profitable if they
focus more on larger, more established potential purchasers instead of the firm's
usual target segment. After getting approval from her boss, Tim Roeder, she emailed
a memo detailing the plan of action.
 Jess Westerly sent out the memo in mid-June to all Field Consultants and Regional
Sales Directors (RSDs) that briefly described her rationale for redeploying the field
consultants’ time
 She explained her reasons behind the sales call patterns change initiatives. She also
shared the results of simulations carried out and assured elaboration and support in
case anyone had queries.
 Her new proposal was received with outrageous negativity. She received responses
regarding the discontentment of the sales consultant at various regions. She also
received several replies to her email, most of them conveying disappointment and
non-acceptance of her proposal. Her first attempt cost her credibility and strained
her relationship with the Regional Sales Director (RSD)
 She was taken aback but with further research and after considering various
scenarios she was still confident that the new proposal will work and wants to try it
out. She got support from Heinz van Hoorn, the director of marketing.

2. Problem Definition

Considering the disapproval from the sales team Jess Westerly should find out a way
to effectively communicate the new proposal and should bring out the change in a
productive manner.

3. Options Available

 Implementing the new proposal by tying up the sales force work with benefits.
 Recruiting new hires which exclusively focus on larger clients.
 Getting the approval from sales force by effectively communicating the advantages.

4. Criteria for Evaluation

 Cost
 Feasibility
 Risk involved
 Time Constraints

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 5. Evaluation of Options
 Implementing the new proposal by tying up the sales force work with benefits.
 This option results in demotivated workforce in the organization. To
contain that the firm has to tie up benefits to the sales force for getting
the job done. With larger clients, the revenues and profitability will
increase but the company we may or may not provide the necessary
service and thus may lose some important customers. Also, relationships
with present companies deteriorate. Salesforce has to be trained
reluctantly to modify their approach according to the client which may
result in a turnover of sales consultants.
 Recruiting new hires which exclusively focus on larger clients.
 This will increase the cost for the company because of the new
recruitment and training process. But new sales representatives will
exclusively consult larger firms thereby reducing the culture clash. But
internally the present sales force considers them as a threat and may not
help them in closing the deal. Also with out personal interactions within
the company, it is impossible to get the work done and the new recruits
may find it impossible to serve the clients putting the reputation at stake.
 Getting the approval from sales force by effectively communicating the advantages.
 Time will be taken in implementing this option. Salesforce is reluctant to
change their approach towards clients and training is necessary to
effectively communicate the message. But once we got the approval from
sales force it would be easier for the company as a whole because of the
experience the sales force has.

6. Recommendation
We recommend the option “Getting the approval from sales force by effectively
communicating the advantages”. The plan Jess was suggesting, even though helps in
achieving the profitability, is against the core foundation on which the company is
founded. With careful planning and gradually adopting to change Kauflauf GmbH can
cater to larger firms as well. But culture clash should not happen in this process\

7. Action Plan
Jess should roll out a plan with a time frame of events in mind. Employees are
considering as an outsider since she was an American. Also, she was just 29 and
many experienced field consultants are considering her as too young and thus are
against the decision. Jess should roll out the plan under the name of the managing
director. The roll out should be gradual. Only a few key accounts in every region
should be targeted in the initial stages. Their needs are to be met first which gives
the firm about the capabilities to serve the client needs. Once Kauflauf GmbH is able
to cater the client needs, confidence among the sales force increases regarding
serving the large clients. This solves the problem and gives a sense of direction in the
future.

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