Site strategy review for one of the leading tech companies worldwide
as an example of the ‘Organisational Behaviour’ issue
As an Engagement Manager at my previous employer, I faced the ‘Organisational Behaviour’ issue to develop and deliver the site strategy consulting project for my client, one of the leading tech companies worldwide. The project aimed at advancing the Operating Model of the German site and deriving recommendations for the Site Strategy. In the following article, I first describe the issue that I have faced at my previous employer, second develop approaches to deal with the issue, and third derive a recommendation.
1. Identification of the Site strategy issue
Firstly, the initial situation was that the company’s Safety Engineering Center, the German site, was the global hub for the company’s Internet safety work. Its strategic programs span understanding the Internet safety problem, developing solutions, and partnering with other partners and empowering users. The strategic challenge was to grow the German site by 1,500 new jobs in the next years. The focus was on current teams who were working on the Browser product, data security, and internal systems.
Secondly, the project goals were to generate an understanding of the markets, clients and channels, and proposition and brands for the company’s Safety Engineering Center. In addition, the goal was to prepare a decision basis regarding the Site Strategy review. This included operational infrastructure, governance and structure, people, and culture, as well as measures and incentives. The objective was to derive actionable strategic recommendations for the Site Strategy based on the Business and Operating Model.
2. Potential approaches for Site strategy issue
‘Organisational Behaviour’ explains how organisations behave in their context and how people behave within and between organisations.¹ It differentiates between a number of levels of analysis — from macro to micro: societal, organisational, group, and individual. These answer questions such as how the organisation is affecting society, how the people in the organisation behave, how a group is forming a high-performance team, and how star players cooperate. Therefore, ‘Organisational Behaviour’ explains the company’s ambition to develop a global hub for the company’s Internet safety work and the challenge to grow its German site by 1,500 new jobs.
Guiding Framework
The ‘Guiding Framework’ of the ‘Organisational Behaviour’ theory² offers the model and framework to organize the potential approaches to deal with the issue. In addition, I analyse the issue by using examples from cases. The ‘Guiding Framework’ structures the issue into four elements: direction (direction and strategy), leadership and people development (human capital), structure and culture (organisational capital), and relationships (social capital).
Firstly, the direction and strategy are defined by the organisation’s strategy and its divisional business strategies and their alignment with each other and the group. It corresponds to the company’s business model (Safety Engineering Center’s Internet safety work analysis): ambition, market and competitor, customer segment and channel, and value proposition and brand. First, the ‘ambition’ of the company is to develop a global hub for the company’s Internet safety work:
“Development centre of the future” and “Engine room in Germany”.
Second, the company’s ‘markets’ are defined as addressing users, industry, start-ups, universities, and international research institutions. The market and competitor analysis evaluates the existing and new Internet safety market attractiveness. Third, in the ‘clients and channels’ sub-element the client’s goal is to understand the Internet safety problem, develop solutions, partner with others externally and internally, and empower users. The customer segment and channel analysis reviews the existing and new German Site target segments and channels. Fourth, the ‘proposition and brands’ sub-factor’s objective is to build the Browser, Privacy and User Trust, Corporate Engineering, Developer Infrastructure, Language Tools, and System Reliability Engineering. The value proposition and brand analysis assess the existing and new Site business strength.
The ‘leadership’, ‘structure’, and ‘relationships’ elements are consistent with the company’s operating model. It contains core business processes, operational infrastructure, governance and structure, people and culture, and measures and incentives.
Secondly, the ‘leadership and people development’ element explains questions around talent such as how much, how good, and how engaged has talent to be. It is also defined by leadership characteristics and consequences. It corresponds to the company’s ‘operational infrastructure’ which comprises the aim to build staffing enablement, managing site growth, and scaling staffing functions. The goal is to review the operational infrastructure (operational infrastructure analysis). In addition, it relates to the ‘governance and structure’ sub-element. Its goal is to create a site culture of One company and foster external and internal partnerships. The sub-element analysis reviews the (HR) governance and structure (governance and structure analysis).
Thirdly, the ‘structure and culture’ is explained by values and culture, routines, artefacts, and beliefs, as well as decision making and knowledge flow in the form of structure. Fourthly, the ‘relationships’ element consists of relationships as well as formal and informal ties in and outside. Both match with the company’s ‘people and culture’ sub-factor. It aims at managing hiring, developing, and retaining high-qualified, international engineers. The goal is to evaluate the integration of human resources systems (people and cultural change analysis). Furthermore, they also correlate with the ‘measures and incentives’ sub-element. It is designed to measure the performance by financial, customer, process, and people metrics. The objective is to assess performance management system (performance measurement and incentives analysis).
In the following analysis, I focus on the ‘Organisational Behaviour’-focused operating model and do not treat the business model. I framed the issue according to the ‘Organisational Behaviour’ theory through three elements: managing people, organisation culture, and managing change. This corresponds to a three-step workstream plan for the company: review operational, organizational structure, and performance and change.
3. People management
The model ‘Talent, Performance, and Development’⁴ offers the explanation for the people management-oriented parts of the issue. I analysed the issue along the ‘Structure of people management’ and the case study ‘Should you keep a star?’. People management is structured with a vertical and horizontal linkage: talent management, performance management, and development.
3.1. Vertical and horizontal linkage
People management is defined by vertical alignment — the linkages to strategy — and horizontal alignment. It is the same strategy to recruit, motivate, and retain best employee, but it is different how companies do it. All organisations need to recruit, motivate, develop and retain their employees. The vertical and horizontal linkages are crucial in delivering this. This means for the company an ‘organizational structure review’ which comprises the governance and structure analysis to review (HR) governance and structure.
Vertical alignment spans the linkage from organisational strategy, through people management processes to team and organisational effectiveness. This means managing people in terms of the question ‘How to deliver the strategy to people’. Horizontal alignment comprises talent, performance management, and development and careers. Organisational development provides linkages to each of these elements.
3.2. Talent management
Talent management focusses on segmentation.⁶ Talent management can be structure in ABC-players. A-players are difficult to manage. B players are highly important to the organisation but are often unrecognised and underappreciated. It is necessary to manage differences between the players as well.
Even as the company continues to grow, it should retain a small-company feel. The company knows that every employee has something important to say, and that every employee is integral to its success. Therefore, they have to adapt the talent management in a way that employees can thrive in small, focused teams and high-energy environments, believe in the ability of technology to change the world, and are as passionate about their lives as they are about their work. This means that self-responsibility is given to the engineers to create their own job description.
Talent management means segmentation of talent.⁷ In the case of my client, an A-player only model is recommended. This depends on the site strategy but there are some clear benefits: A-players are self-motivated, the value of A-players comes up in jobs which have a high discretion (non-routine jobs with a dynamic range). On the contrary, disadvantages are the steep level leadership to jump above boss for conversations, the problem how to maintain pipeline of talent in smaller organisations (start-ups) and the problem to become less for A-players (Infosys) as the company size grows.
3.3. Performance management
The performance management through a fixed ranking should assess and increase motivation — but it is only a encourages a fixed mindset, not a growth mindset.⁸
In terms of my client, various measures and fields of action can be defined in order to increase the contribution of human resources to internal value creation e.g., by improving the willingness and ability of engineers to perform, by making working hours more flexible, attractive remuneration structures and incentive systems or by improving productivity through new technologies.
Performance management through a fixed ranking does not help to improve performance. Instead, it encourages a fixed mindset. It is important to understand that performance is defined by the ability, the motivation and the opportunity to do the task.⁹ This means training, intrinsic stuff and development. In the case of my client, a performance management model by the example of Deloitte is recommended (adopted by EY, GE, Metronic). It replaced the fixed ratings once in a year by weekly meetings with ratings by the team manager. This means constant conversations, which are better in the moment, and future looking.
3.4. Development and careers
Development and careers offer a mindset change of the employees, not skill acquisition.¹⁰ In development there is often a crucible event. It identifies development needs which employees need to keep practicing. For example, Jane Fraser: experience one crucial event in her career as a CEO in Latin America when her manager said that she should communicate more. The crucial event withdraws her fixed mindset: How did it help? What has she learned? Has she withdrawn from things?
One of these crucible events can be the cognition that
“Every day, we make life on the Internet a little safer here in Munich”.
This means that employees are part of an experienced team of engineers in the company’s Safety Engineering Center build a better, safer Internet for all. Another question is how the company can get better. Mainly via careers. Careers address different types of employees T-shaped or even Pi-shaped engineers.
3.5. Retention
Retention is another factor.¹¹ The company’s question about retention is what purpose in firm matters. Therefore, employees leaving because retention deal not great should be considered from this side. For example, in the case of Alyse the leave of Alysa touches the organisation level issues: understand what’s driving the company’s staff (How to keep her?), bench-strength to have someone step into place (How to compensate loss?), what signal about culture is sent if loosing A-players (What it means for firm?). In this case, it becomes clear that talent, performance, training is not linked and clear.
4. Managing culture change
The ‘Core models of culture’ and ‘Changing culture’ theories as well as the case study Barclays offer approaches to analyse the issue.¹² It corresponds with the company’s ‘Operational infrastructure’ which contain the operational infrastructure analysis to review the operational infrastructure (operational infrastructure).
4.1. Core models of culture
The ‘Core models of culture’¹³ define culture as levels which should be aligned. To change the culture, the company has to understand the underlying assumptions within the organisation. Managing culture requires top management action, socialisation, and recruitment. There are core levers which can enable culture to be developed. Culture is transferred through habits, processes, stories, and employees have a toolkit. This means that there is a micro aspect to culture that allows culture to be replicated or changed.
The question to answer is whether the culture is supporting the strategy. This means that first there has to be a fit between culture and strategy. Second, it means that culture has to be kept moving through flexibility and change. There are some negative examples of famous organisations which fit very well but did not advance: Kodak, the Post office in England. In general, it is difficult to have both fit and flexibility at the same time.¹⁴
First, I analyse culture using the ‘Three levels of culture’¹⁵: artefacts, espoused values, and basic underlying assumptions. Culture is the glue which binds the organisation together.
In addition, it relates to the ‘governance and structure’ sub-element. Its goal is to create a site culture of One company and foster external and internal partnerships. It corresponds to the company’s ‘operational infrastructure’ which comprises the aim to build staffing enablement, managing site growth, and scaling staffing functions. The goal is to review the operational infrastructure (operational infrastructure analysis). The objective of the company is to create a site culture of One company and foster external and internal partnerships.
Underlying assumptions are the source of values in a culture and what causes actions within the organisation. Organisational assumptions are usually “known,” but are not discussed, nor are they written or easily found. They are comprised of unconscious thoughts, beliefs, perceptions, and feelings. The degree of difficulty of change increases from artefacts through values to assumptions.
4.2. Artefacts
The company’s site in Germany exposes the company’s artefacts: industry cluster, city advantage, and site design. In a nutshell, it is very German. Frist, the German region, Bavaria, is one of the most important centers for information and communication technologies in Europe, as evidenced by the nearly 30,000 IT companies in the industry cluster Bavaria. Second, the city offers in addition to the high quality of life, first-class universities and an innovative developer scene that make the city attractive for the company’s employees, who come from over 30 countries. The employees particularly appreciate the city factor i.e., the high quality of life and friendly, cosmopolitan people. Third, in addition to the corporate culture and positive working environment, the site design is also typically German due to the countless playful interior design details such as conference rooms that look like Munich subway stations or are modelled on Bavarian stone pine parlours.
4.3. Values
The underlying values are very German because typically German is also the sites “locational advantage”: its engineers. The site builds products and services for the global company in the area of data protection in Germany. They do it for users worldwide. The core value is that users have transparency and control over their data and Germany is the ideal location to work on this task.
4.4. Assumptions
The underlying assumption is computational thinking. The company does not expect employee to become a software developer. But it is important to understand what algorithms and computer science can do, what data analytics, machine learning and artificial intelligence mean. This means that the company primarily looks for people who not only have a specific qualification in data privacy, but above all want to make a difference and have a fundamental curiosity.
4.5. Changing culture
Second, the concept of ‘Managing culture’¹⁷ offers an approach to explain the issue. The company’s ambition to develop a global hub for the company’s Internet safety work and the challenge to grow its German site by 1,500 new jobs require a cultural change.
The goal is to create a site culture of One company and foster external and internal partnerships as well as review the HR governance and structure. This means to assemble the different departments under One culture and to change the culture attract high-potential engineering talent from all over the world.
The concept ‘Managing culture’ comprises three key mechanisms: (1) recruitment, (2) socialisation, and (3) leadership behaviours (leadership role model).
Culture is changed first by changing the artifacts through (1) recruitment to change the people who come in, second the values through (2) socialisation to change the way culture impresses the employees, and third the assumptions through (3) leadership role model.¹⁸
The three levels of culture should be aligned together. In the case study of Barclays, the whistle blowing incited showed that the actions of the leadership caused a conflict between espoused values and underlying actions because the CEO uncovered the whistle-blower. The question to keep CEO has the impact to take the culture in one direction or the other.
Changing the culture requires seven actions¹⁹: (3) top management support, stories, (1) selection, (2) socialisation, rewards, subculture, and consensus.
4.6. Leadership behaviours
Firstly, the (3) top management must be role models. Cultural change is all about leadership and the question ‘Do leaders look like they would live culture?’. The head of the site brings the internationality with him because he worked for twelve years in Silicon Valley, including for Mercedes-Benz. He knows how sensitive Europeans, and Germans in particular, are when it comes to their data. He refers to the site as “our engine room in Germany”. The focus is on data protection. But he incorporates also the other teams which work in the areas of connected automobility and cloud services and a video streaming department.
Secondly, cultural change should be anchored by creating new stories and rituals. Stories can be tradition, belonging, pride, humility, and expectation. It positions the employees themselves in the company. The company creates stories around exponential technology development. What has happened in the past 10 or 20 years will happen in the next five. The craft stories for their employees that it is important to step out of themselves a little bit, be creative and dare to go with it. When one looks around Silicon Valley, the people who do this are often the types one says are crazy. But in principle, they often do nothing other than run things a bit.
4.7. Recruitment
Thirdly, (1) selecting and promoting of ‘lead’ employees who espouse values is crucial. The key mechanism ‘Recruitment’ can be aligned to the culture by hiring the right people in the culture, changing who the company gets in the organisation, and keeping the same kind of people. Selection can also be done by self-selection: what values are exposed recruitment. For example, an organisation person has internalised the values of the organisation. The recruiting process is very broad-based and the company primarily looks for people who not only have a cyber security specific qualification.
4.8. Socialisation
Fourthly, (2) socialisation process and specifically its redesign is an important factor in to change culture. The mechanism ‘Socialization’ means how do the company impress people with values. With the help of ‘Induction’’, the company shapes what the employee thinks. The company gives its team of engineers the space, inspiration, and support to develop the next-generation solutions the internet needs. In addition, training helps to change the culture. The site is the location for its first permanent ‘Future workshop’. You are thus making digital education accessible to everyone. This benefits the society as a whole, ensures competitiveness and allows all citizens to participate. The free training courses in the Future Workshop are intended to make a contribution here.
Fifthly, the reward system has to be changed according to the culture change. The aim is to reward people who life the culture the most. The company is also working to empower more organizations to do this important work with a new Impact Challenge on Safety. It is a 10 million euro grant fund to support nonprofits, universities, academic research institutions, for-profit social enterprises and other organizations that are already working across Europe on a range of safety issues.
Sixthly, subcultures should be shaken up. Seventhly, the company should work for consensus.
5. Change management
The ‘Performance measurement review’ contains the performance measurement and incentives analysis to assess performance management system. The ‘Change management analysis’ comprised the people and cultural change analysis to evaluate the integration of human resources systems. ‘Managing Change’²⁰ offers a further approach to deal with the issue. I analysed the issue with the help of its key elements — the ‘Change framework’, ‘Change Roadmap worksheet’, and by the example of the case study Mirvac.
5.1. Change framework
Change management is a complex, multistage process. The ‘Change framework’²⁰ provides a model for the management — from current state through transition state to improved state. The first level is ‘Leading change’ by creating a shared need, shaping a vision, and mobilizing commitment. The second layer is implementation by ‘Changing culture and structure’. Implementation of change is characterised by making change last and monitoring the progress.
The key to cultural change is ‘involvement, involvement, involvement’ or ‘ownership, ownership, ownership’. Psychological safety and engagement serve as a foundation for change, collective risk taking and innovation. The cases of McKinsey²³ and Tessei²⁴ show that a bottom-up approach is recommendable over a top-down approach.
Managing cultural change, means answering three main questions: where are we going, how do we get there, and what’s in for the people. This can be difficult because people like where they are now. Challenges in change management are to follow through and that change is too abrupt, not transparent. Resistance is inevitable, but it depends what kind of resistance it is. In the case example of the Government Digital Services there was a resistance to digital, both factual and emotional. The key here is communication because people can take good and bad news but cannot take no news. The aim is to transform acceptors into persuaders and get the team members to turn deniers around through social pressure (Behavioral economics, nudge).
5.2. Change Roadmap worksheet
First, it is necessary to define the need for change²⁵. It is important to formulate an answer to the question ‘Why there is a need for change’. Therefore, ‘Organisational Behaviour’ explains the company’s need develop a global hub for the company’s Internet safety work and the challenge to grow its German site by 1,500 new jobs.
Second, the key to change is to create a shared vision. This means crafting and delivering a vision for change. The company’s vision is to develop a global hub for the company’s Internet safety work.
Third, mobilizing commitment to foster engagements is crucial. There should be an answer how the company mobilises its employees for change. In the case example Mirvac commitment was achieved via a documentary, gender group opining, high management involvement, and ‘My simple thing’ which highlighted what is in for the employee himself.
Fourth, the implementation of change by making change last and monitoring its progress is important. This gives answers to the question how to embed change in the company. Change should be embedded across three levels: program, team, and individual. At program level this comprises to introduce and consistently reinforce the values of transparency and continuous improvement. At the team level it is important to define the role of managers as enablers. At the individual level, communicate horizontally in 1-on-1 conversations and stories.
One example of a measurement model is Deutsche Telecom’s. They implemented change measurement through the KPIs 100% share price, 10% employee satisfaction, and 5% customer satisfaction. To monitor the success of the company’s change management program, I recommend to also use Financial Performance Index, Employee Satisfaction, and Customer Satisfaction.
6. Recommendation
In the above essay I applied the ‘Organisational Behaviour’ models and frameworks to explain the issue I faced at my previous employer. It was my client’s ambition to develop a global hub for the company’s Internet safety work and the challenge to grow its German site by 1,500 new jobs.
The ‘Guiding Framework’ offered the structure to analyse the issue — similar to the operating model analysis of the company: leadership and people development, structure and culture, and relationships. I did not treat the first element ‘direction and strategy’, the company’s ambition to develop the German Site as a global hub for the company’s Internet safety work. It was the company’s need to develop the Safety Engineering Center’s markets, clients and channels, and proposition and brands. Instead, I focused on the leadership, structure, and relationships elements which offered an approach to analyse through an operational strategy review. The Munich Site growth strategy required the analysis of the operational infrastructure, governance and structure, people and culture, and measures and incentives.
The levels of analysis ‘people management’, ‘managing culture change’, and ‘change management’ framed and organized the approaches to deal with the issue. The concept ‘Vertical and horizontal linkage’ provided an approach to deal with the people managing issues the company’s site faces. Based on the concept Talent management, Performance management, and Development and careers I recommend my client to manage the hiring, developing, retaining of high-qualified, international engineers as well as building the staffing enablement, managing the site growth, and scaling the staffing functions. The second element ‘Organisational culture’ offered the concept ‘Three levels of culture’ to analyse the organisational issue and the model ‘Recruitment, socialisation, leadership role model’ to manage the culture. Based on the model it is recommendable for my client to develop a site culture of One company and foster external and internal partnerships. The model ‘Change Roadmap worksheet’ framed and organised the issue to manage the change on the site. The client should but a focus on implementing the change by measures and incentives such as financial, customer, process, and people metrics.
7. References
[1] Stiles, P. (2020) ‘Organisations and Individuals’, ‘Organisational Behaviour’ Lecture Unit 1
[2] Stiles, P. (2020) ‘Organisations and Individuals’, ‘Organisational Behaviour’ Lecture Unit 1
[3] Stiles, P. (2020) ‘Organisations and Individuals’, ‘Organisational Behaviour’ Lecture Unit 1
[4] Stiles, P. (2020) ‘Managing people’, ‘Organisational Behaviour’ Lecture Unit 4
[5] Stiles, P. (2020) ‘Managing people’, ‘Organisational Behaviour’ Lecture Unit 4
[6] Stiles, P. (2020) ‘Managing people’, ‘Organisational Behaviour’ Lecture Unit 44
[7] Stiles, P. (2020) ‘Managing people’, ‘Organisational Behaviour’ Lecture Unit 4
[8] Stiles, P. (2020) ‘Managing people’, ‘Organisational Behaviour’ Lecture Unit 4; Roulet, T. (2020) ‘Leadership’, ‘Organisational Behaviour’ Lecture Unit 3
[9] Roulet, T. (2020) ‘Motivation and Performance’, ‘Organisational Behaviour’ Lecture Unit 2
[10] Stiles, P. (2020) ‘Managing people’, ‘Organisational Behaviour’ Lecture Unit 4
[11] Stiles, P. (2020) ‘Managing people’, ‘Organisational Behaviour’ Lecture Unit 4
[12] Stiles, P. (2020) ‘Organisational culture’, ‘Organisational Behaviour’ Lecture Unit 5
[13] Stiles, P. (2020) ‘Organisational culture’, ‘Organisational Behaviour’ Lecture Unit 5
[14] Stiles, P. (2020) ‘Organisations and Individuals’, ‘Organisational Behaviour’ Lecture Unit 1
[15] Schein, E. (1985): Organizational Culture and Leadership. San Francisco: Jossey-Bass Publishers, p. 42–54
[16] Schein, E. (1985): Organizational Culture and Leadership. San Francisco: Jossey-Bass Publishers, p. 42–54
[17] Stiles, P. (2020) ‘Organisational culture’, ‘Organisational Behaviour’ Lecture Unit 5
[18] Stiles, P. (2020) ‘Organisational culture’, ‘Organisational Behaviour’ Lecture Unit 5
[19] Stiles, P. (2020) ‘Organisational culture’, ‘Organisational Behaviour’ Lecture Unit 5
[20] Stiles, P. (2020) ‘Management of change’, ‘Organisational Behaviour’ Lecture Unit 6
[21] Stiles, P. (2020) ‘Management of change’, ‘Organisational Behaviour’ Lecture Unit 6
[22] Stiles, P. (2020) ‘Management of change’, ‘Organisational Behaviour’ Lecture Unit 6
[23] Stiles, P. (2020) ‘Management of change’, ‘Organisational Behaviour’ Lecture Unit 6
[24] Stiles, P. (2020) ‘Organisations and Individuals’, ‘Organisational Behaviour’ Lecture Unit 1
[25] Stiles, P. (2020) ‘Management of change’, ‘Organisational Behaviour’ Lecture Unit 6
[26] Stiles, P. (2020) ‘Management of change’, ‘Organisational Behaviour’ Lecture Unit 6
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