Question: Please read "Radburn Enterprises article and respond to the following questions in 2-3 pages:

1- Based on your response to #3, are you suggesting a revolutionary or evolutionary change? Please support your answer by telling me why?

2-What specific advice do you think Kohler and Munz would give us about this case?

3- The CEO is thinking that he should start an outbound selling group. Using the SWOT analysis, please provide him with a completed chart?

Radburn Enterprises The brochure about Radburn Enterprises contains the following: Radburn Enterprises specializes in turning your basement or spare room into a beautiful, functional living space. Our experienced project managers will meet at your home to discuss your needs and draw up designs to your specifications. Your unfinished basement can turn into a family room, complete with recessed lighting, beautiful carpeting, built-in shelves, entertainment unit, and corner bar with sink. Perhaps you have a room in your home that needs modernization or better use of floor space. We can work within your budget to change the space you currently have into the room you desire. Our motto at Radburn Enterprises is: Quality workmanship and customer satisfaction are always first! Radburn Enterprises started in the suburbs of New York City 95 years ago and expanded quickly. Today, it operates in eight states: New York, New Jersey, and the six New England states. There are 175 people employed at its headquarters in Yonkers, NY and another 4,000 in the field. The key departments located at headquarters and pertinent to this case) are Advertisement, Production, Customer Service, Human Resources, and Sales Headquarters. The Vice Presidents of each of these five departments reports to the CEO, Elliott Barns. The CEO of Radburn Enterprises has called you in to help with an issue. Total sales are down as well as profits. Here is what he tells you: "Ten years ago, revenue was just over $200 million; profit was at $22 million. We had a great profit margin, we strived for 10%. Today, revenue is at $155 million, and profit is at $10.5 million - that is under 7%. That is still a good margin compared to most companies. But we have been at this business for nearly a century. We know how to do things right!" "True, today we have more competition. Home Depot, Lowes, even some department stores have eroded our business. Why it is not even their core business! This company has survived the Great Depression, wars, recessions, you name it." "I give you access to my staff. They are loyal people. I personally walk around the place to say hello to everyone and ask if everything is alright. I frequent our four hubs in Trenton, Hartford, Providence, and Burlington to also meet the people. Of course, the bulk of our people, mainly salespeople, work out of their homes." "They are all good people. We pay them well and provide competitive benefits. I tell them my door is always open if they want to talk about anything." "I ask for your help to turn this company back on track." You conduct a series of interviews. Below is what you have uncovered. Joe Carroll (VP of Advertisement): "We didn't even have a website until five years ago! I had been telling Elliott for years we needed one. Finally, I was given the okay. Then Home Depot copies our ideas.' "I give the salespeople collateral - both hard copy and demonstrations on their laptops. Most don't seem to use the laptop. I think because they're used to selling without one. Although, from what I understand, there's no correlation between computer savvy and sales. Brad (VP of Sales) tells me some people are just naturally good at selling." Brad Pierce (VP of Sales): "It's true, some people are better at selling than others. That's why I tell my four District Managers (one for each hub office) i's important to hire people with sales experience - forget that they don't know the business - relating to the customer is key. We can train them in the business, it's harder to train them to relate to the customer, sell our services, and close deals." "We have a two-day formal training program. Everyone comes to Yonkers to ensure consistently in training. They learn the process from each of the VPs and a few senior people. They go back to their hubs for another day to get the forms and everything they need. Most will work out of their homes." Salespeople work on straight commission-they get 10% of the order until they reach quota and then get 12%. That is quite competitive, no matter what you are selling." "Let me tell you our process - it has changed little over the years: 1) Customer calls Radburn Enterprises or makes an inquiry. They call into our customer service center. The customer service rep looks at the calendar of a salesperson in that area, and schedules an appointment. 2) The salesperson (referred to as project manager) gets a text on their smart phones -all our salespeople are required to have smart phones - we do not provide them. 3) The salesperson meets with customers at their home. He or she asks questions and determines what exactly they are looking for. Salespeople use their laptop program to draw a diagram of what the customer wants; this helps the customer quickly visualize the outcome. Their laptop has all the pricing built in to determine overall price. The customer signs the contract to begin work. 4) Paperwork (contract, drawings) are emailed or brought into the hub office by the following day. Physical copies of the paperwork are placed in the "New Project" bin. If the paperwork was emailed, it then needs to be printed. 5) Paperwork is reviewed for omissions and readability by either the salesperson's direct supervisor or the District Metro Manager. If there are problems, paperwork in placed in the Problem Jobs" folder and the salesperson is advised by email. 6) Once approved, paperwork is reviewed by Production. If there are problems, the Metro Manager is 6) Once approved, paperwork is reviewed by Production. If there are problems, the Metro Manager is advised, who then contacts the salesperson. HRM 538 Page 3 7) Paperwork is scanned and entered into the computer by the secretarial staff in Production and checked against book prices for accuracy. 8) The computer file is then reviewed by our Human Resources Corporate Credit division for proper documentation. In the case of COC (cash on completion), Corporate Credit reviews the customer's credit history, if it is acceptable, they issue an RTP (Ready to Proceed) and the project goes back to Production. If not, the issuing office is notified and the project placed on a Bad Credit report. 9) Production calls the customer to schedule an in-home visit with an engineer specialist (outside contractor) to double check all schematics and materials. 10) The engineer specialist goes to customer's house - and reviews the project with an engineer's eye; making exact measurements and reviewing any electrical or plumbing needs. \11) The engineer has a 3D schematic of the project generated by Production. 12) The engineer goes back to the customer and gets final approval of the 3D schematic. 13) Customer (or lending institution) pays 25% of total job. 14) All materials are ordered (by production)-custom to that project. 15) Materials come in and Production coordinates with all plumbers, electricians, etc. (all are outside contractors), and a beginning date is scheduled with the customer. 16) Project is installed and completed. 17) Customer pays Radburn the remaining 75% of total job. 18) Commission check goes out to salesperson. "The timing is 6 weeks from initial customer visit to beginning of installation. If any of these procedures takes longer than a specified time frame (from 7-18 working days) the project is automatically cancelled and must be reinstated by the salesperson or the manager by issuing a COA (Change Order Authorization)" You speak to several District Managers. Here are some representative quotes that seem to be echoed by all of them: "Some of the rules just don't make sense. If the customer goes on vacation and does not reply to someone within 7 day- for example, when they call to schedule an engineer - they find out the job has been cancelled. "There is high turnover among salespeople. The average person stays only 6 months. Most likely due to a combination of hiring people who do not know the business and the fact they don't get any commission until the job is completed." "About 3 years ago, Brad tweaked the 18 step process. He didn't even consult us." Representative statements from salespeople include: "I've been here just over 3 years, that makes me a veteran! In the beginning, it's tough until the commissions roll in. Still, I close about 3 or 4 deals a month. Only one sticks. You know, the customer has a few days to change his mind, or turns out his credit is bad.' HRM 538 Page 14 "There are a lot of rules about the timing and the process that I do not understand." "I use a tablet to draw my diagram and email it. It doesn't have the official software to draw the diagram because the program is not available for a tablet. It's still better than hand drawing it!" "A customer called me about 2 weeks after I made my initial visit. She said no one called her. Granted, I had emailed the order that same day I met her over to production. Turns out production was too busy to print and put it in the new project bin (Step #4). "I had a customer complain to me a month after I was there that they were still waiting for a call. I find out that the secretarial staff in Production was too busy to scan in the paperwork (Step #7). They do not have commission riding on the project!" "Once, Corporate Credit turned down a customer and did not notify me or the customer! And the customer owned three houses and drives a sports car." "We tell the customer it takes 6 weeks for installation to begin. It is more like 12 weeks." Jacob Owens, VP of Production tells you the following: "My staff works very hard. I am tired of having salespeople berate them. I mean some of them actually yell over the phone at them. They have no right doing that." "I admit I cut my staff by a third last year to save money for the company. We reviewed all personnel at our VP meeting. The decision was they were overhead' and were dispensable." "I think some of the secretaries have their favorite salespeople; you know which ones, those who send gifts or talk to them nicely over the phone. But I don't think that affects their work." Penny York, VP of Customer Services: "My folks really feel connected to our customers - especially when customers call to complain. If I seem sarcastic, it's because my area is the link to the whole business - we are the first contact with the customer. We get inquiries and we set up calls with salespeople via a text." "We are inbound only. That means there is no outbound selling - we do not call people to sell them our services. But that does not mean my people do not sell. Customers call in with questions and it's our job to convince them to go to the next step and see a project manager." "I brought up the fact that many companies have an outbound telesales force. The other VPs thought I should try it out. I said that customer service is different than sales and that Brad should consider trying it. He insists customer service people should do it. I insist it is a matter of skill set - one that salespeople have. Tom Brooks, VP of Human Resources, reveals the following to you: "I did an analysis, and the increases in costs are due mainly to two issues: (1) giving laptops to salespeople who use their tablets or smart phones instead. And frankly, we should provide tablets and smart phones with a consistent software - but that might add to costs, and (2) Elliott going around to each hub at least once a month to have what he calls a quick chat with the people - sure once in a while a personal visit is good but a teleconference or Skype or Face time is cheaper. Bringing in the revenue is the bigger problem." "Keep in mind we do not have anyone calling on customers to bring in revenue - advertisement and word of mouth had sustained us for a very long time." "In my opinion, it is rare that the VPs, including myself, can agree on an issue. And it is even rarer that the people in each function appreciate the hard work that people in the other functions do." "Of everyone, Brad and Joe respect each other the least - maybe that's true for most VPs of advertisement and sales. But it hurts the business when salespeople do not want to show the collateral." "The 18 step process? I did some benchmarking, it seems that it's considered very typical in the industry. But sometimes companies copy processes from each other thinking the other one has the better process. The vast majority seem to use outside contractors, which cuts down on overhead because you pay them only when work is needed. Some collect more money upfront and give the salespeople a partial commission once the customer approves the 3D version of the work. A few of the smaller competitors add a final step: Customer Service calls the customer to make sure they are satisfied with the job." "A big complaint I hear from the field is about the standards that are used by my Corporate Credit unit. Salespeople seem to think customers go to the competition and have no problem. We use the same credit procedures and resources others do." "Everyone likes Elliott. What is there not to like? He lets the VPs settle their own differences (or simply continue to disagree); he goes around the company greeting everyone and telling them they are doing a great job. I have told him repeatedly, being liked by employees is not a pre-requisite to growing the business." Radburn Enterprises The brochure about Radburn Enterprises contains the following: Radburn Enterprises specializes in turning your basement or spare room into a beautiful, functional living space. Our experienced project managers will meet at your home to discuss your needs and draw up designs to your specifications. Your unfinished basement can turn into a family room, complete with recessed lighting, beautiful carpeting, built-in shelves, entertainment unit, and corner bar with sink. Perhaps you have a room in your home that needs modernization or better use of floor space. We can work within your budget to change the space you currently have into the room you desire. Our motto at Radburn Enterprises is: Quality workmanship and customer satisfaction are always first! Radburn Enterprises started in the suburbs of New York City 95 years ago and expanded quickly. Today, it operates in eight states: New York, New Jersey, and the six New England states. There are 175 people employed at its headquarters in Yonkers, NY and another 4,000 in the field. The key departments located at headquarters and pertinent to this case) are Advertisement, Production, Customer Service, Human Resources, and Sales Headquarters. The Vice Presidents of each of these five departments reports to the CEO, Elliott Barns. The CEO of Radburn Enterprises has called you in to help with an issue. Total sales are down as well as profits. Here is what he tells you: "Ten years ago, revenue was just over $200 million; profit was at $22 million. We had a great profit margin, we strived for 10%. Today, revenue is at $155 million, and profit is at $10.5 million - that is under 7%. That is still a good margin compared to most companies. But we have been at this business for nearly a century. We know how to do things right!" "True, today we have more competition. Home Depot, Lowes, even some department stores have eroded our business. Why it is not even their core business! This company has survived the Great Depression, wars, recessions, you name it." "I give you access to my staff. They are loyal people. I personally walk around the place to say hello to everyone and ask if everything is alright. I frequent our four hubs in Trenton, Hartford, Providence, and Burlington to also meet the people. Of course, the bulk of our people, mainly salespeople, work out of their homes." "They are all good people. We pay them well and provide competitive benefits. I tell them my door is always open if they want to talk about anything." "I ask for your help to turn this company back on track." You conduct a series of interviews. Below is what you have uncovered. Joe Carroll (VP of Advertisement): "We didn't even have a website until five years ago! I had been telling Elliott for years we needed one. Finally, I was given the okay. Then Home Depot copies our ideas.' "I give the salespeople collateral - both hard copy and demonstrations on their laptops. Most don't seem to use the laptop. I think because they're used to selling without one. Although, from what I understand, there's no correlation between computer savvy and sales. Brad (VP of Sales) tells me some people are just naturally good at selling." Brad Pierce (VP of Sales): "It's true, some people are better at selling than others. That's why I tell my four District Managers (one for each hub office) i's important to hire people with sales experience - forget that they don't know the business - relating to the customer is key. We can train them in the business, it's harder to train them to relate to the customer, sell our services, and close deals." "We have a two-day formal training program. Everyone comes to Yonkers to ensure consistently in training. They learn the process from each of the VPs and a few senior people. They go back to their hubs for another day to get the forms and everything they need. Most will work out of their homes." Salespeople work on straight commission-they get 10% of the order until they reach quota and then get 12%. That is quite competitive, no matter what you are selling." "Let me tell you our process - it has changed little over the years: 1) Customer calls Radburn Enterprises or makes an inquiry. They call into our customer service center. The customer service rep looks at the calendar of a salesperson in that area, and schedules an appointment. 2) The salesperson (referred to as project manager) gets a text on their smart phones -all our salespeople are required to have smart phones - we do not provide them. 3) The salesperson meets with customers at their home. He or she asks questions and determines what exactly they are looking for. Salespeople use their laptop program to draw a diagram of what the customer wants; this helps the customer quickly visualize the outcome. Their laptop has all the pricing built in to determine overall price. The customer signs the contract to begin work. 4) Paperwork (contract, drawings) are emailed or brought into the hub office by the following day. Physical copies of the paperwork are placed in the "New Project" bin. If the paperwork was emailed, it then needs to be printed. 5) Paperwork is reviewed for omissions and readability by either the salesperson's direct supervisor or the District Metro Manager. If there are problems, paperwork in placed in the Problem Jobs" folder and the salesperson is advised by email. 6) Once approved, paperwork is reviewed by Production. If there are problems, the Metro Manager is 6) Once approved, paperwork is reviewed by Production. If there are problems, the Metro Manager is advised, who then contacts the salesperson. HRM 538 Page 3 7) Paperwork is scanned and entered into the computer by the secretarial staff in Production and checked against book prices for accuracy. 8) The computer file is then reviewed by our Human Resources Corporate Credit division for proper documentation. In the case of COC (cash on completion), Corporate Credit reviews the customer's credit history, if it is acceptable, they issue an RTP (Ready to Proceed) and the project goes back to Production. If not, the issuing office is notified and the project placed on a Bad Credit report. 9) Production calls the customer to schedule an in-home visit with an engineer specialist (outside contractor) to double check all schematics and materials. 10) The engineer specialist goes to customer's house - and reviews the project with an engineer's eye; making exact measurements and reviewing any electrical or plumbing needs. \11) The engineer has a 3D schematic of the project generated by Production. 12) The engineer goes back to the customer and gets final approval of the 3D schematic. 13) Customer (or lending institution) pays 25% of total job. 14) All materials are ordered (by production)-custom to that project. 15) Materials come in and Production coordinates with all plumbers, electricians, etc. (all are outside contractors), and a beginning date is scheduled with the customer. 16) Project is installed and completed. 17) Customer pays Radburn the remaining 75% of total job. 18) Commission check goes out to salesperson. "The timing is 6 weeks from initial customer visit to beginning of installation. If any of these procedures takes longer than a specified time frame (from 7-18 working days) the project is automatically cancelled and must be reinstated by the salesperson or the manager by issuing a COA (Change Order Authorization)" You speak to several District Managers. Here are some representative quotes that seem to be echoed by all of them: "Some of the rules just don't make sense. If the customer goes on vacation and does not reply to someone within 7 day- for example, when they call to schedule an engineer - they find out the job has been cancelled. "There is high turnover among salespeople. The average person stays only 6 months. Most likely due to a combination of hiring people who do not know the business and the fact they don't get any commission until the job is completed." "About 3 years ago, Brad tweaked the 18 step process. He didn't even consult us." Representative statements from salespeople include: "I've been here just over 3 years, that makes me a veteran! In the beginning, it's tough until the commissions roll in. Still, I close about 3 or 4 deals a month. Only one sticks. You know, the customer has a few days to change his mind, or turns out his credit is bad.' HRM 538 Page 14 "There are a lot of rules about the timing and the process that I do not understand." "I use a tablet to draw my diagram and email it. It doesn't have the official software to draw the diagram because the program is not available for a tablet. It's still better than hand drawing it!" "A customer called me about 2 weeks after I made my initial visit. She said no one called her. Granted, I had emailed the order that same day I met her over to production. Turns out production was too busy to print and put it in the new project bin (Step #4). "I had a customer complain to me a month after I was there that they were still waiting for a call. I find out that the secretarial staff in Production was too busy to scan in the paperwork (Step #7). They do not have commission riding on the project!" "Once, Corporate Credit turned down a customer and did not notify me or the customer! And the customer owned three houses and drives a sports car." "We tell the customer it takes 6 weeks for installation to begin. It is more like 12 weeks." Jacob Owens, VP of Production tells you the following: "My staff works very hard. I am tired of having salespeople berate them. I mean some of them actually yell over the phone at them. They have no right doing that." "I admit I cut my staff by a third last year to save money for the company. We reviewed all personnel at our VP meeting. The decision was they were overhead' and were dispensable." "I think some of the secretaries have their favorite salespeople; you know which ones, those who send gifts or talk to them nicely over the phone. But I don't think that affects their work." Penny York, VP of Customer Services: "My folks really feel connected to our customers - especially when customers call to complain. If I seem sarcastic, it's because my area is the link to the whole business - we are the first contact with the customer. We get inquiries and we set up calls with salespeople via a text." "We are inbound only. That means there is no outbound selling - we do not call people to sell them our services. But that does not mean my people do not sell. Customers call in with questions and it's our job to convince them to go to the next step and see a project manager." "I brought up the fact that many companies have an outbound telesales force. The other VPs thought I should try it out. I said that customer service is different than sales and that Brad should consider trying it. He insists customer service people should do it. I insist it is a matter of skill set - one that salespeople have. Tom Brooks, VP of Human Resources, reveals the following to you: "I did an analysis, and the increases in costs are due mainly to two issues: (1) giving laptops to salespeople who use their tablets or smart phones instead. And frankly, we should provide tablets and smart phones with a consistent software - but that might add to costs, and (2) Elliott going around to each hub at least once a month to have what he calls a quick chat with the people - sure once in a while a personal visit is good but a teleconference or Skype or Face time is cheaper. Bringing in the revenue is the bigger problem." "Keep in mind we do not have anyone calling on customers to bring in revenue - advertisement and word of mouth had sustained us for a very long time." "In my opinion, it is rare that the VPs, including myself, can agree on an issue. And it is even rarer that the people in each function appreciate the hard work that people in the other functions do." "Of everyone, Brad and Joe respect each other the least - maybe that's true for most VPs of advertisement and sales. But it hurts the business when salespeople do not want to show the collateral." "The 18 step process? I did some benchmarking, it seems that it's considered very typical in the industry. But sometimes companies copy processes from each other thinking the other one has the better process. The vast majority seem to use outside contractors, which cuts down on overhead because you pay them only when work is needed. Some collect more money upfront and give the salespeople a partial commission once the customer approves the 3D version of the work. A few of the smaller competitors add a final step: Customer Service calls the customer to make sure they are satisfied with the job." "A big complaint I hear from the field is about the standards that are used by my Corporate Credit unit. Salespeople seem to think customers go to the competition and have no problem. We use the same credit procedures and resources others do." "Everyone likes Elliott. What is there not to like? He lets the VPs settle their own differences (or simply continue to disagree); he goes around the company greeting everyone and telling them they are doing a great job. I have told him repeatedly, being liked by employees is not a pre-requisite to growing the business