A Journey of Note
Company X is a fascinating case study for Build Trust First (BT1) to evaluate and offer recommendations for improvement. They are part of a much larger, international organization, trying to break into a fairly established industry in Canada while remaining autonomous from their European corporate offices. With the variety of resources and knowledge available to them through their worldwide business successes, on paper, it seems they are the superior company within the industry. However, new business development is slower than anticipated, and gaining market share in a country the size of Canada is a challenge.
After the SWOT analysis and the recommended strategic changes, BT1 now looks at five areas of strategic influence to be addressed in order to move Company X forward. Within these areas, there currently exists little to moderate strategic influence.
Recommendation #1: Improve VP Strategic Influence with the Strategic Leadership Team
Strategic influence must be championed at the top of Company X’s structure as it ensures alignment and agreement of organizational goals and objectives. Nowhere else is this more crucial than with the Strategic Leadership Team (SLT), specifically between the Vice President (VP) and the other members of the SLT. As the leader responsible for the performance of the whole organization, the VP must use his strategic influence over the SLT to strengthen and unify the team
Through the SWOT analysis, it is evident the addition of the VP to Company X within the last few years has been advantageous. Already, positive changes and clarity of direction are happening within the organization. However, there are interpersonal dynamics at the SLT level that are limiting the trust and collaboration efforts which are necessary for a team of this strategic importance. As previously suggested by BT1, the SLT must champion these values for the whole company by first modelling it within their team. It is this very area the VP must leverage his strategic influence to gain buy-in to these values. While BT1 believes the VP does have a level of strategic influence, demonstrated by the positive changes already occurring, BT1 recommends the VP work to develop his strategic influence with other members of the SLT.
Hughes, Beatty, and Dinwoodie, (2014) suggest a leader can achieve the following types of outcomes through strategic influence; alignment with strategic direction, the inspiration that leads to commitment, allocating resources, and sharing information at all levels of leadership. Any leader needs to recognize that without the ability to influence in all directions throughout the organization, their long-term success in affecting strategic action will be limited. Strategic leaders understand that relationships are the key to success as the execution of strategies require human capabilities (p. 41).
To develop his strategic influence, BT1 recommends the VP does a self-evaluation of his current effectiveness and determine areas in which to improve. By asking reflective questions, the VP will determine the extent to which trust exists between him and each member of the SLT. According to Hughes et al., (2014) trust is the foundational ingredient for strategic influence and it is dependent upon one’s character and integrity. To build trust, strategic leaders are; honest, take ownership of mistakes, acknowledge their strengths and weakness, allows others into the decision-making process, and helps to develop the skills of others.
Hughes et al., (2014) outlines a self-evaluation tool where each of the following questions are answered on a scale of 1-5:
- How well do you understand your impact on other people and how that impact affects the quality of collective work?
- To what extent does your network consist of a variety of people who are outside your routine work?
- How well you intentionally discuss and build trust with others.
- How well have you been able to navigate the political terrain without negatively impacting on your credibility?
- To what extent have you been able to develop a compelling and inspiring vision?
- How well have you been able to create enthusiasm and a real commitment to an image of the future in the hearts and minds of others?
- How well have you been able to find creative ways for people to discuss the undiscussable?
- To what extent do you explore the perspectives of other people to deepen your understanding of their point of view?
- How well do you read and understand the needs, styles, and motivations of others?
- To what extent are you able to use information to communicate with others in a way that is meaningful to them and influences them? (pp. 160-162).
Another way in which to establish trust is by building up credibility with coworkers by demonstrating consistency in performance, the ability to stay calm under pressure, a track record for making good decisions, or just old fashion accountability (Gleeson, 2016). Credibility is another crucial element for obtaining the buy-in needed for success.
To improve strategic influence with SLT, the VP should recognize it starts with him. He must lead with passion, be clear on his values, the measurements of success for the company, and the roles he needs people to fill to achieve that success (Davies, n.d.). In addition to a self-evaluation, the VP must continue to involve the SLT in the strategic thinking process and decision making as much as possible as this will create a shared understanding of the end goals and will allow for the input of diverse perspectives. Collaborative efforts will provide opportunities for mutual support and assist in the influencing process throughout the organization. When individuals know that their perspectives and opinions are valued, they feel compelled to participate in the strategy-making and implementation process (Hughes et al., 2014). The VP can further develop relational capital with the SLT by spending time outside of the work environment and getting to know each other on a more personal, social level. An activity like golf or an event of common interest will create a more casual environment for meaningful conversation. This will also help them to discover shared interests and values across the team (Hughes et al., 2014).
However, it will be necessary for the SLT to address an internal group dynamic to maximize their potential. Specifically, one of the four executives is underperforming in their duties and thus affecting the collective strategic influence and collaboration of the SLT. BT1 suggests the VP undertakes an intensive three-month process whereby he will identify specific areas this SLT member needs to address to improve their performance and collaborative approach within the SLT. Without noticeable improvement in this period, BT1 recommends the company part ways with this individual. The vacancy created by this action allows for the recruitment and replacement of this critical team member by the remaining three SLT members and will set the tone for the strategic task of addressing the need to change and achieve strategic objectives.
Recommendation #2: Improve SLT Strategic Influence with Departments
A second area to develop strategic influence exists between the SLT and the various departments within Company X. It is evident that a level of influence exists between the SLT and the departments due the high level of trust that has been fostered over the past ten years. This is evident to the high adaptability the employees have to change and the fact that no retention issues have been identified as a result of a lack of trust with the leadership of Company X.
In the previous chapter where the SWOT analysis and recommended changes were discussed, BT1 suggested that Company X look at a temporary slim down of their staffing structure. This may include the commissioning of an outside auditor to evaluate salary expenses and make specific recommendations. If the SLT was to proceed with this recommendation, it is vital that they maintain and even grow their current level of strategic influence with the various departments in order to protect the future of Company X. The SLT should consider a staggered approach to improving the necessary strategic influence. First, the onboarding of Department Directors and second, the strategic influence of an entire department.
Strategic Influence with Department Directors
BT1 recommends over a one month period each SLT invest one hour with every department director to achieve three main goals; (a) allow directors to explain their role within the organization; (b) share three things they are most looking forward to in the next six to 12 months; and (c) describe the three most substantial hurdles or challenges preventing them from performing well in these areas. Hughes et al., (2014) support this evaluation where they discuss the importance of spanning boundaries and that “involving others in the process helps to generate commitment in at least three ways… create[s] common understanding of entire picture… [allows] access to more information… [enables them to] develop an implicit understanding of [the] situation and proposed approach” (p. 181). BT1 believes this approach will allow the SLT to gain perspective of the individual and collective organizational perspective within their area of responsibility. The reference for this action comes from Hughes et al. (2014) where they advocate for leaders to gain strategic influence by putting themselves in the shoes of their followers. A further recommendation and an outcome from the preceding actions is to create a political or stakeholder map of the organization. By having the SLT members chart out the political landscape within their respective areas and then interconnect these politically influential stakeholder relationships, a compelling picture of the current status and areas for organizational restructuring can be understood. Hughes et al. (2014) explain this process when they say
Consider a particular challenge you are dealing with and trying to influence around. Draw a “political map” to demonstrate who might be connected or aligned around potential solutions to this challenge. Position those with similar opinions on the matter close to each other on the map, and highlight those with the most power to affect the outcome. Consider all the expected opponents, supporters, and those who might be affected or whose help you might need, even if they might not have a strong opinion. (p. 174)
Such a map is a helpful tool to understand the political nature of the organization and of individual’s ability to influence and be influenced within. Hellman (2017) explains the importance and operation of this mapping function preparing for potentially volatile meetings that require the conversion of an organization influencer from detractor to a supporter (para. 27). BT1 suggests Company X undertakes this political mapping function to understand where best to invest strategic influence in the upcoming restructuring and subsequent onboarding process. Figure 1 (Hellman, 2017) explains the stakeholder mapping function and results.
To realize the strategic influence advantage gained from the restructuring of the SLT and the further understanding gained from stakeholder mapping, BT1 recommend a full-scale restructuring of the organization to be discussed more fully at the end of this report.
Strategic Influence with Departments
BT1 suggests the key to success in the SLT having strategic influence with the various departments is to ensure the valuing of employees from an organizationally strategic perspective and to understand their contribution is much larger than just delivering productive work at the end of each day. Employees at Company X will respond by allowing themselves to be strategically influenced because they are involved and actively engaged at the outset (Hughes et al., 2014).
To allow for the development of a new, vibrant, and employee-led internal culture affecting and influencing external stakeholders, BT1 suggests the SLT will need to define and articulate the strategic vision of Company X. Achievement of this goal will require the SLT to invest in a two day offsite workshop to review Company X’s vision, mission, and values as well as evaluate current organizational strategic objectives. The critical outcome of this work will allow the SLT to devise a plan and schedule for each of the four SLT members to work within their specific teams to propose one or two strategic drivers, along with objectives to guide them, and prioritize actions to achieve objectives enabling a corporate-wide and objective-driven strategic influence. An important consideration during this exercise is the linking of departments to organizational goals. Hughes et al. (2014) provide additional perspective by asking the following questions “What is the overall goal of the project or initiative? How does that goal link to the organization’s goals? In what ways will the organization be in a better place because of this work? What steps are you taking to achieve the goals? What might people expect to see as a result of this work?” (p.187). Once the SLT has worked with their teams to create the one or two strategic objectives relating most specifically to their department, the SLT will then convene a one day workshop to evaluate the proposed strategic drivers. During this session, they will settle on the top five or six strategic drivers with the associated objectives. The outcome of this will be the creation of a company-wide strategic plan to be communicated at a two-hour national roll out. The final step in this process brings the engagement and participation back to the teams who will perform the work, allowing the realization of these objectives. Specifically, each supervisor will now create a set of annual personal goals, much like in a business plan, directly relating to the specific strategic objectives influencing their department and teams. These are reviewed every six months with their direct reports. BT1 further recommend performance pay incentives are tied directly to the achievement of these personal objectives.
Recommendation #3: Improve Human Resource Department Strategic Influence within the Organization
Company X has a relatively strong HR Department given the fact the whole organization is less than ten years old. However, the SWOT analysis did identify several organizational weaknesses within HR’s area of responsibility. This is most likely due to growing pains as an organization. Not all systems are developed immediately. Now is the time for the HR Department to reevaluate their work and to use their strategic influence to address these issues and move the company forward. Starner (2015) states this is the essential work of HR;
While the organization’s financial goals are often front and center in a top-level strategy, in most organizations, people and talent priorities are equally important. These may include attracting and retaining top talent, developing new core capabilities, or enhancing diversity and inclusion – all of which are driven or supported by HR in some way. HR can ensure that talent and people factors are addressed head-on in the organizational strategy. (para 4, 5)
Through the SWOT, BT1 identified many areas currently limiting HR’s strategic influence within the organization; limited internal advancement opportunities, insufficient professional development training events and courses, and low retention rates of salaried employees. As a result of Company X undertaking the recommended organizational and departmental restructuring efforts, many new employees will be joining the organization. There is a need to address the onboarding requirements of these many new employees as they join Company X. Given this, BT1 highly recommends the SLT create best practices and subsequent standard operating procedures for an enhanced onboarding process. This process will ensure each new team member has orientation training on strategic objectives, organizational policies, and corporate culture. This is a preliminary step in increasing HR’s strategic influence within the organization.
Increase Strategic Influence through Onboarding Process
Support for a highly effective onboarding process comes from Annette Matthies, founder and CEO of Aspen Edge Consulting, LLC and an expert in onboarding new employees. She notes, “a solid onboarding process is the pathway to getting new hires integrated into company culture, accelerate productivity and create long-lasting commitment” (Smartsheet, n.d.).
A number of onboarding best practices exist and given BT1 does not purport to be experts in this field, we offer this list of “12 Organizational Best Practices for Onboarding” as defined by expert Tayla N. Bauer (2013) for the SLT to consider when creating and implementing this within your organization.
- Implement basics before the first day on the job
- Make the first day on the job special
- Design and implement formal orientation programs
- Create and use written onboarding plans
- Be participatory
- Consistently implement onboarding
- Monitor progress over time
- Utilize technology to facilitate the process
- Recognize onboarding takes place over time, use milestones: 30, 60, 90, 120 days on the job up to one-year post-organizational entry
- Engage key stakeholders in planning
- Include key stakeholder meetings
- Be clear concerning the who, what, when, where of onboarding
Increase Strategic Influence with Department Directors
Currently, Company X’s salaried workforce is suffering low retention rates, impacting the organization’s bottom line, brand, and ability to become an employer of choice. This poor retention is a result of limited advancement and development opportunities as well as morale concerns in the non-unionized workforce. As HR works to implement new development and training initiatives, they must also increase their strategic influence with Department Directors. Retention of high performing employees is a cause the HR department must champion on behalf of the whole organization.
BT1 recommends the HR Department engages in discussions with Department Directors concerning employee retention strategies. One such example is to implement stay interviews which comprise of questions that “open the floor to a conversation with questions, comments, and ideas for improvement. In addition to bettering the company, stay interviews give the employer a chance to understand the goals and career interests of the employee” (Doyle, 2018, para 3,4). Furthermore, the HR Department has the opportunity to influence the morale of Company X’s salaried employees by working with the Department Director to proactively make changes to improve the work environment. While results may not be immediate, research indicates that such HR initiatives are “pathway[s] to future influence” (Florkowski & Olivas-Luján, 2016, p. 181).
Recommendation #4: Improve Strategic Influence with Current Customers
Company X has established long-term contractual agreements with their existing customers and must leverage these relationships to infiltrate the industry further. Company X will protect the trust that currently exists with their customers by delivering over and above on their business commitments. Hughes et al., (2014) reveal “trust is built and broken over time based on small subtle acts and common mistakes” (p. 163). As Company X has fostered initial and ongoing trust with their customers’ facilities, they must now turn to assess their product and service value.
Starting from Company X’s most recent client performance report of 77% excellent customer service (Company X, n.d.) we need to understand Company X’s current strategic influence and how we can recommend to improve influence and retain their current clients to build on their existing brand. BT1 recommends for the account manager for each customer to meet with their counterparts and ask the following questions stemmed from LDRS 614: Mission, Marketing & Quality (Atha, 2018):
|How has Company X’s service changed in the last year?||Need to understand the following:
|Is our target market still the same at our facilities?||Need to understand the following:
|Is our facilities services still relevant?||Need to understand the following:
|Do we trust and rely on Company X as a strategic business partner?||
By understanding and analyzing responses to these questions, it will allow for Company X to assess their current level of service, competency, and credibility as a service provider and to progressively position their organization to be a provider of choice and to further their strategies. If customers request new technology, increased efficiency, or an adjustment of provided services, sales representatives should focus on solutions that help customers achieve a particular outcome (Wong, 2017). Customers want to their perspectives heard and know what they value is also valued by their service providers. Discovering their needs and surpassing expectations will demonstrate that Company X is focusing on more than just their bottom line (Fallarino, 2017). Gaining trust is the most critical factor leading to long-term relationships and repeat sales (Edlund, 2015).
This is an area where strategic influence over market share is monitored continuously and improved. Therefore, BT1 recommends Company X use their existing customers as a critical strategy to disrupt the Canadian market through a story-based marketing plan. Company X’s account managers will be required to work with a third a party marketing firm to influence customer relationship and leverage trust to establish a strong referral campaign.
Additionally, Company X must use significant resources to make a memorable marketing campaign. Customers who are publicly endorsing a company, generally want to be associated with excellence, quality, and “trend worthy” initiatives. The selection of an outside marketing firm with a credible track record is crucial. To provide guidelines for selection, BT1 recommends Company X look for marketing companies who use Franz’s (2018) cornerstone principles of marketing:
- The Principle of Packaging: The way you package your product or service is a deal breaker. If you sell a service and offer just one service, you still need packing. A package is a combination of items creating an offer to support the client in accomplishing their goal.
- The Principle of Differentiation: You want to be the red crayon in a box of white crayons. You must know how you are different from your competitors and convey that in all your messages, so your prospects pick it up. If you think you don’t have any competitors, you do, leverage your difference.
- The Principle of Reciprocity: The principle is an exchange, and is about relationships and networks. Build your vendor team, your Research & Development team, your administration team, your strategic alliances, and your attraction will multiply. This works on the principle of valuing relationships. (Atha, 2018)
Reciprocity is the foundation for the strategic influence Company X must use with their customers. While it is a transactional relationship as one is paying for a service, the other provides, the strengthening of these relationships over time will reap the rewards for both parties, financially and with improved services.
As the 21st century has evolved, the business world has become a highly competitive culture, driven by people and technology. To be successful in today’s world, we need to understand the current reality and desired future of Company X, identify their leadership competencies, as well as the trends and needs of existing and prospective customers. According to Kotler, Kartajaya, and Setiawan (2017), ” a relationship between brands and customers should no longer be vertical but instead be horizontal. Customers should be considered peers and friends of the brand. The brand should reveal its authentic character and be honest of its true value. Only then will the brand be trustworthy” (pp.12-13). Lastly, to be strategically influential, Company X must build on the current trust of their brand and leverage their existing customer relationships to move ahead.
Recommendation #5: Improve Strategic Influence within the Industry
This final recommendation will be the hardest and most ambitious one for Company X to tackle. The simple truth is Company X currently has very little influence within the industry because of the lack of brand awareness and a relatively small customer base. Add the geographical size of Canada, and it becomes very daunting. However, in order to become a global industry leader and lead in the Canadian market, Company X must meet this challenge head-on.
One of Company X’s most marketable strengths is they are part of an international company and an industry leader in many countries around the world. Corporately, they have the experience, expertise, and resources their Canadian competitors do not have. Their primary barrier is that Company X is expected to infiltrate an established Canadian market, autonomously from its corporate counterparts. The question then becomes how does Company X leverage the corporate resources and knowledge available to them to increase their strategic influence within the industry? Is it merely enough that Company X uses their resources to differentiate their customer service experience to grow and prove their brand within Canada? BT1 believes more is required.
In a previous chapter, BT1 recognized the opportunities for Company X to use influence to gain customers. Predominantly this was proposed in the form of a marketing plan. However, there are ways Company X can strategically influence the industry in their favour.
Strategic Influence through National Contracts or Targeted Industries
In the previous section, BT1 recommended developing strategic influence with their customer base in order to build a referral program. A step further is to take existing customers and target specific industries so Company X can become “specialized” service providers. While facility management is a general service, there are opportunities for industry-specific services to be developed. Company X currently has contracts with a government agency, airports, and a health care provider. It would be prudent for Company X to gain information and knowledge from their existing customers in order to provide an industry-specific package for new customers or gain national contracts.
For example, their current government agency has locations across the country. There is an opportunity to pitch a national contract that would save this agency through volume of service provided. Additionally, Company X can take any learnings from their current customer to tailor a proposal specific to this culture of this agency. If security for the facilities is a concern, Company X can leverage their existing corporate relationships around the world to demonstrate a high level of competency in providing facility security.
Strategic Influence through Environmental Impact
A second consideration is to use their state of the art technology and proven track record in Europe to showcase the positive environmental impact their international customers currently enjoy. Through energy efficient initiatives, Company X’s municipality customers are experiencing lower costs and now are able to promote their social impact to their constituents. While environmental sustainability is a value within North America, Canada is behind many of its European counterparts (EP1, 2018). Company X would do well to showcase their international successes and aggressively go after this market. There are a couple of different options of approaching this.
The first is to do a showcase where city planners, targeted industry leaders, and other potential customers are invited to a demonstration of the technology, real life case studies with stats on cost savings and environmental impact, as well as a round table discussions on the needs within the North American market. A second possibility is to target municipalities that are expected to see substantial growth within the next 10-15 years, thereby needing to expand their infrastructure. Towns in Ontario like Milton, Whitchurch-Stouffville, and King have grown exponentially between 2011-2016 with very little signs of stopping (Statistics Canada, 2017). These municipalities are outgrowing their existing infrastructure and will need to find sustainable ways to service new developments. Company X has the resources to do this in a cost effective, environmentally responsible way.
Organizational Design Recommendations
Company X’s current organizational design is a typical, single business structure with a relatively flat hierarchy. It would be sufficient and even beneficial for a company whose focus is on a specific industry and region. However, as Company X intends to not only grow but become an industry leader within Canada, their organizational design must be structured in such a way to support their strategic initiatives. BT1 has outlined five suggested areas to improve Company X’s strategic influence. The current structure would support many of the internal recommendations to some degree but may not prove to be sustainable. Therefore, BT1 is proposing two organizational designs which will require implementation at different stages of organizational growth. The primary driver for these changes is to strengthen the current company and set up a structure for growth.
The first organizational change is a matrix design as demonstrated below in figure 2. This matrix represents the main profit centers within Canada as determined by geographic location as well as the key departments within the organization. A Regional Director is in charge of each division, and they oversee the various department heads underneath them. Simultaneously, there are Department Directors who provide resources, training, and quality control for all the department heads across the various regions. Company X will create a Senior Management Team comprising of the Department Directors and the Regional Directors along with the VP.
A matrix design will allow Company X to share knowledge and resources across geographical locations with the purpose to establish standards of work output as well as the development of new business. The size of Canada works against Company X is this regard, and so an intermediary step must be taken to accommodate the sheer expanse of territory to be covered.
One of the benefits of a short-term matrix design is it supports lateral cooperation in an organization that is increasingly growing (Vantrappen & Wirtz, 2016, p. 3). This is important for Company X as they need to increase their lateral strategic influence across departments and within their various divisions. A matrix reduces project difficulties as it brings “cross-functional employees together to concentrate everyone’s attention on requirements” (Johnson-McPhail, 2016, p. 58). This coordination of focus and effort will allow the SLT to maximize their strategic influence across the organization. Additionally, the HR Department will have access laterally to influence Regional Directors as well as other Department Directors concerning their development program for employees. Once the divisions become more autonomous, the matrix design will then become a hindrance as alternative methods to facilitate strategic influence will become necessary (Vantrappen & Wirtz, 2016, p. 4).
The matrix model provides not only the support of resources and knowledge from centralized processes, but it will strengthen the overall capabilities of each profit center, preparing for the final goal of a divisional structure. It is essential to manage this shift in structure, minimizing as much as possible, conflicts and confusion. Therefore, by maintaining the same dimensions of the matrix and merely removing the oversight of Department Directors, it will make the transition smoother and more successful.
The divisional structure (seen below in figure 3) will see each profit center become its own organizational entity with all the functions reporting within that division. By decentralizing the functions, Company X will be able to take all the learning and standards gained in their matrix model and continue forward within three highly autonomous divisions. Networking across related departments between divisions would still be of value to ensure maintaining the corporate culture and best practices.
Within the division model, there is still a corporate level of oversight of development, policies and company-wide best practices (Galbraith, 2014, p. 194). However, the ability for each division to focus on a defined region allows for more consistent relationship development with customers and understanding of that specific culture. This leadership structure also provides direct access to corporate management and can advocate for resource allocations or any other support necessary to achieve strategic outcomes (Gillikin, 2018). This will be key for Company X as each region does have their cultural nuances and strategies will need to be accomplished in different ways. There is also a value of economies of scale that a division model offers which will support Company X’s strategic goals of growth (Boleman & Deal, 2013, p. 81).
As financial and strategic control still comes from the corporate office, alignment of organizational objects are still achievable (Galbraith, 2014). Additionally, this structure will continue to allow the SLT to have the necessary strategic influence over departments and managers and their regional customers. Internal strategic influence will no longer be based upon lateral relationships across the organization but will be contained predominantly within each division. Likewise, increased market share will allow divisions to exert their strategic influence within their territories.
BT1 has provided Company X with a thorough SWOT analysis, identifying five strategic changes and recommendations for implementation. However, we would be remiss if we did not also identify the areas of strategic influence that will move these plans forward. As a result, BT1 recommends three internal and two external foci that requires improvement. First, it is necessary for the VP to evaluate his influence with the SLT and then, as a group, address interpersonal dynamics that are currently limiting their influence within the organization. Additionally, the HR Department must take some important first steps to correct development and morale issues. Company X must also look at maximizing their existing customer relationships to expand their customer base through a strategic marketing campaign and referral program. And finally, Company X should seek to increase their strategic influence within the industry to create a demand for the products and services that their company can provide.
These recommendations will require a slight shift in organizational design beginning with a move to a matrix model to increase the collaborative efforts necessary for internal strategic influence. Given that Company X is seeking to establish itself across Canada, preparing for a the inevitable divisional organizational design is a strategic consideration. It is with this proposal that BT1 concludes that Company X is not far off the path to success.
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