Background
Asset Verification Company (AVC), a global provider of audit verification and inspection services, underwent a significant reorganization in 2024 to address operational inefficiencies and support its aggressive growth targets. Founded in 1991, AVC transitioned from a family-owned business to a private equity-owned firm, generating $40 million in annual revenue. The reorganization aimed to alleviate employee burnout, reduce service costs, and improve customer satisfaction by restructuring the roles of Customer Service Administrators (CSAs) and streamlining audit processes. The reorganization was initiated by the company president and implemented by the Learning and Organizational Development (LO&D) department in collaboration with Field Services and Operations.
Organization
AVC operates in the financial services sector, providing inventory verification services to banks and financial institutions that offer auto and equipment financing to dealerships. The company employs approximately 200 salaried staff and manages a network of 1,000 independent contractor inspectors. Prior to the reorganization, CSAs were responsible for end-to-end audit tasks, including scheduling, client communication, and quality assurance, leading to inefficiencies and employee burnout. The reorganization divided these responsibilities into specialized roles: Scheduling, Client Management, and Quality Assurance, aiming to improve throughput and reduce workload.
Program and Stakeholders
The reorganization program targeted three key stakeholder groups:
- Upstream Stakeholders: Included the company president, Director of Operations, Director of Field Operations, and CSA managers. These stakeholders were responsible for designing and implementing the reorganization.
- Direct Impactees: Comprised 68 redefined CSA roles, including Client Service Specialists, QA Analysts, Schedulers, and Regional Field Specialists. These employees were directly affected by the role changes and required new training and workflows.
- Indirect Impactees: Included 1,200 independent contractor inspectors who relied on Schedulers and Regional Field Specialists for job assignments and support.
The reorganization aimed to improve operational efficiency, reduce costs, and enhance customer satisfaction, aligning with AVC’s goal of increasing revenue to $100 million within three years.
Evaluation Request
The LO&D department requested a formative evaluation to assess the effectiveness of the reorganization. The evaluation focused on three key dimensions:
- Employee Knowledge: Assess whether employees were adequately prepared for their new roles.
- Cost of Service (COS): Determine if the reorganization led to measurable reductions in service costs.
- Customer Satisfaction: Evaluate client perceptions of service quality and responsiveness post-reorganization.
The evaluation aimed to identify gaps in the reorganization and provide actionable recommendations for improvement before a broader rollout.
Methods
The evaluation team followed Chyung’s (2019) 10-step evaluation process and used the Kirkpatrick four-level training evaluation framework to assess the reorganization’s impact. Data collection methods included:
- Surveys: Anonymous web-based surveys were distributed to 68 direct impactees, with a 67% response rate.
- Interviews: Semi-structured interviews were conducted with schedulers, managers, and one client.
- Extant Data Review: Internal data, including COS metrics and training materials, were analyzed.
The evaluation focused on three dimensions: Employee Knowledge (critical), Cost of Service (very important), and Customer Satisfaction (important).
Results
- Employee Knowledge:
- Employees reported a lack of confidence in their new roles, citing insufficient training and unclear responsibilities.
- Training materials were incomplete, and employees felt unprepared for complex audits.
- The average survey score was 2.49 (on a 5-point scale), indicating dissatisfaction with training and role clarity.
- Cost of Service (COS):
- COS increased slightly post-reorganization but began to trend downward as employees adapted to their new roles.
- Bill Total increased by 7%, but Pay Total rose by 10%, offsetting the gains. The increase in Pay Total was attributed to a decline in audit quality ratings.
- Customer Satisfaction:
- One client interviewed reported increased responsiveness but noted ongoing challenges with auditor availability.
- No significant customer complaints were identified, but the evaluation was limited by the small number of client interviews.
Conclusions
The reorganization did not fully achieve its goals of reducing employee burnout, lowering service costs, and improving customer satisfaction. Key issues included:
- Inadequate Training: Employees lacked the necessary knowledge and resources to perform their new roles effectively.
- Role Clarity: Responsibilities were not clearly defined, leading to confusion and inefficiencies.
- Process Gaps: Communication and workflow processes were not updated to support the new organizational structure.
Recommendations:
- Role Clarity: Conduct workshops to define roles and responsibilities, and develop detailed Standard Operating Procedures (SOPs).
- Training Development: Create role-specific training modules, including scenarios for complex audits, and pilot them with a subset of employees.
- Employee Support: Provide additional support to employees during the transition, including clear communication and reassurance about job security.
- Cost Monitoring: Continue to monitor COS over the next 6-12 months to identify trends and address rising Pay Total costs.
- Customer Feedback: Implement a formal mechanism for collecting and analyzing customer feedback to improve service quality.
References
- Chyung, S. Y. (2019). 10-step evaluation for training and performance improvement. Thousand Oaks, CA: Sage.
- Kirkpatrick, D. (1996). Evaluating training programs: The four levels. San Francisco: Berrett-Koehler.
- Rummler, G. A., & Brache, A. P. (1995). Improving Performance: How to Manage the White Space on the Organization Chart. Jossey-Bass.
Appendices
- Appendix A: Feasibility and Risk Factors
- Outlines the feasibility of the evaluation project and identifies key risks, including stakeholder availability and incomplete pilot data.
- Appendix B: Data Collection Methods
- Details the instruments and rubrics used for data collection, including survey protocols and interview questions.
- Appendix C: Instruments
- Includes informed consent forms, survey questions, and interview protocols.
- Appendix D: Visual Aids and Addendum
- Contains organizational charts, audit cycle diagrams, and a program logic model to illustrate the reorganization’s structure and goals.
This evaluation highlights the importance of thorough planning, role clarity, and employee support in organizational restructuring. By addressing the identified gaps, AVC can improve the effectiveness of its reorganization and achieve its long-term growth objectives.