Question

Case Title:
Transforming Culture in the Kingdom: How Saudi Telecom Focused on People to Compete in the Digital Age.
(download link- https://www.dropbox.com/s/bxluxgwqtgzmc5l/Transforming%20Culture%20in%20the%20Kingdom.pdf.pdf?dl=0 )

Case Synopsis:
This case describes Saudi Telecom Co.'s (STC's) transition from a government-run entity to a business competing on the open market. Early in its transition phase, STC recognized it would need to transform its employee and company culture to succeed. Led by Dr. Khaled Biyari and his immediate predecessors, STC's cultural transformation was widely heralded as successful by 2018. But Biyari left the CEO role that year, leaving Nasser Bin Sulaiman Al Nasser to take over the position. The change at STC's helm represented a critical inflection point for a company that, as the incumbent provider of all telecommunications in the Kingdom of Saudi Arabia, was seen as critical to the success of the country as a whole.

Assignment Questions:
1. When Khaled Biyari took over as CEO of Saudi Telecom Co. (STC) in 2015, he instituted a number of change initiatives.
i. Explain why there was a need for change at STC at that time. (10 marks)
ii. Evaluate Biyari's change strategies from a change management perspective. (10 marks)

2. By 2018, STC was widely perceived as a turnaround success story in the gulf region. This notwithstanding, some employees still felt that the change strategies being implemented were misguided.
i. Hypothesize why this was the case from a change management perspective (10 marks)
ii. Suggest further steps the CEO and his team could take to achieve full employee buy in. (10 marks)

3. In March 2018, Al Nasser (who did not possess all the skill sets for job as yet), took over as CEO of STC, and his challenge was to transform the company from a traditional service provider to a digital provider for its customers.
i. Discuss how Al Nasser could succeed with this challenge. (10 marks)
ii. Suggest steps Al Nasser could take to ensure that the cultural transformation already achieved at STC was sustained. (10 marks)

Answer 1

Solution 1i):

Following were the reasons why there was a need for change at STC:

• The shift from a government-owned monopoly business to becoming a private player,
• The cultural transformation from a less efficient govt entity to a futuristic private enterprise,
• The organization structure was complex,
• Being a government organization, it had a high degree of bureaucracy,
• Market share of STC was falling against other private players,
• Low motivation level of employees due to lack of clarity,
• Lack of proper training and skills required to perform a job, and
• Leadership vacuum.

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Solution 1ii):

Following were the change management strategies:

• Deployed scientific business tools such as MCK's OHI to establish the current baseline of STC's cultural health and ability to succeed. In 2013, STC was the third-worst performing company to have ever used the metric.
• Business expansion through M&A, which would reduce operational expenses while bringing in new ideas from across markets.
• Recruitment of senior leadership to bring in fresh blood.
• Creation of a Head of Culture role reporting directly to the CEO. It showed that the CEO had direct accountability of the cultural transformation.
• Employees across all levels were involved in identifying the core six values for the basis of the transformation: 1) Customer first, 2) Innovation, 3) Agility, 4) Trust, 5) One STC, and 6) Employee first
• The cultural change was implemented in waves so that it was easier to adopt
• Phase wise buy-in from employees thru top 100, 400, and 1000. Other employees got the opportunity to interact with their bosses and CEO. These were mostly open-ended meetings with no agendas, therefore, allowing free conversation.
• Senior executives visited the field, sat in call centres and held town halls to get a better understanding of their customers
• The health doctor program at every department level to identify and lead change
• The hiring of women employees and integrating them into the workforce
• All of the change management efforts resulted in improving the OHI metric from 33 in 2013 to 78 in 2019.

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Solution 2i):

Following were some of the perceived gaps in STC's change management strategy:

• The focus was primarily on cultural transformation but not much on economic or technological transformation. Both were important given the nature of STC's business.
• Workforce lacked the skills required for the company to achieve the levels that it wanted to.

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Solution 2ii):

Following are additional ways in which STC can gain full employee buy-in:

• The CEO should lay down the 3-5 year roadmap in front of the employees so that everyone is aware of the general direction of growth.
• The CEO should share market feedback in terms of what is working well and what needs to be further improved.
• The CEO should clearly articulate on what basis they will measure success for the company and the individuals.