Vodafone-Idea Merger

C: Can I know why was it failing initially?

I: The network quality is very bad, and they were facing marketing issue too. Why do you think this would have been the case?

C: Bankruptcy would have hit them cyclically. Because of bad network they were not getting subscribers and the lack of subscribers meant they had a low marketing budget and could not invest in making their network better.

I: Right, move on.

C: Post merger, were there any changes in the way operations were carried out, with respect to people policies, processes followed, technology used?

I: Not quite, no. everything was retained just like before. 

C: Since you mention that everything was retained just like it was pre-merger, do we know the structure of the new leadership?  

I: So, we have 2 CEOs now, one of each company. The exact hierarchies of the individual companies are followed in their respective vertical.

C: This seems to be an issue. Do we know the extent of cultural alignment of the two organizations post-merger?

I: It is a complete mismatch. Vodafone employees like to maintain a good work life balance and leave work at 5 pm daily, while Idea employees feel like they are having to shoulder the load of the employees who are leaving early.

Can you summarize your findings to me?

C: Sure, There are 3 broad issues that the Vodafone Idea merger is facing:

1) Lack of money – because of which they are unable to ensure 2 things:

i) better network quality as compared to competitors like Jio

ii) better marketing campaigns to capture new customers

As a result, they are losing customers.

2) Lack of leadership – There seems to be no coherent leadership structure, thus there is no one to define a common goal or plan of action

3) Lack of cultural synergy in the organization

I: Sounds fair, which of these would you go about solving first, assume you have all the control and resources? 

C: I would solve the 2nd problem (lack of leadership) first, as that would require less time to solve and also be the crux of solving the other two issues. Thereafter, I would focus on building synergy within the organization, and once that is achieved at a considerable level, I would like the organization to devote time, energy and resources to solving the first problem of building better network quality and focusing on marketing.

I: Thank you, we can end the case here.