Change Management: Arrowhead Ltd - Case Study Example

Change Management: Arrowhead Ltd. Change management has evolved as a distinct function of management owing to the complexities and criticalities attached to the process. This paper explores how change management can be implemented in a furniture producing company, Arrowheads Ltd, which intends to shift its production segment from low-end inexpensive furniture to high-end expensive ones. In the process, challenges related to this transformation such as communication process, conduciveness of organizational structure and systems, and possible method to change organizational culture have been discussed with respect to inclusion of quality standards, through Total Quality Management methods, that did not exist earlier. Introduction It is has become a necessity, rather than important, for organisations to be prepared to make all sorts of changes in this business in order to sustain in the market. These changes should encompass all or most of business strategies, culture, systems and structure so that they can meet customers’ expectations, and find new opportunities for growth in business, career and sustain the competitive edge in the changing markets (McGrath & MacMillan, 2005). This is exactly the situation at Arrowhead Ltd, who had to venture into high-quality furniture production from less expensive furniture items in order to make some profits for the company. In order to improve the company’s profits through a change in business strategy, Arrowhead needs to implement changes at various levels and in different functions for achieving its objectives. These strategic changes should be able to bring about radical or transformational change to the established ways of working from both organisational and employee perspectives. In Gill’s (2006, p.323) words, ‘change requires effective management: clear objectives, planning; organising roles, responsibilities and resources, and compatible and supportive corporate policies, practices and systems; monitoring and control. Now that Arrowhead has identified its market segment, piloting the decision of producing high-end furniture is a crucial step towards venturing into the transformation. This process should be able to give a fair idea of how and what kind of furniture will be most desired by the new target customer. Firstly, Arrowhead should try to produce some furniture with the help of their best craftsmen who are enthusiastic and willing to innovate according to the customers’ requirement (Drucker, 2007); this process will be a start of innovation. Based on what is feasible by the craftsmen, the company should decide on what types of furniture to be produced. Focusing on the chosen types will help in following a systematic innovation approach. This will also help in ensuring the innovation opportunities are in line with the strategic objective of the company, i.e. to improve their profits. If they try to venture into all types of available high-end furniture, efforts and required will be greater; in addition, fineness aspect may be hampered. Also, it is important for the craftsmen to produce something that customers want (Reid & Sanders, 2002); in case something is not working, they should be able to made modifications or shift to a different type of product. Following this testing phase, managers can decide what kind of products Arrowhead can start producing. The next aspect of transformation is communication to all the employees. This is the most challenging task, and requires appropriate and planned approach. It is important that the communication is cascaded to all at once in order to avoid potential misinterpretations and emotional responses (Cameron & Green, 2004). Appling Cameron and Green’s (2004; p.162) change initiatives to the communication process, it should help in appropriate alignment of all components of change process; in attunement of human resources with the new organisational goal, culture and values; in gaining the support of the critical mass, i.e. the unskilled workers of the company; to explain about building organisational capacity and capability by adopting more suitable structure that will enhance the workers’ capability, maybe, by formation of teams; and, about encouraging individual learning through innovative initiatives that did not exist earlier. Resistance to change will exist and should never be avoided to ensure a successful transformation. As the changes have to be done at a strategic level, policies need to be changed as well; linking performance with monetary rewards and recognition will be a good start to enthuse the workers. Workers will also be inclined towards continuous learning. Creation of a healthy learning environment should be based on win-win conditions, from the company and employee perspective (Ledgerwood & White, 2006). Further, learning process can be facilitated by the existing skilled craftsmen in coordination with an external vendor who can train finer concepts of furniture making and show newer designs of furniture. As this transformation process encompasses a cultural change, training designed should also include enhancement of leadership/managerial skills in terms of performance measurement, understanding new roles and accountabilities as well as workers’ skill development requirements. Performance measurement process should clearly define and measure the desired results, so that workers understand what exactly they are required to do (Halachmi, 2005). As the new work requires greater refinement of the product and an overall skill enhancement, workers would be required to work harder. By defining and clarifying their goals, achievement of the target gets simplified as they would know what exactly they have to do. Further, linking performance with reward and recognition can be a motivating factor for workers to put more efforts and produce better results (Schuler, Fulkerson & Dowling, 1991). As performance measurements are aligned with organisational goals and expectations, and not individual goals or expectations, issues with fairness in assessing, controllable and uncontrollable factors, differences in individuals’ potential and motivation and the type of work, all have to be included in deciding the actual performance. Hence, performance cannot be measured on single entity and requires various combinations of metrics to measure performance in an appropriate manner (Cleveland & Mayben, 1997). In accordance with the organisational expectations and standards, appropriate metrics that are critical to quantity and critical to quality have to be designed. A customer-driven Total Quality Management (TQM) approach will help in achieving effective productivity and quality returns. Although Arrowhead’s present situation requires a quality management system that can yield profits in the shorter term, such practices, as argued by Skinner (1986) with low costs will eventually fail in the shorter term (cited Kaynak, 1997; p.4). Kaynak (1997) also points at reasons given by Fitzsimmons and Fitzsimmons (1994) for failure of short-term quality focus such as inexperienced workers, low capital investment per worker and insufficient training of service workers. Under present circumstances, Arrowhead faces all of these issues; hence, the company owners will have to adopt a more comprehensive quality management approach such as the TQM. This requires management commitment, product quality, continuous improvement, team work and ongoing training. Organisations enhance effectiveness and efficiency by reinforcing the importance of quality in all aspects of their activities and stimulating and assisting the development of quality improvement (Barkely & Saylor, 2001). Overall, it aims to change the ways things are done within the organisation. For this employees must know what to do (goals and objectives), how to do (skill enhancement), have the right methods to do it (motivation, awareness of problems, training); and be able to measure the improvement of the process and the current level of achievement (performance measurement and continuous improvement) (Rawlins, 2008). Schein (1990) had said (cited by Cameron & Green, 2004; p.220), ‘culture is the pattern of basic assumptions that a given group has invented, discovered or developed in learning to cope with its problems of external adaptation and internal integration, and that have worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems.’ Different TQM models have been proposed by various researchers. The common features of all the models include awareness of need for improvement, company’s situation, reasons for the change; clarity of goals in every function and clear reporting structure; skill enhancement through training and continuous learning; performance measurement and management; appropriate quality measurement through adherence to customer needs, minimizing wastage of time and resources, and avoiding errors/defects (Sashkin & Kiser, 1993; Chang, 2006). To incorporate these measures, steps such as formation of teams, empowering the skilled craftsmen with key decision making in production as well as training the other workers in new furniture making concepts will motivate them and provide an opportunity to take up higher responsibilities; rewards and recognition based on performance will further motivate other workers to perform better; appropriate performance measurement and feedback will guide the workers to improve. As a package, these measures can change the culture towards a customer-driven quality management, and emphasize on ownership of responsibilities. Motivating the staff requires appropriate acknowledgement and recognition of their efforts in order to avoid disappointment and monotony. Continuous motivation will also help in encouraging staff to look for continuous improvement and learning. Appropriate recognition, rewards in the form of incentives, non-incentive appreciations, performance related appraisal and pay, promotions and job enrichment are a few measures that will encourage staff to perform better. In addition, sharing the company’s profits and market position, potential plans for future will keep the staff focused and committed as these activities will make them feel ‘included’; inclusive culture fosters better team work and accountability (O’Toole, Galbrath & Lawler, 2002). However, the most important factor that determines the success of this transformation is the new leadership that will be chosen to lead the teams and the project (Pagon, Banutai & Bizjak, 2008; Kelly & Csorba, 2009). Conclusion: Thus, it may be concluded that complexity involved in bringing a transformation is directly proportional to the type of change intended. In this case, the Arrowhead’s business strategy is being changed, which means a complete change in the way organisation functions, its culture, processes and policies. As the transformation is from lower to higher level product type, it requires much effort and time to implement the changes. Hence, TQM is the most comprehensive management approach that can help in driving productivity and quality along with change in organisational culture, systems and structure. Although it is time-consuming approach, the results will be promising in the longer run. Leadership at all levels will have an active role in spreading awareness, training, performance evaluation, continuous improvement and driving TQM. References Books: Barkley, B and Saylor, J.H. (2001). Customer-driven project management: building quality into project process. 2nd Ed. McGraw-Hill Professional: U.S.A. Cameron, E and Green, M. (2004). 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