TROJAN TECHNOLOGIES INC.: ORGANIZATIONAL STRUCTURING FOR GROWTH AND CUSTOMER SERVICE

In March 1998, a group of Trojan Technologies Inc. (Trojan) employees grappled with the issue of how to structure the business to effectively interact with their customers and to manage the company's dramatic growth. The London, Ontario manufacturer of ultraviolet (UV) water disinfection systems believed that strong customer service was key to its recent and projected growth, and had come to the realization that changes would have to be made to continue to achieve both simultaneously. The group hoped to develop a structure to address these issues. Marvin DeVries, executive vice-president, was to lead the development and implementation of the new structure. The transition to the new structure was to begin as of September 1998 to coincide with the new fiscal year.

THE BUSINESS

Technology

Since 1977, the company had specialized in UV light applications for disinfecting water and wastewater. In essence, Trojan's products killed micro-organisms using high-intensity UV lamps. Water was channeled past the lamps at various speeds, based on the clarity of the water and the strength of the lamps, to achieve the required 'kill' rate. Trojan's UV technology had proven to be an environmentally safe and cost-effective alternative to chlorination, and was gaining wider recognition and acceptance. Even so, a significant market remained to be tapped, as the company estimated ". . . that only five per cent to 10 per cent of municipal wastewater sites in North America use UV-based technology . . . [and] of the approximate 62,000 wastewater treatment facilities operating worldwide, only 2,500 currently utilize UV disinfection systems.

Trojan was established in 1977 with a staff of three with the goal of developing a viable UV wastewater disinfection technology. Following several years of work, the first UV disinfection system (System UV2000) was installed in Tillsonburg, Ontario, in 1981. It took another two years, however, before the regulatory approvals were in place to market the technology for municipal wastewater treatment in Canada and the United States. During this time, the company generated revenues through the sale of small residential and industrial cleanwater UV systems.

By 1991, the company had sales in excess of $10 million, and had introduced its second-generation technology in the System UV3000 wastewater disinfection system. As the company's growth continued, a staff of 50 was in place by 1992. The following year, due to capital requirements created by the company's strong growth, an initial public offering on the Toronto Stock Exchange was completed. Also in 1993, a branch office was established in The Hague, Netherlands, expanding Trojan's reach across the Atlantic.

1994 saw the launch of the System UV4000, the construction of a new head office and sales exceeding $20 million. In 1995, a branch office was opened in California to service the enormous market for wastewater treatment in that state. Two years later, an expansion doubled head office capacity to house 190 staff and to meet the demand for sales of more than $50 million.

Well into 1998, the expectation was that sales would reach $70 million by year-end and continue to grow by more than 30 per cent per year over the next five years, reaching $300 million by 2003. The company was in the process of planning additional capacity expansion in the form of building and property purchases adjacent to head office, and expected to quadruple its headcount by 2003 to more than 1,000 employees.

Products

In 1997, 93 per cent of Trojan's sales were of wastewater products (System UV4000 and System UV3000). These systems were designed for use at small to very large wastewater treatment plants and more complex wastewater treatment applications with varying degrees of effluent treatment. The remaining seven per cent of sales were cleanwater products (primarily the System UV8000 and Aqua UV) for municipal and residential drinking water and industrial process applications. Growth in the coming year would be driven by increased sales of the wastewater disinfection products in both current and new geographic markets. In the longer term, new products such as the AIR 2000, which was to use UV light with an advanced photocatalytic technology to destroy volatile organic compounds in the air, were expected to further Trojan's sales growth.

Products were typically assembled from component parts at Trojan head office. The complexity of the product design, manufacture and service arose from the integration of skills in electronics, biology, controls programming and mechanical engineering. The company owned patents on its products and was prepared to defend them to preserve its intellectual capital.

Customers

Trojan sold its wastewater treatment products to contractors working on projects for municipalities or directly to municipalities. Typically, the process involved bidding on a project based on the Trojan products required to meet the municipality's specifications, and, therefore, engineering expertise was required as part of the selling process. Project sales typically fell in a $100,000 to $500,000 range, and given the large value of each sale, the sales and marketing function was critical to the company's success. However, for marketing to be effective, this new technology had to be well-supported. Municipalities purchasing the wastewater disinfection systems required rapid response to any problems, and expected superior service given the consequences of breakdowns for the quality of water being discharged from their facility. Municipalities also had the ability to discuss Trojan and their UV products with other municipalities before deciding to make their purchase, further underlining the importance of warranty and aftermarket service to customers to ensure positive word-of-mouth advertising.

Trojan's smaller product line, the cleanwater segment, focused on a different customer base from wastewater, and it was difficult to generalize about the nature of this segment's customers. These customers ranged from municipalities to industrial companies to individuals.

INTERACTION WITH CUSTOMERS

The Process

The main points of customer interaction in the wastewater product line included:

1. Quote/bid process

2. Configuration of project structure

3. Project shipment and system installation

4. Technical support and warranty claims

5. Parts order processing

Each of these is described briefly below:

The quote/bid process was a major function of the marketing department, with support from the project engineering department. Although the marketing department took the lead role in assembling the appropriate bid and pricing, the customer would on occasion wish to speak directly to the project engineering department on specific technical questions related to the function of the UV unit within the particular wastewater setting.

After winning a bid, the configuration of project structure involved working with the customer on the detailed specifications for the project and applying the appropriate Trojan systems in a configuration that would meet the customer's needs. The project engineering department took the lead role in this work, and either worked through the marketing representative in transmitting technical information to and from the customer or communicated directly with the customer's technical personnel.

Once the project had been configured, it was scheduled for manufacture by the operations department. On completion, and when the customer was ready to integrate the UV system into their wastewater facility, the service department completed the installation and start-up of the unit. The service department would also be involved in demonstrating the proper use of the system to the customer. After the system was in use by the customer, further interaction came in the form of technical support.

The service department would deal with phone calls, site visits and warranty claims and was the primary contact point for the customer. By its nature, most service work at this stage of the process was completed on an 'as-needed' basis by the first available service representative. As a result, it was difficult or impossible to have the same service representative available to respond to a particular customer on every occasion. The service department, therefore, kept a detailed file on each UV installation and all customer contact to ensure the most informed response on each service call.

The final stage of customer interaction was the ordering of replacement parts by the customer after the warranty period was complete. This was handled by a call centre at Trojan head office in London that was separate from the other departments that had dealt with the customer.

The call centre was staffed to receive orders for Trojan replacement parts, but not to provide technical support as with the service department, and would generally not access customer service files in taking the order.

In summary, customers would deal with as many as four different departments during their interaction with Trojan. During the early days of Trojan's growth, the 'close-knit' nature of Trojan's workforce allowed a seamless transition between 'departments.' However, as described below, the company's continued growth began to complicate the transition between departments.

Customer Support in the Early Days

In the 1980s and early 1990s, when Trojan had less than 50 employees and worked on a limited number of wastewater bids and projects during the course of the year, customer support was a collective effort across the entire company. In fact, it was not unusual that virtually everyone in Trojan knew the details of all the major projects in process at any given time. There was a common knowledge base of customer names and issues, which resulted, in DeVries' words, in an 'immediate connectivity' to the job at hand. At times, during those early days, there were as few as two employees in a 'department.' Under these conditions every project received immediate and constant attention from start to finish, ensuring the customer was satisfied and potential issues were addressed in a proactive manner.

Challenges Created by Growth

As the company grew, departments grew. Very quickly the number of projects multiplied and it became impossible for everyone to know all the customers and active projects, or even all the people in the organization. As departments grew from two to five to 10 people, communications became focused internally within the departments. This made it progressively more difficult to ensure timely and effective communication on project status between departments, and the 'immediate connectivity' described by DeVries began to break down. The situation was described by many as one where 'things began to slip between the cracks' in terms of customer service excellence, because it was no longer possible for employees to shepherd a project through the company from start to finish as had been done in the early days. Once a particular department had finished their component of a project, they immediately had to turn their attention to the other projects they had ongoing, creating the potential for a lag before the next department picked up the customer file.

Project Engineering

Project engineering was one example of a department that had begun to experience problems maintaining service levels to the end-customer as a result of growth. By 1997, there were seven engineers in the department handling the regular support to the marketing department and acting as 'specialists' for the various technical components of the products. When engineers were hired into this group, there was no formal training or apprenticeship program in place. The new hire would simply follow along as best he or she could and attempt to learn the complex product line through observation and assistance from others in the department. This type of training was strained by the demand for project engineering services brought on by Trojan's growth.

A 'specialist' role, in addition to their support of the marketing department's project bids, had evolved within the project engineering group. To handle specific technical requests, this informal addition to the project engineer's role had occurred somewhat spontaneously within the department. For example, if one of the project engineers had developed a detailed understanding of the electronics included in the System UV4000 products, that employee acted as the reference point for most detailed queries on this subject and was considered the 'electronics specialist.' There was no specific training or support to develop these specialists for their roles in place in 1997, nor was hiring particularly targeted at filling the specialist roles described above, as it was a secondary role for the department. As a result of the dual roles and the company's rapid growth, project engineers could not take responsibility to guide a project from bid through customer queries to production and commissioning of the project. The demand for assistance on many bids, coupled with the need to respond to queries in their 'specialist' area on active projects prevented project engineers from acting as a steward on specific projects as they passed through the company. Instead, the department operated more as a pooled resource that was accessed as needed by the marketing department to support bids and by the service group to assist with product support.

Service

The growth of the company and the establishment of new product lines had caused an amplified growth in the service group, because for each new project installed there was a long-term source of potential queries and service needs. The service group covered a broad spectrum of needs, from the initial setup of UV systems to emergency responses to equipment problems or queries (which frequently required site visits). A formal training program had been instituted during early 1998 when the new service manager recognized the need to quickly develop new employees to ensure they could contribute a strong technical background and familiarity with the product. An existing service group member typically instructed new employees for approximately one week, and new employees learned the balance 'on the job' through observation and discussion of issues with other service employees. Again, company growth had caused some difficulty in ensuring that new employees received adequate training before they were needed to actively service customer inquiries.

There was a fundamental structuring conflict within the service area on how to best serve the customer. On one hand, customers appreciated the ability to contact one person whenever they had a concern or question. Also, customers frequently needed quick response times to their site for in-person assessments and action by the service employee. This appeared to suggest a need to place service employees physically as close to the end-customer as possible, especially given the company's expanded geographic marketing area. However, the timing of service work was very uncertain. Whereas the project engineering department had some ability to prioritize and schedule their workload, the service department typically had to respond to customer calls immediately, and the geographic distribution of calls was not predictable.

Therefore, if Trojan received significant service requests in California, the company could be forced to respond by sending all available service employees there. The uncertainty of the timing and geographic distribution of service calls lent itself more to the centralized pooling of resources that Trojan currently used.

As Trojan had a significant geographic distribution of sales, service work involved substantial travel. In fact, the constant travel presented an additional risk of 'burnout' that was unique to the department. To address this, and to ensure a reliable response to calls for assistance from customers, a head office call centre was created in 1998. The call centre was staffed by service technicians who could respond to many customer situations over the phone and by using sophisticated remote monitoring of the UV installments in some cases. The call centre also provided a place where experienced service personnel who were at risk of 'burn out' from constant travel could use their expertise. Also, the call centre provided another opportunity to train new employees before dispatching them directly to customer locations on service calls.

RELATED ISSUES

Career Ladders

In a small company, career progression and satisfaction typically comes with successes achieved that significantly affect the organization. There was generally not the expectation or the possibility of significant promotion or role development, but this was offset by the potential for involvement of everyone in several major components of company activity. This was certainly the case at Trojan in the early days. As the company grew, however, a need to distinguish between and recognize the various levels of experience developed. The current department structure did not provide for much differentiation of job requirements within the departments, and, therefore, did not recognize the significant difference in experience levels between new and veteran employees.

Training Issues

As Trojan's sales continued to grow, the need to increase staffing was accelerating. In the early days, the addition of a person to the company was informal and supportive. The new employee would be introduced to everyone and would easily be able to approach the appropriate person to ask questions and to learn their role within the company. Given the rapid expansion of the company, this informal introduction to the company and its processes was rapidly becoming insufficient to allow new employees to become effective in their new position. Training, therefore, needed to be addressed in many areas.

DECISIONS

Given the issues developing as Trojan grew, the structuring issue was becoming steadily more important. The structuring team under DeVries envisioned a regional, team-based approach to customer interaction that would replicate the structure used by the company in the early days. One of the difficulties in implementing such a structure, however, would be ensuring that the groups still operated as though they were one company, sharing knowledge and resources as appropriate. Another would be determining what level of centralized support would be appropriate, bearing in mind the need to avoid duplicating activities at head office that should be handled by the regional teams. Employees were now aware that there would be a change in the company structure, and there was a need to come to some conclusions on the new structure quickly to reduce anxiety about the change within the organization.

Course-Learned Concepts and Theories

Organizational leadership and management/Organizational structure Using the required course reading Organizational Structure: Organizational Structures and Design, apply organizational structures and design concepts and theories learned from Leadership: Theory, Application, & Skill Development, 6e by

Robert N. Lussier, Christopher F. Achua Answer the following questions.

Lussier, R. | Achua, C. (2015). Leadership: Theory, Application, & Skill Development

Question 1 - Issues/symptoms and primary problem(s)( 150-200 words)

Question 2 - Traditional structures (150-180 words) Question 3 - Centralization (200 words ) Question 4 - Traditional structures of customers (150- 175 words) Question 5 - Traditional structure of culture (200 words)