Verizon Is Creating a Culture that Focuses on Shareholder Value



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Case Analysis #2

"Verizon Is Creating a Culture that Focuses on Shareholder Value"

Kevin Keating

Using the competing values framework as a point of reference, it would appear that Verizon’s current organizational culture is a clan. One reason for concluding this would be the fact is that Verizon has invested the time and the resources to educate the workforce. By having the Learning and Development Organizations support each business uniti, it is training its people to increase the number of subject matter experts within the corporation. Furthermore, by having multiple skill sets its employees should find it easier to communicate, collaborate and, therefore, find it easier to come to a consensus on any given assignment or problem.

Verizon is moving toward a combination of Adhocracy and Market Cultures. Supporting the Adhocracy Culture is the fact that Verizon wants its people to be adaptable, creative and quick to respond to changes in the marketplace. This is evident by training Verizon’s sales force prior to introducing the 4G LTE technology with 60,000 hours of technology and device training from January to August prior to its December 2010 rolloutii. To make sure the training is effective they evaluate the customer service using snapshots to see that the training is effective and where it may need to be tweaked or upgraded, in addition, the company evaluates each representative by comparing their current snapshot to their previous snapshots to see their improvement on multiple metrics at 30, 60, 90 and 120 day intervals.

The Market culture is identified by Verizon’s emphasis on creating shareholder value by implementing the Leading Shareholder Value program and having both the CEO and CFO lead each day and a half sessioniii it demonstrates the emphasis management places on it. Moreover, having the requirement that each senior leader submit an Individual Action Plan reinforces that emphasis. The program is designed so that the rubrics used by management to evaluate and implement the program are meant to coincide with the metrics investors, analysts and shareholders use for establishing the company’s value.

Verizon has changed the organizational culture by first having organizational goals and performance criteria which is illustrated by having the goal of increasing shareholder value and the Individual Action Plans as well as the sales force being evaluated on multiple metrics over a period of time. In addition, by implementing organizational systems and procedures they are also effecting a change in the corporate culture. As previously discussed, by making senior leaders submit Individual Action Plans it has established a system by which it has put in place a procedure it can attain its organization goal of increasing shareholder value and establishes a performance criteria by which it can hold the senior leaders accountable. Likewise the corporate goal of making more subject matter experts is an example of implementing an organizational system with the intent of attaining the corporate goal.

President and CEO Lowell McAdam would like to create a more organic organization for Verizon. This would appear to be true because while there are criteria established for performance there are few rules or procedures, in addition with the increasing number of subject matter experts resulting in more shared tasks and increased informal communication as well many teams or task forces. As a result, there would be a wider span of control with a flatter organizational structure. One example of informal communication is the advent of social media as a learning tool. By implementing videos on VZTube and allowing employees to evaluate and share the videos that are most helpful, training video producers can evaluate how to produce future training videos best suited for the widest audience. In addition, informal communication through Verizon’s My Network Social Networking Platform and the My Network On-The-Go has been set up for informal communication and collaboration.

The most important lesson to be learned from this case is that all organizations have the ability to change their organizational culture. Instituting a change of this nature requires an evaluation of the organization and the establishment of goals, planning, leadership and control to make it happen. In Verizon’s case being a technology company it realized it needed an organization that responded as quickly as technology changed. To keep abreast of the marketplace they established a corporate goal of having an organization as good as its network. Since experience has shown that its network technology is constantly changing it needed an organizational culture that would not only allow for change but allow it to change as quickly and even offer ideas that could change the technology. To that end, the Leading for Shareholder Value was implemented with the CEO and CFO emphasizing its importance by having senior leaders submit “Individual Action Plans” (IAP) to increase shareholder value. IAP were specific plans that each senior leader committed to accomplishing. Moreover, by using leadership and development organizations the number of subject matter experts within the organization was increased. Subject matter experts helped to facilitate an increase to the communication, collaboration and shared tasks. In addition, more informal training and communication was implemented using VZTube and My Network Social Networking Platform as well as My Network On-The-Go while always tracking key performance indicators to evaluate what was working and what wasn’t, therefore setting up the controls necessary to make sure the change they wanted was indeed happening while still allowing for any corrections that might be needed.

Verizon’s goal of leading for shareholder value appears to be rewarding its shareholders, the price of its stock has risen at a pace of nearly double that of Standards and Poors 500iv since early 2011.



i Management: A Practical Introduction, Kinicki/Williams McGraw Hill ,”Management in Action” page 257

ii Management: A Practical Introduction, Kinicki/Williams McGraw Hill ,”Management in Action” page 257

iii Management: A Practical Introduction, Kinicki/Williams McGraw Hill ,”Management in Action” page 257

iv https://www.google.com/finance?q=NYSE:VZ


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