Adding value at H & H Financial Services, LLC.

Marunninal, Deepthy ; Dinur, Adva ; Sherman, Herbert 等

CASE DESCRIPTION

This field-based, disguised teaching case describes the birth and continued growth of H & H Financial Services, LLC and how that growth has impacted work processes and procedures. The data for this case was gathered through personal experience of the primary author and interviews of co-workers. The case was written primarily for an undergraduate class in organizational behavior although it has applications to courses in small business, human resources, and strategic management.

The case follows a new hire, Debbie Matthews, as she faces the challenge of dealing with what appears to be a dead end job in that she has little opportunity for job enlargement and enrichment. After 11 months of working at H & H Financial and do the same old job with little to no challenge and growth potential, she wonders if it is worth it for her to stay with the company. Complicating factors in her decision include being a single mother, attending graduate school, and a very tough economic job market.

CASE SYNOPSIS

The case begins with a description of Christopher Blake's birth and growth of H & H Financial Services LLC. Mr. Blake, finding that a large corporate financial services firm was more interested in selling product than helping its clients, founded a part-time financial services firm which put people's needs above sales goals. With the growth of his little start-up venture, Mr. Blake left corporate to work full time in his burgeoning business and ended up hiring Jane Sutton (a former office manager in his corporate office) and two recent college graduates. The firm grew, moved into new office space, and was then reorganized by the now "office manager" Jane who created two departments; supplier and customer relations. Each college graduate became supervisor of the department as Mr. Blake also expanded his side of the operation by hiring two new agents who he was personally responsible for training and managing.

The firm continued to grow and moved once again while retaining its "departmentalization by function" organizational structure. Mr. Blake continued to manage the "front office" (client contact) side of the business while Ms. Sutton managed all of the back office customer and supplier services through her supervisors. Although each supervisor ran a "fun" department Jane ran a much more formal operation where "playing" was kept to a minimum.

The case is written from the perspective of the character Debbie Matthews, a recent college graduate who was hired by H & H Financial right out of college. A single mother in graduate school, Ms. Matthews is at first highly elated about the job given her desire to learn everything that she can. Reality sets in though when after two months she finds that all of her questions about how things work in her office are answered by Ms. Sutton in basically the same way; you do not need to know.

At the end of the case Ms. Matthews is wondering whether she should stay with the firm given her flexible schedule and her need to take care of her daughter or whether she should quit and find a job that she can grow with and continue to learn.

INTRODUCTION

"That doesn't concern you" was the response that resonated through the halls; a rejoinder that Debbie Matthews had heard a thousand times from Jane Sutton, the office manager, and was likely to hear again and again. It was around September of 2008 and after working at H&H Financial for 11 months, this was the same retort to all of her inquiries. Ms. Matthews thought to herself "I can't take this anymore! Why is it that none of my questions ever get answered? Why am I not allowed to learn here? What is my value to the company? Why do I still feel like an outsider? Why can't I use and improve my skills? Why? Why? Why?" Ms. Matthews was fuming as she walked out of yet another one of Jane's tiresome monthly office meetings having lost all motivation and feeling completely defeated. She was ready (and not for the first time) to walk out of the front door never to return again; but the decision was not that simple and could not be taken lightly. Money and a very tough job market were important factors that had to be considered when making such a decision as Ms. Matthews was a single mother attending graduate school.

Ms. Matthews also thought about how the firm had evolved from a small one person operation to a small, fast growing business. She questioned her potential for personal growth and development and what role she could possibly play in the firm's expansion. Ms. Matthews was in a serious dilemma; should she stay for the money and hope that things would change or should she go and find a more challenging job? She thought about the firm's current status and its history as told to her over time with the firm by the founder, Mr. Christopher Blake. (See Appendix A for its product line and services.)

IN THE BEGINNING ...

H & H Financial was founded in 1997 as a local insurance and investment consulting firm specializing in financial, estate and retirement planning. The owner, Mr. Christopher Blake, age 45, had been working with senior retirees and growing families for over 20 years. The business started as a part-time consulting practice given Mr. Blake's dissatisfaction with his fulltime job working for a franchise office affiliated with a large insurance agency. Mr. Blake found that his agency's focus on productivity and "numbers" precluded his ability to provide what he really wanted to do most for his clients; provide them personalized service that they could trust. He wanted his clients to be faces, not names and numbers, and he wanted to offer them the optimal products and services that would best fit their needs, not the "selling needs" of corporate hyping their latest product through their franchises.

Mr. Blake bid his time and learned "the ropes to skip and the ropes to know" about how to run an agency. He obtained several key financial and insurance licenses and professional certifications (i.e. CFP, CFA, CFT, CTEP, etc..) as well as financial product suppliers. When he had developed a large enough private client base (with a growing list of potential clients as well) so that he could make enough to live on, he left his job and reopened H&H as an independent agency to replace his consulting practice.

The firm started with just Mr. Blake operating out of a cheap store front and he was quickly overwhelmed with the "paperwork" side of the business. Mr. Blake was great at selling, knew the product lines in and out, but he was not an expediter nor comfortable with details. Debbie Matthews, from her own interactions with Mr. Blake, easily confirmed this part of his story, if you gave any client paperwork to Mr. Blake it would quickly disappear to "somewhere" in his office and never be seen again.

Mr. Blake's solution was to quickly hire a part-time administrative assistant to handle phone calls, deal with foot traffic (what little there was), and do some light computer work. It was a no-frills operation, except for Mr. Blake's own high end Apple laptop and printer; bag lunches and dinners (except when he met with clients for meals) were the order of the day. Advertisements in the local newspapers, penny savers, and late night spots on the local cable channel kept a slow but steady stream of customers walking into his store and that was all that Mr. Blake needed in order to "work his magic" and develop a customer base.

Times were not easy and Mr. Blake squeaked by on a very limited income. Yet he always looked nostalgically back at those days "in the hole" (his office) and called them "the golden years." Ms. Matthews recalled one conversation with Mr. Blake about the early years of the firm as if it were yesterday. "I was a maverick back then" said Mr. Blake. "A rebel with a cause. I went right from college into a corporate shop, detested it, then rejected it, and decided that I knew better and was going to do it all on my own. I wasn't in it for the money, although I certainly would not have turned it away, but I really wanted to be my own boss, set my own rules, and by doing so deliver real value to the people I served; and I did just that! I could rattle off my client list right off the top of my head, tell you each and every client's needs, and even, in some cases, their birthdays. I might have been broke, working crazy hours, but I was very happy and content."

EARLY SUCCESS LEADS TO GROWTH

Mr. Blake's formula for success quickly caught on and he found that he needed full-time assistance in order to help handle phone calls, process policies, and assist with claims. His office expanded quickly from one part-timer to three full timers who, as he would often say to Ms. Matthews and the other office staff, "buffered him" from the mundane paperwork and day to day office duties. He remained the sole "consultant" providing sales and expert advice and counseling while the staff provided his clients with all of the support they needed in terms of what he called "back office work" (processing bills, claims, questions about policies, etc.). His office staff, consisted of one office staff person from Mr. Blake's old agency (Jane Sutton) and two "raw" college graduates, and for the most part worked independently of Mr. Blake. Although Mr. Blake never gave any of them titles, job descriptions, or formal authority, Ms. Matthews was told by Mr. Blake and her immediate supervisor that it was clear to everyone that Ms. Sutton was the informal leader of the office given her expertise and prior experience in an insurance office.

Ms. Sutton first worked with Mr. Blake to develop office procedures and systems and then worked with the two "rookies" to ensure that the systems were in place in terms of customer/supplier management and accounting. The work was challenging since Mr. Blake hated detailed paperwork and office systems but fun (Ms. Sutton had a background in teacher education and made every task a game) and in sixth months Mr. Blake and Ms. Sutton had ironed out all the major office procedures while the two rookies became fully trained and integrated into the operation. At that point, according to Ms. Matthews' immediate supervisor, Ms. Sutton's leadership faded and all three employees became flexible generalists; part of a self-managed work team. Ms. Matthews thought to herself that that would have been a great time to have joined the firm since she would have had the opportunity to learn all phases of the business. Ms. Matthews wondered, "What had happened to change the work environment?"

Work then was parceled out through volunteerism and cooperation--Ms. Matthews recalled Mr. Blake saying how proud he was that his team at that time operated so well without his input. "I had a well oiled machine and I knew it. This allowed me to focus on what I knew and did best; direct client contact and analysis of their financial needs." Mr. Blake would usually express these sentiments at the then informal monthly meetings; usually over a beer and pizza after hours. Ms. Matthews wondered what it would have been like hanging around with Mr. Blake after hours since this practice was discontinued prior to her joining the firm.

MORE GROWTH, NEW DIGS, MORE PEOPLE

Mr. Blake's old office had an open front area where his three employees worked and a back office where he met with clients. As the business grew, Mr. Blake realized that he would need to bring in new agents (consultants) to help him deal with the increasing flow of customers and there was just no place to put them. A search found a newly renovated office complex (an old doctor's office) just a few blocks away which had separate executive offices and a main office area that could seat 6 employees and a small but separate waiting area for his clients. Mr. Blake and his small team gave a thumb up to the office and quickly settled in. Mr. Blake hired one financial planner and one insurance agent so as to provide more sales and technical expertise to his consulting team. The new associates worked out so well and his business grew so quickly that within a three month period, three new staff people had to be hired (all recent college graduates) to help Ms. Sutton and her old crew manage the additional workload ; Ms. Matthews was one of them.

THE BIRTH OF DEPARTMENTS

Ms. Matthews' supervisor told her when she first came on the job that before the new staff was hired Mr. Blake made Ms. Sutton the office manager while Ms. Sutton made her now "old rookies" each supervisors. Jeffrey Johnson became in charge of supplier relations (dealing with the products and services), and Kenneth Hayes ran client relations; Ms. Matthews' supervisor. (See Figure 1 below, Organizational Structure of H & H Financial Services, Inc.) Ms. Matthews had heard from Ms. Sutton that this new structure was highly efficient from Ms. Sutton's perspective since it allowed Mr. Johnson and Hayes the time to develop their own expertise and familiarity with their specific focal group. These new department managers would handle the day-to-day work routine of their own department with their new staff while Ms. Sutton served as coordinator and in-house expert; the answer person. This structure also made the assignment and training of new office personnel much easier since each employee was allocated to one of the two departments where their supervisor would then provide them with basic training within the department.

Ms. Matthews learned from Hayes that work flow paralleled the organizational chart. (See Figure 1 "Organizational Structure of H & H Financial Services, Inc.) New clients would be brought in by Mr. Blake or his two consultants and that information would then be sent to Ms. Sutton who would then hand it off to Hayes in charge of client relations. He would then have the information entered into the client database by Ms. Matthews or her coworker. New suppliers (insurance carriers) would go the same route (through Ms. Sutton) but then the work would be allocated to Mr. Johnson who would then hand this off to her subordinate. Once in the database, clients and suppliers would then contact their respective departments in terms of service and informational needs.

[FIGURE 1 OMITTED]

Mr. Hayes and Mr. Johnson kept the "fun" atmosphere of the workplace within their departments which Ms. Matthews greatly appreciated. Ms. Sutton however wanted the office to have a more professional demeanor since she felt that H & H was now an "established firm" with expert consultants on staff who also seemed to not appreciate the horseplay of the office workers. For Ms. Sutton maintaining an expert image became everything and therefore she went to great strides to minimize office antics (like wastebasket basketball) and excessive chatter. Mr. Hayes and Mr. Johnson were not happy with the new "rules" but went along with them since most of the time they spent in their own work areas and away from "the back office" where Ms. Sutton stayed and did most of her work. Besides, they knew (although Ms. Matthews found his hard to believe) that underneath that now tough exterior Ms. Sutton was a "buddy" who had given them their first real jobs out of college. However, the change in rules did create tension between the newest employees (including Ms. Matthews) and Ms. Sutton since the new employees' supervisors acted differently around Ms. Sutton while they otherwise maintained a very happy go lucky work environment. Ms. Matthews quickly learned that she could "play" with Mr. Hayes and even Mr. Johnson when Ms. Sutton was away from their work area but she had to be on her best behavior when Ms. Sutton was around or when they went into "management" territory.

Ms. Matthews noted that the old companywide informal monthly meetings with Mr. Blake became formal monthly meetings just with Ms. Sutton and all of her subordinates. Rarely would Mr. Blake or the other agents attend these formal meetings that were run by Jane (they had their own meetings) though everyone would meet quarterly to discuss the firm's overall performance. The monthly meetings without Mr. Blake consisted of discussions of new products, services and/or clients, new procedures, and any outstanding problems that either department could not solve alone. These were open meetings but rarely did anyone but Ms. Matthews raise questions, and these questions were always about work processes and procedures. Everyone else, including the supervisors, only spoke when Ms. Sutton spoke directly to them or asked very general questions about the growth plans of H & H.

Mr. Blake led the quarterly informational meetings which included presentations by the other consultants and Ms. Sutton on the current and future plans for their areas. No one else from the office staff usually spoke at these meetings (even Ms. Matthews) unless specifically asked to do so. Mr. Blake did not go out of his way to engage the office staff since he felt that those actions would usurp Ms. Sutton's authority and legitimacy with her team.

From Ms. Matthews's perspective Mr. Blake was quite happy with Ms. Sutton's new office configuration since it allowed him to once more concentrate on his clients and stay out of the office operations. He could now work with his other specialist consultants to help locate new clients as well as new products and services. This was often voiced by Mr. Blake as a critical operational strategy for continuing to grow the business yet Ms. Matthews questioned how his laissez-faire approach impacted her job and the operation of the office.

ANOTHER MOVE

With sustained success, the organization continued to grow, adding several more consultants and back office staff while keeping the same basic organizational structure and workflow. Mr. Blake once again needed new office space to contain his firm's growing needs and he moved his operation about a mile away to an office complex with larger accommodations where he, each consultant, Ms. Sutton, and her supervisors had their own office space while the other employees worked out of their own cubicles. This new space had several open, unused offices since Mr. Blake wanted to expand his operation to include accounting, tax preparation, and legal services (a paralegal and tax preparer to begin with, perhaps an accountant and a lawyer later on). (See Figure 2, Office Layout of H & H Financial Services, LLC.)

From an operational standpoint, however, nothing changed. Ms. Sutton continued to run all of the office functions and served as a liaison between Mr. Blake and the employees. Ms. Matthews learned at a quarterly meeting that Mr. Blake was focusing even more of his time on the firm's strategic growth and landing "big fish" (corporate clients)--a seeming shift in the firm's basic strategy. Mr. Blake also announced that he was starting to conduct preliminary inquiries as to a possible "number two" who would handle the ever growing functions of finance, accounting and human resource management; a job that Ms. Matthews aspired to after she completed her MBA degree.

[FIGURE 2 OMITTED]

Ms. Matthews noticed that the new large sitting area required the firm to hire a receptionist who then handled "walk-ins" and who would also orient the new clients to all of the services provided by H & H. The receptionist would also, on occasion, administer customer questionnaires that dealt with customer service satisfaction as well as desired additionally services. Ms. Matthews was sorely tempted to take this job because the receptionist reported to Mr. Blake, not Ms. Sutton. She quickly let go of the notion though since she would be devolving in terms of her career and personal development, not growing.

REMINISCING ABOUT HER FIRST FEW MONTHS AT H & H

As frustrated as she had become with the current work environment, Ms. Matthews Matthews affectionately thought back to when she was looking for her first job in New York City and was hired by H & H. As a recent college graduate and single mother, Ms. Matthews was excited when she got the job working for H&H Financial as their assistant case manager in the client relations department. H&H Financial was a small but growing insurance firm of 12 people and Ms. Matthews was happy to see that all of the office employees were around her age. Ms. Matthews was more than delighted to be there so that she could learn as much as she could and expand her knowledge and skills. She quickly and eagerly learned all of her required duties and executed them to the best of her ability. Mr. Hayes was very pleased with her work, highly complementary, and gave Ms. Matthews's more and more demanding work. This fit well with Ms. Matthews's motto which was to continuously learn from mistakes, and to ask questions to improve and expand one's mind and knowledge. As such, Ms. Matthews was always ready and excited to face the challenges that were presented to her.

In her second month with the firm they moved to a much larger office space which bespoke well of the firm's continued growth and success. Ms. Matthews thought that she had real opportunities for advancement and promotion ("as the firm grows, so will I") and thought that she had made an excellent choice in a very tough job market. She was aware of Mr. Blake's preliminary search for an assistant manager and thought that with her MBA in hand (less than a year away) she would be the perfect candidate once she had learned the ins and outs of the business.

The dream however quickly became a nightmare. Ms. Matthews found that after the first few months of working at H&H Financial, her learning curve came to a complete and sudden halt. Ms. Matthews realized that jobs were very compartmentalized and the office manager Jane Sutton did not want the employees to learn anything more than the bare minimum of what their jobs in their own departments required of them--the firm seemed to have a "don't ask, don't tell" policy.

Mr. Hayes was very helpful and supportive about the work in his department, but when Ms. Matthews asked questions about interdepartmental and organizational processes he deflected most of her questions saying "I'm really not sure why we do things this way, check with Ms. Sutton." Ms. Sutton's response to Ms. Matthews's questions was always the same, "I'll tell you what you need to know when you need to know it ... just do your job, do it well, and you'll get along fine." Ms. Matthews thought that perhaps with a few more months on the job Ms. Sutton would learn to trust her more; and she couldn't have been more wrong.

During the Ms. Matthews's third monthly office meeting, Ms. Matthews became increasingly irate when her questions were still be answered by Ms. Sutton with "you don't need to know that", or "you will never deal with that situation", or worse "that's not your concern". Ms. Matthews found that these were the answers to even the simplest of questions dealing with the most essential parts of the business outside of her department. This approach made it difficult for Ms. Matthews to properly do her job because she did not see how her job related to the other jobs in the firm.

In summary, Ms. Matthews thought there was a clear lack of communication between the owner, Ms. Sutton, the two supervisors, and the employees and that this created slowdowns and gaps that bottlenecked the flow of the entire work process of the business. She also noticed that not only was her job compromised by this lack of knowledge, but also, in her opinion, everybody else's. All of her questions regarding this matter were not only disregarded by Ms. Sutton but discouraged as well. Ms. Matthews thought that for such a small but fast growing company, the operations would run much smoother if all of the employees were aware and informed about each other's jobs for they were all dependent and interrelated to each other. Overall Ms. Matthews felt that Ms. Sutton was overly controlling and excessively formal even though Mr. Blake was charming, supportive, and quite friendly.

After several attempts to learn more about her job, Ms. Matthews was starting to lose motivation. She felt like a robot that was programmed to do the same thing day in and day out and it was starting to affect the quality of her work. She was surprised and disappointed to learn that she no longer cared about her performance, her job, and the firm. This is when she realized that by staying at H & H she was starting to compromise her work ethic; her values of always striving to achieve and working to the best of one's ability. Ms. Matthews also found out that she was not the only one feeling less motivated and interested. At least two other people who started before her felt the same way but never said anything to their immediate supervisor or Ms. Sutton.

With all this negativity surrounding her work life, the decision to leave was still a difficult one to make. The company had some great employees in her department that made it fun to come to work every day. Since everybody was about the same age, people got along well. Ms. Matthews also liked the relatively laid back environment in the department and the flexibility of hours the job offered, especially considering that she was now in graduate school. However, Ms. Matthews was not sure if that was enough; after 11 months of working at H & H she wondered if it was worth it for her to continue working there. On the one hand, Ms. Matthews knew that she had no future at the company. She was pursuing her MBA and she now knew that that would not make a difference for her future at H & H. Ms. Matthews wondered, "What is the point in spending money and time to get a graduate degree if it is never going to be appreciated or add value to my career at H & H? Should I stay at a place where there was no chance for growth and no value given my curiosity and desire to learn? At the same time, is it a bad decision to try to change jobs right now considering the downturned economic climate, my need for a flexible schedule for graduate school, and my financial responsibilities? Should I stay simply for the money and my flexible schedule?" Ms. Matthews realized that she had an important decision to make and she had to make it soon before she became completely unmotivated.

Appendix A H & H Financial Services, Inc. Products and Services

Financial Consultant & Retirement Planning. H & H are independent financial advisors offering financial & retirement planning services on a commission or fee basis. They assist clients in implementing the correct insurance and investment strategies that meet their stated needs and objectives and that stay within the boundaries of their risk profile.

Estate Planning. They offer comprehensive estate planning programs. They will review both investment portfolios and other personal vehicles such as Wills, Trusts, and insurance programs to ensure that a financial plan meets clients' personal and independent objectives. Independent lawyers, tax accountants, and insurance specialists may be involved with this process.

Insurance. As insurance professionals, they offer a full portfolio of high-quality insurance products including life, long-term care, disability and variable products. They assist clients by reviewing their current and future needs and recommending the many ways insurance can provide the protection they need for themselves and their loved ones and the peace of mind they deserve.

Life Insurance. Life insurance provides either a stated sum or a periodic income to a client's designated beneficiaries upon their death. Certain "life events" such as marriage, the birth of a child or a change of jobs trigger the need to buy or add life insurance. Deciding the need for life insurance is the first step. The next step, deciding what kind of life insurance, is where H & H provides assistance. They offer a variety of policies to fit a variety of needs.

Health Insurance. Health Insurance is an important aspect of a client's overall financial and life security. Minimizing the health care expenses associated with illness and accidents for the client and his/her family is easy to do and the client has many options for coverage. Whether the client is an individual looking for personal health coverage, a small business wanting to create a health insurance benefit for employees, or a large corporation, H & H will match the plan to the client's budget and health care needs.

Long-Term Care Insurance. Long-Term Care is the only insurance plan that offers protection from exhausting savings for a long-lasting illness or disability. Half a million Americans fall into poverty while paying for long-term care. Medicare covers a small fraction of long-term care and it is limited to skilled nursing care, which isn't the same as custodial care--the kind of long-term care most people need. Some private health insurance plans cover a month or two of skilled nursing after a hospital stay, but that's all. To qualify for Medicaid, the individual in question must deplete most of his or her assets and contribute nearly all of his or her income to meet the program's poverty requirements. Planning ahead with a Long-Term Care policy can protect a client and his/her family from losing their life savings to pay for needed services if the client becomes chronically ill or infirm.

END NOTES:

(1.) The name of the firm and the case characters have been disguised at the request of the firm's owner.

Deepthy Marunninal, Long Island University--Brooklyn Campus

Adva Dinur, Long Island University--Brooklyn Campus

Herbert Sherman, Long Island University--Brooklyn Campus