Instructions to students: All questions are compulsory

Materials:

Dictionaries are not permitted.

TASK: BS1005 Management Practice & Skills Assignment for business studies

Question : Case – Corey Stronghart at Swiftcap, 2017

Corey Stronghart couldn’t believe it. Just five years ago, Corey was finishing his undergraduate degree at Cass Business School. Now he was relaxing in the business class section of a flight from London to San Francisco. Corey was the Chief of Staff at Swiftcap, an innovative currency exchange “start-up” based in London. They had 100 employees who were graduates of the top universities in the UK and Europe, and who had joined Swiftcap in the four years since the founding in 2013.

The idea

The two founders of Swiftcap, Hamish and Hans, were old friends from university and had been always wanted to go into business together, and they hit upon an idea whilst enjoying a late-night kebab after a mutual friend’s stag night at a West London club. They recognised that in an era of increasing globalisation, emigration, and cross-border business, the high exchange fees that conventional banks charged represented a ripe opportunity for disruption. The two founders were an odd couple in many ways. Hamish was a self-professed quant nerd from North London, who was working at the time in data analytics at Google. In his free time he enjoyed railing against the establishment, voted Green, and enjoyed strategy board games like Diplomacy. He thrived on coming up with AND completing his own projects, and his managers let him have free rein over much of his work. Hans, on the other hand, was from Luxembourg, had worked in investment banking, and had built his career on his reputation for knowing everyone in his department, anticipating clients’ needs, and generally fostering a team atmosphere. Hans and Hamish were both on the flight too, sleeping soundly after swilling the free champagne and wine at dinner.

Swiftcap had an incredibly simple, genius premise: instead of actually moving money from a bank account in one country to a bank account in a different country, paying astronomical fees to the banks for the transaction, why not simply keep the money in the countries of origin, and match the loans locally? Hamish and Hans simply could not believe that no one had developed this business model when they conducted competitor research, and when they first pitched to potential investors, people’s jaws quite literally hung open. Both founders were pleased because they felt that their company was not only disrupting an industry, but helping ordinary people engage in financial transactions that were keeping families afloat and supporting the cosmopolitan flow of people and ideas they both envisioned as the bedrock of an innovative society.

Nonetheless the new company would be entering an extremely competitive field. There were many ways in the UK for travellers and companies to acquire foreign currency. The traditional operators were the big four UK banks – Barclays, HSBC, Lloyds, RBS. But this was a seemingly ever expanding sector, as the government sought to create a more competitive industry by supporting the development of new challenger banks. Recent arrivals included Santander, The Co-operative, TSB, Metro Bank, Virgin Money… Banks sell currency direct but will also support the traveller through the use of debit cards when abroad. Other competitors include The Post Office and specialist currency dealers such as; torfx; Purefx; currencies direct.com, worldfirst.com, travelex.co.uk, moneycorp.com, avatrade.com.

The following four years

The company grew rapidly over the next four years, both in employee numbers and in business activity. Implementing the original idea called for good software engineers to build the platform on which all the currency transactions could be managed (the product). Growth came from the expansion of the service to additional target groups within an expanding range of countries and keeping up with the changing profile of electronic devices on which customers wanted to be able to access the service. The company was still growing at an unprecedented scale. Someone had estimated that the number of transactions they supported was doubling every month.

The issues the company faced now were not financial; they had plenty of investor backing, having raised over £10m over two funding rounds. The founders and Corey were simply in over their heads as managers of a hot company that employed a diverse set of strong-willed people. Within the company, the early round of hires, who were mostly engineers that Hamish had recruited to build the product, felt that they had joined Swiftcap to be part of an exciting, disruptive venture with little in the way of the bureaucracy that they had left behind at their old jobs; they had taken hefty pay cuts for the first year they came on board and worked 14-hour days to build the product. Hamish was the CTO, so his job was to lead the engineers and figure out the direction of the product.

About three years in, after Swiftcap received their first round of venture investment, a slew of product managers, project managers, digital marketing gurus, customer service magicians, and hotshot advertising wunderkinds were brought on board to aggressively expand Swiftcap’s market reach and adoption. Hans, with his optimistic trilingual persona, was supposed to set the tone of the company as a whole, emphasising that they were all at the forefront of a fast-globalising world and “bringing the future of capital to the present.”

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The current situation

The problems that arise at this point had to do with the engineers’ perception that they were now being ordered around by a bunch of people who had come in after them, and who had no idea how hard they had worked to build the product initially. Sure, there were a lot of bugs, but customising the interface for different regions and interfaces (mobile vs. desktop for example) was hard, and they were growing at an unprecedented scale. The number of engineers, however, had not grown at an equivalent pace to the growth in business.

The engineers were generally unimpressed with the company vision if it meant that they would be working around the clock (in true global fashion) while everyone else told them what to do. Most of them did not believe that they would be able to achieve what the product managers wanted them to achieve even IF they worked around the clock. On top of their general irritation with the piling on of work were rumours that some of the marketing gurus and advertising specialists were being paid a LOT more than they were, because they had 15+ years of experience and investors thought Swiftcap needed to hit the ground running when it came to market expansion and branding. Also, implicit in the rumours of product diversification was the possibility that they would enter a space like for-profit small loans in Africa, which made some people feel angry. There were some staunch liberals who absolutely did NOT want to see their efforts going to support what they basically considered exploitation of the poor.

On top of these issues, Corey suspected that the product managers, advertising gurus, market researchers, customer service folks, and engineers were working at cross purposes as a result of the demanding pace of growth and their different world views. The engineers needed to understand what features the customer service people needed to support the volume of calls they received, and the advertising people needed the market researchers to tell them which new segments to target. The fantastic news of a quick uptick in customer growth was offset by the sense that operations were spiralling out of control, with tense, unproductive conversations happening in snippy email exchanges between the different functions in between weekly all-hands meetings. Despite all this inner turmoil, Swiftcap was still the hot ticket in the investor world in 2017 and word of their incredible growth had blown all the way over to California, where serious investor money wanted to get in on the action.

Corey, Hamish and Hans were on their way to explain the future of Swiftcap and to raise the round of funding that would give them steady support over the next four or five years of growth. But first, they needed to sort out some of their growing pains, and present a convincing plan for managing the company. As the flight crew came through the cabin with hot towels and espressos, Corey realised that he had his finger on the pulse of the company and could see it objectively in a way that Hamish and Hans could not.

He recalled some of the concepts he had learned at Cass and made some notes on a napkin about the changes that needed to be made at Swiftcap. As he enjoyed the warm goat-cheese omelette and sliced fruit, he felt confident that they were truly on their way to global recognition.

Question 1 : BS1005 Management Practice & Skills-City, University of London

1. Define, compare and contrast at least three leadership theories.(15 marks)
2. How could the three founders of Swiftcap become more effective leaders? Link your recommendations to specific concepts and provide evidence from the case.(10 marks)

Question 2

1. What are the principles of effective teamwork and team decision-making? Be specific in your use of terminology.(15 marks)
2. How could the leaders of SwiftCap encourage more effective teamwork? Link your recommendations to specific concepts and provide evidence from the case.(10 marks)

Question 3

1. Compare and contrast motivation theories. Be sure to discuss at least THREE different theories and to explain the assumptions about individuals underlying each one.(15 marks)
2. How would you diagnose the reasons for the apparent demotivation among the team at Swiftcap? If different theories suggest different reasons, be explicit in pointing these out. Be sure to provide evidence from the case to support your diagnosis.(10 marks)

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