How PARC Analysis can help assess problems in an organisation? – Part 1

I have lately realised how important Organisational Behaviour (OB) is. Out of all the courses that I have taken during the MBA, the only ones that I would remember in the future will be the OB ones.

One important question that the OB courses tried to answer was the issue of Organisations, and how to study them effectively. An in-depth understanding of an organisation is essential to be successful within an organisation, either as a CEO or as a young Analyst. Managers who are successful are not only good at formulating effective strategies, but they are also adept at working with others in implementing these strategies. Skills, personal abilities and knowledge are essential for anyone climbing the corporate ladder, however, understanding an organisation and leveraging its dynamics are absolutely critical.

I have learned many frameworks and analysed many case-studies to understand the Dos from the Don’ts. However, the one that I found most useful is the PARC framework, where P stands for People, A for Architecture, R for Routine and C for Culture. These four concepts could be used to analyse almost all organisations and their organisational issues.

Here I will present the story of one such organisation that we studied. Through the use of the PARC framework, I will try to analyse the situation and try to highlight the issues and problems the struggling managers could face.

BigBank and its organisational problems

During summers, commuting on London trains is a nightmare. Trapped in a sea of people with barely an inch to move, William (Bill) Eddie was getting agitated by the overwhelming crowd and stinky armpits. He was trying to think through the recommendations that he was supposed to make to his boss, Jonathan McMaster, but the commute was distracting him.

The train stopped at Clapham Junction station on its way to Waterloo and a barrage of people filed into the carriage. Though there were more people on the platform than spaces within the carriage, Bill observed how everyone acted in a coordinated manner to make sure that the train is as efficiently packed as possible. No one was directing these people, however, as a pack their actions were perfectly in sync. This was the light-bulb moment for Bill.

Bill was the head of technology at Bigbank’s London office, where he had worked almost all his professional life, raising to a Managing Director. His ascent was impressive and he had an excellent reputation among senior management at Bigbank, especially Jonathan, who was the CEO of European operations.

Bigbank was a huge multinational, operating in more than 150 countries. London was the European headquarters of the bank where it employed 10,000 people in the financial district of the city. Before the financial crisis, it had its fingers in every pie – from investment banking to sub-prime mortgages. The financial crisis had hit it hard and the bank had to be bailed out by the US government. As part of a restructuring process, the management had instituted policies designed to cut costs and streamline the operations of the bank. One of the major cost-cutting policies was to consolidate its locations for its technology department.

London was classified as a high-cost location and the costs per employee for the bank was extremely high. As the technology roles could be performed from anywhere, the management was contemplating moving technology and other support staff out of London.

The Challenge:

Bigbank had over the years developed few low-cost locations such as Dublin and Warsaw. People were encouraged to either move to these locations or face redundancy. Adding to the pressure was the decision by the company to make roles redundant instead of people. So, even employees with high year-end ratings in the redundant role were up for the purge. Morale was extremely low and the uncertainty was causing people to leave in droves.

The emergence of London as a major financial technology hub was not helping as jobs were plentiful. As the pressure continued to mount, people with specific skills who were essential to the bank started leaving the technology division. However, as the bank was still growing, it needed the tech talent more than ever. Bill’s biggest challenge was how to stop this drain on talent and raise the morale. He was pondering this question over and over when the train stopped at Clapham Junction.

To read the analysis section, please click here

Image courtesy: