Challenges faced by Saltshaker Gosh when he Joined Apex: Everybody did things on their own time, attitude towards customers: “Well call you back” No formal business procedures Decisions – Key Executives People had particular expertise, but everybody did anything People did whatever interested them Nobody had any sense of their JDK Structure – Informal & Fluid Employees – Focused, Committed, Hardworking, Worked in close interaction, Responsive & Effective Innovative technical solutions Project based, Continued the structure when the projects increased Quick Cash spend and no Expense monitoring
Atmosphere changing from Entrepreneurial to Chaotic Fire-fighting every day, No underlying planned structure Anything a week away had no priority Operation Sequence: Brian (Ideas) 0 Michael (Reality) 0 Allen (Sales) D Mark (Money) Attrition due to chaotic environment Customer Complaints: No response, technical assistance requests not addressed Increased demand could not be handled Fall behind schedule, miss installation dates, failures in product development – No Solution: System of Accountability and Structure, Defined areas of responsibility Innovative Structures:
Circular Structure: Concurrent circle expanding out from middle circle. (Innermost) Senior executives 0 Managers & Employees (Functions) 0 Customers (Environment) Non-hierarchical organization in which information flowed continuously and freely within organization and between the organization and the customers (environment) Failure: a. Employees could not relate and were completely unfamiliar b. New hires didn’t know how to fit c. Power structure, Decision making power, Performance evaluation – all grey areas d. Completely geared towards responsiveness and planning oriented tasks failed e.
A mentality developed that the customer was the enemy’ Horizontal Structure: Traditional vertical structure transposed in sideways Failure: a. Employees unenthusiastic Need for Control through traditional hierarchical structure. Hierarchical, Functional Structure: Functions organized as 5 teams: Sales/Marketing, Software Development & Services, Engineering & Technology, Operations, and Finance, HER & Admit. Issues: How many distinct teams, Who should head, Responsibilities now and after growth Diagram: (which minimized the sense of hierarchy) Horizontal (for functions reporting to CEO
Gosh), displeased the board of directors Titles given informally, but people cared a great deal about the titles, desk locations – Start of Company politics Succeeded in focusing on completion of tasks System of accountability was in place Heads started creating sub-functions Popularization of teams Inhibited working relationships, increasing expenses Personalities arose, Standards set up by individuals rather than company policies The ‘Ego Box’ Meeting Source of Authority: Functional, not managerial expertise Difficult to measure managerial expertise
Need for broader functional expertise: Reshuffling, Hiring, Promoting and Demoting Emerging need of the company – Quality control instead of fire-fighting by the “great Band-Aid” people Paul Godsons: Product Teams, Functional teams informed about product happenings on a daily basis No system specified who had the authority to make which decisions Conflict between Product managers and Operations Product teams did not know where their authority ended Senior executives attended meetings, but needed time for their main responsibilities No systems to set priorities about how resources should be allocated among the am Business Teams – Intermediaries, representatives from Senior management, Authority in decision, resource allocation Shortcomings: a) More tail than tooth b) Escalating Infrastructure Costs c) Customer Focus Diminished Divisional Structure: 2 Broad Divisions: Inter Carrier Services (CICS) & Cellular Management Information Systems (IS) Operations: Utility functions that serviced both divisions HER, Finance & Admit – 2 Functions Each with 1 Head 0 CEO Gosh Advantages: a) Improved accountability, budgeting, planning b) Employees focused on meeting financial goals ) Cooperation within divisions d) CEO spend less time addressing Operations and more at planning its strategic direction Issues: a) Resource allocation by Senior Management perceived as inequitable b) Lot of Second guessing and discussions on politics on resource allocation c) Divisions wanted control over their resources d) Buy things in triple because of coordination difficulties in sharing the resource e) High walls between the divisions – No communication flow, No cross pollination of ideas, No new product development ideas f) Divisions began to act like small impasses: Own business procedures, play “games” with financial statements (difficult to assess the financial status of the company) Divisions to present funding requests on an individual project basis Set Company Theme: Quality and Created multifunctional multi-divisional quality teams, Centralized Product Development Teams, Rotation of Employees across divisions Josh’s Structure Philosophy: Change structure every 6 months, 10% monthly growth, 50% growth 0 Change in Organization Structure People identify and give suggestions to a problem
Ted baker: Operations incorporated into the other 2 divisions, Data Processing – Shared & Centralized, International Business – 3rd Division Quick Behavioral Changes to Structural Changes Clear Communication of Financial Targets to mitigate the Uncertainty arising through structural changes: Targets established Stability Incentive Scheme, Resource Allocation System, and Other systems had to reinforce the structural changes (Bonus System to foster teamwork) Post DES Acquisition Follow Deed’s requirement – Financial planning systems, Resource allocation systems, Administrative procedures CEO planning strategic direction of Apex within DES Divisional Structure and Structural changes in context with DES Do you think Shirker Gosh did a good Job? Chaos to Order CEO involved in everything to minimal interference in operations and more focus on Strategic planning Quick response to changing organizational behavior Focused on scientific way of Structural changes based on innovative as well as traditional hierarchical structures Delegated more power to employees as per the structure Created a sense of Accountability and Responsibility within the organization
