6 - The changing environment of the dynamic management process

Summary

Successive sales organization changes at Hewlett-Packard

A few years ago, Hewlett-Packard adopted a completely new sales organization structure. The company was split into several autonomous divisions that drew their resources from headquarters, and that were entrepreneurially and autonomously managed, with complete responsibility for marketing and sales.

In addition, HP established a new CSO division (Computer Systems Organization) which was responsible for marketing a whole line of computers, ranging from individual work stations to powerful units for heavy users. By adopting more open systems, the major selling arguments shifted from equipment's performance and price to customers' added value. The new emphasis was to help customers to find the best possible solutions to their problems, even if this meant using components from a competitor.

In order to provide those services, HP salespeople needed to acquire strong expertise in their clients' problems. HP changed the geographical organization of its sales force so that it was organized by customer type (banking, insurance, industrial buyers, etc.) This was necessary so that the sales staff could understand customer problems within their sector.

However, HP soon realized that this sales force organization was not optimal. Because the salespeople always faced the same type of problems, they also tended to sell the same kind of products and so lost experience in selling the whole line of HP products, from computers to printers.