Change Management Action Plan for Superior Widget Corporation - Case Study Example

I. Overview This paper has three parts. First, the Overview gives the background and paints a broad of action with key concerns. Second is the“sales pitch” suggested to top management to persuade employees. And third is the Change Management action plan to implement change of organization behavior. SWC (Superior Widget Corporation) recently underwent some internal reorganization. Customer service functions were spun out of Sales’ various responsibilities. The CEO formed a new Customer Service Department (CSD) by taking that function away from Sales. This key organizational change was implemented by edict. But, it was a de facto justifiable “intervention implementation” of Change Management to modify organization behavior. It was prompted by emerging anxiety about how Sales handled and processed customer feedback and concerns. Sales lived in a potential and/or actual conflict-of-interest. On one hand, Sales’ main concern is meeting aggressive sales goals. On the other hand, Sales can possibly fail to meet them by dwelling too much on customer advocacy. So, the CEO took Sales out of that crossfire by spinning off its customer service responsibilities into the new CSD. That step was proactively positive compared to blindly abiding by laissez faire business-as-usual which looked as though it could possibly lead to collapses of customer confidence and SWC’s credibility with them. Given these circumstances, SWC must map a course to ensure its future. There are three key action items to pursue to follow-up smartly on the reorganization within SWC. These actions address and provide what should prove to be satisfactory resolutions to issues and concerns, questions and problems, and even complaints that are rippling throughout SWC. Besides settling these internal situations, SWC must maintain customer confidence and take proactive actions to increase it. Three Key Actions First Action Item — Internal Matters The first matter is making employees feel that SWC is their professional home. Management must quell fears and apprehensions. Due to the creation of the CSD as an independent business operation functioning outside of the Sales group, organization morale must be addressed. In the wake of the surprise CSD decision, personnel throughout the Sales force wonders where they stand. What is their job security? Why was the move made? Did they fail or were they failing to provide adequate customer service? Why have they “lost turf” and people? Will they “lose” more? And, why were they not consulted (for advice and consent) before customer service responsibilities were taken away from them? Second Action Item — Customer Matters Second and with a degree of urgency, SWC must fix a problem in the making. A review of customers’ sales records shows that widgets were sold to some customers without meeting their needs (purchase specifications). Honestly, no business can do this and realistically hope to survive by doing repeat business with its customer base. When customers learn that widgets they bought and paid for fail to meet their needs/specifications, SWC will face a PR (Public Relations) nightmare. Further, word-of-mouth bad news about such fiascos spreads like out-of-control wildfires in the marketplace. SWC must proactively address and resolve this looming potential problem. On a concluding note about the second point, SWC’s mission must be to turn a negative into a positive. Along the way also find the root cause of this problem. Doing so, SWC must convert this operational weakness into a business strength to ensure SWC won’t again sell any customers the wrong widgets. It’s not a witch-hunt to assign blame. It’s about preventing future recurrences by fixing our business system. All personnel concerned must have some well-defined process(es) to prevent such mistakes. Third Action Item — Grow Opportunities for Employees and the Business Third, this is an opportune moment in SWC. It’s an opportunity to grow the business; its revenues and profits, customer loyalty and marketplace reputation, scope and international reach, capabilities of employees and facilities. We can facilitate growth by taking smart positions today. SWC must use this opportunity to set clearly-defined, realistically attainable goals. Goals must be built around and in-support of executive vision. Where is SWC now? Where does SWC want to be tomorrow? What must we do to get there? Build a bridge to tomorrow. How will it be done? And, who will build it? The mechanics of answering these questions are opportunities for personnel to be responsible for making realities from the executive vision of SWC’s future. Key people will want to make dreams into reality. Such personnel have opportunities to own part of the vision; that is, part of the future. They have chances to chart career paths via OCB (Organization Citizenship Behavior). Using “can do” goals and measuring performance toward achieving those goals, SWC’s people may earn merit-based professional growth. Overview Closing Point — Plan and Navigate a Course SWC needs a plan to make everything work; a strategy with supporting tactics, and a way to make the CSD be a success story that, as a byproduct, elevates SWC’s CEO to visionary genius. This paper presents a plan, pursuing the three courses of action (above), to facilitate and manage changes in SWC’s organizational behavior. II. Managing Change — Win the Loyalty of SWC’s Employees Where SWC Is Today? This plan suggests how to tell SWC employees “Why the CSD was created”, and how it fits in SWC’s future. For curious employees and those who “Can’t see the forest because of the trees”, a top executive’s clarifying look into the future will draw supporters. Even better, SWC people will see where we are compared to where we’re going. They’ll better understand why SWC teammates must knit together tighter to make that vision of the future into a reality. The vision may inspire people to innovate profitably, or strengthen esprit de corps and enrich the work environment, and mostly to involve themselves in OCB (Organization Citizenship Behavior) that is above and beyond the call of normal duty. This section of the plan is to sell SWC people, and seek their “buy in”. SWC proceeds from its present circumstances. Launching of the CSD is fait accompli. Growing pains are fact. Already, in only two years, SWC grew international in scope. Under SWC’s roof, many operations have grown into somewhat autonomous organizations pursuing their own methodologies. However, every person, department or group can’t simply “march to the beat of his own drum.” So, before growth spirals out-of-control such that negatives of growth outweigh its positives, SWC must smartly optimize its business management system. This means providing direction and executive vision to “get everyone on the same page.” Getting Onboard How do we get them all there? There’s no one-size-fits-all answer. Some people saw need for change and are already there. Others, with a little coaxing, will join top management’s pursuit of tomorrow. They may see need to change but want hand holding and friendly gentle persuasion. Still others will resist. Yet, when/if they join they can be some of the stoutest supporters because of all the “becoming a believer” changes they underwent before getting onboard. To Offend? Or, Coddle? CSD was created by CEO proclamation. That offended some. Leaders make people mad sometimes. Tough decisions don’t always make everyone happy. Colin Powell addressed this (Powell, 2000). Effective leaders know this and don’t let it stop them from progressing toward the goal. From experience, Powell says that trying to make all people happy has a negative impact. The most creative, innovative and productive people begin shutting down and even turn themselves off rather than follow a self-marginalized leader who strays toward ineffectiveness by trying to placate all subordinates. Tough decisions keep performance incentives alive. They let a person thrive and prosper by exercising the innate will to excel. In the final analysis, we must plan and execute for success. SWC employees must realize that growth means, by definition, change and tough decisions. Our business experts can help smartly manage change. We need all SWC managers onboard. They are some of SWC’s resident experts. Hands-on widget makers are the other experts. The CEO needs a fully functional crew. That entails winning some loyalties so Change Management is successful in the realm of organization behavior. This is standard business practice. We All Know About “Doing Your Own Thing!” SWC’s recent challenge is that some of this standard business thinking has morphed into a company culture whereby sometimes (a little too often), people are “doing their own thing” to make performance happen. For a start-up business, that work ethic and autonomy works well. Initially! Thereafter, a stabilizing structure, some operations system must emerge. SWC reached that moment. Telltale Sign of Ballooning Problems: Customer Concerns Rising customer concern regarding the level and/or professionalism of customer service was the telltale sign that prompted the creation of CSD. This situation didn’t happen instantly. It built up over time and didn’t rectify itself. Customers alluded to SWC’s customer service shortfalls. The proper Change Management correction didn’t occur spontaneously. Action was necessary. If SWC loses its customer base, if SWC’s marketplace reputation gets blacklisted and if, as a result, customers go to our competition, we will suffer negative consequences; maybe even perish. If that happens, top management gets blamed – specifically, the CEO and/or owner. Everyone agrees the death of SWC is a losing situation. If executive leadership does nothing then the risk is high that SWC continues drifting in that wrong direction. It was time for decisiveness. So, the executive decision was to take action to try to ensure prosperity of SWC’s future. Such action can offend at least a few in our company crew who’d grown comfortable with and too used to doing their own things. Nonetheless, from now on, SWC must progress forward with this foresighted decision. Advantages of Having a CSD The new Customer Service Department shall institute a culture of professionalism in customer advocacy. The conduct of Sales was professional to the best of their various capabilities. But, they’re sales professionals which is different than customer service professionals. The Sales group is out of the crossfire of being customer advocates or making sales quotas. CSD is a clearinghouse for all customer concerns, questions, problems, issues and complaints. At last we can keep statistics. We’ll use them to increase customer satisfaction. We’ll use them to minimize or eliminate problems and complaints, and disseminate lessons learned companywide. We’ll move up the learning curve together. CSD is a resource for taking the pulse of customers and the marketplace. It gives customers and prospects “an insider” who they can openly and candidly confide in. Salespersons make the same claim, but customers always know the salesperson’s goal is to tally another sale. This inhibits communication. Furthermore, CSD will interface cross-functionally in SWC’s management matrix. CSD can go to Sales or Shipping or Production or Design or Contracts. They can cut through Sales hype, Shipping backlogs, Production issues, Design miscommunications or Contract snafus — all which are infamous pitfalls in every industry. CSD is our pilot through such perils. Use them. Weave them into your routine to help increase customer satisfaction, and trigger repeat business and increased volumes of widgets purchased. Our Future of Change To get through our growth pains, SWC needs the best efforts of employee teams. We rely on each team player for their expertise. The time arrived to create a CSD. If our business doesn’t face more “eureka moments” today, we’ll face them in the future. We’re relying on everyone in SWC to help identify such opportunities. It’s better to see them coming and deal with it instead of taking blindside hits. It’s better to be proactive than reactive. We face changes as a business, as departments, work crews and individuals. We must focus our expertise to manage changes ahead. Everyone has a chance to contribute. And we encourage you to add your 2¢ to the pot. III. Change Management Plan There are two obvious options for managing changes: 1) be proactive and create organization out of chaos, or 2) be reactive, flail and survive in “crisis mode”. The first option promotes growth. The second typically fosters self destruction. This plan addresses support from the top on down through the ranks, setting goals, process building and ownership through participation, effective communication, implementation strategy, career growth, training, the importance of planning particularly for Change Management, and resolving the sale of wrong widgets to customers. Commitment Throughout the Ranks It’s good that the CEO made the first highly visible change that impacts organization behavior. It shows commitment from the top. It carries lots of weight to obtain “buy in” from SWC people who see it. It’s impossible to change organization behavior without highly visible sponsorship from top management. People in the ranks don’t take change seriously if they don’t see leaders seriously for it. Forbes calls it “DeLTA” for “dedicated resources, lead opportunities, tools and enablers and appropriate mindsets” (Anthony, Scott D., and Bolen, Kevin, 2008). SWC must have visibly serious management between the CEO and widget-making hands-on experts. If any managers resist, draw data from SWC records to make a compelling case for smart change. Data should show time lost because “haste makes waste” when business operations react to change rather than manage it. Scrambling to train new hires and make production goals at the same time means incurring extra and avoidable costs. We could suffer customer stagnation. New orders could not happen or come in slower. New business opportunities could dry up. Customer loyalty might wane if we fail to change and adapt SWC organizational behavior, and our failure negatively impacts our customers. Data records of diminishing returns will challenge and convince managers to stop resisting Change Management. When they see money actually lost plus the opportunity costs, the resisters should want to manage changes and willingly get onboard and demonstrate commitment to their subordinates. Managing for Results — Set Clear Goals, Make Supporting Processes Well-defined, realistically-attainable goals drive good processes. Goals must have measurable action verbs that make performance tangible and clear. For example, “Cut customer complaints in half every month until they’re eliminated,” and “Reduce rejected products 25% every month.” There are many measurable goals. Increase productivity, reduce factory machine downtime, change tooling faster to set-up new production runs. Doing any of these translates into reduced cost of doing business. That increases profitability. From top management on down, anyone in SWC can envision measurable goals and help make them reality. Management tends to own or co-own processes that run business operations. To run optimally, management must make proficient processes to support executive management’s visions. To make those visions come true, the next layer of managers make goals more tangible on an accountable basis (e.g., annual, quarterly, fiscally, production quotas). They oversee and direct business operations and are responsible to keep them on-track to achieve fiscal goals. This means turning fiscal goals into production goals. They pass doable goals to production managers. This layer of management is responsible for running (not the same as overseeing) business operations. They turn production goals into measurable achievements of widgets produced. Every SWC manager already knows this, or s/he should. People must work together to accomplish and succeed at all the above. Two resources expand on the working concepts. They define and chart steps to effectively execute Change Management (Business Performance Pty Ltd, and Change-Management.com). Though the steps apply to Change Management, they also apply to the process of changing and managing organization behavior. Business processes lead to smoother performance. They’re not meant to limit or handcuff people. Processes guide productive activities. They create a work environment that lets superstars be superstars without the business being dependent on continuous superstar performance ~ which leads to burnout. Processes must be structured but allow situational flexibility to achieve goals. Forging such processes means drawing upon know-how of hands-on experts, the “process owners”, as well as getting ideas from their internal and external suppliers and customers. They forge and agree on a process to meet their needs and SWC goals. They build cross-functional teams and create peer respect and professional appreciation. Effective Communication Business runs on two communication channels. One is formal. The other is informal and the functional backbone of communiqués. A bar graph accessed at http://www.change-management.com/best-practices-report-itoc.htm (click on “Communications”) shows how people perceive business and personal messages conveying news of impending changes. By far, most credence (52%) is accorded to personal messages delivered by the employee’s immediate supervisor. Employees give the second most credibility (39%) to the CEO/President who sends gospel by official business messages. Executive Managers earn next most credibility (23%) by coming over business channels. Department Heads are believed 14% if talking on a personal level. All the remaining six communication avenues are rated below 10% believability. Communication can originate in executive meetings, cross-functional interdepartmental meetings, and when the boss officially passes along “the word”. These cover all four most prized (above) sources. Company newsletters and intranet info are valuable channels, as are special advisory meetings. The CEO already set a precedent. It’s official. The best course is to build on her action with advisory meetings. SWC personnel must be brought onboard. This means gaining “buy in” at all levels, in all ranks; executives and directors, managers and supervisors, production and office personnel. SWC can embark on a formal information program. Explain where we are as a company, where we’re going, what tools we have, and what new tools (including people skills) we need to make tomorrow a reality. This exercises the formal channel. As for informal channels, chats around the coffee pot, lunchroom and water cooler are where many innovative ideas hatch. Take away these venues or design them out of remodeled workspaces, and the social network is extinguished (Dunbar, 1998). Negative experience shows how breakthrough creativity is stifled by loss of informal channels and interdepartmental cross-pollination. It’s important to let this grapevine prosper. Over time, half-baked ideas are well-grilled until they are ready to pass inspection by superiors. Properly used, all these avenues disseminate ideas about Change Management regarding organization behavior, and gather feedback. SWC should use them to help facilitate smart growth. Choosing and Using Strategies SWC can smartly use strategies to manage organizational and behavioral change. Change Management strategies include: 1) Participation, 2) Intervention, 3) Persuasion and 4) Edict. Participation engages resident experts to various depths. To create an over-arching management system, lots of participation is needed to solidify business processes. Participation creates “buy in” via ownership and responsibility. This Change implementation model should work well for SWC to build on the precedent set by the CEO. Cogent concepts regarding participation are in sections 5 and 7, respectively, “The Quality of Awareness Determines Performance” and “Experience Must Inform Strategy and Leadership” in the summary paper entitled “Illuminating the Blind Spot: Leadership in the Context of Emerging Worlds”. It discusses making people cognizant of thought processes that drive business actions (Arthur, et al., 1999-2000). In context of these writings, change strategy implementers are effective when they apprise effected people by change and mold strategy techniques to meet the situation and its goals. Intervention gives people leeway for thoughtful initiative and improvements. OCB practitioners use the intervention strategy of Change Management to overlay innovations that improve operations. SWC can keep this path open. The CEO was motivated by suggestions of customer intervention to make the CSD. In the future, more opportunities will arise. For every serious change opportunity, executives can use the most appropriate Change strategy or blend of strategies and techniques to structure a companywide management system that meets business goals. Promote innovation without soliciting counterproductive ridiculous suggestions. Today, maybe Participation implementation is best for sake of local ownership and buy-in. Tomorrow, someone may sponsor an innovation that is best introduced into business operations by a strategy implementing Intervention blended with Participation. And almost all changes try Persuading one party or another. To help the SWC team accept Change Management challenges and earnestly engage their expertise, executives should reserve the Edict strategy for last resort, emergency, tiebreakers and other limited and thoughtful but necessary uses. Overusing the power to overrule or to rule imperiously will disengage our subject-matter experts. Career Paths and Professional Growth In the workforce SWC has star performers and regular, steady workers. This opportunity to smartly manage growth works for them as well as for management. In the spirit of OCB, some people will want to help implement Change Management to shape SWC’s organization behavior. If their ideas make sense, fit into SWC’s future, are made into measurable goals, and executed accordingly, people contributing thusly will feel a share of ownership and have an effect on coworkers that stimulates more “buy in”. Such people can be co-architects of SWC’s management system and its business processes. They may add their innovative measurable goals to their career path “To Do” list. When accomplished, the goals are achievements. Demonstrated performance and ability to handle greater responsibility may possibly lead to merit-based promotions and pay increases. These are powerful motivators; job satisfaction, ownership of a piece of the business system, earning trust of upper management, monetary enrichment and peer respect. People are drawn to and appreciate a profession that gives career path chances to “write your own ticket”. Persuade Them Onboard Underlying all the previous subtopics is the theme to present a persuasive rationale to SWC employees. For everyone’s wellbeing, the company must manage changes caused by growth. Smart company culture proactively manages change. At SWC we don’t want to be reactive and let change manage us. People must see SWC’s plan which proposes workable ways to succeed at Change Management. They must find and exercise their voice because that’s vital to help secure our future. The CEO can use this moment to show how SWC is at a crucial crossroad. Continuing in the old ways will not elevate SWC to the next level of business performance in the marketplace. By creeping chaos the old way will cause erosion of market position and our business will most likely suffer entropic decay. However, SWC can control its own destiny by creating a proactive company culture and mindset. It can, with active help from resident experts from all areas of the company, systemize business processes that adequately address customers while sustaining and growing profits. Disarming a Time Bomb — Sale & Delivery of the Wrong Widgets This is a disaster in the making. Silently standing by and hoping for the best, wishing to escape unscathed will surely bring down days of reckoning upon us and very likely with lawsuits. SWC can take steps to avert this. By openly approaching customers with an offer to upgrade their stock with widgets that meet their specifications, SWC takes away the main reason to lay blame on our doorstep. It makes SWC a hero. Meanwhile, SWC should seek other customers who need those mis-sold widgets. We may find someone. Being proactive will enhance our marketplace reputation with forthright honesty. It opens a possibility for customers’ specification people to build relations with SWC product designers – those who make our product specifications. Further, this may open doors to customers expanding business with SWC; making large amounts of made-to-order widgets. If such new designs are not proprietary, they can be openly marketed to draw more customers. This matter needs handled with tact and a “customer partner” mindset. Success from such an approach can turn this into a PR boon. References Anthony, Scott D., Bolen, Kevin. (2008, April 4) Transform Your Company for Growth. Forbes.com – Leadership – Strategy and Innovation retrieved May 1, 2008 from webpage http://www.forbes.com/leadership/2008/04/04/apple-nokia-kimberlyclark-lead-clayton_in_sa_0403claytonchristensen_inl.html Arthur, W. Brian, Day, Jonathan, Jaworski, Joseph, Jung, Michael, Nonaka, Ikujiro, Scharmer, C. Otto, Senge, Peter M. (1999-2000) Illuminating the Blind Spot: Leadership in the Context of Emerging Worlds retrieved May 1, 2008 from webpage http://www.dialogonleadership.org/WhitePaper.html Best Practices in Change Management – Interactive Table of Contents, retrieved May 1, 2008. http://www.change-management.com/bp-toc/interactive-toc-v20b_files/slide0011.htm communication http://www.change-management.com/bp-toc/interactive-toc-v20b_files/slide0006.htm steps charted NOTE: via webpage http://www.change-management.com/best-practices-report-itoc.htm Business Performance Pty Ltd. (2003-2008). Change Management Model – The CHANGE Approach, retrieved May 1, 2008 http://www.businessperform.com/html/change_management_model.html Dunbar, Robin (1998). Grooming, Gossip, and the Evolution of Language. Harvard University Press. Powell, Colin (General, U.S.A. Joint Chiefs of Staff). (2000, January 18). A Leadership Primer, slide 1 [PowerPoint presentation, created by Dr. Rick Avramis] retrieved May 1, 2008 http://www.fireleadership.gov/toolbox/presentations/General_Colin_Powell_on_Leadership.pps Read More