Creating Cross-Functional Work Teams

Bonus cases

Bonus case 9-3

Creating Cross-Functional Work Teams

The Direct Response Group (DRG) at Capital Holding is a direct marketer of life, health, property, and casualty insurance. In the past, it sold a mass-produced product to a mass market. Over time, however, sales slowed, profits eroded, and the company decided it had to refocus its efforts. That meant, for one thing, selling to particular, identifiable customers and giving those customers a customized product/service package that was world class, enabling the company to compete globally.

An analysis of the corporate culture showed that people were more concerned with pleasing their bosses than pleasing the customer. People hoarded information instead of sharing information because the people with information had power. The information system had to be changed to encourage sharing.

Organizational change began with a vision statement that emphasized caring, listening to, and satisfying customers one-on-one. To accomplish that goal, the company formed a cross-functional team to study the sales, service, and marketing processes and to completely redesign those functional areas. The idea was to have a world-class customer-driven company. That meant gathering as much information as possible about customers.

Front-line customer-contact people were empowered with user-friendly information systems that made it possible for one contact person, working with a support team, to handle any question that customers had. Management used external databases to get detailed information on some 15 million consumers. The combined internal and external databases were used to develop custom-made products for specific customer groups.

The whole company was focused on satisfying customer wants and needs. That meant changing processes within the firm so that they were geared toward the customer. For example, one case worker is now...