Apigee : People Management

practices and the challenge of

Growth

Submitted By: GROUP-1, Section- H

Priya Singh
Vispute Ankit Prasanna
Kavya Kasukurthi
Kolipakula Bharath Kumar
Franklin Solomon P
Yukta Suniti Keshri
Tripti Chaudhary
Situation Analysis

Apigee was a tech company that delivered API services to other companies that provided
connected digital experiences. The company was run on the idea of ‘empowered employees’
and the values and its culture were designed accordingly. The values of passion, bias for action
and respect were internalized and exhibited in their behaviour. The prevailing culture of Apigee
was focused on freedom and autonomy to its employees, fostered innovation, and to engage
employees through an empowering and fearless communication with no hierarchy. The
employees enjoyed a liberal work-life balance, a self-review-based performance evaluation, an
impact-based compensation plan with rewards based on experiential events like paid vacations,
and freedom provided through self-managed teams. There were also several unique practices
like open layout floor plans and no formal leave policies. This autonomous culture has begged
the question of sustainability over the growth of the organization.

Problem Statement:
Is the current organization structure sustainable with the increase in the size of the
organization?

Alternate Options for Evaluation

1. Employee Leaves: Introduce a more formalized leave application process for

employees. The existing process is not standardized and gives the organization no
capabilities to plan. With increasing employee numbers, prior information about
employees and a count of leaves makes the organization more room to make necessary
plans.
2. Organizational Structure: Apigee has a flat organizational structure. With increasing size
and a need to sustain their competitive advantage and Innovation, they should come up
with a matrix-like organizational structure. This provides room for both functions as well
as the division/product aspects. It is important that the organization introduces hierarchy.
It serves both the aspiration and a control measure.
3. Communication: The current office plan allows people to interact with everyone, and the
teams have no formal meetings as such. This would be very difficult to track with
growing complexity, both in terms of the number of teams as well as difficulty in tasks for
these better communication channels such as EIT and the minimum number of formal
meetings.
4. Performance Evaluation Measures: The current system spends a full day, and
employees, regardless of experience, are put in the same pools. This might be hard on
certain employees and the size ability to address concerns might go down. So, the
system suggested in classroom discussion, BARS, etc. a more comprehensive, and
pools based on cadre is necessary. This can be based on JD & JS.
5. Hiring policy: A new hiring policy, which includes freshers, can be undertaken. Given the
original scale, they can train the employees for skills and attitudes, etc. while the culture
fit can be a dimension for hiring.
Criteria for Evaluation

 Sustainability: In the highly dynamic and rapidly growing industry, it’s crucial for the
proposed solution to be sustainable in nature. The company’s growth will bring in more
revenue and thereby would require more employees. Any change in the organizational
structure or culture so proposed should be well-aligned with the growth strategies of the
company, and also account for changes in the environment

 Budget: In the financial year 2014, Apigee recorded a loss of $60.8 million. With the
plans for expansion in place, the proposed changes should be well within the budgetary
limits so that Apigee has enough money to reinvest in profitable areas in the future

 Core Values: The different alternatives so proposed should reinforce the values stated
below:

1) Passion: Employees at Apigee had always exhibited a passion for their

work and were supportive of their peers around, giving the company a light hearted
and friendly surrounding
2) Bias for Action: Apigee is known for responding promptly to clients. They believe
in the concept of “customer centricity” where the employees give utmost priority in
delivering value and best practises to the clients
3) Respect: Employees are given considerate autonomy and are empowered to be a
part of the decision-making process.

Evaluation of Alternatives:

1. Formal leave policy:

The leave days taken per employee are well below 30 per year. With the rapid growth of
the company number of new hires in the organisation will increase and this might result
in a significant increase in the number of people misusing the current policy of the
unlimited number of leaves. This will also ensure better planning at the organisational
level. The number of leaves per employee is also a cost to the company and formalised
leave policy will establish a control on the same Formal leave policy might have an
adverse effect on the autonomy of the employees and might send a message that the
organisation has lost trust in its employees.

2. Changing the organisational structure:

A flat organisational structure is a good alternative when the number of employees is
less, but with an increase in employee strength, flat organisational structure will be
difficult to sustain. Hence there is a need to introduce some hierarchy in the
organisation. The autonomy of employees will remain unchanged and the compensation
plan will also be kept the same. Hence this alternative should not have implications on
the budget of the organisation. Introduction of the hierarchy can result in introduction of
bureaucracy in the organisation and might send a message that the organisation has
lost trust in its employees.
3. Introduction of formal meeting culture and limit on work from home:
Currently, employees have the liberty to plan their workday. They can allocate resources
and find ways to coordinate with each other. This freedom is currently misused by some
employees. With an increase in employee strength, preventing this misuse can be a
difficult task. Hence, the introduction of formal meeting structure can help prevent this
misuse. Also, this will also ensure proper utilisation of resources. Imposing a limit on the
work from home days will prevent misuse and will ensure that all employees can avail
the work from the facility. Imposing this limit might adversely affect the feeling of trust
and freedom in Apigee employees.

4. Changing the performance evaluation measures:

Current performance measurement system requires the employee and coach to
evaluate performance every month. As the size of the organisation is increasing, it might
be very difficult for the coaches to evaluate all the employees every month. Monthly
goals can also create unnecessary pressure on new joiners who are trying to mould
themselves in Apigee culture. Time spent by employees and coaches every month also
has an opportunity cost associated with it which the company is incurring. Considering
the losses in recent years, Apigee also needs to focus on measures to reduce costs.
Reduction in frequency will not have a significant impact on the culture of Apigee.

5. Changing the hiring policy:

Apigee currently has a rigorous selection process and considers only experienced
candidates for employment. Apigee looks for candidates who can handle freedom and
responsibility in the most productive manner. Integrity, sense of responsibility and
commitment is also tested. Considering the growth of Apigee, hiring experienced
professionals with the aforementioned qualities can be tedious job and a bad hire could
render Apigee’s culture vulnerable. Hence, Apigee can go for hiring freshers from
engineering colleges. They can look for culture fit and the technical skills can be
imparted through training programmes. For better evaluation of candidates, Apigee can
introduce internship programme and hire candidates that comply with the requirements.
Hiring freshers can also result in significant cost saving. Experienced candidates might
take more time to adjust to Apigee culture, but in the case of freshers, this time can be
reduced and they can be moulded to work in “The Apigee Way” easily.

Final recommendation plan:

Based on the evaluation of our criteria we would recommend changing the

organisational structure and formalising activities like leave policy, meetings, working
conditions. As with the increase in the number of employees, control and coordination
among employees are at stake. In order to avoid unwanted problems, it is better to start
with changing structure of organisation.
And as apogee focus is on being sustainable, as well as preserving its core values, the
above recommendations should be taken based on these criteria.
Implementation plan:

Choose a structure which is close to flat structure as if changed abruptly to a structure

which is poles apart employees might face problems while adjusting to new structure.
Along with the changes in structure, formalising the other activities is to take place.
And as the budget is to be considered, we have to take steps keeping in mind that the
recommendations should not show a negative effect on the budget of the company.

Contingency plan:

If the selected structure doesn’t go with the company's values or reduces employee’s
focus, should go with gradual experimentation of any other structure form.
If the very motive of the company is at stake then the company should opt for the original
practices.