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Running head: GROWTH AND DYNAMISM AT HEALTHLINE !

GROWTH AND DYNAMISM AT HEALTHLINE

Grace Amos, Grace Chen, Jeff Hottinger,

Danny Howell, Hannah Elise Jones, Sammi Philips

Pepperdine University
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I. Organizational Overview

Healthline Media, Inc. (aka Healthline) is a private online media company focused on

health-related content for consumers. Founded in 1999 and rebranded in 2006, Healthline has

experienced rapid growth culminating in a large infusion of $95 million in additional venture

capital in 2016. This funding came with an increased demand for income growth, which has

propelled an expansion in staff and content production. Healthline’s current challenges relate to

growing headcount while improving the ability of the existing team to adapt to market changes.

The primary product Healthline creates is its website and the health-related articles the

site features. Revenue is derived chiefly from advertising on the site, and is highly dependent

upon traffic generated by search engines, mainly Google. This dependence forces Healthline to

react to any search algorithm changes made by Google and other search engines that impact

Healthline’s site traffic. To increase revenue, Healthline employs a strategy of producing more

content–which requires more staff–and improving content targeting to consumer demand as

expressed in web page-views and the correlated advertising revenue from ad impressions.

In the broader industry of ad-driven internet media companies, there is instability in the

shape of mergers, acquisitions, and bankruptcies. However, there is continued growth overall as

advertising spending shifts away from traditional media to catch up to where consumers spend

time. As a percentage of time spent, growth in consumer use of online media has outpaced

growth in advertising spending, with a large percentage of ad spending still going to print media

despite large declines in consumer usage (Meeker, 2017, p.13). Trends in online advertising are

moving towards more measurability and towards more targeting (Meeker, 2017), both of which

align with a strategic goal of Healthline to track and customize content for each consumer.
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Healthline aims to distinguish itself from its competitors through its mission, vision, and

values. By using an empathetic voice toward readers, Healthline aims to establish trust. Rather

than readers finding health suggestions that are alarming or overstated, Healthline hopes its

customers find a reliable and trustworthy human voice in its content. Their slogan is “We want to

be your most trusted ally in your pursuit of health and well-being” (About us, 2017). This

strategy is paying off as Healthline is the only health media site that is currently growing, while

competitors are becoming stagnant (Lau, 2016). While some competitors, like WebMD, have

been in the industry longer and have a more well-established voice, they are not immune to the

instability in the broader web-based industry. WebMD was recently taken private by its investors

in a $2.8 billion transaction (Staff, 2017) indicating that while lucrative, the marketplace for

internet health media companies is notably unstable. Another large competitor, Everyday Health

has also recently been purchased by a larger media conglomerate (Staff, 2016). Both the

unpredictability of the current industry structure, and the technology the industry depends on,

demand that Healthline remain vigilant in all aspects of its business in order to grow

competitively. In order to tackle these growth challenges, Healthline is examining how it can

effectively increase headcount, and expand employee capabilities, such that the organization can

respond quickly to continuous changes in consumer demand and search traffic patterns.

II. Analysis of Alignment

Environmental Challenges

An environmental sector analysis positions Healthline as a moderately complex

organization, in an environment with high-moderate instability (Appendix A). When taking all

sectors into consideration, technology and human resources are the most critical to Healthline’s

continued success. Healthline is competing against other major technology companies for talent,
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both in terms of hiring and retention of staff, making human resources a critical environmental

factor. Additionally, as a web-based company, Healthline is highly dependent on search engine

optimization, and must continually adjust and adapt to changes in search algorithms. This

dependence makes technology critical to Healthline’s sustained success as well. Financial

resources, market, cultural and socio-demographic sectors are also critical to the organization’s

success, though these sectors are either inherently more stable or influenced by stabilizing

actions taken by Healthline, such as their advertising revenue strategy (Appendix A). Based on

this analysis of moderate complexity with moderate to high-moderate instability, Healthline is

best positioned to adopt an analyzer position (Miles & Snow, 2003), where they have select

systems designed for stability while others are designed for increased flexibility (Appendix B,

Table 2). Increasing flexibility in essential areas of the business requires empowering the

business at lower levels and designing key processes to enhance agility (Felin & Powell, 2016).

Using a variety of data sources, including third-party employee engagement surveys,

internal meeting slideshows, and strategic planning documents, Healthline’s strategic stance

appears to be aligned with the above environmental analysis - or at least moving toward

alignment. For example, Healthline has a strong process for securing advertising revenue, which

is designed for optimal stability. While competitors have seen decreasing revenue in recent

quarters, Healthline’s approach has allowed them to increase their advertising revenue (Lau,

2017). This approach supports alignment with their unstable revenue environment, and is

contributing to business success. An area that the organization is working on moving into greater

alignment is human resources, which have been identified as a critical need for business growth

and success. While Healthline is currently misaligned to their competitive talent environment,

and lacks other key human resources components needed to enhance required stability and
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flexibility in the area, they are moving toward alignment by making an investment in the People

and Culture (P&C) team in 2018. Because of the current instability of Healthline’s human

resources team and the organizational relevance of the recommendations in this area, further

analysis will focus on key processes of the human resources function.

Functional Alignment: Human Resources

Currently, Healthline’s People and Culture team is only five employees serving

230 total employees in the organization. The team fulfills the responsibility of recruiting, hiring,

on-boarding, training, providing compensation and benefits, managing facilities, coordinating

organizational communications, running the performance review process, and more. The small

team is looking to grow in 2018 and has plans to play a critical role in making Healthline more

agile and competitive. Strategic planning for 2018 outlines key areas in which P&C will make

essential contributions to business success. The two functional goals and associated processes

that will be examined further are “Recruit high-quality, more diverse hires at speed” with

improved talent acquisition processes, and “Identify and develop our leaders, and enable all

leaders to coach their teams” with improved leader/manager development processes (Healthline,

2017b).

Talent Acquisition

As a rapidly growing organization, talent acquisition is essential to Healthline’s business

success. Despite this, Healthline has only employed one recruiter. The objective for 2018 is to

bring on two more employees and create a recruiting team, eliminating the need to use external

recruiting agencies, as Healthline has relied on in the past. The use of external resources has led

to high recruiting costs and lack of oversight in the hiring process across the organization.

Current efforts are underway to streamline this process and centralize recruiting under one
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cohesive strategy. This is increasingly important as there is a high demand for hard-to-fill talent.

To enable successful hiring Healthline has created a “Talent and Culture Framework” that helps

recruiters and managers identify candidates that are likely to be successful at Healthline. The

framework includes appropriate elements of individual mindset, role- and level-specific skills,

and behaviors that align with organizational values.

The recent work Healthline has done to centralize and focus the recruiting strategy is

helping to create stability in this essential area, but does not reflect the flexibility that may be

necessary in their employment strategy overall. There is a question of whether the new approach

will bring in talent that remains relevant as the business changes. While the mindset and values

components of the framework appear to prepare employees well for thriving in a changing

environment, there is a likelihood that changes in the work will transform the skills and roles the

organization needs. As an Analyzer organization (Appendix B), Healthline needs not only to

stabilize key processes, but to develop greater agility in other processes that require greater

dynamism to remain competitive. To develop this level of agility in talent acquisition, other

approaches may be valuable when considering a recruitment strategy and a more comprehensive

and agile staffing and talent management strategy overall.

Leader and Manager Development

Healthline recognizes the need to increase the capacity of their leaders and managers, so

that their organization can be more agile and resilient in all parts of the business. While a robust

manager and leader development strategy is new to Healthline, recent changes have put the

organization on the right track. In 2017, competencies were outlined for each level of the

organization, from individual contributor to vice president. The competencies, along with

organizational values and behaviors, create a framework for effective leadership at Healthline. In
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addition, Healthline has identified general skills that all managers should have, including giving

and receiving feedback, performance review, speaking skills, hiring, and coaching. The complete

Manager Basics and Talent Framework will be rolled out in 2018, now that a foundation has

been established.

Healthline’s current and planned leadership development resources are aligned to the

organizational strategy and external environment. However, some gaps still exist and are related

to the vital capability of agility. Recent engagement survey data show that only 31% of

employees feel their workgroup is agile and prepared for change, attesting to the need for further

development of managers with these key skills. Given changes in the industry and the need for

Healthline to respond quickly and effectively, developing agile capabilities in their leaders is

essential for increased effectiveness. Without agile leaders the organization cannot expect to

support true agility throughout the business. Current leadership development content under-

serves these vital capacities, such as balancing polarities, solving complex system problems, or

incorporating feedback. It would be beneficial to add concepts of agility into manager and leader

development offerings to encourage greater flexibility in leaders across the business.

Organizational Culture and Leadership

In considering existing opportunities to strengthen both talent acquisition and leader/

manager development at Healthline, it is important to consider the current culture and leadership

characteristics of the organization in order to determine what modifications are feasible, and

what additional efforts may be needed to create change. Healthline’s espoused culture is “Train

Hard; Work Together; Recover,” with guiding values of empathy, integrity, ingenuity,

collaboration and joyful healthful living. Based on the employee engagement survey, employees

believe in these values and see the organization as living them, with Healthline scoring 17
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percentage points higher than benchmark on the culture and values areas. In November,

Healthline reached their highest NPS rating to date, at 94% (Healthline, 2017c). This data

emphasizes that a strong positive culture does exist at Healthline, but not all elements of this

culture serve the business. Specifically, the data points to cultural challenges with both

communication and agility.

Executives and non-executives reported a lack of clear communication of Healthline’s

strategy and long-term goals. This lack of transparency was seen in both the quantitative data,

with only 39% of employees agreeing that senior leaders clearly communicated, and in

qualitative survey comments such as “All intentions seem to be good, but overall there seems to

be mixed directions /swim lanes not clear” (Healthline, 2017a). In addition to communication,

survey results produced low scores on employee perception of agility; this was the lowest

scoring dimension on the survey. This lack of clear communication and ability to adapt to

change, especially as Healthline continues to expand, could undermine the existing positive

employee engagement.

Anecdotal information gathered from conversations with stakeholders highlight a key

structural element of Healthline that may be perpetuating challenges with communication and

agility, and this could inhibit changes in key organizational processes. It appears that there is a

strong centralization of power in Healthline’s CEO. Data and anecdotes show that the CEO is

positively regarded, with one employee going as far as to describe him as “loved.” It was also

noted that other senior executives do not have a strong voice in the organization, and there is a

strong top-down hierarchy at Healthline. This lack of diversity in voices at the top makes

communication, change management, and organizational agility difficult. Transformative

changes to the talent acquisition process and leader/manager development will require a degree
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of cultural change in order to shift to more agile ways of operating. Healthline, and their CEO,

have begun to take steps to disperse power at the top, hiring a growth advisor for the executive

team and testing more communication channels, but transforming the organization in a manner

that supports greater empowerment across the business will require both mindset and

organization design shifts (Felin, 2016).

III. Organizational Change Proposal

Given the overall assessment of Healthline as a moderately complex organization in an

environment with moderately-high instability, the recommendations that follow are designed to

increase stability in key areas and flexibility in others. Taking into account recent efforts to

stabilize key components of the People and Culture function, the recommendations offer

suggestions for increased agility in the key areas of talent acquisition, leader/manager

development, and culture and leadership to better support organizational growth and

effectiveness. There are two recommendation sets: one for incremental progress toward greater

organizational effectiveness and agility, and one for accelerating Healthline to more

transformative change. A description of each of the recommendation sets illustrates the potential

future state at Healthline, should the recommendations be pursued. The focus areas that follow

present key recommendations to support incremental progress toward the described state. The

questions support organizational reflection on what might be required of the organization to

make progress on the given focus area, and Table 2 provides specific examples of change in the

recommended areas.

Recommendation A: Toward Incremental Progress

In order to achieve incremental progress, Healthline needs to develop in certain areas so

that employees may experience more role clarification in implementing strategic changes. The
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change initiatives that contribute to incremental progress are clearly communicated to employees

and understood throughout the organization. This allows more employees to engage with the

business, offering relevant suggestions and ideas that help Healthline be more proactive about

business changes. Communication on the business strategy and organizational change come from

a variety of leaders, and managers are prepared to respond to employee questions and concerns,

helping work groups to become more resilient and autonomous. Upward communication

continues to travel through the functional hierarchy, but there are a variety of collaborative

mechanisms used by leaders and teams, so employees experience their voices as valued. When

the business has to change quickly, people understand why, when, and how. There is agreement

on what is required to succeed in a given role, and both employees and managers understand the

expectations of the organization.

Leadership and Culture


Focus Area 1: Clarity and investment in strategy and goals
How can Healthline’s identity, purpose and strategy become a lens for all
employees to contextualize their individual and team contributions?
Focus Area 2: Executive-Level Power Distribution
What are the unique advantages to share power more broadly through the
executive team?
What structures and processes should be implemented to create a less hierarchical
system?
Leader and Manager Development
Focus Area 1: Focus on employee development
What are the career development tracks at Healthline? How are these / can these
be differentiated for strategic talent?
What role should the manager-direct report relationship play in employee career
development?
Focus Area 2: Consistency in management
What metrics can be used to assess success of people managers? How are these
incentivized?
Talent Acquisition
Focus Area 1: Internal development & retention
What skills will Healthline employees need to be successful in the next six
months? Next two years? Ten years? How might those skills be developed in on-
the-job training?
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Recommendation B: Transformative Change

In order to achieve transformative change, Healthline needs to address certain focus areas

so that employees may be empowered in strategic change initiatives within the organization. The

business strategy is co-created with employees and leaders, by pulling relevant information from

the business and its environment on a regular basis. Employee are encouraged to create and own

their own projects, in order to participate in the organization’s transformational developments.

Smaller, more self-managed teams are the main mode of work, and these teams are given the

autonomy to respond quickly to changes in their environments, helping the organization to be

more proactive and agile as a whole. Employees at all levels are trusted to make effective

business decisions and robust transparent communication provides them with the information

they need to do so. Expectations for leadership behaviors are high, and is reinforced by a high

degree of social management if an employee is not engaging in productive behaviors. As a

whole, the organization is flexible because of the high degree of empowerment given to

individuals and teams.

Leadership and Culture


Focus Area: Employee empowerment at all levels - with a specific focus on those closest
to users
How are individual teams / groups empowered to differentiate business processes
due to unique environmental factors?
How does Healthline support and facilitate creative problem-solving at all levels
of the organization?
Leader and Manager Development
Focus Area: Senior leadership support for agility at all levels
What mindsets empower senior executives to be leaders in a truly agile
organization? How are these supported and nurtured at Healthline?
Talent Acquisition
Focus Area: Mitigate the risks of employee’s skills becoming obsolete due to evolving
strategies
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To what extent does hiring focus on the ability to create long-term value, as
opposed to a momentary need for a specific skillset?
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Appendix A

Table 1. Environmental Sector Analysis:


Environmental Critical to Stable? Actions by Org that increase
Sector Org? or decrease stability

Industry -- -- high barriers to entry; strong market


position (2nd to WebMD)

Raw Materials -- -- web-based

Human Resources 1 High-moderate instability (growth, Budget investment; recruitment


layoffs) standardization (increase);
regular reorgs and role change
(decrease)
Financial Resources 1 Low instability (VC funded) Maintaining external funding to
support growth and mitigate
market influences (increase)

Market 1 Moderate instability Strong market position with ad


revenue in challenging
environment (increase)

Technology 1 High instability (google algorithms; Responsive, can cause internal


search engine optimization) turbulence (decrease)

Economic Conditions -- -- VC funded / free content (paid by


clicks not purchases)

Legal-Regulatory -- Same as political

Political -- Moderate low instability (politics of


healthcare)

Cultural 1 Low instability (above 90% NPS); BUT Budget investment people &
high growth & tied to charismatic CEO culture (increase)

Sociodemographic 1 Moderate instability (content based on Keeping in close contact with


socio-demographics of target users) users supports proactive content
change (increase)

Physical Environment -- -- web-based

Conclusions 6 Instability = moderate to high-moderate


Moderate
Complexit
y
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Appendix B

Strategic Position Based on Environmental Analysis:

Table 2. Spectrum of Strategic Stance

Defender Analyzer Prospector


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● Highly cost effective/ ● Combines strengths of ● Emphasis on finding &


competitively low cost defender & prospector developing new product
structure ● Tends to follow or service innovations
● Emphasis on quality, prospectors on key ● Core competence in
price competition, & innovations development of prototype
other barriers to market ● Some subsystems products rather than
entry designed for flexibility & efficient production
● Market segmentation others for stability ● Utilizes core
● Emphasis on efficient, ● Aims to produce range of technologies, structures,
precise production or products efficiently while & management styles to
service delivery remaining open to support flexibility
● Invests in high efficiency innovation ● Invests in new product
equipment ● Defend position in core market development &
● Close employee businesses & innovate or untested technologies
supervision “prospect” on the ● Succeeds in highly
● Succeeds in stable periphery unstable environments
environment ● Succeeds in moderately
unstable environment

(Miles & Snow, 2003)

Table 3. Sample Actions for Focus Areas

Incremental Progress

Leadership & Culture Leader & Manager Talent Acquisition


Development
Focus Area 1: Clarity and Focus Area 1: Focus on employee Focus Area 1: Internal development
investment in strategy and goals development & retention
● Develop communication ● Align incentives with direct ● Implement a regular scanning
training for all people report skill growth and/or futuring process to
managers that emphasizes assess skills that will be
clarity of goals and strategy ● Create career tracks for needed in future based on
upward executive mobility, environment
● Incorporate goal alignment technical expertise for subject
into performance management matter experts, innovation and ● Develop build vs. buy strategy
strategy ingenuity, etc. to develop employee skill for
projected future needs
● Increase opportunities for
direct employee- executive ● Conduct regular assessment of
discussion such as brown-bag employee skill and confidence
lunches or team visits in adapting to future needs
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Focus Area 2: Executive-Level Focus Area 2: Consistency in


Power Distribution management
● Create executive sponsors for ● Ensure all competencies are
different company initiatives. clear and specific at a
behavioral level
● Clarify decision rights for new
initiatives and empower ● Conduct regular assessments
executives / senior leaders to of managers against the
create steering committees. competencies

● Diversify voices leading All ● Create clear supports for


Hands meetings and other managers to improve in key
widespread communications areas of opportunity

Transformative Change

Leadership & Leader & Manager Talent Acquisition


Culture Development
Focus Area: Employee Focus Area: Senior leadership Focus Area: Mitigate the risks of
empowerment at all levels support for agility at all levels employee’s skills becoming obsolete
● Create combination of ● Educate senior leaders on ● Use a ‘travel light’
short-term, project-based, agile mindsets; facilitate approach to recruiting and
and long-term units. trainings to develop hiring, where the focus is
● Facilitate local creativity mindsets on hiring talent for the
and innovation through ● Create regular leadership skills needed in the short
effective differentiation sessions to sense term
● Minimize bureaucratic environment, shape ● With completion of units of
impediments (Felin & outcomes and seize work, project management
Powell, 2016). opportunities office facilitates
● Stand up project ● Invest senior leaders in redeployment of key talent
management / staffing creating high level of (Lawler & Worley, 2011)
group to facilitate rapid internal transparency ● See strategies from
resource allocation and re- around strategy (Lawler & Incremental Progress
deploy as necessary Worley, 2011) above
● Establish communication
cadence to share
information at all levels of
organization
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