Sales force.com is a San Francisco based enterprise cloud computing company founded by Benioff in 1999. As of 2011 it had 97,700 customers, with a 4000 sales force and earned revenue of $1.7 billion. Since its inception, it has inculcated its employees with a social mission, and as a result came up with 1-1-1 model. This model means employees will donate 1% of their work time for philanthropic works; 1% of their equity takes the form of grants and 1% of the product will be donated to nonprofit organizations. With this current model of equity, it has become difficult for the organization to operate. It was estimated that it can operate only for 5 years. In order to counter this issue, DiBianca presented three strategies, where, she was given an option of reselling the sales force CRM licenses to the nonprofit organization. In order to pursue idea, new 501© (4) entity was developed. With its inception, organization had to carefully analyze the legal problem, it has to hire more people to run entity, deciding upon the compensation packages and inculcating new employees with philanthropic attitude. As time passes, this organization is presented with more challenges and one will have to find a way to counter those challenges.
There are many challenges that DiBianca is facing as the leader of the organization. The first of these problems related to culture, its keeping up the socialists and enterprise persons together so that 1-1-1 model remains intact. Second problem relates to grants, which previously were acquired from equity. With setting up of the new entity, how will the sales shape the grants? Moreover, DiBianca needs to consider the total amount of the grants.
Addition to that, the company is growing rapidly, and DiBianca is faced with the challenges to utilize its limited resources and at the same time, expand them. As a result of the limited resources, foundation was considering other ways to provide services to clients. The alternatives include consideration of leveraging over external resources and self improvement. Last, but not the least, the organization needs to figure out the compensation scheme for its employees to keep them motivated. If one looks at these problems, one needs to find and link them for finding an appropriate solution, that’s also what DiBianca wants.
Salesforce.com was extremely proactive in countering to the much needed turnaround as they came up with the idea of the new entity. This idea is worth pursuing, but in trying to do so, it is facing many problems. In order to face these problems, organization will have to be very careful, as it will be a decider for them.
First problem relates to difficulty in making socialists and enterprisers work together. This can be achieved through the introduction of clan culture, open door policy and employees empowerment. Leader should lead by examples and endorses the 1-1-1 model. The enterprisers need should be worked upon more to build a socialist attitude as the socialist are already part of being volunteers and donators. This way the organizational culture can bring on more flexibility and understanding. As per the problem of grants, the selling of the products and offerings will bring in more revenue.
This way organization will be in a position to offer more grants. Other side of it, the organization has increasing expenses with the new entity, this mediates the level of grants, or even company can reduce them, as per necessity. With the increase in sales volume, the grants can be reduced as per the company condition. One thinks that the organization needs to scan the environment and can forecast the risk. Based on these forecasts, the value of the grants can be estimated. This can cause a decrease in the philanthropic initiatives taken by the organization. However, one thinks that, with the introduction of this entity and converting extra donations into sales, the organization has already planned to cut down a bit on this philanthropic work.
Based on this decision, organization can make an estimated forecast and perceived risk. After having a fair idea, organization can make a decision. This is more systematic approach, but, as per one’s view organization should at least keep this amount or can even increase, if sales are good. Then, it can capitalize on its philanthropic work through proper marketing campaign and PR activities. Because in today’s world, with social a mass media Ads clutter has increased, decreasing recall. Philanthropic works add more to the positive marketing campaigns, then TVCs or other marketing efforts. This way, the marketing budgets can be aligned with the philanthropic works.
Another problem faced by the organization is the maximum utilization of resources. The company is considering an option to outsource some of its functions or tasks. One thinks of a median way. This can be as outsourcing some of its function as deemed important. At the same time, organization should build upon the internal capabilities. It is crucial for an organization to be self reliant. Building of internal capabilities represents a long time approach for an organization to deal with the challenges.
The organization has gone through a change and as a result of that change the organization is demanding a structural and technological change. These changes are not overnight facets to deal with; they require time, money and persistence. Therefore, some of the options might require outsourcing as an organization will not have these capabilities to deal with. Addition to that, the organization should go through a slow structural and technological transformation until it has acquired necessary capabilities. If one looks into these actions, these actions related to persistent effort from organization to strive for betterment, at the same time, building relation and internal strength.
Moreover, the organization is also facing the problem of motivation and development of the compensation plan. The motivational level comes into play because of the clash of interests, with socialists on one end and enterprisers at the other end. Organization needs to develop a medium compensation plan, which should motivate both parties. In ones view, the organization needs to implement a more formal evaluation package. One of the suggestions is the use of balances scorecard approach. This approach has a promulgated use, and it provides a 360 degree to measure the performance. This performance review can put everyone to be on track in between being an extreme socialist or an enterprise. The 360 degree approach to measure performance can result in increase motivation for both parties. Moreover, the other ideas for motivation like culture, structure have been discussed in an effort to bring both parties together.
One provided the insights relating to the different problems and provided different alternate solutions for them. But, in reality the organization wants to implement a strategy that solves most of their problems. The organization has decided to transform and so it needs to transform to a clan culture with more formal procedures. It should innovate more by acquiring technology. This procedure is time taking, but it ensures long term growth. Moreover, if one looks at the motivational factor, it’s hard to motivate people from two extremes. Culture plays a vital role; addition to that an organization should implement balanced score card to measure performance. This is also linked with technological innovation and structural change. If one looks them carefully, these changes are like links of chain that are connected to each other. These are facets that are to be completed step by step, but these changes are of utmost importance to bring revolution. One thing that should be kept in mind is to stick with its approach of being social and philanthropic organization.
The organization felt the need of going through structural changes, as it was facing with increased expenses. In order to counter to increasing expenses, three alternative solutions were provided by the DiBianca, and top management allowed her to reselling the sales force CRM licenses to a nonprofit organization. It decided to convert the donations to sales and grants to be lowered. One identified those entire problems and presented the alternative solutions. These solutions were based on long term approach of innovation, renovation and change.
This organization carefully gave up some pat of philanthropic work by converting donations to sales and hiring of enterprisers. Based on this approach, company can take steps like adoption of balanced scorecard that finds a medium path between socialism and profit seekers. It should adopt the technology to endorse the changes; this should be backed up with outsourcing of some functions. This would boost up training and learning at the same time allowed the organization to go through changes. These changes are a step by step and should be adapted to have longer impact.