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This COMP would not have been possible without the unwavering support of several key individuals and teams, who extended their valuable assistance in the preparation and completion of this project.
I would like to start off by thanking the Royal Roads MBA faculty and staff for making this journey both memorable and pleasant. The extensive insight, thought-provoking discussions, and overarching guidance throughout the program was invaluable.
The entire Purolator team for allowing me into their environment and assisting me every step of the way by providing candid feedback and open access to all of the required components. In particular, I would like to thank Mike Boucher and William El-Khouri for their dedicated efforts and resolve in connecting me with the right people and letting me explore and understand the organisation from all angles. This has truly been an amazing experience.
Lastly but certainly not the least, I want to thank my wife Nargis and my two adorable children, who have patiently allowed me to put in the effort so that I can realise my dream of higher education. Nargis, thank you for giving me the encouragement to continue my studies and pursue my MBA and most importantly for giving me the strength to carry on when there were moments when I wanted to give in.
Zeeshan & Izzah I love you both dearly and promise to make up the lost time. I hope that even if I get nothing else from this journey, the two of you can look back one day and draw some type of inspiration from my efforts, or at the very least be proud of your father for his resolve and dedication in pursuing a lifelong goal.
Glossary of terms
BS Balance Sheet
CAPEX Capital Expenditures
CFS Cash Flow Statement
CI Continuous Improvement
COGS Cost of Goods Sold
COS Cost of Sales
CPM Corporate Performance Management
EBT Earnings before tax
ERP Enterprise Resource Planning
IT Information Technology
KPI Key Performance Indicator
P&L Profit and Loss
Planning An integrated planning enterprise view of the business
SOD Statement of Direction
YTD Year to Date
Table of Contents
This report was commissioned to examine Purolator's planning ecosystem as it relates to organisational visibility and cross functional communications on key revenue planning and costing metrics. Key findings were developed and validated through a series of organisational cross functional surveys, in depth interviews, and focus groups. The report takes an in depth approach on identifying components such as alignment, change management, and accountability that are impeding corporate strategic objectives.
Purolator is currently going through structural an hierarchical changes that have highlighted and identified potential voids in the corporate strategic plan; the void is being critically examined as there are inherent flaws in corporate alignment, adoption and execution strategies. There are no clear indications of who owns the strategic planning process from start to finish.
The intense competition and overall global financial environment requires Purolator to change the traditional make up of its planning and structural base from exclusively operational to more of a hybrid marketing and sales\operations composition in order to achieve sustainable business growth. Additionally, the organization's planning ecosystem adjustments have created business gaps that require change management initiatives to manage the cultural shift and long term growth plans. The organisation is at risk of not hitting their EBT numbers set out by the board for the first time in approximately 15 years. Purolator's aggressive EBT targets along with continued growth and strategic expansion initiatives have caused inward pressure on the organization, which has initiated a business planning model re-evaluation.
The organisation has historically relied on the operations group to fill the EBT target gaps which has caused an unintended consequence of a strict divide between the sales and operations business units. Each of the respective groups are independently managing their data integrity which has ultimately caused an issue with the reporting mechanisms and in certain instances depending on your departmental lens, results appear to be more rosier than actuality. Sales typically sells and measures based off of shipments whereas operations measures based off of individual pieces or units. Furthermore, sales are compensated on top line revenue, while operations are measured on EBT targets, these misalignments of objectives are now under intense scrutiny as each of the respective groups tries to understand both paradigms.
The finance group is also at a critical juncture as they must setup the appropriate tool sets to empower the respective groups while maintaining ownership and integrity of all of the financial reporting functionality. The challenge for finance is to weave all of this together and develop one version of the truth. The IT component is a separate challenge that Finance faces; Purolator has outsourced IT functionality to a third party vendor which has added a layer of operational inefficiency to the process.
Sales\Finance\Operations are currently operating in separate silos, where full transparency and communication around key metrics are missing. The net result is that the respective teams are unable to make timely decisions about costing and revenue planning, which in turn leads to lower profitability/yields on certain 'product' segments.
The author has hypothesised that the absence of corporate alignment and accountability structures are the root cause to the respective departments operating in separate silos, which has produced symptoms such as lack of cross functional accountability and qualified central organisational metrics. The symptoms are leading to untimely decisions and selling behaviours that are not optimised.
The author will be researching the root topic of integrated organisational strategic planning and will highlight topics such as corporate alignment, communications, process/metrics, and accountability, which will corroborate the findings back to the problem statement and hypothesis.
Purolator is currently operating in seprate silos as it pertains to its revenue and expense planning structures. There is an inherent disconnect between Operations and Sales that has translated into an impact on both growth and the bottom line. The organisation is lacking centralised metrics that are viewed and agreed upon by the respective departments. Data intregity checks are not central and data validation points are left with the respective departments; IT has no clear involvement on IT application, ownership and access. There is also a resistance to change as the status quo has persisted for many years and mental models have been shaped accordingly.
The organisation is not allowed the luxury of time because of aggressive yearly EBT targets that are coupled with misaligned planning cycles for revenue and expense. Purolator has the academic makeup of correct strucutral planning but interactions with the employee base and analysing organisational behaviour did not indicate proper process or alignment. The external factors of increased competition and market changes are contributing to the desire and expectation for change. Purolator conducts business in a historical market space with very little marketing dollar spent on creating and researching new programs. The luxury of time is not allowed for any substantial traction. The organisation is struggling with fundamental principles on selling patterns; however, there are multiple factors at play other than simple behavioural issues.
In order to take a corrective course of action for the immediate future without disrupting the core business functions, it is recommended that Purolator start off by creating a Statement of Direction for future strategic planning cycles, readjust and realign sales compensation plans for fiscal 2013, setup consolidated Key Performance Indicators and dashboards with cross functional views and balanced scorecards for fiscal 2013 with go live adoption targets of fiscal 2014. Lastly, Purolator should implement a Corporate Performance Management system for the second half of fiscal 2013 with a go live date of fiscal 2014.
The organisation must take a long term approach on growth and thus must align along the same premise. Purolator must evaluate the 3 and 5 year strategic plans and align with the short term yearly plan. The organisation must have a clear identity in the planning cycle and the purpose must be translated through actions. The overall burden of profitability must be shared by all and as such there should be appropriate metrics, tool sets, and accountability hearings for detraction. In taking steps to adjust the future planning state, the organisation can address undesired behavioural patterns and resolve low margin selling.
Purolator Business History and Market Position
Purolator is Canada's leading integrated freight and parcel solutions provider.  Celebrating 50 years of delivering in Canada, the company continues to expand its reach to more people, more businesses, and more places across the country and around the world. Purolator is proud of its Canadian heritage and is positioning itself for future growth and success.
By leveraging competitive strengths in technology, infrastructure and quality-oriented processes, Purolator delivers superior, custom solutions that enhance customer business advantage.  Purolator is a Canada Post Corporation that holds 91% share ownership with the other 9% held by a mix of Barry Lapointe Holdings Ltd. and other. 
Purolator provides import and export services to and from Canada servicing over 210 countries and territories worldwide. Purolator handles the following average number of pieces: daily: 1.3 million pieces, weekly: 6.3 million pieces, monthly: 27.4 million pieces, and annually: 329 million pieces.
Purolator is under an immense pressure to re-set and re-align corporate strategic plans amidst changing economic conditions and increasing competition. The operations and revenue channels need to be intertwined going forward, with the office of finance empowered to hold the respective groups accountable for results. It is imperative for this cross functional exercise to take place in order to break down and penetrate silos so that continued operational efficiencies and profitability can be realised.
Purolator has a very strong operational culture that in certain instances, compensates for execution missteps on the corporate strategic plan. As a result there are times when the company naturally tends to rely on the operations group to achieve profitability, which then gives the perception that the organisation is an operations led company. The consistent and constant pressures to hit aggressive EBT numbers are at the core of the functional issues.
The biggest challenge that the organisation is currently facing is the misalignment between the core functional departments in Operations, Sales\Marketing, Finance and the corporate strategic plan; all three operate extremely well in their respective areas, however, cross functional communications and transparency are lacking from a 'bottom up' perspective.
The core of this consulting project revolves around an analysis of the cultural and organisational structures and the planning eco-systems at large, which ultimately need to be readjusted and re-aligned with corporate strategic plans. Cross functional communications, transparency, and accountability become key elements and drivers for achieving this re-alignment. At the conclusion of this engagement, there will be a set of recommendations that will be applicable to achieving the required target of operational efficiency and profitability.
The main purpose of this Consulting Organisational Management Project (C-OMP) is to increase visibility and cross functional communications on key revenue planning and costing metrics (Budgeting/Forecasting), so that low margin/performing product lines can be identified and eliminated in a much more efficient manner. In trying to address this research question, there will be many connected strategic planning drivers that will be explored and understood so that a holistic solution set can be boiled down and applied to the core requirement of efficient selling behaviours.
The C-OMP will consist of a research methodology overview that contains both primary and secondary reviews, an academic literature review, analysis and discussion, recommendations and an implementation plan.
The main focus of this document is to understand and address how to increase visibility and cross functional communications on key revenue planning and costing metrics (Budgeting/Forecasting), so that low margin/performing product lines can be identified and eliminated in a much more efficient manner. The research methodology for this C-OMP involved both secondary and primary research. The secondary research consists of an academic literature review whereas the primary research encompassed email surveys, onsite interviews, and a focus group.
The intent of the structured research methodology is to understand the root cause of the core problem statement, so that opportunities to identify issues and process gaps can be brought forth and also to validate the approach on recommendations; the correlation of corporate alignment and employee engagement to existing Purolator silo styled departments and the relationship with sales behavioural patterns. The research will shed light on the current Purolator organisational setup and relate it to scientific findings on structural planning and the relationship between formed behavioural patterns.
The benefits of the research will be identifying known behavioural patterns that will be outlined as a direct result of the organisational planning analysis through both primary and secondary research. In understanding the impacts of structural planning and the subsequent importance of corporate alignment, accountability, and transition, the author will tie findings to the hypothesis and problem statement.
The academic literature research assisted the author in understanding the nuances and defining best practises as it pertains to corporate strategic planning. The literature also allowed the author to understand the need for process evaluation and enhancement, change management protocols, and transition states. There were a few core topics that were at the center of the academic research including, change management, transition, and employee engagement with a focus on corporate alignment.
Employee psychological states through various stages of change were also validated through academic findings, with an emphasis on trigger points that drive behaviour and maintain engagement. Various forms of employee accountability were also reviewed as it pertains to change management initiatives.
Three approaches were used for data collection:
Email Surveys: These were distributed to a cross-section of employee positions from the Operations, Sales, and Finance departments at the head office. Employee groups included full time employees involved in the budgeting and planning process. A total of 37 email surveys were distributed with 36 responses received, (Appendix A). The purpose of the survey was to understand current process maps, technology sets and cross-functional employee involvement and pain points that pertained to the overall budgeting and planning process. The author was able to identify commonalities and themes which further allowed the opportunity to draw attention to root causes. The surveys allowed the author to document and validate observations which will further bolster the need for the required recommendation sets to be presented to the Senior Management team at Purolator.
Interviews: These were conducted with various levels of front line, mid-level and senior management employees at the head office in Mississauga, Ontario. There were 4 onsite visits with 16 employees interviewed. The interviews consisted of a series of questions that probed the employees on cross-functional interactions and their understanding and involvement of the planning cycle, (Appendix B). The cross-functional employee interactions allowed the author to connect the dots back to the core problem statement and make assessments on the breakdowns in process and cross departmental communication. The onsite interview interactions allowed the author to further understand the process gaps, challenges and pain points pertaining to the Purolator planning cycle. The author was able to further uncover common themes such as alignment and accountability, which were prevalent in all of the interviews. The purpose of the onsite interviews was to allow the author to understand each of the respective departmental paradigms.
Focus Group: The session was conducted with employees from the finance and operations groups, so that an as-is process map could be documented and understood. The session allowed the author to understand the baseline Purolator planning process in order to further analyse the information by conducting a gap analysis against documented best practices.
The literature review will analyse the importance of change management, corporate strategic alignment, and accountability. The academic research will explore the correlation of the above mentioned items as they relate to each other and the overall planning ecosystem. The literature review will support the hypothesis and show the importance and interconnection of all components as it relates to the problem statement. The literature review will not chart the primary research but rather setup a platform to substantiate the findings.
The importance of understanding the root cause of a problem and aligning it with an implementation plan are extremely important. Adopting proper change management techniques to facilitate the process from start to finish is equally as important.
It has been noted through the literature that organisational change is always rooted in the context of some type of failure. The change in most instances is stimulated by market or competitive forces; the means in which organisations try to interject change is either episodic or continuous, and in certain instances both. In episodic change, it is noted that, "Change is an occasional interruption or divergence from equilibrium. It tends to be dramatic and it is driven externally. It is seen as a failure of the organisation to adapt its deep structure to a changing environment."  Continuous change on the other hand is a "pattern of endless modifications in work processes and social practice. It is driven by organisational instability and alert reactions to daily contingencies. Numerous small accommodations cumulate and amplify."  Ideally would organisations would be self-organising where change is constant, evolving, and cumulative.  Regardless of what model one follows there are inherent challenges to implementing organisational change.
The struggle then, becomes how to control the change management process and the alignment of people, psychology, culture and strategic objectives. Achieving sustainable change begins with a clear understanding of the current state where communication and buy in become imperative for successful implementations.  Managers must understand how to 'sell' the change and persuade employees to 'buy' the change by using various marketing and selling frameworks; employees must be sold on the organisational benefits. It is also important to note that there are two components to a change initiative; the actual change and the subsequent transition. William Bridges notes that change is the way things will be different, and transition is how you move people through the stages to make change work. Change is visible and tangible, while transition is a psychological process that takes place inside of people.  Getting people through the transition is essential if the change is actually to work as planned.
The transition is where things break down, the mental and emotional transformation that people must undergo to relinquish old arrangements and embrace new ones.  The company's culture has an important role in change and can be a major impediment if not addressed and leveraged. It is noted that culture will trump strategy every time. "Deeply embedded cultural influences tend to persist; they change far more slowly than market place factors, and cause significant morale problems when not addressed effectively. When your strategy and culture clash visibly, more likely than not, the culture is trying to tell you something about your own leadership philosophy." 
There are many barriers to success that mainly involve human interaction and interpretation. Leaders are required to display emotional intelligence and relay clear goals and objectives while employees are asked to provide commitment and support by putting personal biases aside. It is important to note that the psychological impacts on the recipients of change and more importantly to understand the different psychological emotional gateways that individuals must clear before accepting and moving on with the change. It is natural for individuals to feel anger, shock, and depression before ending up in what is known as the neutral zone. Here individuals are able to let go of the past, a key hurdle that must be cleared. Interference with routine will almost always cause a strong reaction. "No organisation can institute change if its employees will not, at the very least except the change. No change will 'work' if employees do not help in the effort. And, change is not possible without people changing themselves." 
Avoiding repetitive change is also important in allowing employees to absorb and adjust to one process at a time. Most organisations get caught up in the statement that "change is good" and more change is better and that the constant disruption shapes a future that is more competitive. There are a few symptoms that persist when organisations launch consecutive or simultaneous initiatives. Firstly, this can cause initiative overload as employees get bombarded with a multitude of changes. The second is change related chaos; so many waves of change go through the organisation with no one understanding why the change is being processed. Lastly, employee burnout can be expressed as cynicism.  Repetitive change harms a company's ability to make further change and has a huge impact on employee morale and retention.  Most executives are oblivious to all the change initiatives going on at one time and it is important for them to gage the impact through sample employee surveys and organisational dashboards.
Organisational change revolves around understanding human psychology that has contributions from varying angles. Communication and trust are key components that often times get overlooked. An effective communication strategy and executive vision are often times also absent, which in turn lead to poor consultation with all stakeholders and subsequent resistance. 
The concept and understanding of strategic planning is self-apparent, yet so many organisations stumble when aligning and executing on the actual corporate plan. In certain instances short term thinking and financial targets blur the overall lens of strategic plans; it then becomes a challenge to align short term profitability with long term growth.
In the corporate sector, the impediments between formulating strategic plans and carrying them out at the operational level have always been formidable; often they have been insurmountable. Troubles occur at the top of the corporate structure, at the bottom and also in the middle. Corporate vision and strategy, the accountability of the most senior officers and the board of directors, are often stated as objectives, generalities, and platitudes, rather than specifics. The working levels often view corporate plans as threats, and defy them. 
It is imperative to have both alignment and accountability present when referencing corporate strategic plans. The vision must be clearly outlined and more importantly be relayed to all levels of the organisation. "A business is best aligned with respect to its corporate strategies when the interests of all stakeholders in the business are in alliance with the strategic objectives of the business itself."  The complex nature of organisations and ultimately the size sometimes dictate the structure of the alignment It is here where one has the potential to run into misalignment where departments act in silos, like separate entities detached from the enterprise. "It is the complexity and size that prevent all of the levels of business from living up to this model in recent years. Specifically, the problem in implementing even the best laid plans of corporations in that in addition to simply making the corporate strategy known to the entire organization, the enterprise must also be aligned to the strategy." 
It is important to have all levels of management whole heartedly buy into and execute the strategy based on a set deliverables laid out by senior management. Often times, the strategy alignment can become derailed by self-seeking initiatives from different levels of the employee base; the strategy garners support but with the caveat of self-serving interests taking precedence. Comp structures and behavioural objectives must be aligned accordingly and play part with the overarching strategic plan. Indeed many middle managers have become quite adroit at showing how their own and possibly self-seeking initiatives support whatever strategies the company can devise. This is not the way strategic planning is supposed to work. In theory, the most senior levels of the enterprise ought to devise specific plans with the help of key managers and experts throughout the business. Then the total business should implement the plans with whole-hearted buy-in and commitment. 
Effective corporate strategic planning has themes that are interconnected by alignment and revolve around the following:
Corporate Strategic Alignment
It is noted that there not a single best practice approach when it comes to strategic planning, however, there are commonalities with highly successful companies and the way that they approach the planning process. Strategic plans alone do not constitute execution success; this is the mistake and assumption many organisations make when crafting strategy. President Dwight Eisenhower's military wisdom states that, "Plans are nothing. Planning is everything."  The industry type and timing of market pressures along with size and culture of an organisation will dictate the planning process one takes. In this day and age it appears to be extremely difficult to focus on strategies past the two or three year mark. An organisation's circumstances at a particular point in time will craft and reinvigorate strategic planning discussions.
The American Quality and Productivity Center's International Benchmarking Clearinghouse analyzed the strategic planning processes of 45 top companies. There were a few common best practices employed by highly successful corporations including stretch goals to push out of the box thinking, communication of the strategic plan as a formal and significant element of the process to measure quality planning, strategic planning as a key element in the management system, and documentation of strategic thinking, as revealed in the Clearinghouse's strategy study. 
The planning teams must understand and simplify the process by asking three basic questions: Why are we conducting this planning process? What are we hoping to achieve? And how will we institute accountability to ensure success?
Once the planning initiatives have been solidified, the issue then becomes on how to execute and manage the change. Understanding some of the best practices on how to proceed and ultimately to sustain the initiative becomes critical.
Alignment and Accountability
Most successful organizations have certain core competencies. Whatever an organization's core competencies are, a strategic plan should embrace them and make sure the plan is designed to capitalize on these core competencies.  "Alignment can be applied: to bring an unfocused organization into focus; or to change the focus of a relatively cohesive corporation."  With an absence of both strategic and corporate alignment there comes a certain degree of risk that can potentially turn into internal finger pointing. There should be a balanced score card approach for achieving strategic alignment. The scorecard should consist of quadrants that emphasize both financial and qualitative metrics.
The most effective culture is a culture of accountability. A clear line separates accountable and non-accountable behavior as noted in the OZ principle.  The steps to accountability include: See it, Own It, Solve It, and Do it. "Individuals that display non-accountable behavior typically get caught up in the blame game and/or in the victimized cycles. Studies have found that people who consistently adhere to the steps of accountability always act in an accountable manner. By the same token, people who fail to take these steps get stuck in the blame game, feeling victimized by circumstances that seem outside their control. They fail to move forward in their quest for results." 
Results must be measured and as such the cliché of, "if you cannot track it you cannot measure it" holds true. In a culture of accountability KPIs and analytics become critical. The data and reporting mechanisms become tools in predictive analysis, where one version of the truth has to be created and mapped accordingly. It is typically a best practice to have the office of finance consolidate key metrics and validate data sources through either the GL or CPM type applications. "The CFO in most organizations will have responsibility for financial processes and information. Therefore, analytical efforts in these domains would also be the CFO's concern. Since most analytical projects should involve some sort of financial information or returns, the CFO is at least a partial player in virtually all of them." 
Kurt Lewin's 3 step change model set the framework for the overall initiative and breaks down the process according to stage levels. The unfreezing stage is considered to be one of the more important pieces in the model; the stage focusses on getting ready and mentally prepared for the change and starting the journey of getting away from the status quo. Lewin understood that change is not an event, but rather a process which he identified as the transition. Transition is the inner and psychological movement or journey people make in reaction to a change. 
It is imperative to have a handle on the change management process during the strategic plan execution phases of the project. It is important to note some of the fundamental employee psychology and overall processes on the impacts of the change initiative, understanding employee resistance becomes a major factor in the deliverable. Resistance is viewed as multi-dimensional involving how individuals behave in response to change (behavioral dimension), what they think about the change (cognitive dimension), and how they feel about the change (affective dimension). Capturing the complexity of resistance,  Piderit (2000) suggested that individuals operate in all of these dimensions simultaneously, and that they may even be ambivalent about the change in each of these dimensions. Further, rather than a value-laden perspective of resistance, it is proposed that thoughts, feelings, and behaviors towards change are not necessarily good or bad, but rather positive or negative ( Lines, 2005) or pro- versus anti-change. 
The personality types and make ups of the employee base often dictate if the change will be resisted or adopted. Individual's self-reported adaptive and maladaptive defense mechanisms and their relationship to an employee's intention to resist organizational changes. The individuals were based in organizations involved in the restructuring of departments, reorganizations of systems and procedures, or implementation of new process technologies. The researchers found that individuals who tended to use maladaptive defense mechanisms were more likely to resist organizational change, while those who tended to use adaptive defense mechanisms were less likely to resist organizational change. The adaptive defense mechanisms they examined were humor and anticipation. The maladaptive defense mechanisms they examined were denial, dissociation, isolation of affect, projection, and acting out. Projection, in particular, had the strongest association with intention to resist change, and individuals with lower projection were also more supportive of change. 
Implementation is the critical piece that is often flawed when pertaining to the strategy execution. "Researchers examined how the relationships between employees and managers/change agents, as well as the styles managers employed influenced resistance to organizational change.  Oreg (2006) found that a lack of trust in management was significantly associated with resistance to organizational change, and  Stanley et al. (2005) explored the concepts of skepticism and cynicism and their relationships to trust in management and resistance to change."  Employee buy in through communication and management direction setting becomes a key driver to garnering success. The management team must be on the same page and any detractor in this group must be removed and replaced with a common set visionary.
As most organizations have a multitude of simultaneous change initiatives that are active at any given time, the syndrome of change fatigue sets in. It is important for the management to group and narrow down the efforts so that high priority initiatives can be seen through along with eliminating any duplicated efforts. It is important to note signs of change fatigue. Simple methods of weeding through this are by periodically analyzing through the following criteria set:
Outsiders increasingly question the value/objectives of the change effort
The change effort leaders/coordinators are stressed out and/or are leaving
There is reluctance to share or comment on data about the effort
Budget and resources are diverted to other strategic initiatives
Customers are experiencing impatience with duration of the change effort
Key leaders are not attending progress review meetings
In order for the organisation to take the pulse of the change initiative the following launch and mid-course questions sets should be asked and ultimately evaluated:
Questions That Must Be Answered During the Launch
Questions That Must Be Answered During the Mid-course
Why is this change necessary?
How much will this change cost, and how will it improve our financial or operational performance?
Who from the senior team will champion
the change effort?
How many people will be needed to drive this
How will we announce and roll out the
How long will change last?
Where do we start?
How can we build early momentum and
Who is opposing the change and why?
Which other initiatives or priorities are diverting our attention from completing this change?
How can we renew people's enthusiasm for change?
What are the unexpected side effects the change caused?
How can we acknowledge and minimize these?
What financial or performance improvements can we really attribute to this change?
How do we share what we've learned and ask
for feedback and inputs from people?
How can we make sure the changes we're
introducing will become institutionalized?
The last element of the change should be the sustainment of the initiative. As the change cycle completes, the goal should then be to keep the momentum flowing in the right direction. Effective change efforts should always have the corporate strategy integrated and weaved in to the fabric of the effort. "'Best practice' concerned the integration of strategy, flatter team-based structures, new technology, process improvement, measurement and control, people management, external linkages, change leadership and empowerment. They conclude that conditions favouring the adoption of best practice include 'the cultural and political climate of the enterprise'." 
The primary research for this project consisted of in depth interviews and email surveys. The purpose of the primary research was to analyse and correlate the research findings back to the root question of why Purolator sells low margin services. The primary research allowed the author to boil down common symptoms that were contributing to the behaviours pertaining to the root question. Once the survey and interview results were compiled, the author was able to further bolster and corroborate the research findings back to the core discussion of selling behaviours. An ethical review was completed in preparation for both the email surveys and interviews.
The survey was sent via email to a cross-functional set of 36 employees with a 100% response rate. The survey was sent to employees at the head office in Mississauga, Ontario. The focus was to target individuals involved in the budgeting or planning process in order to understand involvement, transparency, systems, and the overall type of budgeting process (top down/bottom up). The email surveys excluded senior management from the process; the purpose was to understand functional components of the process. The interviews consisted of both mid and senior management. There was an equally distributed cross sectional sample from Operations, Sales, and Finance for both the surveys and interviews. Please refer to Appendix C.
Overall Findings (Please Refer to Appendix C & D)
The overall results had a number of common themes/statements, the most significant being that most respondents felt that there was an element of overall accountability that was missing and noted that there was a mismatch in alignment between cross-functional departments. All of the respective participants, irrespective of their department, noted that Sales and Operations ran as silos with limited cross-functional interaction from the bottom up. Lack of trust between Operations, Sales and Finance was also highlighted on several occasions. Employees felt that the organisation has paid lip service to long term strategic planning but the focus is and always has been on yearly EBT results. Sales and marketing are not allowed to gain proper traction in the planning process and contribute the root problem to be the operations led culture along with noting that EBT targets take precedence over all else. Most respondents noted that reporting and KPIs are decentralised with each of the respective areas managing their own data, there is no one common truth by which Sales and Operations can agree upon, data governance is lacking because of the lack of IT involvement.
The findings also had many positives including that all of the respective departments were able to articulate their paradigm as it relates to the corporate objectives and overall plan. Everyone was able to define the organisational issues and understand the need for change.
There were a few common problem areas that employees unanimously highlighted in that pertained to the research question. It was noted that all departments need to be aligned to the same targets with focus and emphasis on long term growth and corporate strategic objectives, focus should be on profit and not on top line revenue alone, and that everyone must share the burden of profitability. The topic of cross-functional communications and expansion was another key area noted by many respondents. Employees wanted silos to be brought down and process maps outlined and identified. Everyone noted the importance of being accountable, stating that metrics must be centralised with agreed upon KPIs and Dashboards amongst all of the key players, and ownership clearly outlined and identified.
Please refer to Appendix B for Interview Questions.
Strategic planning is essentially a roadmap to where the company wants to be and how it plans on getting there through clearly identified goals and objectives with tactics that are aligned to the actual corporate strategic plan. The consistent theme throughout the research findings was the high levels of frustration around lack of alignment with corporate strategic plans. Some of the research pain points revolved around comments such as, "I would recommend aligning targets and goals cross functionally", "There is neither alignment nor relationship between sales and operations", and "Alignment between high-level board submission and annual business plan". It appears that there is an alignment mismatch between sales and operations. Another respondent noted, "We have a hard time providing some of the reporting detail operations ask for as we are striving for different targets".
The evaluation metrics for sales are completely different from that of the operations group. Sales targets goals on achieving top line revenue, whereas the operations group focus on EBT. In the event sales do not hit their targets, the exercise then becomes that of optimising margins and expenses. "Organisation has always been focussed on EBT numbers and as long as that target was met all else was forgotten or forgiven" There was a general consensus on the fact that the focus should be around alignment with profitability at the forefront. "Easiest way to change accountability structure is to evaluate based off of profit and not revenues". The organisation has finally hit a stumbling block after years of success on achieving EBT targets; the organisation is now in jeopardy of not hitting their EBT objective which has caused intense scrutiny on products being sold and there effective margins. As one respondent stated, "Costs increasing faster than revenues-not a good combination".
When one has two key areas in revenue and expense, the key is to have both move in harmony with a fine degree of balance and most importantly a configured sense of organisational alignment. The end result is ultimately the same; however, with this misaligned corporate culture comes the by-products of segregation and an 'us versus them' mentality, which ultimately has contributed to this silo approach and functionality. As one recipient noted when referring to the consequences of operating in this framework, "Our actions and planning practices have created so many unintended consequences that have continued to linger on".
There were constant undertones of animosity between both sales and operations, with consistent respondent statements such as: "Very strong Operations culture that is hard to shake", "Operations and Sales are at the opposite ends of the spectrum", "We have a very silo based approach", "We have a historical habit of reverting back to old practises and hence the strong operations culture", "Cannot understand on how sales agents can hit club when the company is struggling to hit targets-very demotivating", and "We have a very silo\functional approachâ€¦Unfortunately this has worked for many years". The lack of alignment has set this parting divide; the irony is that everyone is functioning exactly as they should according to the strategic plan.
Upon observation, Purolator does indeed have an operations-based culture, and the bolstering argument is that sales has not hit their numbers in years as one respondent noted, "Sales hasn't hit their numbers in 7 years". The counter argument is that the organisation is very short term focussed and has not allowed the runway for Marketing to lead and sales to drive results. Other comments included, "Because we don't allow marketing plans to gain traction we lose patience if we are not hitting sales targets and revert back to operations based planning", "Marketing strategy is a key component to planning that does not have a strong enough presence at Purolator" and "The organisation is very short term focussed".
The absence of alignment continues to shape the attitudes at Purolator, with a short term focus and lack of overall direction the future will be a repeat of past behaviours and the cycle will remain in a status quo state. Purolator must focus on long term strategies and align them to short term execution plans in order to both sustain and stave off the competition. The organisation has had a difficult time executing best practice strategies because of this consistent focus shift. Marketing must be an active player in the planning cycle and be allowed to adjust and gain traction. In essence there will have to be some contraction before a proper path can be charted and followed as one respondent noted, "We must shrink before we can grow". Irrespective of where the process starts, ultimately there needs to be checks and balances and overall accountability for any plan deviation.
Communication is a key component to any process but in particular to the overall strategic planning initiative. Individuals need to be kept abreast of the vision so that contributions can come with both a common purpose and understanding. As one respondent stated, "In the planning process we have suffered from poor communication of timeliness, accountabilities and responsibilities". It appeared that employees in general were scrambling to hit timelines and objectives without a clear understanding of the relevance, which led to confusion on long term purpose. The experience of short term adjustments to hit EBT gave the perception that the company was only focused on short term gains. Another respondent stated, "I'm not involved in the planning/forecasting process what so ever. It would be great to gain an understanding into this process as Revenue Management chases increases throughout the year in an attempt to achieve this plan". It appears that individuals have made up their minds on the company direction through perception and personal experiences as there are no proper cross-functional communication mediums. Another respondent noted, "As mentioned on the cross-functional piece - No quality control in terms of communication".
The following process map was created by Khelil Khelil and was crafted at a high level after focus group discussions and the realisation that no organisational process map existed and hence the lack of full understanding by cross-functional departments on the end to end structure. The purpose of the flow diagram was outlined for communication purposes (The document is a work in progress); please refer to Appendix E.
Another consistent concern that was voiced was the lack of accountability structures. The lack of transparency and top down planning process contributed to various accountability and adoption factors. The purpose of the email survey was to truly understand how the budgeting/planning cycle is understood and adopted by employees and if there were proper tool sets and process maps in place to facilitate the cycles. 44% of survey respondents disagreed that there were adequate documentation and process maps in their respective areas for the budgeting exercise (noted in question 1 Appendix C). There was 27% conformance on following some type of process which indicates a heavier weighting towards a top down initiative as 40% of the survey respondents stated they do not follow any process, (noted in question 2 in Appendix C) which most likely suggests that either they are not a part of any process or they are just handed pieces by their respective managers. A clear line of function and identified ownership typically clarifies any confusion on handoffs and accountability. It was noted through the survey responses that 40% of respondents had no clear indication on cross-functional touch points pertaining to the budgeting process (question 3 in Appendix C). Only 18% agreed that there were clear definitions on cross-functional intersections. If you cannot identify points of ownership in a process, it becomes very difficult to quickly identify process breakdowns and more importantly hold accountability.
The senior management group had a hard time identifying agreed upon metrics and KPIs which led to a lot of finger pointing. As one interview respondent stated, "We need to have metrics that are agreed upon and adhered to-no KPIs at the moment". The adage of "if you cannot measure it you cannot track it" holds true in this instance. The respective groups had strong departmental metrics but due to lack of alignment had a hard time articulating it into a standard format. As another interview respondent noted, "Systems are difficult to report off ofâ€¦we have the latest and greatest systems but the data is always challenged depending on your respective departments, we need one truth to report off of". A key component to cross functional accountability has to be identified through metrics and a version of the truth that is transcending.
The survey outlined some clarity around the use of excel templates and SAP systems for defining and uploading budgets. Question 4 in Appendix C noted 40% of survey respondents understood the use of the above mentioned as particular tool sets in the process. As one survey respondent noted, "Excel templates as issued from Finance for the budget but Strategy uses PowerPoint for the initiatives that are expected to have cost/benefit dollars. The process is not end to end from strategy to budget". The tools are used as disparate functional sets in order to achieve a particular task or objective. Technology in general was not fully understood or leveraged for efficiency because of the lack of in-house expertise and cumbersome outsourced IT support services. As one respondent noted, "We have all these powerful systems that no one knows how to use so we revert back to archaic spreadsheet practices". However, it appears that Finance does a good job in consolidating and distributing data at the end of each cycle. In question 5 in Appendix C, 34% or survey respondents agreed with being able to see cross functional budget and forecast data. Another survey respondent noted, "Finance actually does a fairly good job putting the output together at the end of the cycle". The unrefined process from an end to perspective ultimately achieves the objective but there appears to be a lot of inefficiencies in the process that cause time delays and lags, along with making it difficult to pin point disconnects and hold accountability in a timely fashion.
The Purolator culture currently revolves around short term objectives and targets, as one interview respondent stated, "Board and CEO have never been invested or truly involved in 5 year planningâ€¦We never get that far to even think about it as everything is always getting reset".
It appears that Purolator has the correct structures in place as everything always starts in somewhat of a correct manner but because of the focus on short term objectives and lack of long term alignment, systems are eventually skewed to achieve the yearly EBT target. Another interview respondent stated, "We have all the correct department titles but nothing resembles how a correct strategic planning process should functionâ€¦We all chase EBT and develop plans to hit numbers exclusively, which is not healthy." The sole accountability factor then tends to revolve around the short term objective of EBT. The lack of overall long term direction then excuses individuals from a true accountability perspective when it comes to strategic planning. An interview respondent stated that, "No one really understands the end to end planning process as there is no clear owner of the process." This sums up and points back to the root cause of lack of ownership, all other sentiments then would be symptoms of this problem. It becomes very difficult to hold anyone truly accountable for the overall process because there is no process that is clearly defined; no one is truly responsible from an end to end stand point. The focus shift from long term to short term thinking then alters the accountability and success metrics, which makes for moving targets. Lack of transparency and communication continued to be a concern to most of the research participants. It is evident that the plans are present but the planning process continues to be one dimensional and is lacking in execution. Another respondent stated that, "No clear structure and ownership of the planning process. Timelines of what needs to be done by are missing".
Analysis and Discussion
The purpose of this consulting project was to analyse the problem statement of: 'How does cross functional Visibility/Communication of key metrics impact selling behaviors and what methods are available to improve inefficient selling behaviors?' It is important to bring this question back into focus in order to understand and tie in the research findings. At the beginning of the project it was quickly noted that analysing and answering the problem statement in isolation was not going to achieve accurate results. The focus then shifted to the overarching issue of the long term strategic planning process, which was the interconnecting component to all discussions pertaining to selling behaviours and margin relevance.
It is important to note that plans are only as effective as the execution strategy and organisational flexibility to adapt and evolve as market forces press forward. There is no rigidity with strategic plans; it is a living, breathing, evolving process that necessitates clear direction and resolve from senior management. "No plan, no matter how well conceived, will ever be perfect. It is impossible to plan for all contingencies. Changes in consumer preferences, market trends, government regulations and the economy can all make all or part of a strategic plan no longer viable. A successful strategic plan must have clarity and clear steps; however, it must also be flexible enough to deal with the realities of a changing business and economic environment."  It was apparent from the research findings that Purolator understood the premise for proper strategic planning and the importance of long term alignment with short term objective. However, the pressure from the board and past CEOs dictated otherwise. Individuals became products of their environment. The organisation is extremely flexible and highly adaptive but the direction setting at the CEO and board level were misaligned which then had a trickledown effect.
There has been much discussion on alignment and how sales and operations are at the opposite ends of the spectrum. Through organisational discussions it was identified that past CEOs had an intentional strategy of misaligning the Sales and Operations functions in order to create a tension that would ultimately benefit the key stakeholders and their aggressive targets. The organisation is currently going through a transformation of sorts in that Canada Post is in search for a new CEO and has an interim replacement for the moment. This is one of the primary reasons that the status quo has still remained for this fiscal year. The realisation amongst the senior management that there is a deeply rooted issue that needs to be addressed is commendable but without a clear direction change from either the board or new CEO there remains chaos as the short term objective of hitting the EBT target still remains. The fact that the organisation is jeopardy of not hitting that target is causing a sense of urgency amongst the top brass; however, that urgency is not fully felt downstream despite being a monumental change initiative.
The current state is mostly realised and understood to varying degrees by the entire organisation, the challenge now is to craft the future state and put forth a method and action plan coupled with a strategic communication strategy in order to achieve results.  Crafting the future state requires a few other components to be in place before the process can begin, the task that should be initiated by the board and further evolved when the new CEO is appointed. Ultimately, there will have to be some short term pains that will be required to be felt in order for long term sustainability and growth to be realised. This is the challenge that the next leader must take on and handle with the input of the senior executives. Collaboration is key. Purolator is still an industry leader on many fronts and need to put that at the front and center of their strategic discussions. It would be prudent to create a SWOT analysis from both a top down and bottom up perspective. The organisation needs to be united on core values in order to posture and adjust in the current challenging climate. The organisational morale was noted to be low, which can prove to be dangerous as the planning transformation is taking place. Even as there are challenges and instability at the top, there are many initiatives that the organisation can take in the short term in order to start shaping the future state.
Purolator not only has misaligned timelines with the revenue and operations plans but there are time lags that prevent the organisation from staying the course on long term strategic plans. Sales should be properly aligned and need to start being held accountable for targets. The operational culture can only start to change as a key component in the planning process starts to function according to actual marketing plans. The marketing plans will only be allowed traction when sales targets and promotions start to take shape and achieve intended results.
There has been much discussion around accountability, which can only be achieved through clear lines of ownership and checks and balances. The metrics should provide the checks and balances. Purolator's outsourced IT environment and lack of involvement in the applications management and ownership process has caused disconnect and a software ownership divide. The systems should be controlled and managed by the IT function and the data integrity should be validated by the finance department. The lack of common KPIs should be a key area of focus, as this is will be the checks and balances of cross-functional groups by the senior managers. The numbers should be trusted and agreed upon before any activity based management takes place.
The main focus for Purolator has historically been the EBT target and taken in isolation there are no major issues with this approach; however, there have been many unintended consequences as a result such as the loss of focus on long term strategic planning and objective