Company X is a well-established vehicle rental agency in Surrey, BC. They have operated for almost two years and serve local and international customers. They have significant growth opportunities and relatively simple weaknesses to strengthen (see SWOT Analysis, Team Assignment 2). The Caravan proposes the following strategic influence development plan for Company X below. It addresses the following six areas of strategic influence as set out by Hughes et al. (2014): building trust, managing the political landscape, boundary spanning, involving others, connecting at an emotional level and building and sustaining momentum. Developing Company X’s strategic influence plan will best happen through a Caravan consultant facilitating the following process. If a consultant is not possible, the leadership of Company X can use the following descriptions and instructions to examine, plan and develop their strategic influence.
The Caravan suggests going through the following activities with the leadership team of Company X, printing and collating each Appendix for each leadership member and then repeating the process and the Appendices 6 months from the present. Doing the activities twice will show growth in the strategic influencing of Company X’s leadership. Evidence to confirm this stem from the commitment of the team leadership through their continued participation. According to Hughes, et al., (2014), accountability breeds commitment. Importantly, strategic influence is, at its most basic, built on trust. And trust is established over time, through many interactions, not only in one situation (Hughes et al., 2014). Company X must keep this in mind as it seeks to build its strategic influence, becoming aware of all its interactions and how they develop or break trust in the company. Company X management must be mindful of all its relationships and understand that these relationships are the key to their success. This extends to relationships where the leader has no power over the person – perhaps upward management or relationships with potential customers or competitors. Managing relationships in all directions in the company (downward, upward and outward) well will improve and extend their strategic influence.
To manage relationships effectively, Company X must take stock of where they are at present and the state of their strategic influence. To do this, Company X leadership members should answer questions in Appendices A to G at the end of this chapter.
Company X will start with Appendix A and rank themselves on a scale of 1-5, with five being effective and one being ineffective with significant improvement necessary. Following this, Company X will take the five questions with the lowest score and the three questions with the highest score and fill out Appendix B, a reflection tool to extrapolate the results and plan future action based on the results of their responses to the appendix questions’ in this document.
After becoming aware of the current state of the relationships around them, the leadership of Company X is now ready to examine their level of trust with those around them. It is imperative that Company X understand the three C’s of trust: contractual trust, competence trust and communication trust (Hughes et al., 2014). Contractual trust is the understanding that the parties involved will do what they say they will do and deliver what they commit to; this trust is about a human’s character. Competence trust is about a person’s skill and ability to do a particular task; this trust is about a person’s capability.
Communication trust is about telling the truth, keeping confidences, and sharing information; this is the trust of the disclosure. Company X should begin with understanding these areas of trust and evaluating themselves in these areas with all those around them, from employees and co-workers to customers, potential customers and other stakeholders, such as contractors (maintenance and vehicle repair companies, insurance companies, etc.). To evaluate themselves, the Caravan advises Company X to complete Appendix C, Company X should retake the questions in Appendix C every month between the present and the six-month mark. Doing so will strengthen the leadership’s build-up of trust.
Following on building trust, the leadership of Company X must understand and be adept at managing the politics involved in the work. The company must begin to think about how they can influence others “while maintaining their credibility and remaining authentic” (Hughes et al., 2014). Leaders who do this “appear not to have [political skill]. Truly skillful execution of the behaviors associated with politics is genuine, authentic, straightforward and effective. Leaders who are not politically skilled come off as manipulative or self-serving” (Hughes et al., 2014). To do this, Company X must complete the following exercise:
1. Each member of the leadership should write out the vision and mission of Company X to the best of their memory.
2. Each member must then confidentially write why they are working for the company and what they contribute to it.
3. Each member should identify three issues facing the company and describe how they can contribute to the solution of the problem (Hughes et al., 2014).
Doing this self-reflection will clarify for the Company X leadership what their role in the company is. It will help to align each leadership member to the vision and goals of the organization and move the vision and mission of the organization from theoretical to practical. Being aware of the exact reasons people are acting in the company leads to the next step in developing strategic influence in Company X: spanning boundaries.
When Company X leadership is clear on their vision and goals for their work individually, and as a team, they must leverage this knowledge to be deliberate with their influence (Hughes et al., 2014). To do this, each leadership team member must consider their relationships in all directions; upwards to board members, outwards to other stakeholders such as potential customers, maintenance companies and insurance and downwards to employees. The most effective way to do this is to visualize their relationships. Each Company X leadership member should complete Appendix D, mapping Your Influence. The exercise will move Company X leadership from an “us vs. them” mentality to a “us-and-them” mentality (Hughes et al., 2014). It is essential to get individuals or teams who usually do not work together to see the results and value of their interactions. To understand the value of collaboration, Company X leadership must have a basic understanding of systems thinking (Senge, 2006). To make systems thinking very accessible, the Caravan team suggests that Company X watch the video Systems Thinking: A Cautionary Tale (cats in Borneo) (https://www.youtube.com/watch?v=17BP9n6g1F0). To reflect on the video and its implications for Company X, leaders and employees must answer the following:
- How does my area of responsibility (sales, HR, etc.) affect the other areas of the company?
- What assumptions do I have about my interactions with three other areas of the company?
- What assumptions do I have about the role of three other areas of the company (Hughes et al., 2014)?
The fourth step in developing strategic influence in Company X is for its leadership to consider how to involve others in strategic thinking. Company X leadership will need to find who else should be included in the strategic plan and running of the business, for example, the employees. The effect of involving others is it increases commitment in three ways: in improving understanding of the situation, in increasing agreement and support of the direction and valuing those involved (Hughes et al., 2014). Developing the strategic influence of Company X in engaging others in strategic thinking is an emergent process and must be handled with care. One way to do this is to approach a change or project as an experiment, to allow others to be involved without a presumed outcome (Hughes et al., 2014). To help Company X experience this, the Caravan recommends choosing a situation or change in process and completing the activities in Appendix E.
The fifth way to create strategic influence in Company X is through connecting at an emotional level with those around. This is to go even deeper with involving others in the strategic thinking and spanning boundaries. Involving others and spanning boundaries only works if people engage at an emotional level, which means bringing the work to life. Bringing life takes place through caring personally about the process and its outcome. The first step to doing this is for Company X leadership to know what is essential to the others involved. To practice thinking from others’ points of view, Company X should complete Appendix F. This allows the leadership team to understand the process of switching from providing rental vehicle insurance to providing ways for customers to purchase it from a third-party as part of their online booking experience from multiple points of view. After completing Appendix F, Company X leadership members should examine and share their answers. In doing this, it will be important to note how making the change to third-party insurance booking meets Company X goals and how the various individuals mentioned in Appendix F would connect with this goal and how their goals could align with this (Hughes et al., 2014).
The final step for Company X to complete is to understand how to build and sustain the momentum they create in their strategic influence development. Strategic change takes time and does not always happen linearly. Company X must remember three things along the journey: to be patient in the change, to take the long view and to celebrate successes along the way (Hughes et al., 2014). To see any strategic change, happen, there will be bumps along the way; Hughes et al., comment that “[e]xecution cannot be flawless right away if the change is significant” as “performance drops because the people in the organization are learning new ways of operating” (2014).
Critical to the sustainability of any change is patience and the understanding that mistakes do not mean complete failure and lack of results also do not indicate failure. If Company X confuses errors and a lack of instant results as a failure of the strategic change, they will miss out on the long-term positive effect of the change. This will break the momentum that is forming. To undercut the dangerous impact of a lack of instant results, Company X must take the long view and celebrate the successes that do exist. Company X leadership will take a walk down memory lane and remember the way Company X began; they will answer the questions in Appendix G and debrief as a team.
Following the team debrief, the Caravan consultant will give Company X a gift of an orchid plant and explain its significance as follows. An orchid is a unique plant and one that does not sell cheaply. Its beauty and fragrance bring it a cut above many other flowering plants and earns its place in visual art. The Orchid has a unique flowering pattern; once it flowers, the bloom may last up to six months. Once it falls off, the plant lies dormant for at least this long and sometimes up to nine months. During this time, the plant is storing up the nutrients needed to bloom. The plant is not dead. Following this period of apparent inactivity, it will thrive again, producing beautiful flowers. Keeping the orchid in a visible place will remind Company X of the sometimes-invisible progress and change happening in the organization itself.
Strategic change takes time. Many significant strategic changes take three to five years (Hughes et al., 2014). During this time, it is important not to shorten or end the project for lack of apparent results. While it is natural for people to desire quick and visible results, taking the long view will build the momentum of and sustain the change project. To keep from breaking the momentum of the change, Company X must plan to celebrate the small successes along the way and revisit the original plan periodically to see how far they have progressed. Celebrating the achievements in whatever way is appropriate will provide the snowball effect, maintaining and increasing momentum with each success. Appendix H will offer a tangible way to measure progress and record it.
Using the six steps above to improve strategic influence will take Company X time. To experience the full effect of the process, Company X will review the actions and repeat them periodically. Reviewing the activities and repeating them in six months ensures Company X will remain focused and aware of its strategic influence development.
Company X work in progress
Company X is a corporate business set up about two years ago with a vision of serving people by providing them clean and newer rental cars at a price everyone can afford. It has been successful in its mission, and its vision is to ultimately expand to all North American airports and eventually to Europe. So far it has been successful and has grown to several locations in Canada and the USA. The company is new and has carefully formulated its policies to make the process of signing the contract and picking up a car as comfortable as possible. People from all over the world rent cars from Company X and can enjoy their vacation to the fullest in a foreign country. Employees of Company X comment that working with the company is enjoyable as they meet people from different countries and say, “the happy faces after you’ve made their vacation travel easier are undeniable rewards.”
The future for Company X is bright as they seek strategic partnerships aiming to reduce losses in revenue through parking fines. The proposed moves to form an alliance with a parking specialist to reduce parking fines by at least 95% is projected to improve revenue by at least 30% over the next two years while the alliance is under review.
The organization started as one location in Toronto and has now expanded to multiple locations in Toronto and locations in Calgary, Edmonton, Vancouver, Chicago, and Orlando. Recently the company has signed a deal with a European car rental company, and it is on its way to accomplishing Company X’s vision of expanding across the world. One of the sister locations has also signed an agreement with a movie production company and is supplying cars to them. It is one of the most significant accomplishments of the brand and has boosted revenue. It was almost impossible not to notice the pride in the regional manager’s voice when he talked about the achievements of the company. He added that the company strives to be transparent, feasible and accessible; transparent in its policies, feasible regarding costs and accessible by being global and being open to customers from all the countries in the world.
One of the current employees pointed out two main things that make her proud to be a part of the company. First, the culture in the company is to help the customers, and it is encouraged to its maximum level. For example, if the customer does not qualify to rent with this company, the agents help the customers to make reservations with competitor car rentals to make sure the customer does not suffer. This kind of approach goes beyond competition and jealousy is commendable. Secondly, leaders are real examples of servant leaders. When needed the top managers get on the floor and clean cars to make sure everything stays in order. People do not feel threatened to make mistakes as the leaders are very patient. Leadership happens through management’s modeling the company’s standard of behavior, and this makes everyone feel more accountable and responsible for the company. This kind of environment is rare, but Company X surely shines brightly because of its work environment. It is safe to say that the company is on the right track and with some strategic advancements it can grow indefinitely.
Organisational Design in Company X (and further suggestions):
The Caravan teams following strengths, weaknesses, opportunities, and threats analysis (SWOT) for Company X identifies the strategic influence development following a hybrid organizational model design. This develops through a combination of attributes from a network organization design, and multi-business strategy. This combination builds on the current single-business design on which Company X currently operates to a potential multi-portfolio business profit center creating multiple streams of revenue and developing a competitive advantage. We support the notion by Galbraith (2014) which states: “Our interest is in designing an organization and network in which the company can jump from one or one set of advantages to the next” (p. 170).
Company X’s threats, weaknesses, and opportunities include, parking space for their inventory (resulting in parking fines affecting revenue), understaffing, competition from Uber, who does not own any vehicles but provides a viable alternative to our customers.
To mitigate these threats, and weaknesses to capitalize on opportunities Company X must form alliances/joint ventures with businesses specializing in parking space, attract more staff through specialists in recruitment or head-hunters; (recruiters), and test the market using the Uber model on a trial basis to check viability and compatibility to stay competitive.
According to Galbraith (2014):
The network organization arises when a company begins performing and owning only those activities where it is superior. It would partner with other companies to acquire the other activities where these outsiders were superior. Combined, this network of companies forms a superior business unit performs all the tasks along the value chain (p. 169).
Company X hold strengths in good quality cars (latest models) and they currently sell their service at 50% less than other competitors in this space. As such, Company X believes these areas will provide the most value to the customer in the value chain and therefore “These capabilities are the ones for it to adapt, build, own, and keep” (Galbraith 2014).
ParkRite specializes in parking spaces for businesses located within 10 minutes’ drive from Company X’s premises. Coincidentally, there are old factory premises which ParkRite owns which they acquired for future business growth projection. Acquired in 2014 the land still lies undeveloped as their business has not grown as anticipated. Company X can form an alliance or joint venture to develop this land into parking space thereby creating revenue for ParkRite while solving Company X’s parking challenges.
Approaching this alliance, however; Galbraith (2014) suggests: “The priority when selecting a partner is to understand the potential partner’s strategic intentions. Other factors include the compatibility of goals, values, styles, and time horizons, and the selection process requires a lot of time and effort from management” (p. 188).
ParkRite has been trading for 22 years in the parking space niche and owns several spaces across BC Canada. They, however, have not been in partnership or alliance with another business before thereby doing the exercise of evaluating their past performance impossible. They envision providing value-laden secure parking services and valeting as an additional perk to businesses. This relates to the model of business for Company X as it potentially enhances the presentation of their cars.
Galbraith (2014) posts: “The design of the network organization consists of four key choices: building the right types of external relationships, which companies to partner with, how to structure the partnerships, and determining the kinds of supporting policies that are needed” (p. 180).
Building the right types of alliances.
Usually, the parties reveal their long-term plans to one another and participate in jointly developing products and services (Galbraith 2014, p. 183). As Company X’s vision is market domination in the car rental space by increasing their reach to greater Canada initially and later internationally at all airports, and ParkRite seeks to open new markets beyond their current portfolio. The proposal by Company X into an alliance is mutual and beneficial to both parties. ParkRite and Company X can jointly outsource staff for this joint venture while ParkRite provides the management through what Galbraith (2014) calls: “the operator model, which happens when one partner takes the management responsibility for the joint activity” (p. 189). He adds: “The operator model has been more successful than the shared model. It makes one company responsible, minimizes conflicts, and leads to faster decisions. (Page 190).
Which companies to partner with
Galbraith (2014) states: “One is the substantial customizing by the supplier for the unique advantage of the customer. In return, the customer makes the customizer the sole or preferred supplier, which reduces the risk and vulnerability for the supplier and ensures the volume to pay for the effort” (183). In the new venture between ParkRite and Company X; Company X is the sole customer, and therefore agreements are drawn to ensure compliance to mutually satisfy the contract. Such agreements reduce the risk of loss of customers for the new venture as long as Company X is operational. This improves the bottom line for both organizations as the agreement places margin for both parties.
How to structure partnerships
“The most involved equity relationship is the joint venture. Here, a separate company is created with its own equity, which is usually split more or less equally between the parties” (Galbraith 2014, p. 185).
Determining the kinds of supporting policies needed.
Galbraith (2014) posts: “The design of the network organization is completed with the creation of supporting policies corresponding to the two remaining elements of the Star Model: the selection and development of people and the reward system. Both are enlisted to create behaviors, values, and norms that support the partnering process” (p. 192).
In this case, since the “operator model” (p. 189), is employed, management is provided through ParkRite as they already operate a similar business, with the rest of the staff coming from a separate arrangement stemming from the joint venture – thus outsourcing to a third party; recruitment agency.
The subsequent steps taken by Company X to secure its market share will be to commit at least 5% of their total fleet after the formation of the joint venture and join the Uber, business model. This move provides a share in their main competitors’ market. Uber is the main competitor to Company X, and the Uber model is simple to implement. Simple registration to Uber’s network with a viable vehicle and driving experience and insurance is enough to start providing the Uber service. This strategic move is short subject to evaluation of compatibility with the current Company X model and profitability. This will also give some valuable insights into how Company X could compete with Uber.
A projection of Company X having multiple profit centers/ multi-businesses places the future model in the hybrid section as it expands horizontally. Acquisition of a portion of a parking specialist partner, reaching out to a specialist in recruitment and positioning themselves in the field of their most significant competitor potentially gives them a competitive advantage through alliances however short-lived they will be. Galbraith (2014) adds: “competitive advantages no longer last long. Not only is every competitive advantage temporary, but the half-life of advantages is getting shorter and shorter” (p. 171).
Strategic change is a process often yielding seemingly negative results at the beginning, however, with time the positive results will start to show.
Hughes et al., (2014) suggest:
The reason results may not show themselves right away is that when organizations go through significant change, performance drops because the people in the organization are learning new ways of operating. Execution cannot be flawless right away if the change is significant. There will be missteps as people learn and the organization adopts. One might argue a drop in performance means the change is progressing exactly as planned (p. 201).
Company X must exercise consistency, patience, and faith in the process and it will indeed shine as an excellent strategic company and reaching all its goals and beyond.
Blob Tree [Digital image]. (n.d.). Retrieved from https://www.google.com/url?sa=i&source=images&cd=&ved=2ahUKEwjSmqqEyI3fAhWpY98KHWCdBTAQjRx6BAgBEAU&url=http://www.pipwilson.com/p/blob-tree.html&psig=AOvVaw0Wo4otbhlv3ZpixTG5lx0R&ust=1544266705596571
Galbraith, J. R. (2014). Designing organizations. San Francisco: Jossey-Bass.
Hughes R., Colarelli-Beatty K. & Dinwoodie D. (2014) Becoming a Strategic Leader. San Francisco: Jossey-Bass Second Edition.
Senge, P. (2006). The fifth discipline. New York: Doubleday
Sustainability Illustrated. (2014, May 06). Systems thinking: a cautionary tale (cats in Borneo). Retrieved December 12, 2018, from https://www.youtube.com/watch?v=17BP9n6g1F0
Strategic Influencing Skills: Where Are You Now? (statements were taken from Hughes et al., Exhibit 4.3, 2014) Rate yourself on a scale of 1-5 (1 being lowest, needs significant improvement, to 5, effective, no improvement necessary) on the following statements.
___ Understand your impact on others and how that affects the quality of collective work.
___ Build a network of relationships with people who are not part of the routine structure of your work.
___ Intentionally discuss and build trust with others.
___ Assess and navigate the political landscape without limiting your credibility.
___ Build bridges across diverse groups.
___ Understand the needs, styles, and motivations of others, and use that information to communicate with them and influence them.
___ Ask questions of others’ perspectives to deepen your own understanding of their view.
___ Create ways to openly discuss difficult topics where there are conflicting views.
___ Create enthusiasm and understanding about a vision of the future in the hearts and minds of others.
___ Use aspirational language and stories to draw people to your concepts.
___ Create champions throughout the organization to further your project or cause.
___ Celebrate and advertise successes to build and sustain momentum.
___ Be open to influence from others.
Reflection and Action
Using your answers from Appendix A, answer the following questions. Which three of these statements do I score highest on?
What life experiences have helped me score high in these areas? Which three areas do I score lowest on?
Why do I score low in these areas?
How can I change my behavior to score higher in these three areas?
What will the effect be on my work at Company X if I do not change my behavior in these three areas?
The Three C’s of Trust (statements were taken from Hughes et.al, Exhibit 4.4, 2014)
- Read the following sentences and put a check mark beside the five things you do most frequently. Put an X next to the five behaviors you do least.
___I discuss my expectations with people so that we arrive at a clear and explicit understanding of our mutual expectations of each other.
___I ensure that roles and responsibilities are clearly defined in my working relationships.
___I make sure the objectives of a project are clearly defined, and measures of success are understood.
___I give as much weight to others’ needs and interest as I do my own.
___I keep my agreements or renegotiate when I am unable.
___My behavior matches my words. Communication Trust
___ I willingly share pertinent job information with others.
___ I create a climate where people feel safe, to tell the truth.
___ I admit and take responsibility for my mistakes.
___I give and receive constructive feedback.
___I appropriately maintain confidentiality.
___I speak about and to others with respect.
___ I acknowledge my own strengths and weaknesses.
___I delegate to others, even though they may not meet my expectations.
___ I allow people to make decisions, even if I do not think it is the best decision.
___I involve others in matters that have an impact on them.
___I actively develop my own skills.
___I take action to help others develop their skills.
- Striding Ahead:
Which 5 areas am I strong in? Are these evenly distributed across the three Cs? Do I score higher in one area? Why?
Which 5 areas do I need to work on?
Write down 4 ways to display each behavior in your role at Company X.
Why is it important for me to display these behaviors?
What will happen if I don’t display these behaviors?
Mapping your Influence (adapted from Hughes et.al, Exhibit 4.7, 2014)
- Choose a change that Company X is considering (for example, switching to providing customers with an opportunity to purchase third-party rental insurance as part of their online booking). Consider all the stakeholders involved in this situation and map them below. Fill in names next to each category.
- Considering the names, you added to the diagram above answer the following questions:
- What do the supporters have in common? Goals? Perspectives?
- Ask these people to raise awareness of the change and express their support for it.
- Considering the opponents of the idea, anticipate their reasons for opposing it and create solutions or compromises for them. Make sure you understand their position fully and when talking with them, explain how the change will positively impact them.
Consider those who can help with the change, present your case, sharing your information to alleviate any issues they may have with the change.
Consider a change Company X is making right now. Gather three to five other individuals or stakeholders involved in this situation and go through the following discussion points together.
Ask each stakeholder, including yourself:
Why does _____________ need to happen? (insert the change that is taking place)
What is your ideal path to the destination of _____________________?
How does this change affect your role?
What would happen if _________________(the change) happened the way another person in the group described it?
The resulting discussion will be interesting and troubleshoot potential problems and add helpful ideas and solutions that the initial individual or team who initiated the change did not think of.
Look at the picture below. Consider where you are on this picture in your professional life.
The Blob Tree*
- Now consider three other people in Company X.
Write their names or roles here:
Where would each of these three people be on the picture above?
- Now consider this exercise as it relates to changing from providing rental insurance to customers to providing ways for customers to purchase rental insurance online as part of their online vehicle reservation. Using the three roles/individuals you chose in question 1, answer the following questions.
Individual 1) How will providing insurance purchasing from a third party online change this person’s daily work? From this person’s perspective, how will this change affect the organization? Will there be any negative effects of the change on this person’s daily life? (questions adapted from Hughes et al., 2014, Exhibit 4.9).
Individual 2) How will providing insurance purchasing from a third party online change this person’s daily work? From this person’s perspective, how will this change affect the organization? Will there be any negative effects of the change on this person’s daily life?
Individual 3) How will providing insurance purchasing from a third party online change this person’s daily work? From this person’s perspective, how will this change affect the organization? Will there be any negative effects of the change on this person’s daily life?
Having completed this exercise, you are now able to approach any change made in Company X from the point of view of others involved in the situation: suppliers, customers booking online, customers booking in person, company executives, etc.
Taking the Long View
Take a moment to remember the beginning of Company X. Answer the following questions:
Where were you when Company X began?
What was the beginning like?
What were the expectations of Company X at the beginning?
Were those expectations met?
Which expectations were not met?
What was the effect of the expectations that were not met?
What is your opinion on these unmet expectations from your vantage point now?
Describe the journey of Company X from the beginning until now.
- Write down three indicators of the success of the current strategic change.
- Are there areas that while you do not see them as current successes, they are proof that the strategic change has not failed?
- Examine the areas you wrote in question 2 and consider them from your perspective in 7 years from now. What will these areas look like in 7 years?
- Using your answers from # 1 and #2, share with the leadership team what is going well in the change initiative.
- Considering all the answers shared by the team, how can you celebrate these successes? Write out a plan to communicate and celebrate success.
Communicate success 1: How will Company X share the success story? With whom?
Celebrate Success 1: How will Company X celebrate success 1?
Communicate Success 2: How will Company X share the success story? With whom?
Celebrate Success 2: How will Company X celebrate success 2?
Communicate Success 3: How will Company X share the success story? With whom?
Celebrate Success 3: How will Company X celebrate success 3?