Course: MGMT 9730: Human Resources Planning Topic: Vallia Energy Case Study

Vallia Energy Case Study (see images below, pages 1-6)

Question about change management regarding the case study (see image below, page 7)

Page 1

After weeks of planning for postpandemic times, Sean VALLIA ENERGY asks Joan to hit pause on their return-to-office mandate. DON'T SEND THE BACK-TO THE-OFFICE MEMO! Sean Lewis Joan Flores Jake Brown CCO SVP Head of Becounting Janet Stritikus Bill French Ted Petersen Administrative load Head of Head of oil-held geoscience and offshore workers Case Study SEAN LEWIS, THE CEO of Vallia their jobs remotely. Though some Energy, stared at the message had trickled back Into the office Should Some screen on his phone and prayed on a voluntary basis, Sean, unlike for three little dots. his competitors, had still not Employees Be "DON'T SEND THE BACK- mandated that everyone return. TO-THE-OFFICE MEMO!" he'd Now, with vaccines and thera- Allowed to Work written to Joan Flores, the senior peutics widely available, it felt vice president who managed their like the right time to reassemble Remotely Even corporate space. For weeks he and the HQ personnel. They'd been If Others Can't? Joan had been planning a return productive during the pandemic, to the office for the 3,200 employ- but Sean worried that Vallia was ees who worked at the oil and gas missing out on collaboration and, company's headquarters In Okla- as a result, Innovation.! by Mark Bolino and Corey Phelps homa City. More than two and He was also concerned about HBR's fictionalized case studies present problems a half years earlier, at the outset the brewing discontent of Vallia's faced by leaders in real companies and offer solutions of the Covid-19 pandemic, those roughnecks-the workers who from experts. This one is based on a case taught at the staff members (around 65% of labored on the drilling rigs and in University of Oklahoma's Price College of Business. the workforce) had begun doing the oll fields and who had beenJoan is surprised that Scan wants to delay "normal."But they wanted to bringing employees back to headquarters. come up with a way to balance work flexibility with in-office col- laboration. After a couple of false Experience Sure, Sean. I'll cancel it. starts, they'd settled on a hybrid Discuss tomorrow? solution: requiring all employees to return to the office at least four days a week, while allowing people to apply for exemptions. We can't afford that risk. I'm Throughout the process, Joan trying to bring Vallia Into the 2ist had been good-humored and century by making us digital and Case Study patient, but Sean wasn't sure how Al-driven and by diversifying Classroom she'd react to this last-minute beyond fossil fuels. That could Notes about-face. He breathed a sigh all be derailed if we lose our best of relief when he saw her reply: people and can't recruit others." 1. A2021-2072 sure, Sean. The memo was due Stanford study of We've considered other a multiation to go out at 10 AM tomorrow. I will approaches for a return to HQ." corporation cancel. Let's discuss In the morn- Joan reminded him.3 When she found that when Ing?" Sean sent a thumbs-up and Sean had first started map- emoji, but his heart sank. He felt ping out a plan, they'd envisioned worked from like he was back to square one. requiring everyone to be in the home two days a week, quit rates office two or three days a week. dropped by 35% RETHINKING THE PLAN But the company had reduced its and absences real-estate footprint early in the by 12% However, "What happened?" Joan asked pandemic, renting out a wing of 2020 study when she and sean met by the its building to a medical-testing of more man 61,000 Microsoft food trucks at Scissortall Park. start-up. To accommodate Vallla's employees found "Jim emailed me," sean replied, returning employees in the space that remote referring to Jim Bank, the head that remained available, Joan had workers became of human resources. "He noticed proposed creating a "hot desk" more siloed that someone recently posted or hoteling system whereby 2. In a 2021 a link in the company wiki to a employees could reserve desks global survey by survey question: Assume there's when they needed them. That ADP Research on-site all along. Many were a back-to-the-office mandate. Idea had sparked immediate Institute, 64% disdainful of the "corporate What do you do? People could pushback: Many people wanted of workers said suits" In the main office. Most choose from three possible they'd consider a more permanent workspace. looking for a had been vaccinated, but some responses: (1) I don't have time Joan had then suggested giving new job if they believed that the severity of the for this survey because I'm work- staffers dedicated but shared were required pandemic had been exaggerated. Ing on updating my resume; (2) desks or offices and creating to return to the and they didn't understand why I already have another job lined up an online tool so that everyone office full-time the office staff had stayed remote for after bonuses are paid out; and could see which colleagues were 3. Could an for so long. They were beginning (3) I'm moving to Hawall to surf." going to be on-site on a given day. employer launch to grumble about what they per- Come on, Sean, that doesn't But some employees objected to a pilot or do A/B cetved to be a double standard: mean anything. "Joan replied. sharing their workspaces. In fact. testing before They were often offshore or In the "It's just a joke!" several department heads had told rolling out a held for weeks at a time, while "Maybe," Sean said. "But It got Sean that if working from home companywide refum-to work their colleagues had the luxury of me thinking. The labor market a few days a week meant losing program? What being home with their families. has never been tighter, and many their private offices, they'd rather are the risks and Sean and Joan had never people now love working from come In every day. People had benefits of such expected working arrangements home. what if they'd rather quit also pointed out that Vallia would experimentation? to go back to a prepandemic than accept the new polley?z lose the benefits of spontaneousJoan wants to understand why Sean seems to be changing course on their hybrid work model. You've canceled Vallia's Not canceled, The labor market is tight, and now What will happen to trust and return to the office? postponed. people love working from home. teamwork if we're never We can't afford to risk losing them. physically together? You're an anchor employer here. Your city needs you to bring your people back. I'm not saying never, I'm just saying not yet. Sean fields a phone call from Dean Johnson, head of the local chamber of commerce. collaboration without a common an impending wave of retire- "I'm not saying never, " Sean schedule for everyone. ments. To appeal to younger responded. "I'm just saying not 4. A 2020 PWC With those concerns in mind, workers, especially those with yet. We don't have to rush this." survey found Sean and Joan had shifted course engineering and other technical The pair sat In silence for s that workers with less than the again. They'd managed to end the skills in high demand, off com- beat before Joan spoke again. years of expan leasing arrangement with their panles were trying to shed the "I'm curlous. What was the anos are aspa- tenant and planned to bring all reputation of being old-school most popular survey answer?" clally eager to be employees back four days a week. and part of a "dirty" Industry. At "surf's up." sean said, smiling In the office and Both of them had been feeling vallia, Sean was emphasizing the wanly. to report feeling confident about the decision- firm's digital transformation and ass productive until Sean saw the pseudo survey. Its efforts to reduce carbon and while working "We aren't going to please methane emissions and ellmi- EXTERNAL PRESSURE remotely everyone, "Joan said. "It's legit nate flaring, a technique blamed In his office later, Sean fielded to worry about folks resigning for air pollution and methane a call from Dean Johnson, the 5. Before the because we pull them back in. But leakage at small drill sites. Under head of the local chamber of pandamic according to a we also have to consider whether his leadership, the company commerce. survey led by keeping employees remote- also touted its commitment to "Dean, I had a feeling you the University particularly new hires and young diversifying its workforce and might reach out" of Chicago staff-will leave them withering supporting inclusion and equity "Hi, Sean. You sound well. Individual on the vine."4 workers In some programs in the community. Which surprises me, as I heard parts of the U.S. Sean prided himself on "I mean," Joan continued, that you've lost your mind and spent $12,000 being In touch with his workers, "what will happen over time if decided to cancel Vallla's return to $15070 8 especially the next generation. we're never physically together? to headquarters." year on food, For years business experts had Trust, teamwork, knowledge "Not cancel,"Sean said, shopping and been advising the energy sector transfer, a sense of belonging- chuckling. "Postpone." antertainment hear that lobs. to prepare for "the great crew these are things I worry about "well you know how disap change that would result from losing. pointed I am, speaking as theSean gathers the executive team for a Zoom meeting to consider an extension of Vallia'i work from-anywhere policy Remember, this sn't permanent We're paying to keep our offices My remote team comes together only ready. We should try to get quarterly. Maybe in-office days should come value from the space be geared toward collaboration? Jake Brown Janet Stritikus We can't live in limbo forever. At some point we need to make the tough decisions. Bill French Ted Petersen We are trying to recruit a new My field crews resent the hardships Joan and I will settle generation. How can we build a culture they deal with while the office on the plan soon. when no one knows each other? staff gets to work from home. voice of the OKC business com- In their downtown cores. "Your "My priority right now is our munity."Dean replied. "You're an community needs you to bring people," Sean said. "But If there's anchor employer here, and your your people back." a way to get some revenue from B. What people are the primary customers the empty office without turning obligation do for dozens of small businesses."'s companies have to contribute to "I know that, Dean." Vallla's MORE OPINIONS It over to another firm, and while retaining control of when we and protect their presence had helped the once- The next day, Sean gathered his return to work, I'm all ears." local commu- stagnating metropolis become senior leaders for a virtual meet- Janet Stritikus, who led the nities? How one of the 25 largest cities in the ing and told them he was consid back-office administrative roles. should Vallia prt country. "But I have to think ering continuing with work shared another idea "Many ontize Me many stake holders? about the long-term sustainable- from-anywhere for at least the people on my team have worked Ity of my workforce," Sean contin- next quarter. He acknowledged remotely for a long time, but we 7. Is there a ued. "It won't do anyone any good everyone's desire for certainty come together each quarter for critical mass If all my staffers quit and take the about a return-to-office plan but training, bonding and sharing of of employees 10 grand to move to Tulsa." He explained that he'd rather walt best practices. Why not let man- naoussery to was referring to a cash Incentive and be right than rush and be agers have mandatory In-office foster a corpo- rate culture? offered by the nearby city to lure wrong. Aflurry of raised-hand days geared toward projects that What practices remote workers to relocate there. Icons appeared on his screen. require collaboration? and tools can "I get It, but all of us at the "We're still paying off loans on "Great thinking. "Sean said. organizations chamber and City Hall-we're our building, and paying to keep "That could be a good first step." use to create not sure OKC can take the hit if It ready." said Jake Brown, the Bill French, the head of geo- shared norms and values when your offices stay empty." Both head of accounting. "We should sclence, spoke next: "We're trying employees are men were well aware of the at least try to get more value to bolster our workforce and not colocated? recent Wall Street Journal story out of it. Maybe we should keep recruit a new generation. That Indicating that remote work had leasing space to the medical- requires building a new culture. become a credit risk for many testing company, or rent out areas But how can we do that when no cities because of lower tax bases for events or conferences?" one knows each other?"7Experience "That's exactly why I'm torn," Sean replied. "We do need to make sure that something bonds us together. But new hires don't want to be forced into the office." "Coddling them doesn't sit well with my field crews," Inter- jected Ted Petersen, the head of the oll-field and offshore workers. "They resent the hardships they deal with while the office staff gets to work from home." "Please rememberthatthis lan't permanent," Sean replied "And short-term, perhaps we can stretch the budget to add more contractors. That would allow some flexibility for our full-timers so that things feel more fair." How should Vallia "Fine, but we can't exist in limbo forever," Ted said, sound- proceed with plans for in- Ing exasperated. "We may not be sure what's right, but at some office and remote work? point we need to make the tough decisions." The experts respond. Sensing rising tension, Sean decided to end the meeting. "Joan employee office days, sean should and I will get to work and settle on focus on creating an environment so the plan soon,"he said. As he was BRACKEN DARRELL IS attractive that people will want to come signing off, he noticed that Joan the CEO of Logitech. In. Then he should let teams decide for had texted him a worried-face themselves what the right mix of on- amoll. "Nokidding " he replied. @ and off-site work should be. Organizations can make their work- places Inviting by providing the best MARK BOLINO Is the David Sean was smart to trust possible tools-whether hard hats or L. Boren Professor and the his instincts and press webcame-and space that is functional Wengel F. Price Chair M Interns- and comfortable. They need rooms ional Business at the University pause on the return-to- designed for small-group conversation of Oklahoma's Price College of Business. COREY PHELPS Is the office rollout. and collaboration, with relaxed seating. dean and the Fred E. Brown Chair good lighting, and easy-to-acces of Business at the University of To build the right culture, Vallia should whiteboards. There should also be Oklahoma's Price College of still have a headquarters. But I'm not a conference rooms to hold meetings with BUSMess. fan of mandates. Instead of scheduling colleagues, partners, and customers,elther in person or via technology that Why? Because work is something you not seen nor do we anticipate any drop ensures that people not in the room feel do, not a place you come to, and most In productivity, engagement, or reten- Involved and engaged. (Disclosure. My chief executives, Including Sean, are tion; even during the Great Resignation, company sells videoconferencing and already leading dispersed workforces. we had very few voluntary departures. other office equipment ) Additionally. As companies grow, they spread out If Sean wants to transform his work- the design should incorporate small, over multiple rooms and then multiple force, allowing remote work is one way enclosed spaces for people to make pri- floors and then multiple time zones, to do it. vate calls or do heads-down work. Some countries, and cultures. Vallla Energy Before our transition, I shared of those can be reserved for the few already has employees collaborating Sean and Joan's concerns that less- employees who choose to come into the across locations, so embracing that experienced team members would miss office every day: the rest can be booked distribution is not as big a leap as one out on crucial mentoring that Innova- hourly or dally through an app. might think tion would suffer, and that resentment it can be tempting to look for a one- I understand Sean's Indecision. might grow among workers whose roles size-fits-all solution. But Sean should spotify moved to a distributed-first require them to come to the office. But tread carefully. He can't take away the model In February 2021. But when our we've found that distributed-first has a flexibility to which HQ employees-and cofounder Daniel Ek started pushing wonderful self-organizing quality about new, diverse talent he wants to recruit- the Idea a few years earlier, I was uneasy It. Most of our employees chose an office have become accustomed. And, to state and often felt myself pumping the mix over a home mixso they could reap the obvious, an organization position- brakes. Of course, It was the pandemic the benefits of colocation; they just Ing itself as a 2ist-century energy com- that changed my mind. Like other didn't want to be obligated to come in any shouldn't require its employees to technology companies, we shifted to all the time. We don't do hot-desking. commute In their carbon-emitting cars all-remote work, and employees told us but we don't assign desks elther- every day. So balance and flexibility are that they cherished the newfound flex- Instead, we designate "neighborhoods" key-asis clear communication. Ibility and autonomy. We didn't want based on function and role so that sean should emphasize to his entire to take that away from them-and we people know generally where to find the workforce that the roughnecks' on-site realized we didn't need to. Today most colleagues they need for collaboration. labor continues to be mission-critical, employees choose where and when Though we believe that our transi- generating the capital that Vallia needs they work; we ask only that they state tion has been a success, we continue to build a new future. He should explain their preference for an "office mix," In to seek feedback from employees. why the OKC headquarters will remain which they work mainly from the office. and we've partnered with academics an important gathering place-and or a "home mix," In which the office Is from Stockholm University to measure a commercial hub in a thriving city. available to them but isn't their primary long-term results. Sean will want to And he should reinforce the Idea that work location. do something similar at Vallia, paying the company's success depends on sean's decision is more complicated. particular attention to sentiment among a collaborative spirit and everyone's as Vallia has a class of employees who the roughnecks. contributions. don't have the option of working from Humans are creatures of habit. The home. But I suspect that the on-site pandemic was a discontinuity that crew members will be understanding. opened up a rare opportunity to do if sean makes it clear that the company things differently. Sean, who seems KATARINA BERG IS values them as much as their HQ col- to have continued to go into the office the CHRO of Spotify leagues. Transparency and sharing the himself, is struggling to accept the reasoning behind all decisions are key new reality of work. But Ican assure to keeping employees engaged. him that his knowledge workers, who Flexible work arrangements are have become habituated to increased Sean should shift Vallia relatively new and haven't been deeply freedoms, will never go back entirely to researched. But at Spotify we see strong the way things used to be. The sooner he Energy to a distributed- Indications that our stance has made and his team accept this, the better.@ first model, permanently us more attractive to talent, particu- allowing people to work larly young employees and those from HBR Roprint R2301M diverse backgrounds whom we might Reprint Case only RADIX from anywhere. have struggled to reach before. We have Reprint Commentary only R23012Pick a future scenario (a or b): a) Vallia implements a Return to Office policy (4 days per week as described in the case) OR b) Vallia implements a \"distributed first model\" as described by Katarina Berg (permanently allowing people to work from anywhere) IJ'.' Change Describe the change management plan you would propose. Management | Ensure you consider informal and formal networks and communications channels. What are the considerations to ensure fairness and consistency related to 'exemptions' if the RTO policy is implemented? How do you address Dean Johnson's concerns if Vallia implements the distributed model