Case Analysis

of
“APIGEE: PEOPLE MANAGEMENT PRACTICES AND THE
CHALLENGE OF GROWTH”
SITUATIONAL ANALYSIS:
Apigee was founded in 2004 and had its headquarters in San Jose, California. Apigee's mission
was "To deliver products that help make every business a digital business." Apigee helped its
clients with digital transformation by building APIs. Organizations realized that digital
transformation proved to save costs and boost bottom lines for them. Given this significance of
digital transformation, companies started spending formidable money into transforming
themselves. As a result, the API management space has also witnessed a rapid growth leading to
several prominent competitors for Apigee. Apigee went public in 2015, raising $87 million.
Apigee has three main areas of operations: products, consulting, and implementation.
The company has a customer-centric approach, backed by technically sound personnel that helped
it become a market leader. Hence the company has always focused on rapid resolution of client
needs. To achieve this goal the company created a work culture of autonomy, openness,
spontainety, and courage to empower employees to take risks so that they could deliver quick and
innovative solutions to their clients.
Apigee has always focused more on people than on the processes because it
believed that focus on people would enable efficient processes. Also, the company's culture-
building exercises through a bottom-up approach have helped the company identify its core values-
passion, a bias for action and respect. The culture-building exercises gave the employees an
opportunity to express what they felt about the company, its culture, and their source of motivation.
The employees of the company were highly passionate, positive about the future of the API
industry, and highly skilled. This coupled with a friendly environment the organization provided,
encouraged the employees to put in extra efforts. Also, it enabled cross-functional meetings and
enhanced employee learnings. A social media initiative for hiring and a digital strategy workshop
that provided a new approach to retail sales are two good examples of how the company's culture
led to innovative solutions. Also, employees gave utmost importance to meet client needs. In
addition to this, the company had trust in its employees and had no restriction on the use of
networking websites.
Employees were allowed to make critical decisions ( operational freedom in conducting
a hackathon ) which increased their sense of commitment and loyalty towards the organization.
Given the culture and the skill requirements of the company, the hiring process necessitated a
rigorous selection process. And as the company was on a path of rapid growth, the hiring process
became more crucial. The performance management at the company was exhaustive as it went
through multiple reviews by the team coach, the functional head and the team members
themselves, thus making the performance evaluation reports more credible. The company also
introduced performance management through a mobile application thus increasing both the
objectivity and frequency of performance appraisal. The system also allowed real-time feedback
and made performance review meetings redundant. The horizontal structure of the organization
allowed switching employees to different teams without hierarchy conflicts and allowed them to
take on bigger responsibilities. Also, the majority of the employees believed that the company's
compensation and benefits scheme was successful in identifying and rewarding top performers.
More importantly, the company encouraged the employees to strive for work-life balance
and offered employees personalized rewards that made them more happy and satisfied. Employees
were also given the liberty to plan their workday. Besides this, the employee teams were self-
managed. The self-management led to synergized efforts and increased productivity. Also, team
leads were encouraged to experiment with people management practices enabling them to choose
the practices that best suited their team.
The company's office had bright colors to enhance the overall energy and an open
plan layout that improved accessibility. Also, the company didn't have a restriction on leaves and
still had the average leaves taken less than the standard 30 days per year. This indicates that the
company's culture has nurtured commitment in employees. Further, the company also didn't have
a travel approval policy; the onus was on the employees. All the HR practices that the company
had in place had positive outcomes like enhanced productivity, lower attrition and better
collaboration that resulted in organizational effectiveness.

PROBLEM STATEMENT:
What changes with respect to people management practices, if any, should be brought about so
that the company continues to run successfully while undergoing a rapid growth?
ALTERNATIVES:
1. Continue with the existing practices with an enhancement in the hiring process.
2. Embed the existing culture through institutional processes.
3. Invest in a data-driven employee engagement study and bring changes accordingly.
CRITERIA FOR EVALUATION:
1) Openness of work environment – The API management space has seen rapid growth, and
one of the most important things to survive in this industry is being innovative. Openness
in the environment fosters innovation.
2) Skilled employees- Having technically sound personnel is crucial for the success of the
company. Also, since the company is customer-centric, employees must be able to respond
quickly and effectively to client needs.
3) Commitment of employees - Employee commitment always matters in organizational
productivity. It is hence important to look for ways that nurture employees' commitment
towards the organization.
4) Mitigating hierarchical conflict- When organizations are not fully flat, changing job roles
to assume higher responsibility can create conflicts among people in different levels of
power and decrease the organizational effectiveness.
5) Preventing misuse of freedom- Sometimes the openness and friendly culture of the
organization that is in place for nurturing innovation, trust and commitment can be
misused.

EVALUATION OF ALTERNATIVES:

SI No. Criteria for Existing Institutio Engagement

Evaluation System with nal study
enhanced process
hiring

1. Openness of work
environment ✓ X ✓
 2. Skilled employees
✓ - -
3. Commitment of
employees ✓ - -
4. Mitigating
hierarchical
conflict
✓ X -
5. Preventing
misuse of - - -
freedom

ANALYSIS:
1) Continue with the existing practices with an enhancement in the hiring process.
The company has seen remarkable growth in revenue with the existing unique culture.
Though there has also been an increase in losses, this is not a point of concern because the
company is growing and it's imperative that the company invests for future gains.
Moreover, the API management space requires employees to be innovative and open
to learning. This is what exactly the company's current culture is fostering with a flat
organizational structure. Since the company plans to expand rapidly, it is important that it
retains its culture. For effective functioning of the culture during the expansion of the
organization, it is advisable that the company spends more time hiring suitable employees
for the company. Though the company has an effective hiring process in place, its quality
and more importantly scale can be greatly improved. Thorough hiring can be a reliable
means to handle the company's growth efficiently.

2) Embed the existing culture through institutional processes

Though institutionalizing management practices can bring in more accountability, it will
not create an environment that encourages innovation through cross-functional learning.
Also, it leads to friction between the interaction of employees at different informal or
 formal power levels. And lack of an open and friendly environment is a clear disadvantage
in the API management space.

3) Invest in a data-driven employee engagement study and bring changes accordingly

Investment in data-driven engagement study can provide useful insights and actionable
opportunities. But such studies are usually done at large companies and require significant
efforts, time and money. Since Apigee is a growing company, it is not advisable for an
upfront investment. Also, the company's main focus should be on its three core operations
- products, consulting and implementation.

DECISION:
It is advisable to go with option 1 since the company has a proven track record with the existing
culture, and it is highly risky to implement even a low degree institutional process. Also, the
company is a category creator and market leader. Moreover, the existing culture enabled high
employee commitment and low attrition rates. This unique culture can itself be a competitive
advantage for the company and enhance its core competency of building APIs for big companies.
More importantly, a company's culture is difficult to copy and will hence keep Apigee
differentiated.
To ensure proper expansion with the unique culture in place, the company must give utmost
importance to hiring suitable employees. It has to spend time and efforts in making an accurate job
description for new positions and ensure that the company's values and culture are effectively
communicated to potential new hires.
Also, an engagement study can be done in phases reducing the required upfront
investment. This allows the company to take constant feedback from its employees and focus on
the things causing inefficiencies in the system.