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Harvard University

MGMT E-5100

Apigee: People Management Practices and the Challenge of Growth Case Study

Case Overview

Since the turn of the 20th century, the information technology industry worldwide began

experiencing exponential growth seemingly year-after-year. With organizations around the world in

demand for comprehensive consumer data, operational efficiencies, and continual financial growth and

sustainability in cutthroat industries, application programming interface (API) providers saw opportunities

for business ventures that met those demands. Apigee Technologies Pvt. Ltd was one such API provider

which experienced success during the ascent of this specialty in the technology sector of the early-2000s.

Based out of Bangalore, India, often referred to as the “Silicon Valley of India”, Apigee took well

advantage of their area’s highly educated workforce of inhabitants specializing in STEM fields. Apigee

experienced further growth after Srinivasulu Grandhi took over as vice president and managing director

of Apigee’s Bangalore office in 2011. By 2015, he oversaw Apigee’s staff blossom from 250 to well over

400 during that four year span. Perpetuating the vision espoused by Apigee’s CEO, Chet Kapoor, Grandhi

established a culture of collaboration, openness to experimentation, and an emphasis on innovation and

learning. Their approach during this tenure paid off for the company as Apigee’s total revenue grew from

$27.6 million in FY 2012 to $52.7 million in FY 2014, representing a 91 percent increase.

However, as often happens with fast-growing companies, its losses had also been soaring, from

$8.3 million in FY 2012 to $60.8 million in FY 2014. Losses in FY 2015, however, had slowed compared

with the previous year. In April 2015, the company sold 5,115,000 shares in its initial public offering,

raising $87 million. Apigee’s was thus the first public offering from a software company that worked on

APIs. Despite the rise in recorded losses, the company’s future was still exceedingly bright. With the

company trending towards further expansion, there was dubiety on whether the company would be able to
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maintain this culture of “collaboration, openness to experimentation, and an emphasis on innovation and

learning”. Key members of the senior staff pondered whether Apigee would require adjusting critical

human resources operations in order to adapt to the foreseeable growth. A question that must be answered

is: “Would it be possible to connect the growing number of employees with the organizational values of

sustaining passion and excellence without creating organizational conflict?” While the optimism and zeal

was high throughout the organization, Grandhi was well aware of the challenges that lie ahead and knew

he needed to discuss with the HR team and the senior management the integration of Apigee’s unique

culture with its growth plans.

Experiencing Growth and Dealing with the Potential Pitfalls of Organizational Success

Since Apigee’s inception, Kapoor and Grandhi were clear that the organization would be

designed and driven by a heavy focus on people and would work toward establishing management

practices that empowered employees. Kapoor stated, “ We at Apigee deeply believe in the ‘magic of

people.’ Apigee nurtures the right environment for people to realize their potential and lets the magic

unfold. We constantly look at fine-tuning our ways of working and our hiring approaches to allow this

magic to happen (Ivey Publishing 2017).” The organization’s people-emphasized approach to

management was based on the strong inclination that putting the employee first would enhance

productivity and the efficiency of processes would soon follow. This people-focused style of work

necessitated an understanding of the culture and the values that prevailed at Apigee. “Referring to

Apigee’s unique culture and its effectiveness, Michael Fleshman, senior VP for customer digital

technology at BBC Worldwide, remarked, “What defines success for us is the design of the APIs

themselves. The level of expertise that Apigee brought to the table in terms of individuals who can help

with the design of the APIs was an important aspect” (Ivey Publishing 2017).
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There are several reasons why many point to the growth and success at a company like Apigee.

These are some of the highlights that set the company apart from several other inside and outside of the

tech industry.

● Cultural Building at Apigee

○ The unique culture at Apigee, i.e., “the Apigee way,” was the outcome of

culture-building exercises that were initiated to identify the company’s core values.

Apigee’s way of building culture was markedly different from traditional top-down

culture-building approaches; Apigee’s leadership team devised a bottom-up approach that

was accomplished in-house.

■ What this entailed was a culture in which democratic values were appreciated.

Employees were allowed to express their thoughts and opinions regarding their

work, the company, and its culture. There are three critical values were

internalized and exhibited at Apigee: passion, a bias for action, and respect.

● Passion, A Bias for Action, and Respect

○ In addition to the personnel at Apigee being passionate about their work, they also took

an interest in the work of others and supported their success in addition to their own.

Learning beyond their individual roles took place as well. Thus, individuals within the

organization were free to informally collaborate across divisions where brainstorming

and idea formulations occurred without constraints.

○ “Another important value that guided Apigee’s manner of operating was its “bias for

action. The secret of Apigee winning deals and appreciation from clients stemmed

primarily from Apigee’s culture of taking quick decisions and responding promptly to

clients. Because of the hyper-focus approach towards customers was emphasized and
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associates were not micromanaged, associates were free to make unilateral decisions

without the constraints of red-tape like in many large organizations.

○ Lastly, “respect, both for each other and for autonomy, was a deeply valued and

cherished philosophy at Apigee. This respect was reflected in Apigee’s flat organizational

structure. Highlighting Apigee’s culture of respect, an employee remarked, “At Apigee

there is hardly any hierarchy. All employees can walk up to the CEO anytime to talk

about new ideas or about something the employee is not happy with” (Ivey Publishing

2017). Another employee stated, “Employees are trusted and empowered to make

decisions. We have freedom in doing what we need to do to get the job done. There is no

bureaucracy or politics—just a good environment of cross-functional teamwork” (Ivey

Publishing 2017).

● Human Resource Practices, Performance Management, Work-Life Balance, etc.

○ With Apigee’s core values of “passion, a bias for action, and respect” being at the center

of their success, a specific human resources strategy was set in motion to ensure the

preservation of their core values. This entailed that the hiring process must be keen on

identifying candidates who could blend seamlessly with Apigee’s culture of being able to

handle freedom and responsibility in the most productive manner.

○ As the company evolved, the leadership team introduced performance management via a

mobile application that had four or five customized themes for each business function.

Using the application, the employees entered their goals, which the coach reviewed at the

start of every month. At the end of the month, the employee could perform a self-review,

which would subsequently be approved by the coach. “The use of innovative technology

increased not only the objectivity of the performance appraisal but also its frequency by

replacing the biannual performance appraisal process with a dynamic system that
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captured performance in real time. The employees were fully aware of their performance

through real-time feedback, thereby making performance review meetings redundant”

(Ivey Publishing 2017).

■ This employee engagement has enabled employees to succeed through an

environment of empowerment, autonomy, self-learning, and fearless

communication built upon the absence of hierarchy.

○ Additionally, employees were given the flexibility, freedom, and autonomy to manage

the type of schedules that best suited their working style. With much of the Apigee

environment being informal compared to traditional corporations, employees are free to

work from home (as long as the necessary personnel from their team are notified). As

Apigee’s culture facilitated collaboration and openness within the organization,

individual employees did not feel the need to hide information or to make excuses for

their absence. This also meant that employees could take vacations at seemingly any

time, as long as their colleagues were kept apprised.

“Apigee’s unique DNA with regard to its HR practices had several positive outcomes, such as

enhanced productivity, lower attrition, and better collaboration that resulted in organizational

effectiveness (Ivey Publishing 2017)”. In fact, this culture of empowerment and freedom enabled it to

partner with several large and influential clients, including the British Broadcasting Corporation and

Adobe. “Apigee had undoubtedly created much goodwill among application developers, who constituted

another vital stakeholder group and played a major role in contributing to the success of the organization

(Ivey Publishing 2017)”. However, as Apigee was poised to take the big leap to become the leading

provider of cutting-edge digital transformation technology across the globe, Grandhi felt that Apigee’s

existing culture was fraught with risk. He anticipated that Apigee’s culture of excessive freedom and
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empowerment could lead to lower productivity or subpar organizational results. “After all, a culture that

lacked monitoring could make it easier for employees to set lower benchmarks and to indulge in loafing.

Grandhi and his senior team had invested much time and effort to build the unique culture at Apigee,

which assumed that employees had both the maturity and the capability to handle autonomy” (Ivey

Publishing 2017). With the prospects of Apigee’s growth projections, Grandhi must answer some of these

questions, such as: Would Apigee’s current culture be sustainable if the company grows? Was it possible

to embed Apigee’s culture into people’s consciousness through the use of institutional processes? Or

would such an effort betray Apigee’s culture of autonomy and freedom? Would the leadership team be

able to install processes without entering into the bureaucracy quagmire? How could Apigee guard

against complacency? In light of Apigee’s ambitious growth plan, Grandhi realized the importance of

seeking answers to such crucial questions.

Recommendations for Management

Throughout their early years of rapid success, Apigee implemented the four most effective

leadership styles to shape their company culture of autonomy, empowerment, freedom, openness to

learning, collaboration, democracy, and employee-centricity. With the balance of the “Authoritative

Style”, “Affiliative Style”, “Democratic Style”, and the “Coaching Style”, Apigee found early success

that set them apart from their competitors and won them favor amongst numerous elite multinational

corporations. While it is imperative for leadership within an organization to employ a healthy mix of

styles to manage their teams, there are also potential pitfalls that may occur when these styles are not

applied correctly or sufficiently to address certain scenarios. I will begin by briefly providing explanations

of each aforementioned leadership style, how or when they may be implemented in certain situations, and

the potential pitfalls of each corresponding style.

● The Authoritative Style

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○ An authoritative leader takes a “Come with me” approach: she states the overall goal

but gives people the freedom to choose their own means of achieving it. This style works

especially well when a business is adrift. It is less effective when the leader is working

with a team of experts who are more experienced than he is (Coleman 2000).

● The Affiliative Style

○ The hallmark of the affiliative leader is a “People come first” attitude. This style is

particularly useful for building team harmony or increasing morale. But its exclusive

focus on praise can allow poor performance to go uncorrected. Also, affiliative leaders

rarely offer advice, which often leaves employees in a quandary (Coleman 2000).

● The Democratic Style

○ This style’s impact on organizational climate is not as high as you might imagine. By

giving workers a voice in decisions, democratic leaders build organizational flexibility

and responsibility and help generate fresh ideas. But sometimes the price is endless

meetings and confused employees who feel leaderless (Coleman 2000).

● The Coaching Style

○ This style focuses more on personal development than on immediate work-related tasks.

It works well when employees are already aware of their weaknesses and want to

improve, but not when they are resistant to changing their ways (Coleman 2000).

As Apigee continues to grow, Grandhi is right to be concerned of his organization’s excessive freedom

and empowerment because while it has worked in its current state larger organizations are inevitably more

complex and need more control and strategic management. With these heightened complexities at play, I

recommend that these additional leadership styles be incorporated into Apigee’s current repertoire.

● ​The Pacesetting Style

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○ A leader who sets high performance standards and exemplifies them himself has a very

positive impact on employees who are self-motivated and highly competent. But other

employees tend to feel overwhelmed by such a leader’s demands for excellence--and to

resent his tendency to take over a situation (Coleman 2000).

■ While the attributes of autonomy, empowerment, freedom, collaboration, and

democracy are what have made Apigee the type of company that has attracted top

talent in their region in the past, it would be in the best interest of the company to

incorporate pacesetting styles that push employees to reach certain heights when

required. The reason for incorporating this style is that not all employees are able

to sustain a high level of motivation towards their work. Thus, it would be

beneficial for Apigee to moderately incorporate goal-setting objectives that assist

employees in getting to a certain level, pushing their limits, and accomplishing

objectives that otherwise wouldn’t have been achieved without a little nudge

from its management team.

● The Coercive Style

○ This “Do What I Say” approach can be very effective in a turnaround situation, a natural

disaster, or when working with problem employees. But in most situations, coercive

leadership inhibits the organization’s flexibility and dampens employees’ motivation

(Coleman 2000).

■ Statistically, this leadership style is the least effective amongst all mainstream

leadership styles. However, as Apigee continues to expand and bring in different

types of employees, there’s bound to be situations in which crises occur or

problem employees arise. Thus, in order to maintain order and control, it’s

imperative that Apigee incorporates this style of leadership, when necessary. I

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must emphasize necessary because this style of leadership, when abused or used

incorrectly, can provide lasting damage to individuals, teams, and organizations.

Apigee must use this style cautiously, but also understand the powerful influence

it may have in certain situations.

Conclusion

It’s not enough that Apigee