Case Study – Compound

As Compound UK is the selling division of a multinational pharmaceuticals company, sound communication technology is imperative to ensuring effective inter-firm collaboration. Justifiably, senior management felt that the company could become more competitive by facilitating the sharing of information. Hence, Lotus Notes was introduced in 1996- but was this installation successful in achieving management’s desired outcome? As is the case with most software implementation (ERP for example), there are ways in which this process could have been improved.



Firstly, to encourage the application of the strategic selling function, a league table based on the quantity of strategic selling sheets and contact records was introduced. The caveat of this is obvious- by focusing on the volume of different records generated, emphasis on quality is significantly diminished. Whilst this problem was later identified by strategic selling managers, blatant attempts to manipulate the current reward structure in the interests of personal gain were rarely punished. To avoid such a scenario, Compound should have installed an independent Quality Review Panel. The duties of the panel would include flagging records with insufficient amounts of data (i.e. “.”) and quantifying the quality of the records maintained by each sales representative. In doing so, this would allow Compound to form a hybrid league table which takes account of the volume of strategic selling records maintained and the quality of information contained within such records.



Evidently, review of every single entry would represent a waste of resources and is not recommended. However, the panel could identify a sample of files created by each employee and grade it accordingly. The one drawback associated with sampling is that some representatives may feel that extraordinary performance in some instances would go unrewarded; thus, employees will be encouraged to cite files they are particularly proud of and feel merit attention. The flip side also exists as entries lacking in such quality may be left unnoticed, although employees will likely realise that consistently insufficient entries will be identified eventually.



In addition, the e-mail component of Lotus Notes was also used as a political resource for some employees. Primarily, this was because many 'cut throat' employees wanted to increase exposure to their superiors and were happy to be considered 'yes men’ if this would have a positive effect on career progression. As many messages received by management were deemed to be pointless, I recommend that a filtering system be applied to the email facility which prioritises mail in terms of urgency/importance. When sending any piece of mail, the creator would be required to state the associated level of importance; consequently, these individuals would be encouraged to consider the relevance of their message prior to actually sending it. If they attach a misleading label e.g. “URGENT” to a trivial e-mail, the employee may be reprimanded for wasting precious managerial time.



To reward effective collaboration, Compound attempted to motivate sales representatives by offering financial bonuses on top of their base salary. However, Kohn (1993) asserts that “rewards punish”. This belief stems for the idea that highly attractive rewards contingent on certain behaviours generates a feeling of control. If employees endeavour to succeed and subsequently do not receive a reward, this is indistinguishable from a punishment. Indeed:



“by using rewards, managers are creating a workplace where people feel controlled and this is not an environment conducive to exploration, learning and progress”[1].



Compound's staff were apprehensive towards the introduction of Notes; whilst it was promoted to more effectively pool the resources of the company, many cynics questioned the underlying intention. This concern was warranted by the big brotherly supervision which ensued.



The greatest advancement towards this collaborative objective did not come from the technology itself; it was the novel approach of James Black. He appreciated the intricacies which hinder the free flow of knowledge. Fundamentally that there must exist a trusting ethos where employees, expected to share their knowledge or experience, feel comfortable in doing so. Alexander Ardichvili conducted a study in to this area, using Caterpillar Inc as his subject. The most important barriers to sharing, identified by this study, were that participants are wary of publishing information, fearing reprisals if the data was flawed, a "fear to lose face". An element of this is apparent from the Compound case. Once the medical director began to participate in a previously fruitful forum of discussion, the contribution was seen to significantly drop off. This implies a lack of trust or cooperation throughout the company. I feel that this is the first aspect which needs to be rectified before the full benefits of the new technology can be realised.



“Research shows that there are numerous reasons individuals could have for sharing their knowledge with other members, ranging from self-esteem boosting to egoistic and conformist considerations” (McLure and Faraj, 2000)... Furthermore, Osterloh and Frey's (2000) research on intrinsic and extrinsic motivation for knowledge sharing suggests that intrinsic motives are much more powerful enablers of such sharing than are extrinsic (e.g., monetary or administrative) stimuli”[2]



The best results ensue where members actively want to pass on information, like the comprehensive and accurate filling of a Reps database, wholly for the good of the company. It is not effective to force this data from them through ill-defined incentives which only serve to skew the intentions of employees towards a more egoistic framework.



Compound does not exhibit such a proactive community nurturing the dispersal of knowledge. There is a distinct segregation within the Sales workforce, fatalists who have longs since given up their chances for progression and the career orientated who only aim to impress their superiors. There is fierce resentment towards group, who have instilled an air of competition in to the former’s job. This derogatory perspective is coupled with the Lotus Notes system which facilitated the comparability of performance.



I feel that increased monitoring is a by product of the software not deserving the attention it receives at Compound. The more functional aspects of Lotus Notes should remain at the fore, buttressing the companies market position. Perhaps the performance measurement could be shifted toward this facet, where each individuals contribution toward the corporate objective is rewarded, overruling the primitive quantitative achievements in place currently.


References;



[1] "Why Incentive Plans Cannot Work", Kohn, A.,Harvard Business Review, Sept-Oct 1993.

[2] "Motivation and barriers to participation in virtual knowledge-sharing communities of practice", Alexander Ardichvili, Vaughn Page, Tim Wentling. Journal of Knowledge Management, 2003.