Geneone Changing Organization

GeneOne is a biotech company that wants to grow. The market is showing favorable conditions to enter the public sector. The research and development departments could use the influx of capital to fund future projects. So, what is the problem? The problem with GeneOne is the same problem that plagues most companies that are knowledge intensive: change. Change is a scary concept to private companies. The management team is made up of old friends and colleagues. Most of the team has seen the company grow from start-up to a major industry player. The concept of moving from being accountable to themselves and the consumer to being accountable to Wall Street, the FDA, and consumers is a major shift in mission and vision. How can a company like GeneOne succeed in moving from private to public? The answer lies in a study of culture, politics and values. The transformation of leadership is an exciting and interesting challenge that can be overcome by understanding what drives a company.

In 1996, GeneOne was a startup company and experienced growth that made them a $400 million company by 2004. (University of Phoenix [UoP], 2005, 1) Now, they are considering going public. The Chief Executive officer and the Board of directors decided that it was time to make an initial public offering (IPO) of stock. This IPO would be followed up by annual growth targets of 40% in revenues as a measure of success. This change is throwing their leadership into turmoil. The presiding question is how to change a culture where the employees have the emotional link with the prosperity the company currently enjoys? Is the alienation of key founding employees worth the infusion of rules and capital that accompany becoming a publicly traded entity? Where does the hostility start and end? What can GeneOne do to develop their future without changing who they are?

Part one: The organizational structure of GeneOne.

The organizational structure a company employs directly influences the organizational culture. Organizational Structure refers to the division of labor as well as the patterns of coordination, communication, workflow and formal power that directs organizational activities. (McShane & Von Glinow, 2004, 446) Organizational Culture is the basic pattern of shared assumptions, values and beliefs governing the way employees within an organization think about and act on problems and opportunity. (McShane & Von Glinow, 2004, 476) Both of these concepts should be directly proportional. For example, an organization with strong leadership should have a strong culture. In GeneOne’s case, their leadership is very centralized and functional; however, the individuals in leadership are held back because of frank hostility against one another. A structure is centralized when power is held by a small group of people and functional because they are segregated into specific knowledge groups. (McShane & Von Glinow, 451-453) Because of this, if any manager oversteps their departmental definition, others instantly rebuff the considerations and feel threatened. GeneOne has now gone from an environment where everyone works for the benefit of the organization to a silo. A silo system cannot easily integrate with any other system, meaning a company can have multiple versions of the same data, violating the idea of a single version of the truth. A silo effect can and will have an influence on the culture, more negative than positive.

A functional structure leads to a silo effect. The silo effect is staying within the boundaries of their knowledge base, and attacking any criticisms of other’s areas of expertise. (Higgins & Young, 2003, 23) The effect is a very real example of politics and power. Power is the ability of a person, team or organization to influence others. (McShane & Von Glinow, 2004, 358) In meetings, the leadership of GeneOne is often argumentative, and tense. The March 8, 2005 meeting illustrated the tension and confrontational effects well when the CFO openly criticized the CTO on the direction of her research. (UoP, 2005, 5) The technology officer accused the CFO of not having enough challenges in finance. Any leadership issues that managers have will filter down to subordinates; therefore, enhances the functional silo, and reinforces their manager’s power.

The downfall of this structure is that the leadership has mostly the members who started the company. The emotional attachment is what is hurting the Initial Public Offering (IPO). Effective leadership has a high degree of emotional intelligence. The resistance to change is becoming more transparent and subject to investors is deeply rooted in emotional intelligence.

Emotional and social intelligence are recent labels to traditional behavioral research. Emotional Intelligence is the ability to monitor one’s own and others’ feeling and emotions, to discriminate among them and use this information to guide one’s thinking and actions. (Seal, Boyatzis, & Bailey, 2006, 192) The definition of emotional intelligence relates to transformational leadership. In transformational leadership, a manager appeals to the values and emotional needs of the individual in order to bring about change. (Anonymous, 2002, 6) What is lacking at GeneOne is the ability to appeal to those value states in the management teams.

The major driver of change in GeneOne is the Board of Directors and the Chief Executive Officer. The appeal is not one of growth, but of an order. In email correspondence, the CEO states, “if you are not on board with the IPO, then I accept your resignation.” (UoP, 2005, 7) With a management team who is highly educated and scientifically driven, this particular form of assertiveness will not appeal to the other members. In fact, the above one statement may have doomed the IPO from the start. Another problem area that GeneOne has is lack of experience in public matters. Although competent, several of the leadership members expressed their fears about an IPO. The CFO did not have any experience with public companies, and would not open the books until all the “…i’s were dotted and t’s crossed.” (UoP, 6) At first glance, the refusal to open the books may indicate that there was something on the books to hide. Subsequent statements by the CFO state clearly her concern that she did not have enough experience. Without strong supportive leadership, the need to achieve is missing.

Part two: organizational politics.

The politics of management are just as complicated. Just as self-monitoring is the extent to which a person observes his or her own behavior, the extent to which a person monitors others can lead to success in leading people. (Kreitner & Kinicki, 2003,