The 7-S Framework

53 of 87 have here supplemented The Extended Business Model Canvas with an expanded

internal analysis of the company in Chapter 6.4 Internal Analysis, which will answer these questions.

54 of 87 The framework was created by McKinsey in 1980 and shows the internal factors in the company and aims to show the relationships of the factors in comparison to the company strategy. The strength of the framework lies in the fact, that it encompasses both traditional elements such as strategy and organisational factors, but also more subtle and soft values such as company culture and employees. The framework operates on the assumption that the company strategy will achieve better results, if all of these elements perform well and synergised together. The criticism of the framework lies in the fact, that there is missing an actual outcome of applying the framework to the company – meaning what does the

applicant actual gain from applying this framework besides highlighting the actual status of the company? This model is there for the first part of the internal analysis, and will be used as a diagnostic of MyLoyal’s internal situation. In order to meet these limitations, and taking the internal analysis to a more actionable stage, the following 12-Step framework, Ansoff’s, and Porter’s internal analysis will aim to bridge this gap.

6.4.1.1 Structure

The team of MyLoyal is currently counting 13 people split between 2 investors, 8 employees, 1 outsourced app development project manager, and 2 product design freelancers. The company is operating within two countries, Denmark and Lithuania. All sales, marketing, product design, and data is managed in Denmark, and all app

development and backend development I managed and operated from Lithuania. The CEO Peter Bodskov and COO Mathias L. Heide manages the daily operations, overall strategy and leadership of the company. CTO Tadas Planciunas manages all the development in Lithuania and is living in Vilnius where the second MyLoyal office is

located. The employees has the roles of CEO, COO, CMO & CDO, CTO, marketing intern, product design intern, backend developer, and Dev Ops developer. The overall authority relationship within MyLoyal is defined by a decentralized and flat structure. The 2 company investors and board members has a status meeting with the management team of

MyLoyal every month, and also receives a status mail by the beginning of every week, in order to constantly be aligned with the progress of the company and enable them to help when it is needed. With the pandemic influencing the working conditions, and also

MyLoyal having to work from home in large passes of time during the last year, the experience of already working collaboratively through digital contact has been a big

55 of 87 strength, as the company has had a quite easy time with adapting to the home office work environment.

6.4.1.2 Strategy

What is MyLoyal’s strategy to attain competitive advantages within the digital loyalty industry in Denmark?

MyLoyal has in the last year achieved significant growth within the industry in Denmark, since the company made the strategic switch and moved from the MyLoyal App platform to MyLoyal 2.0 and provided loyalty white label apps. This has been achieved through a sharp focus on price, while at the same time providing development at a high quality and delivery on time. Exactly these factors has historically resulted in previous great IT-scandals with IT-projects going off-track and budgets being significantly exceeded. By focusing on creating local references and taking all opportunities that has revealed themselves to the company, MyLoyal has managed to reach a stage where they can win further market share. As a startup, MyLoyal has not clearly written down their strategy on their website, nor do they have the need to make a yearly report for their stakeholders, where they go in depth of the progress that has occurred during the year. Instead the strategy is defined through the years of experience with the focus on operations and the need to listen to their customers to find where MyLoyal creates value. In this time, MyLoyal can point towards 5 central elements in the company’s method towards gaining

competitive advantages:

Operational management:

The current business model is built upon having what MyLoyal calls Operational

Management. This means that the team is built upon the principle that IT-professionals leads IT-professionals, and product designers leads product designers. In practice this means, that as MyLoyal has all its development located in Lithuania, which is led by Tadas the company CTO, all development decisions once a loyalty app has to be build, are managed by him. At the same time, all product design is managed in Denmark, by me the author, and also functions as the bridge between the customer and the rest of the

company. This principle of letting professionals lead professionals results in faster decision

56 of 87 makings, where only the full team and board management is involved in the beginning of the projects or at high level on monthly meetings, in order to ensure the quality. This will be described more in Chapter 6.4.1.3 Systems.

IT partnership:

MyLoyal aims to be at the edge of development within IT solutions in the digital loyalty industry in Denmark. In order to achieve this, MyLoyal believes that it is necessary to build the solutions in collaboration with the customers based on their wishes and great ideas, which can in return create value for MyLoyal’s other customers. MyLoyal aims to not only provide a solution for its customers, but as explained by Peter in the interview ‘’We have a very strong relationship with our clients, and that is also a big part of our success’’

(Bodskov, 2021, 2:29).

Talent:

The success in the last couple of years for MyLoyal can be attributed to the company’s ability to attract and retain very high level international IT talent. To further grow the company it is absolutely essential to gather more talented IT talented, to help grow the company.

Decentralised responsibility:

Across the organisation there is a very high degree of decentralized decision making. As is often the case within startups, all team members wears many hats of responsibility, and a big part of the fast moving capabilities of the company can be attributed to this

decentralised structure.

Result oriented method:

MyLoyal always operates with a full focus on the end product. The most important factor is to reach the goal with the development, in the right quality and at the right price. This unrelentless focus on quality and price, sometimes means that the MyLoyal sets optimistic timeliness, and as a result the internal deadlines are not always met. This is also why, the company sets buffers on specific stages of the development process, in order for the end deadline of when the loyalty apps are launched with the customers, are actually met.

57 of 87 6.4.1.3 Systems

Answering what systems are in place for MyLoyal means to answer what processes that are in place of the company, and the major focus is answering how work is done. This means looking towards the company’s potential client management system,

communication systems, HR systems or other processes that are available within the company. When looking towards systems on tech startups in Denmark, there will be less formal systems in place within startups compared to bigger organizations, where the need for more formal structures and systems are needed to a higher extend. Within MyLoyal there are two systems in place. One as to how the company completes its operations.

Applying the framework towards how work is done, there has in this thesis been supplemented with the 12-Step Framework in Chapter 6.4.2. The other system within MyLoyal is its communication hierarchy. The communication hierarchy is divided between:

• informal talking & meetings

• Phone & email

• Slack

• Invision

• Asana

For day-to-day communication, most is managed through informal talk inside the officer or ad hoc meetings, either physically or via. Google Hangout when the Danish office and the Lithuanian office communicates. The next line of communication is phone and email communication. As part of the system for communication within MyLoyal, it has been decided to keep all internal communication as much as possible away from email. Email communication is used for customer contact or partnership communication with POS providers during development and integration. All internal communication during development or for quick briefing is done through Slack, which is an instant message service made for companies. MyLoyal on average sends 2,113 messages per week, 16%

of them in public channels, 4 pct. in private channels, and 81% in direct messages

between members. Furthermore 74 files gets shared within Slack between the team on a weekly basis. In total that totals around 110.000 messages via Slack every year between the relatively small team. This is a consequence of the two offices working closely together on a daily basis but being located in different countries. There are also limitations to this

58 of 87 form of communication, as there at times are miscommunication between the team, as it can be difficult to have clear understanding through text messages. Finally we have the last two lines of communication, which is through Invision and Asana, both of the services are used for project management and product development, and is where every project is divided into small tasks and delegated throughout the company.

6.4.1.4 Shared values

What is the organization trying to achieve? Overall these superordinate goals don’t change much over the span of time. Generally the organization is either profit organized or not profit organized - MyLoyal is profit organized. As a fast moving startup with a clear focus on operations and execution, the company has never defined a clear set of shared values or any social mission. This can be seen as a weakness from an outsiders perspective, and it is definitely a requirement for the company to reach a bigger scale, but I would argue that even though there are no clear defined shared value, there are still very much

unspoken shared values. These I as the author can describe from a personal perspective, as I live in them on a daily basis. Firstly all employees takes responsibility for their own work, we all work on the assumption that each of us are competent people and we trust each other. Secondly the customer is the main focus for MyLoyal. If there is suddenly appearing an unforeseen challenge regarding our customers, then everyone on the team drops their individual tasks and focusses together on the customer challenge in order to solve it as fast as possible to create a good customer experience.

6.4.1.5 Style

When looking towards the company’s style, it is about diving into the culture. It can

generally be very hard to diagnose, but it is important, as the style of the company are the characteristics that reject outsiders who don’t have the same style.

For MyLoyal the culture is defined by a highly informal work environment within the team, but a highly formal environment towards the company investors and board. There is a underlying assumption that everyone takes full responsibility for their own work, and meets the deadlines there are set. It is highly fast paced, and the style can at times be harsh, in the sense that MyLoyal is working on several complex projects at the same time, meaning there are little room for errors, so there can become frustrations within the team, when

59 of 87 deadlines are not met or there are unforeseen variables that occur such as technical

limitations that where not known prior to starting development.

6.4.1.6 Staff

Understanding and analysing the company staff is done with the purpose of looking towards the people in the company and the intrinsic talent. For any company, but especially for startups, the most crucial factor is the team that is aiming to visualise the vision of the company. Within MyLoyal there is a high gender diversity and an international team, which leads to economies of scope, as the company enables more possibilities through more perspectives, as compared to a highly homogenous team (Investopedia, 2020).

6.4.1.7 Skills

When analysing the company skills, this refers to the institutional and individual skills of the company. This is important due to the economies of scope mentioned in the previous Chapter 6.4.1.6. This can be a paradox at times, as there is an increasing trends among startups to have increased specializations within skills in order to compete with larger companies, which can lead to exactly these homogenous teams.

It is therefore important to have skill acquisition strategies in place when the company can’t grow them themselves, or simply within startups to be good at reflecting upon the existing skills of the company, and to be aware of when they need to be supplemented.

MyLoyal has the investors and board members who has extensive experience within management and strategy.

MyLoyal holds Monthly strategy status meetings, with the purpose of seeing if there is a need to acquire new skills, and if so answering what they would cost. Should they be inhouse or should the skill be outsourced? If it should be outsourced should it be within Denmark or internationally? If internationally, for MyLoyal it should be placed optimally within Lithuania, as the company has a cultural and organizational advantage operating within a country where they have an office and team members located, which can share their cultural and professional knowledge.

60 of 87 If the skill should be outsourced, what is the best kind of structure of labour? Should it be an individual freelancer, or should the company hire a bigger organization who can help at potentially higher scales but also higher costs? What are the pros and cons of working with big organizations? What are the pros and cons of working with freelancers? These are among the crucial questions that must be answered upon structuring the talent acquisition strategy and processes. Within MyLoyal the split is clearly defined and divided.

Product design, sales, marketing and data is managed within Denmark.

App development and backend development is managed within Lithuania.

In Denmark we use freelancers to help us with product design, since they are time and cost flexible. They are required to be in Denmark, as the product design flow can at times be highly complex and the solutions are made in Danish, and it is hence advantageous to have Danish talent who can speak the language, know the customers and can potentially meet up physically which within product design can make the process easier.

In Lithuania MyLoyal has internal developers as previously explained for backend, and has outsourced all app development. The app development is managed by a senior developer and project manager, who is the one person of contact for all app development. MyLoyal is therefore not in direct contact with its app developers, but everything goes through the app project manager. The strength in this lies in the cost flexibility, but there is also great

limitations due to the need for micromanagement, and the bottleneck of contact, since MyLoyal always has to go through the project manager. If the project manager for example is sick or on Holiday, it is impossible to communicate with the developers who are working on the current projects.

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