TEAM CASE STUDY: MOVING TO TEAMS AT AT&T
Tom Brown is the new manager at the AT&T Phone Store in Chicago. The store has a 45- member sales staff, the largest in the mid-west. Because Tom consistently achieved the highest sales revenues in the region for the past 5 years, was promoted and relocated to run the flagship store in October 2014. AT&T is traditionally hierarchical and operates following standard operating procedures. It is a classic “command and control” organizational culture.
Except for the store manager, all store employees are paid minimum wage. However, employees can earn an additional $20,000-30,000 annually from incentive pay, which is strictly based on service agreements, phone sales and additional options. All product prices (phones and accessories), returns, repairs, and service agreements, are made at the corporate level. Technical problems/customer service issues are handled over the Internet through the AT&T Service Center. While store employees are expected to handle basic customer service issues, they are only incented for selling phones, options and service agreements. This creates a competitive environment, which AT&T corporate has always believed increases productivity and motivation.
As of the second quarter 2015, employee turnover has increased 9.5%. In addition, poor customer service ratings and increased competition from T-Mobile, Verizon, Sprint, Cricket, and Ting have reduced store revenues by 12%. Tom is concerned that corporate rules and procedures are stifling innovation, new business, and customer retention, while negatively impacting employee morale & turnover. Tom believes that shifting to a team model, using different incentives and goals, would encourage a customer service orientation among the staff, while increasing store revenue and employee incentive pay. However, Tom is uncertain whether he can persuade corporate to accept these changes.
Your team must address the following:
(1) How can Tom convince corporate that a team model will work? What arguments should he make? Provide a bullet point list of topics Tom should include in his argument with supporting reasons for each.
(2) You’re Tom and you’ve been given approval to move ahead with your program, but only as a six-month pilot. At the end of six months, your store will be evaluated using the following criteria: (compared against all AT&T stores-including Chicago)
? Net revenue
? Sales (services, products and options)
? Customer service survey results & new customers
? Costs/expenditures
? Employee satisfaction survey results & turnover
You have scheduled a meeting with your staff to explain the new approach. Provide a bullet point list of topics you would cover with supporting reasons for each.