MBA6130 U06A1 Professional Challenge 1

Running head: MBA6130 U06A1 PROFESSIONAL CHALLENGE

MBA6130 U06A1 PROFESSIONAL CHALLENGE

Eric W Hirshfeld

Capella University
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Abstract

The challenges that face companies in today’s economic environment are innumerable, and

come in all sizes. Remembering what Merry Holmes, Store Human Resource Manager, Home

Depot, says about customer service helps keeps things basic, “customer service is not one

big thing, but a million little things” and really puts in context the idea that our customer

love, and hate, the small facets of our business. Telephone communications is one of those

small things that can have a customer building or customer destroying affect. The simplicity

of the device, as well as the way in which it can be used to build our business, places a

burden on those in leadership positions to ensure optimal usage. When we fail to provide the

necessary direction, the results are all our own.

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Contents
overview.................................................................................................................................5

Key Challenge.........................................................................................................................5

Cost-Benefits Summary...........................................................................................................6

Measurement Strategy............................................................................................................6

Surveys...............................................................................................................................6

Voice of the Customer.....................................................................................................7

Exit Survey......................................................................................................................7

Store Manager Survey.....................................................................................................7

Install Survey...................................................................................................................7

Findings...................................................................................................................................8

Busy Signals........................................................................................................................8

No Answer...........................................................................................................................8

Inappropriate Transfer.........................................................................................................8

Rudeness.............................................................................................................................9

Failure to Follow Up.............................................................................................................9

Summary of Your Recommendations......................................................................................9

Training...............................................................................................................................9

Awareness.........................................................................................................................10

Accountability....................................................................................................................10

Conclusion.............................................................................................................................10

References............................................................................Error! Bookmark not defined.

Figure 1. Candidate Process (Identification) Worksheet........................................................13

Figure 2. Process Improvement (Idea) Worksheet.................................................................14

Figure 3. Cause and Effect Diagram (Fishbone)....................................................................15

Figure 4. Phone call Flowchart...............................................................................................16

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Figure 4. Measurement Strategy Worksheet.........................................................................17

Figure 5. OIP Implementation Evaluation and Recommendation Worksheet.........................18

Figure 6. Store Manager Survey............................................................................................19

Figure 7. Exit Survey.............................................................................................................20

Figure 8. Online Receipt Customer Survey............................................................................21

Figure 9. Install Completion (1000 Report) Survey................................................................21

Figure 9. Install Completion (1000 Report) Survey

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OVERVIEW

The initial contact with a customer can have a great impact on keeping or losing a customer;

the initial contact cannot solely win a customer for life but it can set conditions in motion

that enable later events to bring about a substantially positive outcome. The phone systems

employed by The Home Depot, and how it is used by associates at each store, fits this idea;

impactful and yet simple.

Poor customer service, as provided through the usage of our phone system, can have quite

detrimental effects on the success of our business. But, it is only the leadership that stands

to blame for allowing such negative impacts to persist. Understanding the problem, the

contributing factors and the correct methods of addressing these events is vital to the

remedy. It is however, like most all challenges that businesses encounter, the ownership of

the problem that can truly be seen as the opportunity.

In many stores, the phone system is looked at, and used, as the great tool that was

envisioned by Alexander Graham Bell, a tool that greatly enhances the speed and accuracy

of our abilities. When the system is not respected nor used to the optimal level, the

enterprise failing in such a manner is likely to suffer reduced efficiency and reduced profits.

Upon my arrival at my current location, it soon became apparent that the phone system was

seen as a hindrance instead of an asset; associates turned down the volume, didn’t turn it

on as all, set it down on a shelf or desk when it was time for break, or even just refused to

use it in any professional manner.

KEY CHALLENGE

Home Depot relies on customers to give us direction as to how we can make their shopping

experience better, even world class. Each store manager has the ability to log into the

customer survey website to extract survey scores and comments. It is these comments that

have bolstered an already existing complaint about our phone system. It is not being utilized

to the fullest potential; in fact, the system frustrates customers and associates alike.
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From calls ringing into busy lines that result in having to hang up and dial back into the

store, to phones that ring without answer, the problems abound. All the opportunities (or

problems) can be traced back to a number of contributing factors, and usually, in turn, a

contributing associate. With the recent investment of over $64 million into an updated and

advanced phone system[Burritt, 2010], there is no reason for our customers to have a bad

experience when trying to reach the store or a particular department. Hours of training and

millions in technological investment has not improved the experience, as far as calling on

the phone is concerned. The great system has dramatically enhanced the experience once

the customer gets in the store, but getting them here without frustrating them is the hard

part. Figure 4 models the basic process of an incoming call.

COST-BENEFITS SUMMARY

The difficulty in measuring the actual cost benefit of a poorly utilized phone system is that

lost sales are likely rarely, if ever, accurately calculated. Specific and accurate data is just

readily available to build a model on; a few real and validated arguments for exceptional

customer service are available. It is know that the average customer spends approximately

$80,000 in a lifetime at the Home Depot. We also know, through previously validated

research at the corporate level in Atlanta, that for every customer that is treated poorly,

they will tell their relatives, friends and neighbors; of those, ten will follow their advice. That

equates to a loss of $880,000 from one bad experience.

A statistical calculation in a related area is as follows: one, we at Home Depot know that

40% of all of the customers that walk through our doors will leave without purchasing

anything; two, if each associate working any particular shift during any given day, were to

covert one of those non-purchasing customers to a sale through exceptional customer

service, that a store the size of my store would, using average customer count, average

ticket, and average number of associates in the store each day, generate an additional

$2,000,000 per year. In looking at these two known’s, the cost-benefit summary for just

answering the phone correctly, and turning it on when one is suppose to, can have dramatic

affects.
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MEASUREMENT STRATEGY

Findings were extracted from various surveys and over the period of 30 days. Data was

pooled and evaluated; some data provided had little substantive value, while other data

serves as a great resource for improvements.

Surveys

There are four different surveys used within my store that are used for measuring customer

satisfaction. Each of the four was developed to extract comments and suggestions from

different kinds of customers. One by itself provides limited data, limited reliability, and with

limited application. The four are: Voice of the Customer (VOC) Receipt Survey, given to

customer upon purchase or return of merchandise; Exit Survey, solicited at exit prior to

leaving the building; Floor Walk Surveys, conducted by the store manager walks sales floor,

speaks to customers and asks for feedback; and Install Completion Calls, which are

managed by the Customer Order Specialists use the 1000 report to select customers to call.

Voice of the Customer

VOC surveys participation is solicited by store associates, but must be completed outside of

the store on customer’s computers, and by themselves. Company Code of Conduct and

Standard Operating Procedures requires that associates are not allowed to complete the

surveys, not even when they purchase merchandise themselves.

Exit Survey

Exit surveys are worked and completed by the department supervisors and salaried

managers while standing at the entrance and exit, engaging customers leaving the store.

They are asked if they would like to participate in a survey to help our store improve the

customer’s experience. If customers agree, they are asked four simple questions that

provide simple feedback that can have maximum impact.

Store Manager Survey

Store manager surveys, or floor walk surveys, are handed out only by the store manager.

The store manager will ask customers if they would like to participate in a nine question

survey in exchange for a $10.00 discount on their visit’s purchase. If they agree, the store
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manager will give them the survey to fill out during their visit; once they complete the

survey; all they need to do to receive their discount is to present the survey to the cashier

upon checkout. The cashier will contact the store manager as soon as the customer exits

and hand off the survey.

Install Survey

Install completion survey, or 1000 report follow up, is conducted by the Custom Order

Specialist from an automatically generated report based on installations that were

completed the day prior. The survey results are kept in binder and reviewed by the salary

managers each day. The customer order specialist is also given the chance to ask the

customer how the telephone communication process was during the installation process,

and if there are any suggestions they can improve the experience.

FINDINGS

Not all of the survey results provided a eat amount of help. Once the data was input into a

management pool, sorted and manipulated, the following items are common occurrences’

and damaging to our service level: busy signals, ringing with no pickup, transfer to wrong

department, perceived rude conduct by answering associate, and failure to follow up when a

return call is promised.

Busy Signals

The busy signal was found to occur when a customer dials an extension directly from the

outside and that phone is not turned on for the day or the battery has died. In this scenario,

the customer must hang up and call the store back. In most cases, the customer thinks it is

their fault and tries the same process over but finds the same result. Phone assignments are

basic and easy to understand; the first digit of the extension is the number one; the last two

digits of the three digit extension number is the department number. Since each department

has a phone, the issue of not having enough phones for every merchandising department is

not valid. Should a phone become unserviceable, each store has a small contingent of

“floater” phones to take up any slack. When replacement phones need to be ordered, they
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usually arrive within 24 to 48 hours. Extra batteries are plentiful; the store has 20 extra

batteries, so there should always be enough to support operations.

No Answer

Ringing without pickup results from one of two situations, first is the team member has

turned down the volume to the Mute level and the ringer cannot be heard or the fact that he

team member is just failing to answer the phone for any number of reasons. Associates

should not be muting the phone, as it has a vibrate mode where a ringer is muted but the

phone can be felt by its vibrations. This mode will not interrupt conversations or meetings,

but still allows the holder to know a call is coming in.

Inappropriate Transfer

When a call comes into the store, and the phone operator identifies the caller as needing a

particular department, that call can be sent through immediately. If the call bounces back,

the destination phone either didn’t pick up or the phone rang busy. Should the phone

operator know that the phone is operational, the obligation is to try to help the customer

themselves or to take a name and number so a capable associate can call back and help the

customer. If the operator is unsure if the destination phone is working, they may try to assist

or have a capable associate call the customer back. The correct answer is not to just forward

the call to a department that will answer the phone; doing so will put the customer in

contact with an associate, but in contact with one that is not able to immediate assist the

customer in most cases.

Rudeness

When a customer perceives rude or unsatisfactory behavior over the phone, it is often the

result of unintentional or accidental actions. It was discovered that in most cases, the action

that precipitated the customer complaint was conduct or language that was intended for a

fellow associate; in these cases, the associate didn’t see the call as one coming from an

outside line or one that was transferred from the phone center. When the activity was not

accidental but merely poor phone etiquette, a coaching discussion or other levels of

accountability wasn’t undertaken by the supervisor or manager.

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Failure to Follow Up

Our customers understand the delays and other problems with orders happen, they merely

ask to be kept informed of the situation. It is when we fail to communicate with them that

we find ourselves in a position that can dramatically damage our reputation and adversely

affect our future survival. When these occasions arise, where our team members fail to

follow up, leaders have a moral obligation to teach, coach and train them to success and, if

necessary, hold them accountable for their failures. When we shirk this responsibility, not

only do we take the burden upon ourselves but we also set in motion those behaviors that

will result in future continue the actions as if we approved them as acceptable.

SUMMARY OF YOUR RECOMMENDATIONS

Most of the supporting data did point to a couple of easily managed areas; suffice it to say,

that the areas for improvement actually deal more with leadership than a broken process.

The lack thereof will continue to provide tacit approval for unacceptable behavior. The

leadership centered areas for improvement are training, awareness and accountability.

Training, awareness and accountability are three areas that can truly affect the

opportunities identified.

Training

The training segment must include four separate, generations or seasons, and is, what I call,

the training model: book work or reading associated to the area of study; demonstration by

the trainer, so the trainee can see it in action; group work where the trainee and trainer

work the task together; demonstration by the trainee, where the trainer can closely observe

the trainee in action; lastly is the evaluation, where the trainee is periodically observed and

evaluated by the trainer and supervisor.

Awareness

Awareness of circumstances, surroundings and events can serve as a great tool to keep us

on track with our goals and objectives. As we provide information to the team on feedback

and the solutions to opportunities, they will respond accordingly and the awareness alone

becomes a correction tool. When we fail to give the feedback and information to our teams,
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we fail to allow them to fix the problems or address the opportunities themselves. Since

each of our team members comes to work to make a difference, and not to fail, they are

equipped with, at least minimal, motivation to affect change.

Accountability

Accountability is nothing more than follow-up, with the added step of documenting

conversations and training, when necessary. Accountability is how we identify and document

improvement areas, and is critical to remember that this can come in different forms.

Accountability can be simple questions, the opportunity to work beside the team member, or

all the way to a documented counseling for failures in behavior or performance. The intent of

all this is change culture and behavior, not lose the associate to frustration or termination;

not properly conducted, the training, awareness, and accountability can hurt morale rather

than improve the customer experience is not properly executed.

CONCLUSION

Leadership is not wanting to endure difficult times or trials, but rather the desire to dive

head first into the chaos of the day to find the difficulties and trials, take them head on and

fix them. This requires leaders to be cut from a different cloth and have an integrity focused

character. Without this, it is easy to take the path of least resistance when encountering

opportunities and challenges.

When dealing with seemingly simple trials, we often uncover that the leaders bear some if

not most of the burden for the problem existing in the first place. When we allow something

a simple as telephone protocols to go unchecked, the team members that have less than

adequate integrity and ideas will push the bounds further and further. The failure to address

the telephone issues listed herein can have far reaching consequences that ultimately result

in lost sales and a damaged corporate reputation. This is owned by the leader, no one else.
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WORKS CITED

Burritt, C. (2010, January 12). Business and Technology-Home Depot spending $60M on

handheld devices. Retrieved January 14, 2011, from The Seattle Times:

http://seattletimes.nwsource.com/html/businesstechnology/2010776052_homedepot13.html

Clothier, M. (2009, May 24). Catering to Customers. Bloomberg New , p. 3.

Katz, B. R. (1960). Toward a More Effictive Enterprise. Harvard Business Review , 80-102.

Krajewski, L. J., Ritzman, L. P., & Malhotra, M. K. (2010). Operations Management, Ninth

Edition. Upper Saddle River: Pearson Prentice Hall.

the Ateneo Economics Association (AEA). (2008, May 31). Analyzing The Rice Crisis in the

Philippines. Retrieved February 07, 2011, from The official blog of the Ateneo Economics

Association : http://ateneoeconomics.wordpress.com/2008/05/31/analyzing-rice-crisis-in-the-

philippines/

The Home Depot. (2005). 2004 Annual Report. Atlanta: The Home Depot.
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FIGURE 1. CANDIDATE PROCESS (IDENTIFICATION) WORKSHEET

Provide a brief synopsis of your company: The Home Depot® is the world’s largest home

improvement retailer; with 2244 stores in the United States, the Commonwealth of Puerto

Rico, the territory of the U.S. Virgin Islands and the territory of Guam, in Canada, in Mexico

and in China, and with over 300,000 associates, The Home Depot® is truly a international

company. During this unstable economic period throughout the world, the company

reported third quarter sales, FY2010, at $16.6 billion; a 1.4 percent increase from the third

quarter of fiscal 2009. In FY2009, during the depth of the recession, the company saw over

$66 billion in sales; this was roughly a 7.2% decrease compared to the previous year, but

with the control on operating costs, shareholders enjoyed a $1.57 diluted earnings per

share.

Processes Importance Scope Parties Priority Overall Impact Costs If Not

and Involved Improved
Descriptions
Phone System Critical Our All store Urgent Diminished Negative
customers associates customer comps,
utilize the satisfaction, in leading to
phone system turn reduced reduced sales
to check on customer base and loss of
product, call staffing as it
on special is related to
orders, or just sales adjusted
check on hours
promotions or
events.
Delivery Important Service after All store Urgent When service With $80,000
Service the sale, associates, goes bad after average
customer from the the sale, the customer
loyalty based sales impact is lifetime sales,
on the overall associate to dramatic due to coupled with
experience the delivery word of mouth the idea that
will-call and personal they will
coordinator recommendatio influence 10
n people, total
impact per
incident could
be $880,000
Will Call Important Customers The selling Important Customers Positive
System will come associate and would not make growth is the
pickup their the high dollar basic
purchased department purchases, and expectation
product, they supervisor reduce the of the
expect it to growth potential shareholder;
be ready since average without this,
when they ticket growth is the store’s
want it expected future is not
as likely
Seasonal Moderate The store Recovery Important Lower Voice of Negative
Recovery appearance, team on the the Customer comps,
being grand Freight Team, scores, lower reduced
opening recovery average ticket, sales, and
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ready, and Department loss of customer potential to

having the Supervisors, loyalty lose ability to
product on Operations keep store
the shelf for Assistant open
the Store
customer’s Manager
visit

FIGURE 2. PROCESS IMPROVEMENT (IDEA) WORKSHEET
Selected Process: Phone System Usage
Problem Statement
Customer’s vocalized dissatisfaction in the way
in which our phone system works. They call in,
dial a specific department from the menu, and
the call rings busy and they are required to call
back, or the department they are calling just
doesn’t answer the phone and the call will get
transferred to a department that is not able to
answer their questions. Customers calling
departments and leave messages will likely not
get a call back. Or, inappropriate telephone
answering protocol are used.
Implication
With a continuing poor usage of the phone
system, customer service quality will continue to
be poor. Results from such poor quality:
-Drop in sales
-Customer’s sharing poor experience
-Poor communication, internally
-Reduced staffing needs
-Closure of store
MBA6130 U06A1 Professional Challenge 15
Issue Background
Home Depot does not use a voicemail feature.
Calls are routed to departments that they select,
either by waiting for a prompt or even dialing
the extension directly. When associates do not
turn their phones on, turn the volume up,
replace the battery when low, or even answer
the phone when it rings, customers call
management with complaints as well as enter
complaints on the voice of the customer
surveys. As topics have been addressed in the
past, the quality of phone usage temporarily
rises, but inevitably the quality tends to
degrade.
Desired Outcome
The desired outcome is for the store associates
to enthusiastically engage one another about
proper usage of the phone system; peer
pressure sometimes works best in holding
associates accountable. Communication
between departments and external customers
will rise to the level that complaints of the phone
system become the exception instead of the
norm.
-Increased sales
-Wider range of usage of the system
-Ease of reaching associates
-Weeding out of those associates failing to adapt
-Phone system is seen as a tool for success
instead of a barrier
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FIGURE 3. CAUSE AND EFFECT DIAGRAM (FISHBONE)

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FIGURE 4. PHONE CALL FLOWCHART

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FIGURE 4. MEASUREMENT STRATEGY WORKSHEET

Pictorial Representation of the Revised Flowchart:

Note: Submit your completed pictorial flowchart diagram for review to your instructor.
Flowchart changes were minimal; no feedback from peers concerning needed changes.
Measurement Strategy – What qualitative or quantitative measures will be used and what frequency
of measure?
Continued use of the Voice of the Customer survey as well as store manager surveys of customers
via sale completion calls, sales floor interaction, and exit surveys. One question on the custom
designed questions will be directly related to the quality of phone system. VOC results are updated
and available weekly. For customer calls after sale completion, the store will continue to use the
1000 Report which automatically generates daily, and lists completed install orders (or orders that
have install labor charges associated with them). Store manager conducts a minimum of five
surveys on the sales floor each day. The exit surveys are completed by the Front End Supervisor,
Department Supervisors, Assistant Managers, and Store Manager; on weekends, the store has a goal
of completing a minimum of 25 exit surveys.
Impact on the Existing Problem Statement:
There will have no adverse impact on the existing problems statement. Survey execution will be
conducted by the store leadership team, and the balance of associates is unaware of the survey
questions. Survey results are shared with the leadership team as appropriate subjects are
encountered.
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FIGURE 5. OIP IMPLEMENTATION EVALUATION AND RECOMMENDATION

WORKSHEET

List of potential data collection tools and techniques:

VOC Receipt Survey; given to customer upon purchase or return of merchandise.
Exit Survey; solicited at exit prior to leaving the building.
Floor Walk; store manager walks sales floor, speaks to customers and asks for feedback.
Install Completion Calls; Customer Order Specialists use the 1000 report to select
customers to call.
Your selected data collection tool and technique: (Include a realistic sample of your
collection tool.)
The sample surveys are illustrated in the below figures 6 through 9.
A description of your data collection process: (Who, When, Where, and How)
1. VOC surveys participation is solicited by store associates, but must be
completed outside of the store on customer’s computers, and by themselves.
Company Code of Conduct and Standard Operating Procedures requires that
associates are not allowed to complete the surveys, not even when they purchase
merchandise themselves.
2. Exit surveys are worked and completed by the department supervisors and
salaried managers while standing at the entrance and exit, engaging customers
leaving the store. They are asked if they would like to participate in a survey to
help our store improve the customer’s experience. If customers agree, they are
asked four simple questions that provide simple feedback that can have maximum
impact.
3. Store manager surveys, or floor walk surveys, are handed out only by the
store manager. The store manager will ask customers if they would like to
participate in a nine question survey in exchange for a $10.00 discount on their
visit’s purchase. If they agree, the store manager will give them the survey to fill
out during their visit; once they complete the survey, all they need to do to receive
their discount is to present the survey to the cashier upon checkout. The cashier
will contact the store manager as soon as the customer exits and hand off the
survey.
4. Install completion survey, or 1000 report follow up, is conducted by the
Custom Order Specialist from an automatically generated report based on
installations that were completed the day prior. The survey results are kept in
binder and reviewed by the salary managers each day. The customer order
specialist is also given the chance to ask the customer how the telephone
communication process was during the installation process, and if there are any
suggestions they can improve the experience.

How have the results enhanced, supported, or changed each of the following:

The Problem Statement Flowchart

None None

Measurement Strategy
Due to the anticipated volume of
measurement data, collected information
will be consolidated and entered into a
Microsoft Excel spreadsheet for sorting and
data manipulation.
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Anticipated Recommendations
Training, awareness and accountability are
likely to be the recommendations.
Accountability can come in different forms,
and as such needs to be reviewed and
monitored. The intent is not to lose
associates but rather change culture; not
properly conducted, the accountability can
hurt morale rather than improve the
customer experience.
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FIGURE 6. STORE MANAGER SURVEY

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FIGURE 7. EXIT SURVEY

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FIGURE 8. ONLINE RECEIPT CUSTOMER SURVEY

FIGURE 9. INSTALL COMPLETION (1000 REPORT) SURVEY