Board Agenda item: Five WRSX From: Francoise Mellier, Group HR/Talent Director, Paris Office, WRSX Group To: Board Directors Cultural change in New York There are some profound differences in culture across the Group and in some cases these differences are detrimental to the business. In particular, the hierarchical nature of the New York office's management style is in huge contrast to the Paris office and indeed the London office. The result of this is that junior and middle managers in the New York office are not empowered to make decisions that are commonly made by their equivalents across the Group in other offices. Decisions about important and urgent matters, many of which relate to clients, are delayed, sometimes to the detriment of the business. The issue for the Group is whether it is acceptable for the New York office to continue to operate as it does or whether steps should be taken to bring about change in the culture of the New York operation. The Board asked Francoise Mellier, the HR Director from the Paris office to produce a confidential report on this issue. An employee survey was carried out as part of her research and the results are now ready to be presented so that the Board can decide whether it needs to take any action as a result of Francoise Mellier's report. The issue for the Group is whether it is acceptable for the New York office to continue to operate as it does or whether steps should be taken to bring about change in the culture of the New York operation. MSX.V4_BM1_Detailed_Agenda_Items | Copyright @ Learning Dynamics 2021. All rights reserved.Summary of findings: The New York office is in an old building on Madison Avenue with beautiful antiques and paintings from the nineteenth century in the offices of all the top managers. Client feedback is mixed. Some love the old-fashioned formality and manners of the New York office. Some find it conservative and reflecting a lack of innovation in client work. Junior and middle managers in the New York office are not empowered to make decisions that are commonly made by their equivalents across the Group in other offices. Decisions about important and urgent matters, many of which relate to clients, are delayed, sometimes to the detriment of the business It is difficult to transfer people into the New York office, or to get them to work on project teams under some of the top NY managers, as they feel de-motivated by their lack of authority. Some of the very best talent in New York seems to be leaving the agency and exit interviews have highlighted 'lack of respect' and 'autocratic working environment' as a major reason for leaving. The culture of the New York Office is very formal with senior managers only attending meetings with their peer group or their direct teams The New York office negotiated to retain its Executive Dining Room arguing that more junior staff would find it uncomfortable to eat their lunch with senior managers if there was only one staff restaurant. There are also separate toilet facilities for senior managers. All managers above a certain grade are entitled to an office with windows to the outside and getting one of these offices is seen as a symbol of having arrived' in terms of career goals in the New York team. All of the top team are located on the 5th floor of the building and not with their teams. Senior managers tend to avoid social events with employees or lower ranked managers. The employee survey attached makes it clear that while some people find the lack of authority a problem, especially those who have transferred into the New York office, some actually like the fact that they are not accountable for decisions made. There is an argument for radical change if the Board believes that the New York office will not deliver its performance objectives if the current culture is allowed to continue. Mellier's report raises the issue of how clients perceive WRSX. She believes that successful global organisations have global cultures which supersede national cultures. Companies such as IBM, Procter & Gamble and Citi have corporate cultures that are seen by clients as delivering the same quality of products and services wherever you do business with them. Such organisations have delivered this global culture through creating global systems, global processes and global structures. The issue before the WRSX Board is whether change is necessary - and if it is, the scale of the change that is required to drive better performance and long- term growth in New York. MSX.V4_BM1_Detailed_Agenda_Items | Copyright @ Learning Dynamics 2021. All rights reserved.New York Office Employee Survey Executive Summary Introduction: First Person Research, WRSX's appointed research consultancy, was briefed to conduct a survey among New York Office employees at all levels. Questionnaires were distributed to all employees and staff participation was on a 'voluntary self-completion' basis, i.e. all staff were offered the opportunity to complete a survey. There was a 42% completion rate which is better than the industry-average of 27% for staff surveys. The data has been checked to see if it is representative across all businesses that fall under the New York Ofce and it is representative unless there is a 'health warning'. The survey was conducted in the past three months and this is an Executive Summary of the main findings: 'The Agency has a clear strategy that is well communicated to its employees ': 55% of all respondents agreed that the agency has a clear strategy but only 23% of employees agreed that communications about the strategy were clear and effective. 'The culture of the Agency is positive and optimistic': 43% of respondents said that they were positive and optimistic about the agency's future. 'The business places the most competent people in management positions '.' As many respondents disagreed with this statement as agreed with it. i.e. 50:50. 'My manager is interested in my well-being': As many respondents disagreed with this statement as agreed with it, i.e. 50:50. 'The style of management in the Agency motivates me to do better': 60% of respondents disagreed with this statement. The positive response rate was particularly low amongst mid-level managers and creative teams. 'll/ly relationship with my immediate boss is good': There is a generally good relationship between workers and bosses, with 65% of respondents agreeing that they have a 'good' relationship with their boss. However. only 35% of mid-level managers and creative teams had a positive view of their relationship with the senior management team. 'l am clear about my objectives and how they fit into the Agency's performance objectives '.' As many respondents disagreed with this statement as agreed with it, i.e. 50:50. 'l feel that l have sufcient authority to be able to do my job without always referring decisions to my boss '.' 47% of respondents disagreed with the statement but this rose to 65% disagreeing at mid-management level and within creative teams it was 71%. M5X.V4_BM1_Detailed_Agenda_ltems | Copyright Learning Dynamics 2021. All ghts reserved. 'I feel that I have too much responsibility for the level that I work at in the Agency': Only 26% of respondents agreed with the statement. It would appear from this that employees are willing to take on more responsibility. 'When things go wrong, I feel that the right people take responsibility': 71% of respondents agreed with the statement - evidence that there is not a 'blame' culture present in the Agency. 'People learn from mistakes and share their learning with others': 60% of respondents agreed with the statement. 'I would be happy to recommend this agency to a friend as a good place to work': Overall, 63% agreed. However, when the data is split by unit / function, the figure dropped to 42% in the 'creative' function areas. 'We are a work hard/play hard organisation': 46% of respondents agreed with the statement. 'We have a lot of fun and many of my colleagues are friends': 76% of respondents agreed with the statement. 'Senior managers are approachable and in touch with what is going on in the business' On average, 32% of respondents agreed with the statement, but there are big differences between units / departments. Please see the full report. 'This is a company that always puts its customers first': 54% of respondents agreed with the statement. In the open-ended question towards the end of the survey, many employees commented that 'the agency puts clients before employees'. 'Sometimes I feel that customers are unreasonable in their demands': Surprisingly, 23% of respondents agreed with the statement - surprising because we may have expected this figure to be higher. The answer is in answers to the open-ended question: 'While clients may be unreasonable in their demands, it is up to the right WRSX department to negotiate with them and make sure that their demands are not seen to be unreasonable. It is about the management of expectations - for clients and for employees'. "I feel that my ideas and suggestions are listened to by the company': Only 44% of respondents agreed with the statement. 'My remuneration and benefits package are in line with, or better than, what I would find in other agencies doing a similar role': 71% of respondents agreed with the statement. My remuneration and benefits package reflect the level of effort I put into my work': MSX.V4_BM1_Detailed_Agenda_Items | Copyright @ Learning Dynamics 2021. All rights reserved.75% of respondents agreed with the statement. There are opportunities for me to progress within the Agency should I wish to do so': 71% of respondents agreed with the statement. 'I have been provided with training which will allow me to progress in the company': 65% of respondents agreed with the statement. 'The standards of Health & Safety within the company are high': 82% of respondents agreed with the statement. 'The company invests in my professional or technical training': There are differences between units and functions, with some being higher and others lower. On average, 54% of respondents agreed with the statement. 'Senior managers know what I do, and I feel valued by the senior team for my business unit'. 51% of respondents agreed with the statement. 'On a day-to-day basis senior managers know what is going on in the company'. 41% of respondents agreed with the statement. 'When we have successes, we all celebrate and share the rewards': 35% of respondents agreed with the statement. 'When we have successes, this is communicated throughout the agency': 45% of respondents agreed with the statement. Our recruitment processes attract high-calibre people': On average, 78% of respondents agreed with the statement. Management scored 67% with the trades-management people scoring 75%. 'New people are welcomed into the agency and properly trained to do their job': 51% of respondents agreed with the statement. 'We value diversity in the agency in terms of Race, Sex, Sexual Orientation, Culture, Age and Experience': 83% of respondents agreed with the statement. 'Our senior management team lead from the front and are the primary motivators in the agency'. 23% of respondents agreed with the statement. I see myself having a long-term career with the Agency': On average, 52% of respondents agreed with the statement. There are, however, differences between age bands. 65% of 18-24 years olds agreed, with 41% of 35-44 years olds agreeing. MSX.V4_BM1_Detailed_Agenda_Items | Copyright @ Learning Dynamics 2021. All rights reserved.I have not thought about my long-term career but am happy in my current role': 49% of respondents agreed with the statement. As with the question above, there are differences between the age bands. 'I believe that I will need to look outside the Agency for my future career': While the survey was anonymous, this is an emotionally difficult question for employees to answer. 21% of respondents agreed with the statement. Amongst certain groups the figure was as high as 43%. Because of the difficulty of the question, the real figure may be higher. Prepared by: Robert X. Preston | First Person Research Inc. Agenda Item Decision Options: The Board has four Action Options: Option A: The first option put to the Board is to undertake a radical review of the management structure of the New York office, reducing the number of management layers and moving authority down the organisation in line with the rest of the Group. This will mean interviewing and consulting with staff and managers, re-drawing of job descriptions and objectives in line with similar roles in other offices. The budget for this restructure would be $350,000. Option B: The second option builds on the first. So, as well as undertaking a radical review of the management structure of the New York office, reducing the number of management layers and moving authority down the organisation in line with the rest of the Group, the Board votes for further action. Radical change will only be brought about by moving key personnel from other offices into the New York office at a senior level. This is what Francoise Mellier calls 'Leadership by example'. This will also mean moving some of the New York team to other offices or giving them an option to take early retirement or redundancy. The budget for taking this action would be $800,000. Option C: The third option again builds on options A and B. All of the suggestions in A and B would be put into effect but there would be even more radical change. The plan would be to move out of the current building into a new, ultra-modern building similar to the London and Paris offices. But, this would mean moving from Madison Avenue, seen as the heartland of advertising in the United States. Only the top five managers would have their own offices. Everyone else would work in open-plan offices in teams based on sector/service offering. There would be meeting rooms booked on a first-come-first-served basis and hot- desking for visiting staff from other offices. There would be one staff restaurant and no Executive Toilets. Out would go the antiques and in would come modern art and modern furniture. The budget for this action would be E2.5m. MSX.V4_BM1_Detailed_Agenda_Items | Copyright @ Learning Dynamics 2021. All rights reserved