Initial Conditions The global telecommunications industry has been drastically shifting from “analog, Madeline, narrowed to digital, wireless, broadband and, more recently, toward smartened and machine-to-machine” (Canter 2). This quote highlights the shift from hireling to wireless, Introduction of smartness, and change in the Industries competitive landscape. Additionally, the shift emphasizes the struggle for Verizon in moving from the slower, more bureaucratic, and less customer-centric hireling business to the more flexible, faster, and entrepreneurial wireless business.
This struggle Is amplified as a result of Sidewinder’s decision to separate the hireling and wireless companies. As Verizon has moved forward it has progressed, changed, and reacted to its changing environment and competitors. Verizon’s reaction to the phone release, implementation of the Bios (fiber-optic services), ecosystem approach, and cultural changes highlight a few accomplishments In the past 3-4 years. The phone Reaction & Success Verizon’s customer base was deteriorating due to the shift from voice products to wider costumer solutions.
Verizon acknowledged this shift and successfully developed the industry first mobile-based distribution system, which allowed users to download games, rhinestones, and videos – driving revenue. While historically focused on offering basic telecommunication services, Strindberg realized the need to venture in adjacent complementary industries including GAPS;enabled devices, navigation, games, and music. However, this success was quickly overshadowed by the threat of the Apple phone – introduced in June 2007.
In response to this market-changing event Strindberg explored multiple options but concluded that they internally did not have the competencies to build a competitive 1 OFF Strindberg implemented policies, Tiger Teams, system alignments, best practices, and accountability structures for all three partners. Verizon successfully overcame historical resistance to partnerships and sharing proprietary information. “In a departure from tradition” this internal cultural change led Verizon to a successful launch of the Druid (Canter 5).
Innovation & HOSE In the past 3-4 years the success of Verizon’s wireless technology came at the expense of their hireling business. In response to the declining revenues, Strindberg built a Bios network connecting directly to customers’ homes. While originally it was intended to help compete against Poop companies, he realized an unexpected opportunity to integrate its phone, TV, and Internet services through an interactive platform called Flexible (Canter 6). In order to implement the idea, Strindberg was forced to re-evaluate a small portion of Verizon’s organizational structure.
He changed the way design teams worked from being in solos to larger, compromising, and connected teams. This was the first step in creating a shared vision between fragmented departments. By 2012 these internal changes led to 16 million households using the new Flexible technology. The Ecosystem Approach With a new and shared vision/goal of “beating competitor AT&T by at least two years,” Verizon examined the way innovation was introduced internally (Canter 7). Realizing their fragmented operations, Richard Lynch, introduced the G LET innovation center as the foundation of meeting their vision.
The innovation center would allow Verizon to expand their core competencies from a reliable network to the endless demands of their consumers. Through successful partnerships with what they called “product vendors” and “enablers,” internal knowledge sharing, and collaborations with all sized businesses they facilitated hundreds of new technologies. Verizon successfully leveraged their knowledge gained during the Druid project. Furthermore, Verizon achieved a milestone in developing strong trust with partners leading to their successful partnerships and introduction of the connected home.
A Changing Culture and Structure As technologies converged the necessity for collaboration between hireling and wireless grew (9 Canter). Under Sidewinders leadership the shift from two disconnected organizations to an integrated or “One Verizon” begun. This occurred through compensation based on overall company performance, simplifying the product development process, rotating staff, monthly leadership meetings, and most importantly vertical restructuring.
While these changes were challenging to implement, Strindberg attempted to overcome them through customer feedback, going on sales calls, and modifying plans – ideas consistent with the Change Wheel. Bureaucratic culture that still exists in the divided organization. While this segmented organization structure was successful during the early years, the recent environmental changes have demanded a more flexible, quick-paced, and innovative culture.
To meet these demands Janet Cochins, a change leader, continued to make drastic cultural changes through empowering teams, defining a clear vision, and creating common goals such as exceptional customer service (Canter 11). In August 2011, Cochins and Strindberg made large improvements but acknowledged that the company still had a significant way to go. Challenges Although Verizon has made a lot of progress it is evident that there are still many challenges including Wireless’s U. S. Perspective, a divided culture, horizontal operations, and duplication of resources across organizational segments.
Together this leaves Macadam with a situation that could lead Verizon in either direction – positive or negative. Macadam is entering an organization that: Is on the leading edge of innovation on a wide spectrum of products; Has inimitable readerships and strong trust with collaborators; Is a first mover in many markets including interactive home/car technologies; On the other hand, this same organization must overcome several barriers. As Verizon attempts to go globally with wireless technology it must overcome its lack of international knowledge, divided culture, “American association”, and product cannibalism.
Clearly Verizon is moving towards the right direction with their initiatives, but it is not clear if they will be able to adapt their culture to the changing environment. Recommendations: Moving Forward Moving forward Macadam will have an uphill battle. While the Credo, vertical integration, innovation department, and new policies have been successful – it may not be enough. To quote Macadam, “The culture dies very, very hard. It’s going to take a lot more than one class and one employee meeting to get there…
A lot of the way we have done business is not effective in this competitive environment” (Canter 12). Macadam must continue the previous efforts although challenging. Specifically he should: Create financial incentives that are tied with department collaboration between hireling and wireless Continue to rotate employees across units Continue to provide education sessions on shareholder value, innovation, and While those are some broad recommendations, Macadam should also leverage the expertise of the hireling department when expanding wireless globally.
The Avoidance relationship would help accelerate change and take hireling and wireless globally “through a common set of products and features” (Canter 12). Avoidance, operating 60% of its business in Europe, is a clear partner with knowledge of the unique regulatory environments in potential global markets. Lastly, Macadam must push forward with vertical integration and a structure that focuses on major customer types, product, and solutions. It is critical that Macadam implement these recommendations in the scope of Cotter’s Change Model.
While past efforts have conveyed goals, communicated a vision for change, and formed coalitions – they have not created enough urgency (Step 1, Appendix A). Macadam must clearly convey the importance of cultural change and implications of failure. By doing so he will develop a sense of urgency around the change and help motivate employee buy-in. Conclusion Together these recommendations provide Macadam with a framework in competing in an exciting but different telecommunications environment.
While he faces an uphill battle, Strindberg has handed him an organization with the potential, tools, and assets to successfully compete domestically and globally. Appendix A: Cotter’s 8 Step-change Model for Verizon 1) Create Urgency 2) Form a Powerful Coalition 3) Create a Vision for Change 4) Communicate the Vision 5) Remove Obstacles 6) Create Short-Term Wins 7) Build on the Change 8) Anchor the Changes in Corporate Culture Citations Canter, Resonate M. , and Matthew Bird. “Transforming Verizon: A Platform for Change. ” Harvard Business School (201 1): n. Page. Web. N. P. , n. D. Web. 23 Feb.. 2014.