Analysis: Organisation Levers

Like all startups, growing up pangs are clearly visible at Artemis. The initial eight-year phase was consumed by growth and the startup team consisting of Madhur, Atul, Rassal, Harish and others seem to have been comfortable working through the issues without focus on structure and other required levers that are an imperative to scale and complexity.
 

The case throws up many issues: structure, decision-making styles, fairness and issues around transparency. These are very typical of organisations at certain tenure and scale. The current situation offers Madhur and team a chance to re-look at operations to ensure critical organisational processes are geared to manage future growth. Else, they are bound to flip-flop along the way.

 

The first question that needs to be understood is, how come Madhur gets to know the real issue of financial misdemeanour at the last stage. Why has Harish not discussed this with Madhur to ensure proper governance? Using organisational re-design as a means to message poor performance is poor management. How come Harish took so much time to cite the real cause? What happened to mutual trust and confidence? If it is to do with financial mismanagement, then it does not have to go through all these layers of confusion and chaos. The decision making is simple and straightforward and asking Atul to go is, in fact, good for the organisation and its culture. But what happened in the process makes Artemis very vulnerable to employee perception of fairness and other related interpersonal issues.

 

The other important area that needs consideration is the role of HR and how to effectively leverage the capability of that function. It is understandable that managers are always under pressure to perform and ensure task completion, but the difference between being effective and ineffective lies in the ability to draw upon skills of other colleagues to ensure focus on all matters. Rassal’s travel is no excuse to not involve him. And what about seeking Madhur’s opinion when Harish took the call to change the structure? It is sad to note that Madhur also gets to know of Atul’s role change through an e-mail! And if hiring Ashwin is to do with a larger strategy of forming a JV with Gevore, it seems to be submerged under many layers of Artemis’s decision-making styles. And when Rassal points out the conflict of interest, Harish’s remark “these things happen in business” should make Rassal stand up and think about Harish’s outlook to ethics. Madhur and Rassal also need to investigate deep into the roundabout views of Harish on Atul till he finally states it to be a case of financial fraud.

 

When considering factors that influence a firm’s success, topics like strategy, technology, markets and leadership get significant managerial attention. But the important factor of organisational design — the accountability system that defines rights, roles, responsibilities is often left to evolve naturally without conscious planning and thought. This is clearly the case at Artemis with such a casual approach by Harish. Structuring is a critical area that requires a lot of deliberation and involvement of all key stakeholders. What is worse is that Artemis is using organisational design as a means to oust someone. Structure is not fossils like coral reef that can be used by people in power. Madhur should take note of this and make necessary changes in the roles and responsibility matrix regarding organisational design responsibility. HR should own this area and Rassal and his team should use this case as an example to set things right.
 

Last, it is important for practitioners of management to know and understand that human interactive networks are a lot dependent on organisation structure as much as they are on informal relationships. It facilitates the flow of information in an organisation and that directly impacts the culture. Strategy, structure, culture flow need to be appreciated so as to build organisations that withstand human errors of judgement and individual egos. Structure is a critical component of corporate governance and sooner Madhur and the founding team realises that, the better for the future of Artemis.

 

There are many levers to ensure and sustain organisational success. As Artemis grows in size and scale and complexity overpowers people into chaos, the current situation is a great starting point to make necessary changes.

 

 

(This story was published in BW | Businessworld Issue Dated 20-10-2014)