Consultant roles and responsibilities in organizational settings

Consultant

The organization I have chosen to study is FedEx. In recent years the company has expanded beyond its core overnight courier service to ground service, logistics, less-than-truckload, customs clearance and office services. The company is considered an economic bellwether in that its performance mirrors the performance of the economy overall. FedEx is also highly sensitive to changes in the price of jet fuel, its most important input. The industry is not subject to any new or unusual competitive pressures, but the economic climate and volatile state of fuel prices presents some unique challenges. Furthermore, the move into other lines of business brings FedEx -- accustomed to duopoly -- into competition with a wide range of different companies.

FedEx grew as a competitive entity by offering an innovative service (Raine & Herel, 2009). They were able to build market share so rapidly that only UPS, DHL and one or two other competitors were able to enter the space. FedEx still maintains the dominant position in the overnight business. The company has been less competitive, however, in other lines of business that it has entered. The firm has few if any distinctive competencies in these other lines of business, besides its iconic brand. It is recommended therefore that in order to be more competitive in these businesses, the company tie its service offerings to its overnight client base. The existing client base -- and by extension the goodwill of the brand -- is the main competitive advantage FedEx has in customs clearance, LTL, ground shipping or any of its other businesses. Therefore, it should leverage this advantage as much as possible.

The current organizational structure does not support this. Many of the divisions are only loosely tied together, the result being that most companies see different sales reps, different drivers, and are handled separately. This means that the company is not leveraging its brand well enough. It is recommended therefore the different operations become more tied together. From an operational perspective, this should start at the sales level. Customers should have one point of contact that can help with all of the different services FedEx operates, rather than just one service.

2) By reconfiguring the sales function such that any given company has just one point of contact, service levels will improve. However, this must be supported -- the reps must receive in-depth training beyond what they presently receive. The company therefore needs to develop an improved training program that reflects a more close alignment of the different businesses it operates.

Also critical to the service function is the other point-of-sale contact, the driver. At present, multiple drivers are used, for each type of shipment. This does not facilitate strong communication as the different drivers have no means to communicate with one another, since they essentially work for different companies. This is not the case with UPS, giving them a competitive advantage in terms of service. This element of the change is more sweeping than the changes involving sales representatives. However, it can be done in increments, gradually, and in such a manner as to support the changes to the other service/sales functions.

3) The integration of the different divisions and services can be better conducted if FedEx becomes more of a learning organization. At present, the business is highly centralized, which slows the learning process dramatically. Decision can take years to implement. FedEx can also take years to adapt to changes in its operating environment. In order to become a learning organization, in particular one with improved customer service, FedEx needs to build stronger feedback loops (Falletta, 2005).

The present loops are often broken -- the point of contact for a problem could be one of the drivers, which means that if the problem originated elsewhere in the organization, the message may or may not reach the intended recipient. Thus, the company needs to do two things. One is to provide an easy means by which a driver can disseminate information to other parts of the company. This is a feedback loop that is barely open if at all right now, but in order to improve service should be open to the point where feedback is immediate and constant. The second feedback loop recommendation is to position the sales staff as service staff, reducing the emphasis on sales figures and redefining the role towards an emphasis on total customer satisfaction. The underlying principle is that total customer satisfaction will result in more freight sent through more channels. This assumption should be tested before full implementation is conducted.

4) These changes will require employees -- particularly those that interact with the customers directly -- to be more innovative and creative in meeting the needs of the customers. The shift from an emphasis on driving sales to an emphasis on providing service must be accompanied by not only improved training but a shift in the rewards system.

The rewards system should emphasis organization-wide sales, rather than representative-specific sales. Overall, it is understood by the business community that FedEx performs roughly in line with the market as a whole. The objective of the sales/service team therefore should be to facilitate the company in outperforming the broad market. This will require FedEx to therefore leverage its brand, as opposed to squeezing the extra package out of the overnight business. That business is relatively mature, the growth for FedEx is in the other channels. By shifting the rewards systems, we will free employees from the past myopic objectives towards objectives more congruent with the firm's new strategy going forward.

5) As mentioned, the reward scheme will need to change to facilitate this shift in outlook. Rewards for sales/service staff will now by corporate-wide. This may discourage some sales reps, however, since their individual performance will be less relevant. This is congruent with our strategic shift away from sales, however. The people that we want in this position now are service-oriented individuals who have the ability to understand customers' needs and tailor our service offering to meet those needs. We expect to lose people who do not have as strong a service orientation. However, this shift allows us to hire more internally, as we can identify top service people in our call center operations for these positions.

FedEx has a high rate of retention (Kinney, 1998), so we will not need to adjust our strategies in that regard. Employees are generally given jobs for life as FedEx does not lay off workers. This engenders strong loyalty, even in the face of lower pay scales. The sales/service staff will be an even greater part of the team and this will be central to retention. This strategy has worked for FedEx since its inception and we so no reason to stray from it now.

6) In order to improve technology, greater investment is required. The company has a strong technology base, but will require an improved communications infrastructure in order to facilitate the greater cooperation between business units. This will require an infusion of capital in order to build this out. We do not see the need for changes to the technological development aspect of the company. There are relatively few, simply tasks that require the attention of the technology officers, so spreading this responsibility would put too many cooks in the kitchen for the company's needs.

7) With each unit being operated independently, there is concern that these changes will run into resistance. Some of the units have been built on acquisitions and the FedEx culture has not been instilled in all acquisitions equally. As a result, we must be able to overcome employee resistance. In this case, we will be autocratic, and be prepared to move employees out who do not wish to go along with our plans. It is imperative that the people we have in place, particularly those who are dealing with customers, are on board with the new plan. We can ill afford the time to coddle those who are not team players. They will need to be removed from the team immediately.

The biggest potential area of resistance will come from disgruntled sales reps that have seen their incentives disappear. This group will be closely monitored, as many may need to be removed. There are no positions within the organization that we can move them to, so a severance package will be put together to assist them on their way out of the company.

8) The shift towards integrated operations and improved customer service will help us deal better with the threats of economic downturn and higher fuel prices. With economic downturn, we will be better positioned to help our customers save shipping costs by using other FedEx services. This cross-selling will also prevent our customers from trading down to other services in the event of tougher economic times. Moreover, this effect will also hold during periods of high fuel prices. We can work with our clients to manage their logistics needs during such times, something our current organizational structure does not allow for. As a consequence, we feel this new structure better insulates the firm against the risk of economic downturn, high fuel prices and even intense competition.