Marconi Case Study

written by Eddie Glines, Lance King, Masimba Ruwo

                For the Marconi case we will analyze the case reading against “The Ten Commandments of Implementing Change” in Jick and Peiperl.

The first commandment is to analyze the organization and its need for change. Part of this task is to understand how effective implementation will be based on the history of other changes. Marconi was somewhat unique in that they went through a very long period of control under a conservative to a fault managing director. By the time the shareholder had enough of the slow growth the company was near crisis resulting in a quick transition from little change over decades to many large changes quickly. Lord Simpson the new CEO “quickly set about restructuring”. These large and quick changes created a threatening environment for the employees as the case author describes the changes sent a clear message that “things would ‘not be the same again’” Given the past history of the company moving so slowly in the past, a better approach would have been to start small and simple with incremental success to bringing those skeptical of the change into the fold. The next CEO, Mike Parton continued to make this same mistake. However, he was in a corner with the financials of the company and needed to make the changes quickly to keep the company afloat. Even so these sweeping changes seemed to take place before he had extensive meetings to communicate and convert his top leaders to his vision for the company.

Indeed creating a shared vision and common direction is the second commandment for implementing change. Mike Parton took things out of order by creating an action plan and acting quickly without apparently providing his vision of where he was going. His short term action plan was described as selling non-core businesses, cut jobs, and use cash from these cuts to bring down the debt. All this he did within the first quarter of being CEO. Little wonder morale was after all these cuts. Had Parton explained his vision to employees at all levels in the company and the logic behind what he was doing, the ones left after all the cutting would have been more confident of what was happening and the future of the company. Indeed a survey was taken and 62% of the top managers had considered leaving the company. I believe if Parton would have explained his vision effectively before all the cuts, that number would be significantly lower.

Another source of dissatisfaction among employees had to have been the inability of the company to create a current identity with employees as evidence by the lack of integration of the systems and processes as described by Parton “We have many companies with different processes that are not integrated.” This is the third commandment of integration to separate from the past. I know from personal experience being in a company for the last seven years that has been acquired, and then acquired several other companies that when the systems are slow to integrate there is confusion, insecurity, and low moral as the result.

Another aspect Parton could have done better was in creating a sense of urgency, the fourth commandment. While it was not hard to see a real sense of urgency due to the cuts Parton was making, some middle managers still felt, “if they keep being quiet and go about their business…the world will forget and leave the company alone” Amidst the drastic cost cuts the managers still felt this way? They must have not understood the financial situation fully even in the face of what was going on around them. This was a result of not starting with the vision and converting them to urgency of implementing the vision in the first place.

Moving forward, Parton is going to have to use his leadership position to stir the company in a good direction. However, the position and the authority inherent with it are not going to be adequate. He is going to have to use his experience in senior managerial position and his understanding of finance matters to navigate the companies trying times. For the implementation of the change process, Marconi as a whole must rally behind its change visionary.

It is of utmost importance that the board of directors and any stakeholders of the company are onboard. This allows for the creation of swift communication channels and great teamwork. The strength of the management team formulating and executing the change procedures needs to be versatile enough to tackle the different barriers that might arise.  The negative reception of the change policies and the already existing low morale might be two crucial barriers.

During the conference Parton failed to convey a sense of importance of all goals to external stakeholders. One of the most important measures of Parton’s change success is going to be the increased value to shareholders and external investors. The general perception of Marconi, as a company, is a vital aspect of a successful transition.

Two very important areas that Parton succeeded with the Conference is getting out a general sense of what needs to be done and to prepare his counterparts of what was to come. In the future, this process is going to go through several microscopic analysis to guide the changes. The first is the creation of a document that acts as a mission statement. This document could outline the specific communication channels that employees will use to interact with senior management. One complain that was brought up during the conference was the accessibility of senior management. A document of this nature clears up any ambiguity that a general undocumented goal might possess. This can be followed by the dictation of boundaries. These boundaries will guide the day-to-day company activities: an example is a code of conduct. By providing boundaries Parton insures that the path each and every Marconi employee envisions of the goal is set within predetermined guidelines. This solidifies the importance of the goals and could also be a motivating factor. Progress can then be measured using a diagnostic system that provides metrics. This is a very complex part of the whole process. This is due to the underlining relationships that exist between internal success and external criticism. The company could potentially create a positive image by increasing overhead expenses, an action which would not be favorable with external critics of company performance. Finally, a system that allows the change to be monitored interactively becomes very important. The business in which Marconi operates in not a stagnant one therefore the inability of the company to regularly inspect its success metrics and reevaluate them accordingly is crucial.

The Marconi Way may be considered both a practical and a symbolic structure that it enables individuals toward the vision of the firm. It starts as a literal symbolic structure as it helps people identify the shared beliefs of the company. When put into practice, these added beliefs can become a collective driving force leading the company toward the standards and expectations. This shift of paradigm leads to a literal shift in attitudes and behaviors. However, the only way the actions of the Marconi people will once again illustrate the passion of individuals for customers, colleagues, communities, and the stakeholders experienced prior to the dotcom disruption, is if they adopt a similar methodology of defining the company. This evaluation can be similar to the initiative launched by John Mayo and Rob Meakin in 1999.

After identifying the most important departments that have struggled within the company, a list should be created of people who subscribe to the vision outlined by Parton. These people should then be enlisted to help re-establish The Marconi Way. And because some middle managers have chosen to keep quiet instead of surfacing department-related issues, an award system should be instituted. Not only will incentivizing management assist in ultimately improving profit margins, but it will also help to benefit the company as employees begin re-committing to individually help stimulate the values and culture of the company. Option plans have proven to be effective in the past, Incentives might begin with an option-plan that vests in five years and is correlated with a target to increase the value of the firm by twenty percent.

A similar incentive would be granted to remaining employees subject to a twenty percent increase in management selected metrics in various departments over a six month period. Though this is a short period of time, it may provide the stimulus the culture needs to thrive again in the competitive telecommunications industry.

These two sequential incentive-based structures would be most effectively implemented by micro-managing employee tasks until management felt shared beliefs, attitudes, and standards increase and are maintained for at least a quarter.

Parton’s effectiveness in his conference stated a clear and concise message, style, and intent to management—so much so that not a single person applauded when he finished speaking. His objective in delivering his address was to speak to individuals who wanted to make the most of their current situation.

The silence of his audience may have been due to a distinct recognition of the need to get back to the fundamental principles of what set the company apart from competition. Additionally, these leaders may have felt a sense of sorrow for their lack responsibility in being a change leader when it was needed most. Parton was brutally honest in his judgment of the current circumstances and knew that not all of his leadership would subscribe to the upcoming objectives. Parton outlined the vision of getting back to the basics with beautiful simplicity as he identified management’s need to build confidence in the employee’s perspective of the business model, processes, and culture. This will need to be executed from the ground up and will not be easy due to the disrupted confidence of a former enthusiastic, motivated, and ambitious Marconi team in mid-2000.

Of all the employees at Marconi, Parton’s management was impacted the most.   To supplement his objective description, he provided specific cues that are poignant, but that will need to be consistently addressed throughout the implementation of the strategy recently introduced; especially because Parton mentioned that leadership must be relentless on commitments. This must be a top down tactic applied on a day-to-day basis. It is recommended that the company is results-oriented in, not only establishing dates to fulfill various strategy tactics, but also in establishing what the specific roles employees are within various departments. Micromanaging may be needed for the first few months of getting fundamentals re-established as they pertain to the successful implementation of employee’s roles.  

As dramatic changes occurred within the telecommunications industry, many employees may have felt removed from the responsibility to reinforce the company vision tactics due to a lack in understanding of their role given the circumstances at hand. Therefore, in order to ensure that each employee becomes accountable for their fiduciary duty to make a difference in acting and not merely being acted upon, individuals must be aware of their focus, specific objective, and measurable goals. This awareness can be developed and reinforced by creating a document that outlines the said parameters. This document can be kept in a departmental file for management to utilize when an area within that sector of the organization is not in harmony with the vision of the company. A change leader may then meet with an employee and ensure they are acting according to their primary results areas. This form may also be used to award and incentive team members when they meet their measurable goals. This process has been proved to be effective by the Dave Ramsey Corporation.