CASE #1

Action Ambulance is a provider of ambulance and transportation services to hospitals, nursing homes, rehabilitation facilities and special-education programs within school systems. The firm has over 250 employees and is based just north of Boston, USA. The firms mission statement is: To build and strengthen relationships that promote exceptional customer service and team member success. Actions Vision Statement: People Helping People. Its published values are: honesty, responsibility and hard work. The firms innovative development of laminated ID cards, which it also produces for a number of government institutions, is one example of the firms approach to meeting its mission.

The firms CEO is Mr. Mike Woronka. He became chief executive in 2006 after having worked at the company for a decade. During that time the ambulance business became increasingly competitive for two principal reasons. The first was rising health care costs which led to hospital consolidation. The second was that customers were demanding dedicated resources with optimal response times. This drove up the cost of service and prompted Mr. Woronka to find new ways to differentiate Action from its competitors. He wanted to attract new clients and expand the business and believed that the best way to achieve this was through a more aggressive approach to sales. However such a strategy was unusual in an industry where account managers are paid a straight salary and tend to push for additional sales in relatively gentle manner. Normally, in the course of serving current customers, the account managers might also help develop new accounts. At industry events, they would meet health care providers looking to switch transportation companies, or they would network with hospital decision-makers to seek a greater percentage of their business. The company set no goals for landing new business, and account managers were paid a straight salary without commission. They had no incentive to cold-call or to pursue prospects actively. Mr. Woronka knew that he needed to train his existing account managers to be more proactive or to recruit a full-time sales representative to pursue new accounts. He also considered hiring a sales manager to oversee the team. He saw this as a way of keeping the firm nimble and ready as stated on the firms website.

Although a sales consultant advised him to recruit a full-time sales rep immediately, Mr. Woronka decided instead to see if his account managers had the necessary skills and motivation to secure new clients, and he asked the sales consultant to train them in sales techniques although he did not introduce any sales incentives such as bonuses. After eight months it became apparent that the strategy was not working with account managers becoming frustrated as they struggled to accept the changes to their way of working. He decided to press on without the help of the sales consultant but continued to be dissatisfied with the progress made by his account managers. Eventually he decided that the skills set of the account managers was inappropriate and that personnel changes were needed and he contacted the sales consultant and asked if she would come back to help him recruit a professional sales representative.

The sales consultant returned to write a job description for the professional sales representative role and to recommend an appropriate remuneration package of $100,000 with about 60 per cent through commission. She also suggested that the base salary should be higher during initial training. The sales consultant stayed on for two months to ensure that the new sales representative hit the ground running; and during this time she coached, role-played and accompanied the sales representative to client meetings. Mr. Woronka was very pleased with the attitude and performance of the new person. He felt the new, proactive selling strategy worked well even during a recession. The new role contributed to an increase in annual revenue of approximately $1.5 million (to $17 million) and the opening of two new offices. During this time Mr. Woronka acted as the sales manager but was starting to think about recruiting another sales representative and a part-time sales manager. He no longer feels he has the time to carry out this de facto role effectively. He is still looking for new ways to differentiate his firm in the market place. As he explains: as health care evolves and changes, were looking at new ways to differentiate ourselves. Hospitals are being forced to move patients out of their facilities with less notice than they had before. Five years ago, we knew almost 24 hours in advance that someone was going to move. Nowadays we receive 85 per cent of our calls with 15 to 30 minutes notice about when patients are moving.

The firm now has one rather than two account managers as Mr. Woronka believes he is getting more value from the selling roles and is adjusting sales targets accordingly. The firm has received an award from the American Business Awards for the quality of its services.

1. To what extent can an effective HR strategy be recognized? (5 marks)
2. To what extent might the creation of an HR role have been helpful? (5 marks
3. In what ways might the review of HR strategy in an organisation of this size differ from comparable processes in a much larger organisation? (5 marks)