YOLA : Managing multiple challenges
1. How should Lingham manage the dual structure with Cape Town and Silicon Valley?
Lingham chose to found a company with one foot in South Africa and the other one in the West coast of the USA. After facing difficulties for his choice (for example, it was hard to get an American visa to find investors there), he had to fight to maintain a good atmosphere in his company. How to avoid frustration and jealousy on both sides?
Until now, Lingham managed to deal with this dual structure by implementing initiatives such as virtual teams, frequent business trips for him and a real meeting of all employees in San Francisco at the end of 2008. He also tried to clarify key tasks and reporting relationships by publishing an organizational chart for every “center of gravity”.
Since the economic crisis, YOLA has new challenges to overcome: the internationalization of its business, the change of revenue model because of the increasing competition, the activity decline and, as a result, the pressure on cutting costs. The Human Ressources have a great role to play in the process of designing a new organizational structure. Lingham is actually thinking of splitting better departments across locations and I think this is the solution. In fact, he should decentralize “centers of excellence” to those cultures that do the job best and most cheaply. This strategy is called “divergence” and would give more autonomy to the South African subsidiary by moving toward more local control.
However, the CEO of YOLA should not forget the only important constraint: to maintain close relationships with partners who are mostly in the USA by letting key roles in partners’ relationships in San Francisco. This obligation could change in the future with the declining role of the partners in the new “freemium” revenue model.
2. How viable is the proposed expansion into the developing world as a future source of competitive...