The pains of a junior company: where to start the change?

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Summary

This teaching case highlights the current situation of the junior company E.JUNIOR and how its president Ana seeks to solve, in a structured way and guided by an experienced consultant, the problems and challenges experienced by the organization of which she is a part. Junior entrepreneurs need to make decisions and, for that, they use management philosophies and tools in order to help them. The objective of the case is to address the Current Reality Tree as a tool for the representation of problems, their causes and effects and to apply it in the proposition of improvements.

Keywords: Junior enterprise; organizational strategy; change methodology; Current Reality Tree.

Abstract

This teaching case highlights the current situation of the junior company E.JUNIOR and how its president, Ana, seeks to solve, in a structured way and guided by an experienced consultant, the problems and challenges experienced by the organization. Junior entrepreneurs need to make decisions and, for that, use management philosophies and tools. The objective of the case is to present the Current Reality Tree, as a tool for representing problems, its causes and effects and how it possibly contributes to improvements definitions.

Keywords: Junior enterprise; organizational strategy; change management methodology.

Ana and her trajectory in search of knowledge

Three years ago, Ana had entered the University of Brasília (UnB) and, under the guidance of friends and relatives, she had become aware that, in order to have a good education, it would not be enough just to attend and be approved in the subjects of the course. It would be necessary, in order for her to leave the University well trained, to get involved in activities and projects that it offered. It would then be necessary to be proactive, as well as to have a lot of initiative so that you could extract the maximum results for your personal and professional development.

In this context, she discovered what a Junior Enterprise was and was delighted with the possibility of applied learning and, above all, with a lot of autonomy. This was something that Ana had missed a lot in her studies until she arrived at the University. Veteran colleagues of the course explained to her, in the first week of class, that the concept emerged in France, in 1967. The EJ, as they called it, had as its main objective to provide students with real practical experiences so that they could acquire a higher quality and significant education. These EJs are part of a larger organization called the Junior Enterprise Movement, or MEJ, whose mission is "to train, through business experience, committed leaders capable of transforming the country into an entrepreneurial Brazil".

Ana was excited to realize that those students, already in the 60s, were aware of the importance of expanding and improving their professional experiences and, therefore, decided that she would try for a place in the selection process of E.JUNIOR, a junior company linked to her course. Throughout the selection, she became increasingly curious about the EYM, and learned that, in Brazil, the first Junior Enterprise was created at FGV in 1988 and, soon, new initiatives emerged throughout the country, which today reach more than 1,500 EJs in more than 300 universities (Brasil Júnior, 2022).

It seems like yesterday this selection – Ana thought.

But two years had passed since the moment she discovered the universe of JEs. Throughout this period, she worked as a trainee, project consultant, sales advisor and, recently, had assumed the organizational presidency. In recent weeks, she had been reflecting on how she could, now with even more responsibility, contribute to the development of the company and its members.

The challenges of Ana and E.JUNIOR

The Junior Enterprise of which Ana was a part, E.JUNIOR, had completed its fourth anniversary and had already managed to structure itself, as well as carry out a relatively good number of projects in the area of its course, providing quality services to its clients and promoting the development of its members.

E.JUNIOR has about 30 members, who are divided into 6 directorates:

1. Organizational and Institutional Presidency;
2. People Management;
3. Marketing;
4. Sales;
5. Projects, and
6. Administrative-Financial.

When there are projects under development, students also act as consultants, assisting in planning and execution, in addition to meeting the client's demands. Each board has a director, who is elected for a one-year term. Generally, these are members who have been working in the EJ for some time and, therefore, are more experienced, in addition to knowing more deeply the activities developed there.

To enter the EJ, students enroll in the annual selection process and, if approved, go through a period of Trainee , which lasts approximately three months. During this period, they receive training, get to know the company's dynamics and are able to carry out projects. If they perform well, they are approved and start to act as effective members, being distributed in the boards, according to the availability of vacancies and the profile of each one.

Ana noticed problems that generated concerns both strategically and operationally. She had been involved with EJ long enough to know well what was working and what needed improvement. And she was willing to leave her mark on this trajectory of consolidation of an organization in which she believed so much. She understood that the number of projects could be expanded due to the potential market already identified. However, there was a certain difficulty with closing contracts. As for the projects captured by the company, these had been increasingly presenting delays and loss of quality.

As for the members of E.JUNIOR, she perceived a lack of commitment associated with a dissatisfaction that generated a high level of turnover of the company's members. This resulted in a loss of knowledge about how the processes were carried out, in addition to not having time for the new members to acquire the necessary knowledge for the proper functioning of the EJ and an effective service to customers.

Ana had the impression that there was a relationship between the various problems, but she was having difficulties in establishing what these relationships were as well as defining possible solutions to the issues, which increased and hindered the progress of activities, in addition to the company's own performance.

A consultant found by chance: change is necessary, Ana!

The other night, Ana had arrived home, after a day of studies and work at E.JUNIOR. At his house, there was a guest, a friend of his father from his college days. The guy was interesting and his name was Jonas Rodrigues. JR, as his father called him, had worked in large multinational companies and in important consulting firms, but he had decided to pursue a career on his own and was undertaking with the opening of a differentiated business school. The school sought to guide its students to conduct change processes in the companies in which they worked, for this, it used specific methodologies and tools, which placed professionals as the main actors in the change process.

After finding out what activity JR was developing, Ana couldn't help herself:

- How interesting! Does this approach work only for large companies?

-No. It works for any type of organization – said JR.

- We are experiencing a series of problems in our junior company. Scarcity and low quality in projects, high turnover of members, lack of standardization in processes. We don't know for sure how to look for solutions and we are looking for help – continued Ana.

- It will be a pleasure to help you! I was once a junior entrepreneur and I remember well that there are many challenges. And the motivation of the people there is also immense! It will be great to be able to contribute, but keep in mind that the change process we work with is very different from traditional consulting processes," JR replied.

The consultant, found almost by chance, proposed to guide Ana through the process with questions that should generate reflections in her and her colleagues. In this way, as he said, junior entrepreneurs could, by themselves, structure and implement the necessary changes so that the mission of their organization can be achieved more effectively.

-Wow! That's what we need," Ana said excitedly.

- I should come to Brasilia every two months, so we can quickly talk about the progress and evolution of your company. You should keep in mind that a change process should contain answers to basically three key questions: “ What to change?" , "What to change to?" and "How to cause change?" . You should start your reflections from the first question – explained JR.

JR explained the approach he used to promote improvement in the organizations in which he worked as a consultant. It was based on the Socratic method and combined with the Theory of Constraints. The Socratic method, which originates from Socrates, a well-known philosopher who lived in the fifth century B.C., had the characteristic of asking questions to reach knowledge. The Theory of Constraints, also based on the Socratic method, developed by the physicist and philosopher E. Goldratt, has as its main foundation to promote the identification of the system's constraints.

The first question: "What to change?"

Ana agreed to the challenge and met with some members to discuss the proposal and draw up a plan. They imagined that the first step to be taken would be to bring the entire company together and carry out a brainstorming about the problems that had been perceived by the members of the EJ. These problems would be the answers to be given to the question "What to change?" , as they should be eliminated.

On the E.JUNIOR whiteboard, a list of questions emerged:

1. Difficulty in reconciling the activities of the course (disciplines, projects, internships, among others) with the activities of the junior company;
2. Demotivation with the company and the MEJ;
3. Unmet expectations related to personal and professional development;
4. Low participation in projects with customers;
5. Overload of activities;
6. Lack of time to study, generating failures in the subjects;
7. Absence or reduced knowledge to execute the operation and management processes;
8. Low number of projects prospected;
9. Difficulty in prospecting customers;
10. Few enrolled in the selection process;
11. Little money in cash.

Anyway, there seemed to be problems of all kinds and orders. It was clear that there was a difficulty in identifying the relationships between them and also in quantifying them. With the list of questions obtained in hand added to JR's coming to Brasilia, Ana tried to present the list to him, who then replied:

- The list is very interesting and really covers a number of points from different areas in the company. Try to define, from this list and complementing it with other problems, what are the root causes of these notes.

Ana and her colleagues tried to research the meaning of this concept. JR would come again to Brasília in two months and the junior entrepreneurs realized that they could not waste time.  During this period, Ana met with the other members of the board. She was very happy and wanted to put the question to everyone.

• We now need to first identify what are the root causes that have limited us in terms of performance – said Ana.
• What are these root causes? – asked Eduarda, the marketing director.
• I think these are problems that generate other problems – suggested João.
• It makes sense. I initially suggest that we do research on the clear definition of what root causes will be – proposed Ana.

It was agreed that João, project director, would carry out the research. On the agreed date, the presentation began. John explained that root causes were those problems that generate other problems, called effects. The effects were typically the most visible problems, which, even after eliminated, arose again. While the root causes require greater analysis efforts to be identified. But once identified and eliminated, the organization's performance would certainly improve. João had gone further in his research and discovered that there was a problem analysis technique called the Current Reality Tree (ARA) that had the purpose of structuring problems and causes in order to find the root causes.  This diagram was developed by E. Goldratt, an Israeli physicist, who developed the Theory of Constraints.

Finally, João then summarized that the Current Reality Tree is a problem diagramming technique where causes and effects are structured in order to identify the relationship between them.

Junior entrepreneurs wasted no time. They immediately tried to apply the ARA to structure the problems they had listed with the technique of brainstorm . They realized that new problems arose and that several of them actually had a causal relationship between them, as can be seen in the following image:

The root causes identified by the application of the ARA were threefold:

1. There is no adequate training for members;
2. EJ's business processes are not structured properly;
3. Strategic management has deficiencies.

These root causes give rise to the various problems raised and, once these causes are eliminated, the problems of management and operation of the EJ could be solved.

Ana couldn't wait for the next meeting with JR. I wanted to show the work developed and check if they were on the right track. Thus, when she met again with the consultant and presented the developed ARA, JR congratulated her and her team for the excellent work developed:

- You have taken a big step. The fundamental thing in a process of change and improvement is precisely to obtain a well-made diagnosis. It is important to know where we are coming from.

- Thank you very much. The use of the technique helped us a lot. When we deal with problems on a daily basis, we don't know how to relate them and we can't perceive and solve the causes that generate them.

"That's what happens, Anna," JR replied. It can be said that a big step has already been taken, but now efforts must focus on the next question: " What to change for?". Try to define a vision for organization and also actions that eliminate root causes.

Second question: "What to change to?"

Ana shared the conversation she had with JR and her entire team was motivated by the performance of the actions. Members began to look for alternatives to deal with the problems identified.

Coincidentally, Pró-Jr, a program that supports UnB's Junior Enterprises, had launched a project aimed at promoting initiatives to improve the management of EJs. This program, created in 1993, aims to stimulate the growth and training of undergraduates in practices related to entrepreneurship. To this end, it seeks to improve communication with the EJs and between them, hold conversation circles, offer training lectures to students, provide opportunities for projects in which the EJs work together and put them in contact with potential customers, in particular, Startups linked to the Support Center for Technological Development - NITCDT/UnB.

The project in question, which had recently been launched by Pró-Jr., was called DesendevEJ and, together with the discipline of "Junior Enterprise 1", also linked to Pró-Jr. and focused on the EJ members of the campus, sought to disseminate philosophies, techniques and management tools for the improvement of the administration of junior companies.

Pedro, also a member of E.JUNIOR, who was following the developments of the process led by Ana, was aware of what was happening within the scope of Pró-Jr and the EJ discipline. The professors and the Program were seeking to train students and companies in an initial set of three management methodologies:

1. Management by competencies;
2. Management by processes, and
3. Balanced scorecard.

Management by competencies focuses on people management, addressing the members of EJs. The idea is to promote the mapping and development of knowledge and skills aligned with the organization's strategy, as well as the motivation and satisfaction of members, who, by having guiding elements for development, would be better able to achieve the mission of the Junior Enterprise Movement.

Process management basically focuses on understanding, standardizing, and improving the various flows of actions that occur within organizations. The reduction of the complexity of these actions is achieved through process maps that contemplate the key elements of the flows in "drawings" that represent the reality of the operations and also serve for knowledge management, ensuring that they are not lost when, for example, the departure of members who executed the process occurs.

Or Balanced Scorecard It is a management philosophy that aims to unfold the strategy into an aligned and integrated set of goals throughout the organization, considering a set of four dimensions that guide the process of translating the strategy into actions, supported by a body of measurable indicators to control the achievement of these goals.

Pedro gave an overview to the other members of the EJ about this content that was being worked on by the Pró-Jr. project. and for discipline.

-Wow! - exclaimed Ana. It seems that these philosophies concern our root causes in a very direct way!

- I also had the same impression! – Pedro added.

Ana understood that these would be interesting paths and immediately wanted to share it with JR. She then sent him an audio message to say that they were able to see the problems better and that they saw possibilities for change initiatives that would lead to the elimination of the root causes.  JR's excited response read, "Bingo!! Now, it's time to move towards good change planning. Good luck! And count on me!"

Ana, although very motivated, had in her head the third question he had asked her on the first date. And I couldn't stop thinking: we've come this far, we have more clarity about where we are and where we want to go. But "How to cause change?"

Discussion questions:

1. Review the list of issues raised in the brainstorming of E.JUNIOR and compare it with the reality of the EJ you participate in. Are there any similarities?
2. In the ARA built by Ana and her team, the effect appears as "the EJ is not able to close a good number of projects". If a greater number of projects were to be closed by EJ, what could be the potential impacts on the organization?
3. Considering the 3 root causes identified by Ana and the E.JUNIOR team, discuss a plan for the implementation of each initiative.
4. How could E.JUNIOR move forward to bring about the necessary change? How do you suggest that Ana take the next steps?

Gallery

References

BRASIL JUNIOR. 2022. Meet the EYM. Available at https://brasiljunior.org.br/conheca-o-mej

DETTMER, W. Goldratt's theory of constraints. Milwauke: ASQ, 1997.

GOLDRATT, E.M.; COX, J. The Goal: A process of continuous improvement . 2. ed. São Paulo: Nobel, 2002.

RENTES, A.F. TransMeth: Proposal of a Methodology for Conducting Business Transformation Processes . Habilitation Thesis. São Carlos School of Engineering, USP, 2000.

About The Authors

Mário Andrade is a professor at the Gama Faculty of the University of Brasilia. He teaches Production and Quality Management, Automotive Production Management and Junior Enterprise 01. Email: marioand@unb.br

Helena Costa is a professor at the Department of Administration at the University of Brasilia. He coordinates the ADM Casoteca. He teaches Introduction to Adm and Contemporary Topics in Adm 1 and 2. He was a member of a Junior Enterprise during his graduation. Email: helenacosta@unb.br

Nicole Alonso is a graduate student in Business Administration at the University of Brasilia, former member of AD&M Consultoria Empresarial (junior company) and managing member of the Casoteca ADM team. nicolealonso2000@gmail.com

Taíze Carvalho she is a master's student at the Faculty of Education at UnB and works in Pró-Jr (CDT), an area that develops actions related to the ecosystem of Junior Enterprises at UnB. Email: taize.carvalho@gmail.com

Isabela Campello is a graduate student in Business Administration at the University of Brasília and a member of the Casoteca ADM team. Email: campelloisabela@gmail.com

Marina Accorsi is a graduate student in Business Administration at the University of Brasilia, a member of AD&M Consultoria Empresarial (junior company) and of the Casoteca ADM team. marinaaccorsi@gmail.com

This case was written from secondary information and based on other references cited. It is not the authors' intention to evaluate or judge the company in question. This text is intended exclusively for academic study and discussion, and its use or reproduction in any other form is prohibited. Copyright infringement will subject the offender to the penalties of Law No. 9,610/1998.