Research Of The Causes Of Weak Revenue In Oath’s SEA Programmatic Business
This report was written to identify the cause of weak revenue in Oath’s SEA programmatic business and to propose a change plan to resolve the issue. Using the Consulcube model, we discovered the underlying issue and also determined the employees where change is directed at, along with the styles that will be used to manage the change. We also looked at factors such as organisational readiness level, resistance and emotions which can impact the change effort. Finally, we discussed on how to reinforce the new behaviour, along with the limitations of the model used.
Introduction
Following the sale of Yahoo to Verizon and its subsequent merger with AOL to form a new entity – Oath in June last year, its new CEO Tim Armstrong had stated that he intends to grow the company’s revenue to US$20b, from the current US$8b, by 2020. APAC has been identified as the next growth spot and in South-East Asia (SEA), the 2017 overall digital spend was US$14. 5b with programmatic advertising contributing US$2. 8b. This figure is expected to grow exponentially as adoption increases.
However, Oath’s current SEA programmatic ad revenue is only US$6m, representing 0. 2% share of the market. With it being the third significant force in digital media after Google and Facebook (Forbes 2017), this is obviously a glaring gap which the SEA management team needs to address and there is a need to first change the status quo in order to meet the growth target set.
As the business development lead, I will use the Consulcube to draw up an intervention plan to advise the management team on the next steps. This is a systematic process which first involves determining the focal issue that is hampering Oath’s performance, then identifying who the change is directed at, before arriving at the intervention style to be used. The framework is based on an assumption that behaviour tends to be repetitive in nature and can therefore become embedded beyond one’s consciousness. Hence, there is a need to break up the negative behavioural cycle by initiating intervention in order to set the organisation up for success.
Key Focal Issue
A focal issue is defined as the cause of an organisation’s difficulties and there are four categories ranging from the exercise of power and authority to goals and objectives (Rutherford 1988). At first glance, it would seem that the absence of a satisfactory goal might be the focal issue as the target of growing 2. 5 times within 3 years is undeniably, very aggressive for a newly-merged company. However, it is crucial to spot the real underlying issue as an incorrect perception would render the intervention a failure. For example, if an overly aggressive goal is perceived as the focal issue, there might be an attempt to lower the target and the organisation would not be able to maximise its true potential, defeating the purpose of the intervention. Alternatively, management could impose goals to meet the target, further exacerbating the problem by bringing in power and authority.
Being more advanced, the legacy AOL sales teams had taken the lead role in programmatic sales globally after the merger. For SEA, therein lies the question of such an arrangement as AOL’s regional presence has always been weak. Thus, the team is unable to build relationships with advertisers and agencies to drive revenue. However, as the AOL teams already own this piece of the business globally, any attempt to change here could be viewed as a power-play. This could relate to the other category of morale and cohesion. With the integration of both Yahoo and AOL workforce still underway, the cohesion level is weak due to differing cultures. Blake & Mouton (1983) prescribes that when change is initiated at any of the issues, a ripple effect can be felt. Therefore, we need to be cognizant of the causal effect which might be brought upon with any change. From the above, it is apparent that the focal issue is of norms and standards because the team is unable to build relationships, the basic foundation of sales, with clients to drive revenue growth. On the contrary, the legacy Yahoo sales team handling the managed business has consistently been recognised as one of the best sales team regionally, regularly winning awards from agencies and building up close working relationships with clients over the years. The proposed solution would be to merge the two teams and have the Yahoo team, who is more adept in relationship-building, to sell and the AOL team, who is stronger in product knowledge, to handle account management.
Unit of change
Having identified the focal issue, we then need to recognise the client because that is whom change will be directed at. The Consulcube unit of change definition encompasses individuals to the larger social system. We also need to ascertain if there are others who might be the client because the change effort could be compromised if anyone relevant is left out. For example, due to the redesignation of roles from sales to account managers, the AOL team is the most obvious client group. However, we also need to consider if the Yahoo team, who will have an expanded portfolio with the change, should be in as well. As part of the merger between the two teams, there is both a role switch and expansion involved. The AOL team needs to transit from a client-facing role to a backend one while the Yahoo team needs to take on programmatic selling. As such, the client for the intervention would be the inter-group as they are the ones affected by the change and can have a direct impact to solve the focal issue. It is critical that we identify the “real” client so that resources such as time and effort are not wasted.
Intervention Style
Finally, we need to decide on the intervention style to be used. There are a total of five intervention styles, with each being different in character from one another and they can be broadly categorised into the authoritative or facilitative approach. Recognising the focal issue as norms and standards, the initial intervention style would be to utilise confrontation. This challenges the inter-group’s thinking while enabling management to provide feedback in a positive and constructive manner, increasing the awareness about their behaviour and attitude. The AOL team might feel contented but we need to bring their attention to the fact that Oath’s current market share at 0. 2% is way below what it should be achieving vis-a-vis their market position in the industry. By posing difficult questions to the team, this can lead them to view the situation objectively. For the Yahoo sales team, the same set of questions could enable them to see the need to integrate both managed and programmatic business, leveraging on their client relationship skill as an effective solution in altering the status quo. Once the differences are clear, the intervention can then shift to a catalytic style. This prompts self-exploration and problem-solving in the team with the use of open-ended questions, encouraging them to think of ideas to further improve the operation. For example, through data and info collection, future digital market trends can be shared with the inter-group to generate suggestions on how they can be structured to support the growth of the business. This can help to accelerate the process by speeding up the transition once the goals are digested amongst the team members.
A study conducted by Blumberg and Wiener (1971) shed light on the importance of utilising a confrontational approach to lay the groundwork in order for change to proceed. This relates back to the issue of a low trust level following the organisational merger, thus openness through addressing the issue on hand is recommended. This is followed up with the catalytic style for change to permeate the inter-group, which is expected to take up to three months.
Level of Readiness
However, prior to the change, we need to ensure that members are ready to adapt to the new working model and this brings about the question of their readiness for change, which refers to their change valence and efficacy to do so. It is a critical precursor to successful change implementation and therefore, we need to measure it before implementation to identify key issues requiring attention. Armenakis et al (1993) proposed doing so by using observation to spot deviant behaviour or through interviews to gain insights. For example, management can monitor if members are exhibiting any negative behavior in their daily work ranging from coming to work late to failure in adhering to work deadlines. To address the issue of privacy, management can also schedule one-on-one meetings to seek out the true response to the change. Traditionally, change readiness has been studied and conceptualised on an individual level but Rafferty et al (2013) argue that as organisational readiness is a multi-level construct, it is important to understand the implications at both individual and organisational levels because processes which contribute to change readiness for these two can differ. For example, although the inter-group might be ready for the change, the lack of belief in organisational training support by the Yahoo team could prove critical as they might not be convinced that they will have the necessary knowledge to sell successfully. As such, surveys such as the Organisational Change Readiness Assessment, which contains questions measuring the readiness level at both the individual (e. g. attitudes and behaviour) and organisational level (e. g. support and cultural), can be used to overcome this.
Resistance to change
The questions asked can help to form an overall picture of the organisational change readiness level. If it is low, members will resist the change. Besides measurement, the use of OCRA can also help to identify resistance. Kotter (1995) posits that resistance is a barrier that is often the biggest obstacle to successful organisational change implementation and is therefore critical that it be overcome. There are many reasons for resistance and these include the parochial self-interest factor where members are concerned about their job security. As the proposed change involves a role restructuring, members might construe it as a prelude to retrenchment. This could also have been brought about due to the lack of trust following the merger. To counter this, we can leverage on the Kotter & Schlesinger (1981) framework which prescribes that facilitating and providing support in the form of training is essential in settling the members into their new roles. This is because the work would be different from what they used to do and by utilising the consultative approach, it can help to address any fear and anxiety which might be generated with the change.
Emotions
At the heart of resistance lies a fear of the outcome being worse than the current situation. In order to manage this effectively, it is helpful to understand the Kubler-Ross Grief model and the stages of emotion which the inter-group will be facing. It is important to foster an emotional connection with the inter-group who will be affected as it can help to increase their commitment to the cause. Management needs to bring the inter-group to the acceptance stage in the quickest time possible to avoid them from being stuck in a flux. A study conducted by Castillo, can guide the actions management can take during the initial stage of denial and anger, for example, by taking preventive actions such as improving communications to generate confidence and reduce uncertainty.
Communicating the change
Kotter’s framework states that management needs to engage and enable the inter-group through communication of the vision. When planning the timing of communications, besides coherence and clarity in the messaging, consideration should also be given to inform the inter-group first before others. This will allow time for clarification of doubts and is done during the intervention phase when the use of the confrontational mode allows the inter-group to see the necessity for the change, as well as its expected results. Along with the establishment of behavioural and perceptual actualisation through the follow-up use of a catalytic style, this results in looped communication that is both multi-channeled and continuous.
Culture and how will the change be reinforced
Kotter (1995) postulates that new behaviours formed can regress if they are not embedded within the organisational norms and values. Thus, it is important to showcase the results of the change as a condition for the behaviour to remain. For example, management can regularly highlight the improving revenue trend in the weekly sales meetings following the change to internalise the new way of thinking. Progress needs to be continuously pointed out and success stories demonstrated to the inter-group in an attempt to anchor change in the culture. The constant linkage between the change and improved performance can help to increase the momentum.
Criticisms of Consulcube
Nevertheless, while the Consulcube model tends to be widely used as a framework to manage organisational change, there are certain limitations which we need to be mindful of. Firstly, the model attempts to classify a problem into one of the four focal issues which might not be realistic as not all problems lie exclusively within a particular domain. For example, if members are not achieving their set targets amidst the uncertainty about the organisation’s future, should this be classified under goals & objectives or morale & cohesion? In addition, the model is unable to measure the intensity or level of intervention chosen commensurate with the issue. In our case, to what extent should confrontation be used during the initial intervention as over-usage might cause resentment, breeding resistance to the change? While it is clear that different interventions have differing levels of impact, it is not clearly stated if certain types of styles are meant for deeper levels of change.
Conclusion
Managing change successfully does not just involve the use of a theoretical framework. It is a multi-faceted approach which involves at the end of the day, people. Thus, ample consideration should also be given to the emotional aspect to help them overcome the initial state of inertia following the change as success of the program hinges on them. To quote Larkin and Larkin (1994), “programs don’t change workers — supervisors do”.
