Critique case study analysis :Team C

Team Presentation (Part 3): Case Description 5

Transforming Verizon: A Platform for Change

TEAM : C

Introduction

The telecommunications industry is a fast paced, technology driven industry. The environment of the industry continually and consistently evolves in order to follow consumer needs, in the smartphone and broadband industries. Verizon’s leadership team is challenged with evolving their structure and culture to remain agile and innovative within the mobile category. This is a significant departure from their traditional telecommunications business. A breakdown of the relevant resources and systems currently existing at Verizon will outline the base for change. Further, an analysis of the key stakeholders and change implementation process will present the success factors, and shortcomings of the change implementation. Finally, next steps and recommendations of alternatives to the process that would have added value to the process will be discussed.

Background

Verizon is a telecommunications organization formed in 2000 as a result of a merger between Bell Atlantic Corp. and GTE corp (“History and Timeline”, 2017). Their business commenced providing analog and landline communications to customers, and soon evolved to providing digital, wireless and broadband for smartphone use in 2003 (Kanter& Bird, 2011). In 2011 in the U.S. it was the largest carrier service to over 95 million consumers. To remain competitive they divided themselves into two divisions, wireline and wireless. Wireline served enterprise customers with sales, marketing and network operating systems for customers, businesses and government bodies and was characterized by a more centralized and bureaucratic culture (Kanter& Bird, 2011). Whereas, Wireless was a national venture that was more decentralized and innovative. In 2007 their top competitor entered the market, the Apple iPhone in partnership with competitor, AT&T. To remain competitive, Verizon created a partnership with Google, in the development of services to bridge their competencies in both wireless and wireline.

The Need for Change

Verizon's CEO McAdam; after analyzing the global telecommunications industry , noted a change from analogue, online and narrowband to digital, wireless and broadband. The industry was also moving towards Smartphone. Smartphone customers increased as the years went by and suppliers of Smartphone were seen a tremendous increase in revenues. It was with this motivation that he acted to position the company into the heat of the competition.

McAdam assessed Verizon’s position among its competitors in the form of organizations, culture, revenue and network. The main competitors as established were AT & T in the wireless, Cable Vision in terms of cable operators, Voice over internet protocol providers like Vonage and other communication companies. The company had two different cultures; the wireless and wireline business. With the onslaught of the wireless business the wireline business was losing its customer base rapidly. It was slower, there was more bureaucracy. The revenue for the wireless business was rising whilst that of the wireline was falling steadily. The company was faced with the decision to ensure that both wireline and wireless networks develop new products to monetize these networks. The goal was to transform the company from a local service to global provider and technology firm.

One of the main requirements for change derived from need to competewith the Apple iPhone. Several options were looked at, and shelved. This did not stop them in their search for a partner, leading to a proposal to Google, along with device manufacturer and as such they reached out to T Mobile. The three decided that the product had to be in the market in a year’s time and they went to work rigorously. Verizon had to take major risks to lay firm ground for product launch. For instance the company had to spend $100 million on buying media before the product was perfected. Verizon was able to launch its Verizon Droid only two weeks behind schedule. The timing could not have been more perfect as it was Christmas holiday season and Verizon was able to secure a license to play the Star Wars movie name off the Verizon Droid something that boosted sales (Kanter& Bird, 2011).

Verizon made the decision to go global but their established global infrastructure was not an interconnected brand. To become global, Verizon partnered with China Mobile, the largest wireless operator in the world. However, going global is still a challenge as U.S. companies have a reputation of controlling host nations. There was a major challenge as the company wanted to make Verizon One, a more integrated network. The growth of the wireless business made it difficult to them to grow the wireline business and this provided an in company competition between the two networks and this made the customers confused. This prompted CEO McAdams to launch a culture statement along time lines of shared values and shared success as the catalyst to integration of the company.

Change Process

Key players - Key players in the Verizon’s organizational change were the new CEO Lowell McAdam’s, the former CEO Ivan Seidenberg and Janet Schijns.

As for the organization of Verizon, the former CEO had ensured that wireless and wireline companies under Verizon Communications remained separate in a bid to give the budding wireless industry some head start in order to grow without being smothered by the already established wireline industry. Verizon’s wireline industry offered global services even if it ran in only 12 states while its wireless industry offered national services and had consumers nationally.Verizon had two different organizational cultures tied directly to either its wireline business or wireless business. The wireline business was losing its customer base, was slower, very bureaucratic and was less focused on the customer. On the other hand, the wireless business was more entrepreneurial, was faster and was more flexible. In terms of its sources of revenue, Verizon obtained revenue from both its wireline and wireless businesses. Finally, Verizon having Wireline and Wireless as separate businesses was very crucial to its performance and success. Adaptive challenges & the process to overcome them led to Verizon’s success as they never second guessed in solving their challenges. The telecommunications landscape was shifting at high speed 2003 to 2010. Despite these changes, the CEO wasn’t methodical in his approach. He had to look closely and read between the lines thus focusing on regulatory issues of traditional telecommunication cast a long shadow on wireline. 

Results &Conclusions

Verizon recognized the need to remain competitive by becoming more risk adverse and innovative. However, establishing a strategic framework to guide implementation would have reducing confusion that was faced in the two business units, and felt by consumers (Spector, 2013). Leadership did not seem to align on how they would assess the changes made, and the training and incentives that would be necessary to instill and integrate change. Spector (2013) suggests that leadership alignment on change initiatives is imperative to successful change implementations. Before implementing changes, conducting organizational research through shared diagnosis would have created an opportunity for mutual agreement and adjustment, laying the groundwork for the culture change necessary for the wireline business unit to remain innovative (Spector, 2013). There appeared to be a lack of shared diagnosis in some of decisions made prior to Janet Schijns, which did not include data collection for organizational diagnosis or mutual agreement.

Further to this, there were multiple changes made simultaneously, at a fast pace, leaving confusion with some programs and integration issues. Measuring the integration and culture shift experienced by the two business units prior tointroducing a newproduct would have shown that the units weren’t in a place to deliver an integrative product successfully. Developing a measurement program, and creating employee engagement programs through training and rewards may have eliminated some of the discrepancies (Spector, 2013).

Working with a strategic framework, conducting data collection through shared diagnosis, ensuring proper training and rewards programs, and measuring success would have set the organization up for greater success.

References