Visa Europe: Culture Change Management

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Abstract

In modern dynamic work environment, organisations have to continuously change their internal structures and operations in order to remain competitive. However, making the change work is not always easy. Modern leaders have to encounter formidable barriers to change. Visa Europe is one of the organisation that needed to change its organisational culture to fit in its new structure as a standalone company after separating from Visa Inc as well as fit in the modern competitive environment. As a result, the Visa Europe management introduced a “peak performance culture” to replace its outdated “initiative-based” approach. The case study offers credible lessons on how managers can make organisation change work.

 

 

Visa Europe: Culture Change Management

Visa Europe is a technology payment company owned and operated by close to 4,000 European financial institutions and other payment service providers. The role of the company is to work at the forefront of technology to introduce new, easier and more secure payment options for its members and their customers (Visa Europe, 2014). Initially, the company operated as a branch of Visa International (traditionally a non-profit international membership association providing its services to financial institutions worldwide) (Clarke, Higgs, Meyer2010; CIPD, 2011). In 2005, Visa international decided to list in US Stock exchange as private company, but allowed its Europe branch (Visa Europe) to continue operating under the membership association model. Consequently, Visa Europe became an independent company, separate from Visa Inc., and incorporated in the UK, with an exclusive, irrevocable and perpetual licence in Europe (CIPD 2011, Visa Europe 2014).

Need for Change- Environmental analysis

Change has been described as the “new normal” for businesses. As IBM (2008) observed, globalisation, complex multinational organisations, technology advances, more frequent partnering across national borders and company boundaries are just some of the enablers and accelerators of change. Such dynamic work environment has seen companies continuously realign to remain competitive. The change situation at Visa Europe was no different.

Separating from the Visa Inc and having to operate as separate company was fundamental change. As a new company, Visa Europe needed to develop new capabilities, including its own ability to process visa payment separate from Visa Inc. Initially, the company had relied on the central processing system in US. In addition, Visa Europe had to expand its offices, hire new staffs and prepare for the consequent legal, financial, risk and security roles of a standalone company. As result, Visa Europe had to restructure to fit in its new roles as a separate stand-alone company. All these changes were happening at a time when the competition in the technology payment was becoming increasingly vigorous.

Against the backdrop of the above fundamental change, Visa Europe also needed to change its culture to fit in the dynamic Europe environment.  All companies operating in UK as well as Europe are affected by the politics of European Union. The European Union move towards integration has also seen integration of financial services and liberalisation of financial services.

Besides conforming to the rules of company as established in UK, Visa Europe had also to comply with various European financial directives. Initially, as a branch of Visa Inc., Visa Europe was still tied to US Company’s regulations and culture. As a company established in UK and offering payment services across Europe, Visa Europe had to restructure its operation to comply with Europe’s financial directives. The regulations of payment services in Europe keep on changing and every payment company has to keep on reorganising to comply with new directives. In 2007 and 2009, for instance, the European Commission issued the new Payment Services Directive and the Electronic Money Directive respectively. As an incorporated company in UK, Visa Europe had to change its culture to fit in the new legal environment.

Consumer shopping habits in Europe has changed significantly over the recent years. More and more customers prefer to carry out their shopping online. Both the amount that consumer spends online and the number of online transactions continue to rise. In 2013 for instance, in what is known as the Mega Monday (the UK’s busiest shopping day), Visa Europe reported that there were 7.7 million transactions, an increase of 16 percent compared to previous year, and whopping £450 spent on online shopping (Visa Europe 2014). As a company, Visa Europe had to change its culture to rhyme with the increased Europeans love for e-commerce (Visa Europe 2014).

As a company dealing with technology payment, advances in technology is indisputably one of the chief drivers of change. Any company in the technology sector has to be innovative, swift and creative to remain competitive. In online payment, consumers want to see new and innovative products more often as well as be assured of the security of their online transaction. Visa Europe had no option than to bring in an innovative culture in its operations.

Culture change in Visa Europe was also necessitated by the increased competition in the payment services. A new culture was needed to compete with other payment services providers. Visa Europe had to offer higher services as well as introduce personalised services to its European members.

As a result of these new developments, the management of Visa Europe felt that it needed to bring in a culture of “peak performance” but retain the “family feel”, flexibility, empowerment, and innovation that had been the embodiment of its traditional success (Clarke, Higgs and Meyer 2010; CIPD 2011). Such a change could not have been possible with the existing culture that was only fit for a small branch that was centrally managed at the Visa Inc headquarters in USA.

The advantages of Peak Performance Culture

The culture that Visa Europe changed to is described as “Peak Performance Culture”. This is a management culture that is borrowed from sports. While describing this culture Gilson, Pratt, Roberts, Weymes (2011) remarked that there are teams and sports personality who have managed to stay at the top no matter the prevailing circumstances. According to them, there are lesson that business leaders can learn from teams like Chicago Bulls, Australian cricketers and sports personality like rugby’s Jonah Lomu, basketball’s Michael Jordan, William’s F1’s Frank Williams and cricket legendry Sir Donald Bradman(Gilson, Pratt, Roberts, Weymes 2011). All these players and teams have a culture of peak performance. It is from this background that Visa CEO remarked that the company should operate like “one-touch football’ where decision would be made fast. In order to achieve such a culture, each of the employees had to be empowered and trusted to make critical decision when times requires.

Such an approach has had numerous positive outcomes. The key business metrics such as customer satisfaction, growth, transaction volumes remain on a steady upward trajectory (Clarke, Higgs and Meyer 2010). As the new CEO, Nicolas Huss, proudly states, there are more Visa cards than there are people across Europe today. In 2013 alone, the company managed to issue additional 27 million Visa cards, the point-of-sale (POS) spending expanded by almost 8.0 per cent and there was an increase in company revenues mainly from new introduced products and services (Visa Europe, 2014).

The Peak Performance Culture also improved employees’ engagement. As the company introduced a new culture, it ensured that enthusiasm, the empowerment, the “family feel” and the trust that was there was Visa Europe was small, internally focused and highly networked organisation was not lost as the company transitioned to a larger, more structured and performance-focused one (CIPD 2011).

After the implementation of the culture change, the company had repeated stories of how individual potential had been released and how employees started improving their careers. The benefit of the peak performance culture is that it aligned the company’s values and employee’s personal values. Such an alignment made the employees feel liberated. With such an alignment, the employees not only bring their energy, creativity and enthusiasm to work, they also bring their commitment to the well being of their associates and the success of the organisation (CIPD 2011). According to one of the company’s employees, the new culture stretched, challenged, and moved them out of their comfort zone into their development zone (Ahlfeldt and Cramb 2007).

Ø  The advantages of the culture change can be summarised as follows:

Ø  The company started instilling values and behaviours that drove the culture change

Ø  The culture change drove the employee fulfilment

Ø  Employee fulfilment unleashed creativity and innovation

Ø  Innovative products drove customer satisfaction, and,

Ø  Customer satisfaction drove shareholder’s value

How Realistic is it to change an organisation culture

According to a study carried out by IBM (2008), nearly 60 percent of change projects carried out by organisations across the globe failed to meet their objectives. 44 percent of the projects failed to meet one or more of the goals of the change while 15 percent of the projects were called off by the management due to total failure. This study shows that implementing an organisation change has inherent risk of failure, but Visa Europe shows that it is realistic to change an organisation culture so long as the management applies the fundamental principle of change correctly.

 How Visa Europe managed the Culture change

            When implementing change, companies can result to different change management models. The most common are the Lewin’s Change Management Model, Mckinsey 7-S model and the Kotter’s 8 Step Change Model (Martins and Terblanche 2003; Burnes B (2004). All these models are designed with the recognition that change is not always easy to implement. For change to work, the management must overcome all barriers to change, including the initial employees resistance to change (Todnem 2007). Each of these models offers leaders a guideline to follow as well as the expected results for change.

            While introducing the required change, Visa Europe CEO told the employees that the traditional “initiative-based” approach could not sustain the organisation in a competitive and challenging market environment (Clarke, Higgs and Meyer 2010). According to the CEO, the company needed to operate like “one-touch football” where employees would be required to make quick and swift decisions. To achieve this, the company sought the guidance of Kevin Roberts who was then the CEO of Saatchi & Saatchi, a marketing service company. Robert was experienced in applying peak performance culture (Visa Europe 2014).

            Working with top teams, Robert introduced peak performance culture to Visa Europe. The hallmark of the culture change was to align employee’s personal values and aspirations with the organisation goal. Each of the employees was made to understand how his or her personal contribution could lead to the organisation success.

The management of the company, with the help of Kevin Roberts, felt that it needed to establish a shared and widely understood vision of the company.  As a result, the management started an organisation-wide conversation that aligned employee’s aspiration with the organisation vision and purpose.  The first engagement started with a one-day long workshop that explained the importance of the new culture to the mission of the company. Line managers were picked to head a sub-group of eight to ten individuals. The extensive involvement run for a period of 12 months before the peak performance culture was rolled out.

            The whole process of engagement was based on two critical principles. One the management made sure that employees understood the change was voluntary, and two, it was made clear that the change would be non-hierarchical (CIPD 2011). Working on these principles, the management realised that employees were enthusiastic. Each of the participants in the workshops and sub sessions became an ambassador of the change.

Drawing from this experience it is clear that managers have a realistic chance of changing an organisation culture if they master important principles of change. The case study brings out the importance of commitment from the top, the value of making the change process be seen as a business process and not one owned by the management, and more importantly, making individuals the focus of the change. The case study also shows that it is important to empower the participants of the change process so that they can become the ambassadors of the process and also to sustain the process for a long time (Balogun and Hailey 2008; Schein 2010). The peak performance culture has been sustained at Visa for over seven years now. In addition, a culture change stand a realistic chance if an organisation leadership manages the expectations of employees. This is where employees are helped to understand their realistic aspiration in the context of organisation goals.

Nonetheless, each of a culture change project has realistic challenges. At Visa Europe for instance, employees were sceptical of fluid structure of the change process. Since each employee was made responsible for the change (no hierarchy), the employees saw the change as unstructured and not very clear. Other employees did not understand how individual focus of the change process could lead to business benefits. The other challenge that threatened the process was the fear that those who did not participate in the process would be excluded from the new culture networks. However, the overall business improvement coupled with employees satisfaction helped in overcoming the challenges.

 

 

 

 

 

 

 

 

 

List of References

Ahlfeldt D & Cramb J (2007) Building a sense of family at Visa Europe. Human Resource International Digest Vol. 15 (2): 24-32

Balogun, J & Hailey VH (2008) Exploring Strategic Change. New York: FT Prentice Hall Financial Times

Burnes B (2004) Kurt Lewin and the Planned Approach to Change: A Re-appraisal. Journal of Management Studies Vol. 41 (6): 977-1002

CIPD (2011) Developing organisation culture: Six case studies. London: CIPD

Clarke N, Higgs M, & Meyer E (2010) Participating in Culture Change Programmes: Insights from three Different Culture Change Interventions. Southampton: University of Southampton.

Gilson C, Pratt M, Roberts K & Weymes E (2011) Peak Performance: Business Lessons from the World’s Top Sports Organizations. London: Routledge

IBM (2008) Making Change work case study. New York: IBM Global Services

Martins EC & Terblanche F (2003) Building organisational culture that stimulates creativity and innovation. European Journal of Innovation Management Vol. 6(1): 64-74

Schein EH (2010) Organization Culture and Leadership. New York: John Wiley & Sons

Todnem R (2007) Organisational change management: A Critical review. Journal of Change Management Vol. 5(4): 369-380

 

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