Leading Change: Why Transformation Efforts Fail - Research Paper Example

?Introduction When the new CEO joined HP in 1999, the company was in need of serious guidance. The CEO decided to restructure and reorganize the company into quadrants but this met with strong employee resistance. The CEO’s vision of creating a new interface with the customers did not meet the approval of the existing employees. After the merger with Compaq cultural integration became a major issue although with the induction of new personnel the task was made easier. Effective change is always linked with a well established vision and lack of vision can result in unsuccessful change and organizational decline (Palmer et al, Ch 9). Vision is often confused with mission statement and values, which is precisely what happened at HP. Vision is a statement that describes the mid- to long-term goals. It is an expression of how the organization wants to be perceived. Mission statement on the other hand is a one sentence statement that defines the purpose of the organization. Visions statements should be inspirational, aspirational and measurable (Schraeder, 2002). Vision is also the ability of the organization to articulate the inner voice of the organization. The purpose of planning is to bring effective change. Organizational vision should be the focal point of all planning activities. The vision should be analyzed in the context of the external environment. Organizational vision ash three components – why the change is needed, the aim of change and how the change action will be initiated. The CEO at HP knew why the change was needed (to gain competitive advantage, to enhance sales coordination and increased market share) but the aim of change was not clear. There was no compelling vision and nor was this vision communicated effectively among the subordinates. Application analysis Vision is plan for the future and it should clarify the direction for the future (Kotter, 1975). The CEO of HP merely stated that culture could be changed by “going back to the roots of the place”. This statement has no inspirational message and neither is it measurable. It was too vague and Paler et al contend that visions fail when they are vague. Kotter clarifies that without a clear vision the transformation efforts can easily dissolve into confusing and incompatible projects that steer the organization in the wrong direction. To go back to the root, the CEO started restructuring the organization by reorganizing the company into “quadrants,” creating two “front-end” sections that consisted of sales and marketing and two “back-end” functions. This effort met with subtle employee resistance changes should be done in a systematic manner. The CEO’s vision had an affective component as it sought to achieve the intended outcome. It did not focus on motivating people and in increasing their commitment to change. Strained relations made the post-merger integration difficult. To achieve the objectives, new personnel were inducted which temporarily made the transition task easier but it increased resistance from the existing staff. The clear and compelling vision statement was not communicated effectively by the CEO which is evident from the fact that even after the merger many employees were not convinced of HP’s riskiest move. This can confuse or alienate the workers contends Kotter and this is what the employees at HP underwent. The CEO used “a range of methods” to communicate the vision including “management by walking around” style but Kotter believes that the compelling vision statement should be communicated in five minutes or less. This implies that communication of the vision was not right and hence the company could not move in the right direction. The CEO gained popularity with the “new DNA” and the “transferees from Compaq” but not from the employees from the HP system. People were unable to relate to the description of change. Vision is a plan for the future and hence should drive change but HP could not handle the internal and external pressures as the vision lacked clarity. Communicating the vision becomes challenging if the organization faces job loss (Kotter). At HP the resistance to change intensified as there were victims of the job cuts resulting from the merger. The CEO worked with the local ad agency and the head of Human Resources to create a set of “Rules from the Garage” to achieve her objective of the culture. The change attempt at HP failed because the CEO was unable to engage and empower the employees and thereby was unable to resonate or connect with the people for whom it was intended. The company’s aspirations and directions were embedded in “The customer defines a job well done” and “Invent different ways of working” but these are also vague mission statements. It does not indicate who the customers are and does not clarify the ways of working that would be suitable to the customers. Lessons learned This analysis has made me realize the difference between vision and mission and the importance of these two in strategic planning. This case study also highlights the importance of organizational culture in the change process. Leadership is essential but the leadership should not merely focus on the outcome. The focus should be in motivating, engaging and empowering employees and the outcome will be achieved automatically. Another important lesson learned is that communicating the vision is as essential as designing the vision. The vision should be understood by every member of the organization to encourage them to participate in the change process. Engagement of the existing employees in the change process is more essential than engaging the new employees. The mission statement should be amply clear to all the stakeholders and should be able to communicate the message clearly. The vision statement should be based on mid- to long-term planning and the mission and vision should convey the values and goals of the company. Strategic planning hence requires that the leader should understand the aim of change and ensure the right change actions to achieve success. The change process at HP was necessary but the CEO could not make the vision compelling and could not share it effectively with the subordinates. This led to resistance from the employees. References Kotter, J.P. (1995). Leading Change: Why Transformation Efforts Fail. Harvard Business Review. March-April 1995 Palmer, I., Dunford, R., & Akin, G. (2009). Managing organizational change: A multiple perspectives approach (2nd ed.). New York: McGraw-Hill Irwin. Schraeder, M. (2002). A simplified approach to strategic planning. Business Process Management Journal, 8 (1), 8-18 Read More