IIM Case Study: GUS India Education - Preserving the soul during rapid growth
Shashi Jaligama, Managing Director (MD) of GUS Education India (GEI) and his colleague, Nikhil Patwardhan, Senior Director, Client Services held a review meeting with the core team at the end of the workday on April 17, 2020. It was the coronavirus pandemic that had forced GEI to implement a work-from-home option for the staff; so the meeting was held on a videoconferencing platform. The meeting had largely focused on the efforts to ensure the highest quality of customer and employee experience during the lock-down even as the organization prepared for a possible short-term decline in demand for its services.
The meeting ended and everyone other than Shashi and Nikhil had signed-off. They indulged in some small talk with the intention of calling it a day but found themselves reflecting on the success of GEI since its launch. They recalled giving up careers in Global University Systems (GUS) in the United Kingdom (UK) and relocating to Hyderabad to start the India operations of the organization. They looked back with pride on the high level of growth that had been achieved and the high-performance organizational culture they had instilled. However, they reminded themselves that they needed to adopt some initiatives to sustain the rate of growth as well as introduce systems and processes to support the next stage of growth while maintaining the organizational culture. They were concerned that the culture could get diluted with the increase in the number of new employees, and their own inability to spare as much time in engaging with the employees as they had done in the early stages. Both acknowledged that there were some signs of strain in customer and employee experiences which needed to be addressed at the earliest.
Shashi had largely devoted time to manage external relations and had relied upon Nikhil in all organizational matters. Just before logging off, Shashi requested Nikhil to develop a plan to deploy systems and processes to sustain high growth while preserving the soul of the organization that had contributed to the entrepreneurial culture, which delivered quality services to customers and high engagement levels to employees. Nikhil had completed a 7-year stint in various positions with a gaming organization before taking up the current role. He had started at the entry level, when it was a 100-person organization, and had worked his way up both vertically and laterally through various positions and departments to become a head of department (HoD). When he left, the organization was listed as a FTSE 100 company with a market capitalization of £4 billion and employee strength of 2,500. He hoped to draw on that experience to address some of the challenges in implementing an entrepreneurial culture at GEI. Further, he personally valued people empowerment and was passionate about building an organization that encouraged empowerment.
However, he was also aware that as an extravert and natural people-friendly person, he had managed the affairs successfully so far based largely on his instincts. So, he decided to do some self-study and also consult with some of his senior colleagues who were part of the core team (see Annexure 1) in order to offer recommendations that were sound and implementable on scale. He also wondered if his exploration should examine something more than culture that needed to be articulated to sustain the high performance as the organization scaled.
GUS EDUCATION INDIA
GEI was the captive service arm of GUS, an international network of higher education institutions that provided Bachelor’s and Master’s degree programs, and a wide range of vocational programs and training services, including professional and language training, and corporate and executive training. As mentioned on their website,
GUS's network of institutions, affiliates and partners work across borders to offer globally-respected programmes and qualifications to students from all corners of the world.
The origin of GUS could be traced back to the establishment of the London School of Business and Finance in the UK by Aaron Etingen in 2003. It expanded by adding or acquiring other schools of higher education in the UK. GUS was registered as a private limited company in the Netherlands in 2013 to become the holding company that owned the schools and institutions in the network with Aaron Etingen as the Chairman, CEO and the majority shareholder. Since then, it continued adding educational institutions in Germany, Canada, Ireland, Israel, and Singapore. In 2019, it added the Pearl Academy of Fashion, Design and Media, and University of Petroleum and Energy Studies (UPES) in India with the purchase of Laureate Education India. In 2020, it operated 20 educational institutions, had offices in 42 locations, and had more than 75,000 students registered in various programs. GEI was a full-service in-house digital marketing and analytics agency located in Hyderabad, India that delivered scalable online marketing services to all the GUS institutions and their program brands. It was established in July 2017 but was formally launched on March 26, 2018 with about 100 employees. It grew rapidly to reach almost 1,000 employees by April 2020 with 18 types of services, including corporate services, digital marketing, CRM and analytics, market intelligence and product design, design, operations, contact centre, and global student recruitment.
THE BEGINNING
Shashi was from Hyderabad but had moved to the UK to join an Internet marketing firm. In 2013, he had joined GUS and was heading the digital marketing division of the business in 2017, when he was tasked with establishing a captive in-house marketing agency. The GUS leadership team had possible expansion in East Europe in mind when he tried to persuade the board to try Hyderabad as a possible location. Since GUS had earlier worked with a third-party agency in India and faced challenges, there was some resistance from within the GUS Board, but finally Aaron agreed to support the move. Shashi convinced Nikhil, who he knew for several years as a colleague from an earlier job, to join him in this adventure. Nikhil joined GUS with the agreement to move to India to set up the client services operations. As a part of this mandate, Nikhil first joined GUS UK for a 4-month stint to understand the services. They together moved to Hyderabad in July 2017 to initiate the venture. The evolution of GEI over the phases since then is shown in Figure 1.
PHASE 1: SETTING UP
The first phase, in July 2017, began with the process of complying with necessary government procedures to start operations and set up the physical infrastructure. Since Shashi was from Hyderabad, and was well-networked locally, he was able to do this quite efficiently. At the same time, Nikhil focused on starting the operations. The focus was on migrating functions to Hyderabad through a smooth transition with care to maintain business continuity for clients by ensuring zero downtime. He hired experienced digital marketing staff who had entrepreneurial tendencies to start the process of migrating functions from UK operations to Hyderabad. He also set up a data team to build the company’s first management information system (MIS) and enable data-driven decision making. This involved a two-stage process. During the first stage, the team had to convince the head office and global clients that GEI, located in Hyderabad, India could provide services of international standards by delivering high quality service and achieving targets consistently. Parallelly, the team had to work with the GUS group management to bring about a cultural change in GUS’s different entities, irrespective of location, to move away from individual Excel sheet reporting to an analytical, state-of-the-art MIS reporting system that provided business insights and advice for timely decision making.
Nikhil and his team also worked on establishing all the standard operating procedures (SOPs) and implementing best practices from his earlier experience to be able to assure clients of long-term quality service. He was able to hire about 50% of the digital marketing team he required and migrate about 80% of the digital marketing functions according to the plan. The team consisting of independent-thinking members with a problem-solving attitude worked to ensure 100% business continuity with zero downtime and maintained a growth of about 15% in marketing leads and enquiries for GUS courses, colleges, and universities. The young team was able to observe increasing brand recognition and recall in about 40 countries around the world where GEI had started online advertising. At the end of this phase, in December 2017, the organization had about 35 employees.
PHASE 2: BUILDING UP
The second phase of the journey, starting January 2018, was to build on the solid foundations of the earlier phase. About 3 months into this phase, there was a grand event with the Minister of Information Technology, Government of Telangana as chief guest to formally launch the operations of the company on March 26, 2018, when it had about 100 employees. Based on the early success of the functions migrated by the digital marketing team in India, the GUS leadership migrated six new functions. The GEI team took complete ownership of the service delivery processes that were migrated to enabled client success and earned client trust. The team leaders were able to win the confidence of the clients to become their go-to advisors on critical issues that were relevant to guiding their digital marketing strategies. As the processes and functions stabilized, the team introduced data-driven decision making and SOPs to manage operations more systematically and to avoid constant firefighting, which was quite the norm in the early part of Phase 1. The team proactively anticipated the client challenges and built protocols to address them to maintain operational efficiency of the highest standards. Most clients liked the idea of data-driven decision culture at GEI and learnt to have confidence in it as a trusted partner. However, some clients had to be educated on the benefits. It had to be demonstrated to them that a more data-driven approach ensured better end results. During this phase, the team was able to deliver the growth targets as planned to achieve 30% growth in leads and enquiries. At the end of this phase, in December 2018, there were 300 employees in the company.
PHASE 3: RAMPING UP
The third phase, beginning January 2019, focused on accelerating growth. This was achieved by scaling existing services with existing clients and deepening the relationships with a few by providing additional services, and finally adding new clients to the portfolio. Further, due to continuous success of the teams in India, eight new functions were transitioned to increase the suite of offerings from GEI. With the positive reputation built during Phase 2 and enhancements in the data-driven approach, adoption of best practices, and process improvements at GEI, the average cost of acquiring a new client was reduced by 30% from the previous year. With the new capabilities developed, the organization was able to enable new brands from clients to go to market within 2 weeks, which was a very high level of performance by international industry standards. GEI was viewed as a reliable trusted partner which had capable and empowered employees who were able to respond quickly to the client needs. Many more clients were willing to recognize some of the key employees as thought leaders and sought their advice on how to benefit from the services that GEI offered. Having gained the trust and confidence, many clients wanted to retain their assigned campaign managers and often asked them to be retained at any cost when there were plans to assign them to another client or some indicated a desire to leave the organization for other prospects. At the end of this period, GEI provided end-to-end sales, marketing, and remote operations for two universities and one college affiliated to GUS, and select services to most organizations in the network. By the end of this period, in December 2019, GEI achieved a growth rate of 94% on year-to-year leads and enquiries. It had nearly 1,000 employees at the end of Phase 3.
ORGANIZATIONAL CULTURE AT GEI
Shashi and Nikhil shared a common vision for the kind of organization and organizational culture they wanted to establish. They wanted to lay the foundations of a high growth entrepreneurial organization which had a high-performance culture that would be sustained even as the organization grew large.
ORGANIZATIONAL CULTURE IN PHASE 1
In Phase 1, they aspired to hire and empower customer-centric employees who had a growth mindset. They spent a lot of time interviewing candidates and interacting with them to ensure that they hired employees who shared their vision. They followed an open-door policy to encourage employees to be open about feedback, whether positive or negative, and also devoted a lot of time with early hires to ensure that they imbibed the culture. In the early days of this phase, many, particularly those who had joined from some larger firms, were skeptical that it was possible to have a non-autocratic, non-bureaucratic and open culture that encouraged transparency and open discussion of shortcomings. Shashi and Nikhil had to demonstrate through their decisions and actions that they were serious about discouraging a “Yes Boss” culture and encouraging frank feedback on any issue that employees felt were important in order to improve performance and the work environment. Finally, as it sank in with everyone that the leadership team was serious about the culture that was being instilled, the open-door policy and the entrepreneurial culture was appreciated and accepted by the employees.
Shashi and Nikhil knew everyone by first name and the entire team spent so much time with each other that there was little need to have any formal systems to instil and sustain the culture in the organization – one of them was always available to provide guidance. The open-door policy ensured they obtained immediate feedback on what was working or not working, and collectively they were able to develop a very entrepreneurial culture. Both were aware of, and to an extent prepared for, the challenges of sustaining a cohesive, competent and scalable team consisting of people with work experience ranging from 1 year to 15 years, who would deliver the same or better results than accepted international standards. A big disadvantage was that at the time of its launch in Hyderabad, GEI was an unknown corporate brand, so hiring and retaining capable but brand conscious employees was difficult. The challenge was further complicated by the employee attrition rates of about 30% in the industry, with an average tenure of most employees in a role for 12 to 24 months, and expectations of about 30% growth in compensation at least every 2 years.
Since the affiliate team was the largest, Shashi and Nikhil initiated the process of creating a team charter for it. The team charter was envisioned as a document that presented the common purpose for the team, and provided guidance and clarity to the team members of the importance of the work they performed. It emphasized their contribution to service provided to the clients, its impact on client’s success, and the overall performance of GEI. It also provided the employees with a personal development path and a plan to enhance their skills. While they had heard about team charters and its benefits, neither Shashi nor Nikhil knew how to create one. Nikhil was able to locate an example of a team charter project which he customized and enhanced to suit the specific needs of GEI (see Annexure 2). He conducted a brain storming session with the entire team. It essentially asked each of the employees to list their professional aspiration for the next 3 to 5 years and then asked them to list what they thought was the company’s aspirations for the long term. After open discussions of the personal, professional and company aspirations as suggested by group members, each of them was asked to individually attempt to align their personal aspirations with those of the company. After the individual exercise, the discussion was opened as a group activity, and Nikhil played the role of a facilitator cum coach to nudge the team to form a common team purpose based on the outcomes of the individual exercises. The adoption of team charter based on inputs from every team member played a critical role in convincing doubters that Shashi and Nikhil were keen on a high-performance culture built on empowered teams and employees. Chaitanya, Head Analytics, who was one of the early employees, still recalled how the idea of developing a team charter evolved and his experience with the participative process that was followed to adopt it. He believes it led to high levels of bonding within the team. The team charter and the transparent process used to develop it convinced all those like him who had joined GEI in pursuit of an entrepreneurial culture that they had made the right career choice.
