He simply sees increases and decreases in numbers but he is not thinking them through like he should. Raw data alone does not provide the necessary info you need for quality control and improvement. Data must be organized, analyzed and interpreted. The first thing he should have done was organize the data, by region, by plotting it into some kind of chart so that he could compare the different regions similar to what I did in figures 1 and 2. When I first saw the figures, I noticed that the numbers in some of the regions were significantly higher than some of the others.
Clearly, the regions with the larger numbers must be a larger and better region with higher potential for sales. Those three regions were northeast, southwest and northwest. So these regions should be compared against each other since they are all similar in regards to market potential. It is not fair to compare these regions with other regions of a smaller market that may be suffering from losses due to competition or other external factors. So then, the smaller three regions were plotted on a second graph to see how they stack up to other regions of their same nature.
Also, Ron should look at sales performance of other companies in similar industries, size and geographical areas to see how they compare relative to its competitors. Based on the charts that I produced, I was actually able to see the true performance for each region based on all five years. Ron praised the managers of the northwest, southwest and northwest regions for increasing their sales but when you look at the charts you can see that the northwest region is actually trending down overall.
The northeast region is staying pretty constant and the southwest region is trending up very slightly. So Ron’s analysis of their performance is not too accurate when you look at the data using this tool. Sure, there may have been some increases from the previous year or quarter but overall, they haven’t shown much grow in the last five years. As far as his “problem” regions, his analysis of this data is incorrect as well. He considered the mid-Atlantic, south and north central regions to be “problem” areas but in reality they did quite well for their region.
They may not have had as many sales as the other three regions but the important thing is that they are growing. The north central and mid-Atlantic regions are trending up at a much greater rate than any of the top three regions. The south central region is remaining pretty constant overall but at least they are not declining. After all, Dave, the manager of the south central region said that it was in fact a tough region and that there was a lot of competition. He said that he did lose numerous accounts over the years but he was able to replace them with new ones.
When Ron looked at the numerical figures, he didn’t think as to why his sales were lower. He didn’t bother to take into consider that this was a tough region and that it was more difficult to get accounts in his area than it was in others. Mr. Hagler should have acknowledged and gave recognition to the managers of the mid-Atlantic and north central regions because of the rapid growth they had over the last five years. The case doesn’t state what Selit Corp. sells but in general, sales are usually higher in the fourth quarter due to the holiday season and lower in the first quarter.
Ron needs to take all of these factors into consideration when evaluating the sales data. Numerical goals are meaningless, especially if they are based on an inaccurate analysis of the data. In addition comparing the data properly and considering other external factors, Ron needs to determine why there is variation from year to year to year and from quarter to quarter. However, variation exists in all processes. The important thing is to determine if the variation is due to a special cause or a common cause. All special causes need to be removed first.
It seems that the source of variation in this case is due to common causes thus the system is considered stable. Using the appropriate statistical tools, common cause variations can be predicted. Understanding and reducing variation is the key to improvement and success and to managing any system. Statistics provide an effective and efficient way of obtaining meaningful info from data, allowing managers and workers to control and improve processes. From a leadership perspective, Mr. Hagler seems to not understand what being a leader means.
Being a leader means to influence and change the behavior of your workers in a positive direction to come together and work towards a mutual goal. The mutual goal here is great sales performance. Mr. Hagler’s used coercive power to try to get his sales mangers to increase sales. He tells his workers to “improve this quarter’s results or else! ” Fear is not the best way to go about getting the results you want. Fear is actually a demotivator. Employees want to feel empowered and recognized for performing well at tasks. People are better motivated by intrinsic rewards.