Netapp Case

Problem Statement

NetApp is currently recovering from the restructuring plan involving the firing of 200 employees and costing the company more than $8 million 60% of which was in severance payments. The company needs to increase employee's productivity and profit margins. Jim Wilson was hired as a new district manager for the districts of San Francisco Bay Area, and as a new entry, he faces the pressure of making positive impression and building credibility within his sales force and region manager as well as the challenges of learning the ropes of his new job, restructuring and managing his district sales force composed of survivors of the first company's layoff, and reach the company's sales target.

First, Wilson should decide which representative should retain and which to fire to meet the company's goals by also dealing with the unexpected resignation letter of one of his best sale representative. Specifically, some of the salespeople lack some critical skills and capabilities proper to their job. This is probably due to the lack of effectiveness of either the hiring process philosophy of "over hire", training program for new recruits or the developmental program for experienced reps. Moreover, Wilson need to decide whether to let go Thompson or ask her to stay after her marriage considering that she is a top performer that is not liked by the RM and the sales force is already very small. Finally, was it a good decision to hire Engel considering the difficult situation Wilson is facing?

Second, Wilson need to find a new approach to negotiate quotas and goals with his reps and the region manager because she does not agree with the changes that he is making in the sales force to reach the company's goals.

The third problem Wilson faces is to decide whether to train Frank who will likely to fall short the company's growth goals or replace him in hopes of hiring a better performer. To complicate the decision there is the fact that he is the older in the district and the best-liked person by his customers. Also, Wilson should evaluate whether it is best for the company a short or long-term solution.

Finally, he needs to decide what approach to take when dealing with DeShutes that ignores company's policies but put customer's needs ahead of company's goals.

Recommendations

First, the current hiring philosophy of "over hire" should be revised because the objective of recruiting is not to maximize the total number of applicants and it does not it necessarily provide them with experienced professional. It should focus on acquire reps that can be developed to become top performers by setting proper qualification criteria regarding the tasks and responsibilities of the job. This will reduce some costs to the company as well. To decide whether Engel hiring was a good or discrete hiring, Wilson should evaluate the pros and cons considering the situation he is facing. Either way he will have to make other adjustments later in his sales force to maximize his potential. Regarding the Thompson case, he should evaluate again whether it is worth it to wait for her to come back because her positive contribution to the company's growth and reaching of his target or let her go because it would be too late to make a positive impact considering also the small sales force left. Also, after Wilson have done this evaluation he should ask her whether she is willing to come back or not after the marriage. Only after that he can start restructuring the sales force and focus on reaching the target goals. Considering the performance of most of the Wilson's sales rep there is a need for a personal development plan if there is not one in place or revises the current one because, from the results, it is not effective. The Focal Review used by the company can be used to evaluate who needs training, whether he can be trained and what he need to improve and put them in training to reduce their weaknesses or to learn about the latest market changes.

The methods and types of Quotas need to be changed. With the RM, Wilson should propose her to use sales volume quotas because they are directly related to the market potential. The current methods of market calculation and actual sales measures do not reflect the difference between the districts potential. Instead, each sales district should have quotas based on its profitability potential. With his reps, Wilson should set financial and activity sales quotas to make them focus on most profitable customers maximizing the effort, time and profit of the company.

Regarding Franks poor performance, Wilson should evaluate the short and long terms consequences of keeping and training him and fire him considering that his sales force is very small and the customers like him. Putting him on the improvement plan is a beginning but it is not a long-term solution. The same should be done in the case of DeShutes considering that he was accommodating the customer need and most of the company's executives are supporting him. Also, since he possesses a lot of valuable knowledge and information, if he would be fired, the competition could take advantage of that. Putting DeShutes on the improvement plan to make him conform to the company's policy is a good start. This could also serve as improving his performance because in FY2002 he had a loss 19% on his quotas. Because those two decisions seems to be based on whether they can recover through the improvement plan, Wilson together the HR members, should revise this plan to understand whether there is something wrong with it because most of the time reps in this plan are fired. The compensation plan need to be revised as well because people in the same position receive the same salary and commission should be more reasonable which will also help the company financially.

Rationale

Frank has another problem besides the ones previously mentioned. He spends 80% of his time dealing with customers that contribute only 20% to the company's growth. For this reason he should put into a training program that focuses on time management in order to improve this skill and be more effective

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