Effective Leadership at Sensis - Case Study Example

Managing Change and Leadership Institution: Name: Table of Contents Table of Contents 2 Introduction 3 Background of Sensis CEO 3 Type of change 3 Incremental versus transformational 3 Need for Change at Sensis 4 When the change occurred 5 Management of change process 6 Resistance to Change 6 Freeze/Unfreeze model Analysis 7 Targeted Changes that took place 8 Culture and Performance Change 9 Conclusion 10 Introduction This report analyses a case of managing change through effective leadership at Sensis. The information presented is derived from an interview with the company director John Allan, company data and personal analysis based on secondary literature sources. Allan led Sensis through a continues incremental change, which consisted of making frequent and decisive adjustments that, although diminutive, had cumulative effect, to last for two years. Much of the changes that Allan initiated were cultural changes and management structure. Background of Sensis CEO John Allan has vast experience in managing media organisations. Before he joined Sensis in 2012 as the managing director, he was the managing director of The Australian and Chief Executive Officer at TrueLocal.com.au. At Sensis, he is responsible for overall leadership of the company. Sensis is a major Australian marketing company that caters for the promotional needs of Australian businesses. The company runs a range of major print and digital publications such as White Pages, Whereis, Yellow Pages and TrueLocal. Sensis is a wholly-owned subsidiary of Telstra. He is directly in charge of circulation, advertising, operations, digital teams and circulations. Allan initiated cultural change at Sensis. Type of change Incremental versus transformational Allan led Sensis through a continues incremental change, which consisted of making frequent and decisive adjustments that, although diminutive, had cumulative effect, to last for two years. Much of the changes that Allan initiated were cultural changes and management structure. This is consistent with typical incremental versus transformational, as suggested by Carter at al. (2012), who pointed out that continues changes imply that work routines and social practices are modified. Need for Change at Sensis On critical reflection, Sensis needed to align its values, cultures and structure with its parent company Telstra with the view of meeting strategic growth goals. This view is based on Allan’s statement that he had proposed three elementary sets of change, namely political allocation, technical design and culture mix problems. According to Allan, culture mix problems were at the centre of interest and triggered the need for change. Telstra has been on steady growth path since its last phase of privatisation in 2006. It has acquired a range of business operations and separate business units because of its financial might. Allan said that a decision was made to align Sensis in respect to culture, operation and strategy, to enable it focus on innovation and attain its objective of becoming the leading marketing company for small and medium-sized enterprises in Australia. Allan stated that in 2011, the business division held onto its profits and in the financial year 2010/2011, the company reported a decline in net income by 5.9 percent. He further stated that in the first six months of 2012, the company’s sales had plummeted by 24.1 percent. In his opinion, the shift to digital marketing in the directories and advertising segment had happened more rapidly than expected, hence finding the company unprepared. Allan was then hired to replaces Bruce Akhurst as the company chief. According to Allan, it was then that he was hired in July 2012. His first role was to change the management structure and the company structure. Hence, he was to assume the position of a change leader. As a consequence, Telstra redesigned its organisational structure as Sensis in addition to other business units that merged in one location. Allan said that afterwards, he had to lead Sensis into flattening out the organisational structure to attain its goal as an innovative and highly performing marketing company, with the view of becoming the leading online directory service in Australia, with its Yellow Pages product. According to Allan, the reason for initiating this change was due to the fact that when he entered the company in 2012, his first realisation was the company performance gap. As stated by Purser and Petranker (2004), performance gap describes the desire to move an organisation from a less desirable economic or social state to a desirable one. In the case of Sensis, this would only be realised after increased financial performance once culture change had been implemented. When the change occurred Allan stated that the change was incremental and transformational. He initiated his revival plan in August 2012 after his appointment. More progressive changes had been implemented by the end of 2013. However, the changes are to carry on until the end of 2014. Allan outlined the fundamental changes that occurred as a shift from the bureaucratic and vertical structure to a horizontal structure. Additional changes included a shift in specialist functioning of the company’s divisions to create a more customer-oriented culture in the company’s corporate culture. According to Allan, before he joined Sensis as the CEO, there was a general casual attitude towards dressing, reporting for work and performing tasks. Additionally, a number of the employees had been employed as relatives and friends of the existing staff rather than on academic qualification and work experience. Allan stated that some of the changes included hiring more skilled staff and retraining the existing staff. On critical reflection, training can effectively align the employees to corporate objectives as well as improve their skills (Shaheen et al., 2014). Oluwakemi et al (2011) argued that training triggers employee commitment. The hiring and training started in December 2012 and went on until June 2013. Additionally, Allan managed to achieve these objectives by reducing the management layers to create grounds for more direct reporting, as this would enable faster decision-making. This was also to enable the management to establish frequent interaction with the employees. Kotter and Schlesinger (1979) discussed that as the size of organisations increases, more interconnections result. At the same time, less communication happen causing delays in decision-making. Management of change process Resistance to Change Allan stated that once he uplifted the reporting and management structure, the employees were at first left without direction. Additionally, the reporting channels, company objectives and processes were not communicated efficiently. Accordingly, many employees resigned in protest after feeling upset about the changes. In view of the high turnover, it is possible to conclude that it was a reaction caused by general discomfort with change (Strebel, 1996). As pointed out by Reger et al. (1994), fear of consequences and anxiety may set off discomfort with a change initiative, further causing negative reactions and turnovers. Lorenzi and Riley (2000) stated that training employees to adapt to change can effectively manage resistance in this circumstance. It also enables a company to attain short-run effectiveness and long-run efficiency (Dartey-Baah& Amponsah-Tawiah, 2011). Allan’s focus on career development was therefore justified. Indeed, it should be perceived that Allan strove to use change resistance to his advantage. Ford and Ford (2010) advised that rather than blaming resistance, organizations can change the situation by motivating employees. Purser and Petranker (2004) suggests that such situations can be managed through the Kurt Lewin’s Freeze/Unfreeze model, that is applied in motivating employees to accept change. a) Unfreezing is focused on preparing employees for change. This is an essential component of the change before implementation. The need for change and resistance are influenced. An effective tool that can be applied at this stage is Force Field Analysis to analyse the forces that resist change (Purser & Petranker, 2004). b) Second, the peoples, structures, tasks and technology are changed. In actual fact, the organisation is totally unfrozen as well as prepared for change. Additionally, company objectives are clarified. To avoid resistance, Gadiesh and Gilbert (2001) suggest that employees should not be perceived to have a sense of low or high job security. c) Unfreezing is focused on evaluation of changes that have happened. Freeze/Unfreeze model Analysis On analysis, Allan recruited new HR managers who had experience in organisational transformation within a highly competitive media and marketing industry. On critical reflection, change agents can reduce resistance to change. According to Purser and Petranker (2004), change agents comprise of individuals or group of individuals responsible for changing the existing patterns of behaviour to support change. However, the perceived risks include the responsibility of the company executive who determine the direction of the change (Oakland & Tanner, 2007). On reflection, Allan provided an able leadership that set ground for change by communicating his revival strategy to the company. Targeted Changes that took place a) Structure – the new HR managers, under the leadership of Allan, made changes in the company’s organisation design through effective operational processes, resized teams, effective reporting system, new job titles and higher remuneration. b) Tasks – The management staff was added more responsibility, in a strategy called job enrichments. According to Peterson (2007), job enrichment motivates commitment. In this case the managers were motivated to act as change agents. c) People – the company started advertising jobs online and in newspapers in a strategy towards improving employee recruitment. The existing staffs were also given incentives to nominate candidates who were afterwards selected officially by the HR managers. In Sutarjo’s (2011) analysis, on the effectiveness of job-person-organisation-environment, the researcher suggests that an individual must assess his skills with the job as well as the characteristics of the job as it has the potential to improve job satisfaction. d) Culture - corporate culture, values and objectives was conveyed by Allan from the parent company. Employees were given rewards in situations where their behaviours were consistent with the values. On critical outlook, culture symbols can be effective at this stage. Among the culture symbols are trophies. For instance, the Sensis started to recognise the need to adopt the “employee of the month” award, as a trophy from Telstra. The company also aimed to reinforce ethical culture. Thomas et al. (2004) suggests that creating and sustaining change urgency is critical under such circumstance in upholding ethics. e) Strategy – Allan states that he believed that clarification of the company’s operations and goals was necessary to facilitate consistency within the company. He stated that this was to be done through the weekly meetings and by the departmental heads. Allan’s leadership depicts a form of transformational and visionary leadership. Kotter (1995) explains that in transformational leadership, leaders exert their leadership through their language, visionary and transformational change approach. On analysis, Allan and his team used a forced approach called to down command strategy, where they used incentives and rewards, shared decision-making, communication, rationalisation and empowered approach, which was effective. Using new HR managers as change agents was also an effective approach. Ciric and Rakovic (2010) suggests that in such an approach, organisations should use an expert, communicate the need for change, inspire feedback from employees, steer clear from changing for the sake of it and evaluate organisational structure and change. Culture and Performance Change According to Allan, since the company’s transformation, the company’s sales department report a growth rate of 17 percent per employee. Among the strategies employed included: a) Performance appraisal review, where each employee graded himself based on their performance and compliance with corporate values. b) Reward and remuneration, where employees are given remuneration based on how they attain the given targets, or Key Performance Indicators (KPIs). These helped align employees to new organisational culture as well as sustain the change objective. Oakland & Tanner (2007) remarked that align the culture can support the needed change. Conclusion Sensis changes its organisation culture to be more professional and the management structure from being bureaucratic to a transformational one and more customer-oriented. Although there was a high turnover at the outset, it can be assumed that the turnover was due to budgetary constraints as the company had experienced losses in the previous years. References Carter, M., Armenakis, A, Feild, H. & Mossholder, K. (2012). Transformational leadership, relationship quality, and employee performance during continuous incremental organizational change. Journal of Organizational Behavior, J. Organiz. Behav. 1(1), 1-17 Ciric, Z. & Rakovic, L. (2010). Change Management in Information System Development and Implementation Projects. Management Information Systems, Vol. 5 No. 2,pp23-28 Dartey-Baah, K. & Amponsah-Tawiah, K. (2011). Influencing organisational behaviour through the application of learning theories. 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