Reference no: EM133501810

Case: It is Monday morning and you are going through your to-do list for the week when you receive a phone call from your supervisor. "That document you wrote for EKT worked! They want us to conduct an organizational change analysis and help them identify some of their major opportunities for change. They want you to at their offices in Waltham tomorrow morning to get things rolling. This sounds like a great opportunity for you!"

The next day you find yourself back in the conference room with several of the leaders at Elite Knowledge Training. The Vice President, who is acting as your client, begins the meeting. "Alright, let's get down to it. Here at EKT we are great at delivering incredible training but we haven't been able to get a good handle on some of the changes that are going on in the business environment. We are aware of some of the changes in the external environment but we need some clarity on those issues and we were really hoping you could help us get a handle on what is going on so that we can adapt."

Over the next several hours, you question the leaders in the room to gather insights on some of the issues and needs within the organization, as well as environmental factors affecting their business. You promise to do some additional research and provide them with a written report within the next three days.

That evening you return to your hotel room and continue your research online. You summarize your findings, including key quotes from the interviews, documented below: 

Through several interviews over several hours, as well as online research, you learned a lot about EKT. One of your major questions was "What are some of the external forces that are driving change in your organization today?" Below are the responses from the executive team at EKT.

Interview 1: Sally DeSuzan, CPA - VP Finance and Budgeting

"One of the biggest things that has been difficult for our organization is the desire to consistently produce a high quality product for our clients while dealing with steadily increasing costs for doing business. We're talking about increases in city taxes, increases in cost for supplies, working to maintain competitive pay for our employees - it just costs more to do business than it did 5 years ago. Or even 1 year ago! It puts a lot of pressure on us - we've been able to creatively come up with solutions, but it hasn't been easy. And when you consider that our revenue has consistently gone down over the past 7 years, things have really become tough. And it is becoming much more difficult to always make a profit. All of us are more and more concerned about what is driving this. In other words, how long can this go on before some of us are out of a job?"

Interview 2: Bill "The Shark" Johnson - VP Marketing

"I'm gonna be honest here. I think we are in a lot of trouble. I have been pushing Mike (the CEO) for years to start looking toward online training. I mean, we haven't even begun with online promotion and sales - our competitors are highly successful at this and it is kind of embarrassing - you know? But he just doesn't seem to want to change. Every time I talk with Ed (EKT's owner) he seems open to the idea, but he always says it is Mike's call, and we never get things moving! I still believe in what we are doing here, though - we offer some incredible products to our clients, and I think there will always be a place for our services - at least I hope so. We have some loyal clients, and most of my marketing is focused on them or on their partners. I just think we need to really thing about entering the online education market or at least providing some kind of supplementation to our traditional training, that's all. I hope it's not too late" 

Interview 3: Melvin Wellington Levins Jr. - Retired VP of Sales

"I started working at EKT when I was 53 years old. There were only 3 employees at that time - myself, Ed (the owner), and our old assistant Jane. I ran sales, Ed delivered all of the trainings and Jane handled the operations and budgeting. Ed took a big risk on hiring me since I was approaching retirement age, and I will always be grateful for that. There were times we were barely making it, but over the next couple of years we landed some pretty big clients. Those partnerships have proven to be very valuable to our organization and really helped us grow in the first decade of our business." 

"Actually, Jane and I didn't get along too well for the first couple of years. But over time we grew to appreciate each other, and after a couple of years we both fell madly in love with each other! She had never married and my wife had died a couple of years earlier. We both decided what the heck and got married and we have been married ever since! The word I hear now from EKT is they are barely making it today. That is sad to hear. I know times have changed - has EKT though?"

Interview 4: Jay Clark-Gardner, PMP - VP Learning Design

"Listen - I think one of the major things going on out there is this shift to online training. There are a lot of people moving to online, which I think is a big problem. There was a report done by the Association for Talent Development last hear that showed that face-to-face training is irreplaceable. And I for one believe that is true. Come on - how can you train someone on how to give a presentation with a computer? They need to actually present something to learn how to present! Sorry, I get pretty excited about these things."

"I do have to say, though, that many of our smaller clients have left us because we did not offer online training. They went with some of our competitors' prepackaged online management and leadership training, which is definitely an inferior product to ours. First of all, ours is customized to their specific needs and situations, and second we have been doing this for 25 years! How long has that company been doing this? I suspect not that long. I suggested to Mike we poll existing customers on whether they would actually purchase an online training program from us - he did not seem interested. I think Mike does not like change and this would be a major one for this old company."

Interview 5: Julia Childress,  - VP Sales

"Twenty years ago all of our business was here in the Greater Boston Area, which meant that we could operate out of Waltham with very little need for travel, other than for conferences or retreats. Actually, they used to have a yearly retreat to Hawaii for the top associates from each department. We really used to look forward to that, but ever since the recession when we lost several of our clients, we haven't been able to do any of those retreats. It's too bad because our employees really used to look forward to that and worked hard to be the top associates. But anyway, now many of our major clients have either merged with, purchased, or been purchased by global organizations. This is good news for us because we get to sell to and service the major clients and get to do some traveling overseas, but it definitely increases the costs for our organization. Travel and lodging can be very pricey, and in our competitive environment it adds to the complexity. Global business is great - but it is not cheap. I know our budget is tighter than ever. I can see it is a decline of sales year to year. Thank goodness we have our main clients." 

"One thing that has been really important as well has been the shift in industry from face-to-face to online training. The majority of training still happens face-to-face, and we've really made a name for ourselves by delivering excellent in-person training. But as many of the leaders in our long-standing clients retire and are replaced by younger professionals we are definitely feeling much more pressure to offer online trainings as well."

 

 

Results of Your Online Research

Late into the evening you research anything you can about EKTs business environment. As you prepare to close your laptop for the evening, you type out the following key findings.

• There is definitely a big shift in the market to online. Some organizations report that while they were previously doing training 100% face-to-face, they have shifted to 40% or more online and only 60% face to face. htat is a large share of the market.
• There has been a definite shift in how people gather information over the last several years. Internet technology continues to become more and more innovative and prevalent, work faster, and be more readily available. This is true in the United States as well as in many other countries throughout the world.
• Over the past decade, a huge number of learning technology software companies have sprung up offering their "easy-to-use" products to learning professionals. Many of these claim to offer high quality materials at lower prices. It is clear from these company websites that these technologies have been used by thousands of organization across the US and internationally. And it appears that the adoption of the technologies will continue to grow.

Your next task is to write a summary report of the environmental factors that are driving critically needed changes and expectations in the training industry and at EKT.

Action Items

1. Based on your findings above, write a document in which you report to your clients on the environmental factors that are driving change in the training industry and at EKT.
2. In your document, identify:
   1. Which of the Five PESTE factors are influencing EKT,
   2. How the PESTE factors are influencing EKT, and
   3. Some preliminary recommendations for change opportunities for EKT. Note that not all of your findings point to PESTE factors.