Change Management at Altium Ltd - Case Study Example

Change Management Name Institution Date Change Management Introduction Altium Ltd is among the fastest growing software companies in Australia. The company’s core business involves developing electronic design automation software products and these products traditionally have been offered on costly UNIX based mainframe systems. Altium Limited's long term strategy to develop of desktop software covering various electronic design technologies that are can be used easily and are also economical. Altium Ltd is a learning organization which means that the company learns and promotes learning among its people and also promotes information exchange between workers and therefore creates a more knowledgeable workforce. According to Taylor et al (2012), a learning organization is a firm that facilitates learning for all organizational members and constantly changes itself and a learning organization is normally typified by constant improvement through new ideas, knowledge, innovation and insights. Consequently, learning organizations are very flexible because members of organization accept and adapts to new ideas and changes through a shared vision. Smith (2006) explains that a learning organization is able to avoid the mindset problem when dealing with change because an organization fosters a climate of learning in a firm. There are various aspects that indicate that Altium Ltd is a learning organization. First, the culture of the Altium Ltd Company is that of innovation where the company operates within a very turbulent atmosphere where innovation and entrepreneurial activity, creativity and risk taking for the employees are among the key values of the organization and this has enabled the company to have a competitive advantage (Spiros, 2010). Secondly, whenever Altium Ltd faces a problem, the organizational leadership together with the employees identifies the root cause and countermeasures are developed even if it means instilling a change and training employees regarding the new change. Altium identifies root causes mainly through a very simple method known as “five whys” where “why” questions are asked as many times as possible to establish the root cause of the problems and after determining the problems the organization embarks on implementing the required changes (Spiros, 2010). Secondly, the company uses hansei which includes; responsibility, self-reflection as well as organizational learning. This means that the company focuses on using the concept to reflect on problems, mistakes and weaknesses and then devises ways to improve. Altium utilizes hansei concept for practical improvement where the management carries out hansei events for the improvement of the company’s products and processes. The improvements are then fed back into the organization, including the employees and disseminated for the required changes and recommended improvements to be implemented (Goul, 2010). In addition, Altium uses policy deployment which is the company’s process that cascades organizational goals from the top of the organization down to the workforce level. Aggressive organizational goals begin at the top level, downwards and every level comes up with objectives that support the goals. At Altium, the organizational goals are always measurable and concrete and they always underpin the organizational/executive-level objectives and this enables the organizational goals to be measured and monitored regularly (Goul, 2010). Organizational Changes Organizational changes take place throughout organizations’ life cycles and the changes have an effect on the entire organization. Organizational changes are increasing due to numerous forces such as globalization that has resulted to swiftly advancing technologies, cultural diversity, resources as well as the economy and hence the capability to identify the need for change and institute the change strategies efficiently, using a practical responses to both external and internal pressures is fundamental to the performance of the organization. Internal changes can encompass innovation, organizational structure, processes as well as Human Resource requirements while external changes might entail government legislation, customers’ demands as well as the actions of competitors (Wood et al, 2010). Altium Ltd focuses on innovation and for that the company is continually implementing changes which even include Human Resource changes such as employing new employees and also changing organizational structure and processes to accommodate the innovations. Leadership at Altium utilizes efficient change management strategies which also include efficient communication strategies to reach everyone in the entire organization, operational alignment, readiness to change in addition to implementation and this reduces and overcomes any resistances that are normally associated with change implementations in organizations (Dalglish & Miller, 2010). Since Altium utilizes collaborative culture in the company which is combined with the methodical nature of Altium task-based computer design systems to encourage collaborative discussions of each and every detail in the work, employees at Altium always question all changes implemented in the company and at times there are resistance to the changes but the Altium leadership deals with the resistance to changes by ensuring that from the beginning everyone in the company is informed of the change and also utilizes several change initiatives that will be discussed in this paper. Organizational Change at Altium Ltd After a short period after Altium Ltd was started, the company needed to align the organizational culture, values and structure within company’s headquarters in Australia with its other sale operations regions in Australia for the company to meet strategic growth objectives. As Wood et al (2010) stipulates, the effective changes strategies used in organizations include; technical design, political allocation along with culture mix problems. Generally, any time an organization instigates a change, one and even all these three problems arise. In Altium Ltd, the change involved culture problems because the company operates in different and diverse culture settings being an international company. Altium Ltd has had steady developments and growth since it was established where it has various operations in various regions in Australia where each region operates as separate business unit and are supported by Human Resources, finance, IT, commercial operations from the company headquarter in Australia among other support services from the headquarter. In this case, the alignment mostly involved the company’s headquarter which is in Australia. Altium in Australia decided to align the company in regard to operations, culture and also strategy in order for the company to focus on innovation and performance to attain its organizational goal on being the leading provider of computer software for the design of electronic products in Australia and within other countries where the company has operations. Consequently, Altium headquarters that is the parent company redesigned its organizational structure and merged most of its business units from different regions in Australia within one location. After Altium made this relocation, the company started leveling out the organizational structure lead by a new management team, Human Resources and the company’s CEO. From that time, the company has been under steady change to attain its objective for constant growth in terms of performance and number of employee and stand out as a high performing and innovative organization with the goal of being the leading computer software provider company in Australia and outdo all its competitors. As Wood et al (2010) elucidate the performance gap refers to the need to move from a lesser state to a higher state and this can be illustrated in Altium through the increased performance after the occurrence of the change and implementation of the change. What Changed at Altium Ltd after the Implementation of the Change The most notable changes that took place include the move from the initial vertical structure to a horizontal structure and also there were changes within specialist functioning of the company’s divisions and this created a professional, corporate culture that focused on customers. The culture at Altium Ltd, ever since the company was established was a casual altitude in regard to dress code, beginning and end time, informal communication style and most employees were recruited through existing personnel, who recommended either their friends or relatives instead of recruitment being done basing on competency and job skills. For instance, some of the company’s management team members had their friends or relatives working for them and there was no dress code requirement and workers reported for work and left different times. When the change was employed, all this changed. The company’s HR in collaboration with the management employed more competent and skilled employees, the existing employees were trained again and company processes were designed and then procedures were set up. These goals were attained by reducing the management layers and this resulted to a more direct reporting and did away with the bureaucratic way of reporting. This is supported by Wood et al (2010) who argue that as the size of the company increases, there are increased interconnections and reduced direct communications among organizational members. When the leadership at Altium Ltd fortified the earlier management and reporting systems, at first workers were somehow lost and were left without direction and communication regarding the communication channels and organizational objectives and processes was not clear and this caused a lot of uncertainty in the entire organization. As a result, a number of employees quit job because they were confused and were not happy regarding what was taking place in the company. Nonetheless, Altium maintained some of the workers who had lots of experience with new career development propositions as well as new management members were hopeful and open regarding future advancements that were to occur in the company. How a Leader Should Manage the Change A leader can manage the change by utilizing the Freeze/Unfreeze concept. According to Sadri (2010) Freeze/Unfreeze concept emphasizes on the need to prepare individuals for change and hence a leader at Altium Ltd should have ensured that all the company organizations were prepared before the change was implemented. Preparing people for change is a very important aspect of change process before the change is implemented and preparing people for change involves assessing and influencing resistance and need to change (Dalglish & Miller, 2010). Therefore, in this case as a leader one would have used Force Field Analysis tool; this is a very useful tool during this stage. This entails changing of individuals; tasks; structure and technology. If possible, the company is totally unfrozen, ready for change and the organizational objectives regarding the change are articulated clearly. When preparing employees for change, leaders steering the change should not perceive workers as having a sense of high or low security at this phase in order to avoid resistance from employees such as the one seen in Altium Company where even some employees resigned (Kamugisha, 2013). A leader is supposed to act as an agent of change and take the role for the change behaviors through a supportive way and thus the leader should also take into considerations the perceived risks that should come with the change and decide on the direction of the change as well as come up with ways of eliminating the perceived risks such as the ones witnessed in Altium. Refreezing involves assessing and reinforcing the changes that occurred. In Altium, the new management team that was hired due to their experience in matters regarding organizational changes, as a leader one should ensure that the team gets the required skills to steer the change, have high performance and fit the change setting that Altium desired. Rather than expecting the management team to steer the entire change process by themselves, as a leader one should guide the management team (Li, 2005). To manage the change, a leader should facilitate clear and fast communication channels to enable organizational employees to perform their tasks more efficiently and thus get thing done faster, in addition to enhanced technology. This can ensure that employees and everyone in the company collaborate and there is elevated unstructured communication and reduce rules, processes and close supervision (Dalglish & Miller, 2010). Role of Strategic Leadership in the Change As Schneier (2011) suggests, strategic leadership entails applying strategy when managing a company. During changes, leaders are extremely influential in making sure that the organization change is established and permanent as well. During a change like in Altium, a leader should use the following types of leadership styles in order to manage the change successfully: Charismatic Leadership Style: A charismatic leader has character and capacity of mobilizing and sustaining activities such as the ones involving changes within an organization. During the change process, the leader should through individual actions and professed traits mobilize workers and sustain an effective adoption of the new dynamics coming with the changes. As a result, the leader should change individual’s values, objectives as well as aspirations by envisioning, energizing and enabling the process of organizational change (Burnes, 2010). Instrumental Leadership Style: An instrumental leader makes sure that everybody within the management team and all the organizational workers follow the projected line of change to make sure that the change process is steady and permanent as well. Consequently, to effectively manage the change at Altium, a leader should invest in creating competent teams, clarify the line of action to the team, management and workers and develop measurements and administration rewards and punishment depending on how organizational members handle the change process. Through this kind of leadership, the leader will ensure that the change in the company is permanent and not momentary (Dalglish & Miller, 2010). Since the employees at Altium did not embrace the change positively, as a leader, one should introduce the news regarding the change professionally and in a conducive manner to make sure that the organizational members receive the news about the change positively. Accordingly, it is important for the leadership to make sure that there is training and seminars to enlighten employees regarding the change and also the leaders should act as role models for the other organizational members for them to be motivated and be keen and willing to sustain the change (Li, 2005). During the first stages of the change process, the leader should be envisioning to make sure that he/she creates an image of the future that individuals can identify with and work towards its attainment. This is because individuals have a higher likelihood of being committal to the organizational change when working towards a common objective and also as Kamugisha (2013) argues, the efficacy of the management greatly impacts the success of change management. The leader also has the responsibility of energizing and motivating the organizational workers for them to have the motivation of working the set goal. To energize the workers, a leader can demonstrate individual enthusiasm by personally interacting with the organizational workers. This is because when the employees perceive that the leaders are confident with the implemented change, they will also be readily willing to be involved in the process of change (Taylor et al., 2012). Additionally, as a strategic leader, one should assist employees psychologically for them to be able to perform when they face challenges that the change is likely to present. It is therefore vital for leaders to offer employees emotional support by listening to them, understanding their predicaments and participating in finding a solution. Accordingly, employees are likely to be confident and participate in the change process willingly because they know they will get support whenever they face any challenges that are likely to come with the changes (Dalglish & Miller, 2010). Sustaining the Change In order for the change to bear fruits such as increased growth rate, a leader can use strategies such as: Performance Appraisal Review: The leader can form a team specifically responsible for reviewing the performance of the workers where the employees are requested to rate their performance and how they use the current organizational values where the organizational leadership is supposed to discuss the values with the employees before they can rate themselves. For instance, at present “impact” is a core value in the company and hence the workers can be instructed to rate their contribution to the organization in terms of the impact they have had since the changes were implemented and then provide examples of the behavior that signifies impact. The performance Appraisal Reviews can be carried out during end of each quarter which means the review can be done four times annually (Sadri, 2010). Reward and Recognition: Employees can be given targets in accordance with their job category and experience where they are offered incentives to motivate them to attain the targets. In this case, jobs are broken into task constituents where every constituent has the target behavior that should be rewarded. In addition, the outstanding employees can be recognized where the employees whose performance is outstanding gets an award at the end of month in order to motivate the employees. More importantly, since one the goals for implementing the change was to make Altium the leading company in the industry, for instance the worker with the highest sales in the sales department can be awarded and the employee of the year can for instance be recognized by awarding him/her a new car. This will also motivate all employees to work hard to get the recognition and in the long improve performance of all organizational workers and hence assist the organization in sustaining the change and achieving the set goals as well. According to Dalglish & Miller (2010), such fortification used to sustain changes are known as extrinsic and are reward given to an individual by another individual’s valued result and since they are environmentally effectual, they are very vital in influencing behavior through the law of effect (Dalglish & Miller, 2010). Generally, organizational changes, especially when it has to do with cultural change like the one witnessed in Altium Ltd can take long and hence efficient management of the change is necessary in order to sustain the change. It is therefore very important for the organizational leadership to ensure that the cultural change strategies align the culture to support the intended change. For instance, in the case of Altium, the targeted culture was a proficient and customer focused culture and this necessitated employees to expand proficient skills and behavior. To manage and sustain such a change, it is necessary for all employees to have adequate and efficient trainings aimed at increasing awareness in communication, while focusing on probing and empathy (Taylor et al., 2012). Conclusion The organizational change at Altium involved changing from a bureaucratic structure and culture of casual and unprofessional work practices to a professional, high performance, innovative and customer focused culture. For a leader to manage the change, he should utilize strategic leadership during change management. For instance, the leader should motivate the employees for them to adopt and sustain the change and also act as a role model during the change process. In conclusion, to manage a change properly and effectively a leader should employ good management by making the right decisions through skill and sound judgment. References Burnes, B. (2010). Managing Change: A Strategic Approach to Organisational Dynamics. Sydney: Prentice Hall. Dalglish, C., & Miller, P. (2010). Leadership: Understanding its global impact. Tilde University Press. Goul, N. (2010). Becoming a learning organisation: A social work example. The International Journal. 19(6). Kamugisha, S. (2013). The Effects of Change Management in an Organisation. Journal of Management & Business Studies. 1(1), PP. 1-18. Li, L. (2005). The Effects of Trust and Shared Vision on Inward Knowledge Transfer in Subsidiaries Intra and Inter-Organizational Relationships. International Business Review. 14(20). Sadri, G., (2010). Developing corporate culture as a competitive advantage. Journal of Management Development. 20(10). Schneier, B. (2011). Exploring Strategic Change. 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