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Portugal Telecom Case Essay

Portugal Telecom (PT) is a global telecommunications operator with a portfolio covering all segments of the market, personal, residential, SOHO / SME, corporate and wholesale and all technological solutions, fixed, mobile, multimedia, data and corporate. With 74 million customers, PT has a diversified portfolio of assets in 14 countries, including Portugal, Brazil and high growth international markets, including the subSaharan Africa. The company has 33,000 employees of which 11,000 are in Portugal. In March 2009, PT launched the ‘Open’ project with the aim of ‘industrialising’ the innovation process, to accelerate the roll out of novel services, and create the right conditions to leverage the power of creativity of its employees, according to Rogério Canhoto, Group Manager for Innovation. The process has three streams, the short, medium and long-term. The short-term is aimed at innovations that can have immediate impact. The medium-term looks three to five years out and is focused on the ‘next big thing’. The long-term is far ranging and involves external partners sharing their vision of the future.

The long-term strategy is fed back into the medium-term to generate the candidates for the ‘next big thing’. In its short life span it has already generated significant traction across PT’s employees through a comprehensive communications plan that challenges employees to come up with new ideas every five to six weeks, such as reducing cost in a particular area, or how to capture the ‘millennial’ generation. “Employees are encouraged to participate in an ‘ideas market’” explained Rogério. “Everyone has credits that they can use to ‘invest’ in ideas and also comment on them. At the end of the period, the top 20 ideas go to the Board for debate and approval”. The Board and a group of internal experts examine each idea for ‘game-changing’ potential and ease of implementation. Those ideas that are selected get assigned to a team made up of the inventor, someone from the Open team, and someone from the Operations team.

Follow-up happens every two weeks with the Board to ensure that obstacles are dealt with swiftly. Credits can be won or lost according to what happens to the ideas that employees back or comment on. These can be converted to small prizes, such as a box at a local football game, attending the TED conference, or – the most eagerly sought – shadowing the CEO for a day. His backing and commitment to the programme is well understood by the employees. Backing up the project is a training programme that has already been attended by 5,000 employees. Moreover, a scorecard keeps track of participation at the departmental level, and has a direct impact on managers’ bonuses. There are also additional coaching sessions available to managers who request them, as well as a roadshow to help departments who need to improve, or field-based employees that are unable to attend the training sessions.

Implementation and measurement.

One of the most crucial findings in this category was a clash between ‘short-term management performance priorities and long-term innovation priorities’, with 41% of respondents noting that this was the top factor blocking successful innovation. This was followed by 27% saying that ‘middle management focused on the delivery of projects rather than innovation beyond project scope’. Perhaps all very understandable, particularly during uncertain times, but successful innovators need to be able to balance these competing aspects. The follow-up interviews confirmed this line of thinking: most interviewees indicated that getting the balance right between innovation and the day-to-day operations was extremely difficult. Some respondents do have mechanisms to allocate and prioritise resources and projects, but many have a more ‘silo-ed’ approach to innovation projects and how they are funded and measured.

When it comes to measurement, it’s a well-accepted management practice: if you cannot measure something, you cannot improve it. Innovation is no different. Clearly, measuring the value of a particular process in an organisation is not easy, but without metrics it is hard to accurately demonstrate the impact of innovation initiatives. Just 16% of respondents said they have good metrics in place to evaluate the success of innovation projects (a further 20% somewhat agreed). When asked specifically about ROI as significant mechanism of measuring innovation, only 9% used it. Just 29% of respondents said they succeeded in sharing best practices within their organisation, an important aspect of improving how an organisation performs.

Without effective processes and the ability to learn from all parts of the organisation, it becomes harder to implement the steps needed to improve in an effective manner Currently, it seems that organisations mainly believe that measuring innovation is too difficult or insufficiently useful to spend time on. Despite this view, it is critical to develop and use such measures in order to increase innovation readiness. Organisations can then start to rank and rate themselves against their peers; this alone will allow them to start improving, as these metrics will point to the practical steps that can be taken to streamline and enhance their processes. http://www.telecom.pt/InternetResource/PTSite/PT/Canais/SobreaPT/Pessoas/pessoas.htm

Translated to English from Portugese

As we believe

As a company committed to excellence, our people are proud to work with us. Talented and passionate people, who do what they like because they like what they do. With each passing day, we believe even more firmly that to fulfill our mission , achieve our vision and show our values ​​people who are part of our team is an advantage unique competitive . Our people are unique and generate value. In a sector as challenging as telecommunications, change happens “assapar” and therefore believe in people with “fiber “to win our battles, because we know that only people can turn threats into opportunities, problems solutions and dreams in reality.

We are large, we are leaders and we believe in the value of our people. So we bet on talent. Talent as synonymous with excellence, but also of passion. Talent like positive attitude, knowledge, thoroughness and initiative. Passion for wear our jerseys. In companies PT, all people have because we have all the people . Because our greatest happiness is to contribute to the happiness of our people.

Individual Performance Assessment

To comprise the best management teams and encourage strategies of talent rotation allows for the growth, motivation and development of Human Assets, thus making Portugal Telecom more just and competitive. These are the concepts that establish the new PT model of Individual Performance Analysis that aims at promoting mobility, investing in training and attracting talents.

In 2003 PT created a transversal system for the management of PT Human Assets: a new model common to the companies comprising the PT corporate universe that would align principles important to the management of Human Assets. With this aim in mind the model of Individual Performance Analysis was created and has since then been in permanent evolution endeavouring to accompany the management needs and expectations of the PT employees. One of the innovations that this model assumed in 2004 was the introduction of self-assessment and the assessment of technical competence.

These two variables will allow a more detailed understanding of the technical competences of PT and the consolidation of a Knowledge Resource Directory, thus facilitating mobility processes and aligning the development/training plans with PT’s future strategy. This new dynamic system contributes towards the efficient detection, development and preservation of talents. To render operational an assessment system, based on the performance of the Company (based on Business Indicators) and on the individual performance (based on management and leadership competences, technical competences and individual indicators).

To reinforce the culture of performance (attaining objectives) and excellence, to detect the development potential and to identify development opportunities (based of rotation and Professional mobility), to manage remuneration and to identify the future leaders of the organisation are the general objectives of this new model. http://www.telecom.pt/NR/rdonlyres/F43EC9C4-9ABE-41F5-B71B-32F5CFB9576C/1460535/SUSTAINABILITY.pdf Hereunder extracts taken from the above.

PT’s Human Asset organisation aims essentially to:

• Promote a culture of merit and continuous development within the organisation;
• Maximise employee skills and capabilities;
• Ensure close and effective accompaniment of organisational structures;
• Ensure excellence in execution betting on specialisation;
• Promote a constructive labour relationship;
• Stimulate a fluid communication throughout the whole organisation;
• Include all employees in this model irrespective of work contract.

A process of analysis in terms of behaviour skills and achieved results was defined and implemented, involving all employees, which is based upon a number of transversal skills, systematized into a common scale, differentiated by assessment profiles so as to allow an evaluation suited to the duties and skills of each employee. The Performance Assessment is supported on an application (management tool) resident on PT’s internal portal, its main features being the ease of access by all employees and execution of all associated actions. The telecommunications sector has evolved very rapidly in recent decades, which means successive adaptations of its employees and management models of goals and incentives. So, in 2011, a new model of professional development was implemented that seeks to blur the complexity arising from previous models based on:

• Simplicity,
• Individual merit,
• Internal equity,
• Competitiveness, through compensation in line with the market, and
• transversally, as it promotes mobility.

This model includes five professional categories and five levels of development in the various functional areas of the company’s activity. With simple and objective rules, the new professional development model allows all employees to: • have a clear perception of the evolution of his career in the company,

• know what is to be expected from their career,
• know that performance matters to their evolution, and to • feel more motivated to work.

Two movements of professional evolution are provided for:

• progression that certifies the employee movement to the next development level in the same professional category, where they continue to perform duties of similar complexity; • promotion that certifies the employee to a higher professional category, as they perform duties of greater complexity

PT’s Research, Development and Innovation model is based on a program where all employees are agents that contribute actively to its implementation. In addition to technological innovation, employees have been called upon to participate in the organizational, procedural, environmental and social areas, especially within the framework of incremental innovation Through the marketplace of ideas – online platform resident on the company’s corporate intranet – employees respond to challenges, submitting, discussing and voting on solutions.

About 2/3 of employees have already participated in challenges launched by the OPEN program In 2011, this program generated 2,461valid ideas, of which 42 were implemented, which can be found in the RD&I chapter. This new culture has contributed decisively to leverage methodologies and work processes within the organization, to foster their social and environmental sustainability and to create a relationships ecosystem susceptible to stimulate employee creativity and commitment in identifying ideas/solutions that distinguish PT’s attractiveness in the market.


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