Change Management - Qantas Airways Limited - Example

Change Management Name: Date: Unit: Substantive organizational change presents some of the most delicate times in the organizational life cycle. Transitions during change of strategy or leadership when not handled well have led to the destruction of many a company. The goal of this project is to document and internalize the steps taken to effectively manage change in real life situations, document the best practices and also make observation of things that could have been done better in the process of change. The report will also give the researcher opportunities observe the principles for change being in action. While text book principles will be observed, there will also be a study of the role of innovation in the process of change management since there are some situations for which general principles may not apply exactly owing to the uniqueness of the organization and its circumstances. The report will also show how the objectives of company staff may be aligned to change in the company since; ultimately employees are the ones who will be pushing forward the new processes and agenda. Owing to the centrality of employees to the success of the process it is of critical importance for the process of communication between leadership of the change process and the staff to be clear in order for the proposed change to be socialized as a way of reducing resistance. Background Few industries are as dynamic as the airline industry, new trends and threats and challenges arise every day and competition is extremely stiff. Air travel companies, therefore have to keep changing in order to survive in such an environment (Sull, 2009). Qantas Airways Limited is one such company. Change has been necessitated by many factors ranging from the effects of nationalization in its early days to adoption new technologies over time. The heightened global terrorism threat in recent years has made security a major expense in the airline industry. Because of the threat of increased terrorist activity is also a serious threat to the company’s profitability and very survival. It would be a public relations disaster should an act of terrorism be undertaken in the airline. The unpredictable nature of oil prices is another external force that regularly necessitates change in Qantas. Since the company business is international, there is also the constant threat posed by fluctuation of currency value. The company has also faced the challenge of industrial action leading to grounding of operations. With such a plethora of challenges the only for the company could survive was by undergoing massive changes in management practices from time to time in order to infuse efficiency and also cut costs (Qantas, 2009). Method The research in this case was approached as a case study in which information on the management of change in Qantas was sought from research from secondary sources including write-ups by the company itself. Being a classroom assignment, this method was considered appropriate since it gave the learner an opportunity to elaborate on the subject at hand while at the same time creating a hypothesis. It also allowed the researcher to juxtapose textbook theories vis a vis real world situations in order to see how effective the said theories were in the real world with the particular instance being investigated in focus (Potter, 2008). For a company as old and dynamic as Qantas, which also operates in a rather fluid environment, it is difficult to pinpoint a particular instance of change, rather change is constant. With this in mind, different instances in the constant cycle of change were picked to show how each step in Kotter’s theory was applied. A study of the company’s operating environment was also taken in order to see whether the action taken during this change management was the best possible in the learners assessment. This enabled the researcher to put himself in the shoes of the company’s change managers and see what he could have done in a real life situation. The researcher looked at the change process through the lenses Kotter’s Theory. Findings with regard to Qantas in each of the steps was examined to see whether it was undertaken and if it was, how it was undertaken and to what effect. Findings Establishing the need for change in those involved in the company business is the first step in change management according to Kotter’s theory (Kotter, 2007). In the case of Qantas as would be the case in any LSO, establishment of this need pertained to getting all the stakeholders, including shareholders, the staff and also to a significant extent their clients to internalize the need for change. In the case of staff this would be rather difficult since the proposed change would involve laying off some of the staff members which would in turn mean that the said staff members and their unions had to be convinced that laying them off was what was best for everyone. The other challenge for change would also come from the fact that the company, having been in existence since 1920 and being one of the oldest airlines on earth, had its own traditions that were rather set in many people’s minds which would not be easy to change (Hansen, 2009: Porter, 1996). Since many Australians identify the airline as a symbol of national pride the audience to which the need for change had to be communicated and accepted in the case of Qantas was much larger than in any ordinary company. Over the years, Qantas has communicated through the media and also through shareholder and staff meetings, while there has been some resistance as was the case with staff in 2011-2012, the company’s corporate communication strategy during times of change has been effective. The next step in Kotter’s theory is the formation of a team to guide the change. In December 2014, the top management executives in Qantas left the company to pave way for others. Gareth Evans the hitherto Chief Financial Officer would replace Simon Hickey as the Chief Executive of Qantas International while the Chief Executive of Qantas Domestic Lyell Strambi was replaced by Andrew David who was, up to that time,the C.O.O among other changes. Regarding these changes, the company C.E.O Allan Joyce said that they were part of the company’s larger transformational agenda. During these changes the company added transformation as one of the responsibilities of the company’s Executive manager in charge of strategy. The company therefore had somebody specifically charged with driving change in the company (Qantas, 2014). To ensure that the stakeholders including employees who would drive the change and be most affected by it support the change, it is imperative, for the organizational leadership to create a positive vision for the uptake of employees in the company (Robbins et al. 2006) . One instance in which this was observed to have been sorely needed was during the dispute between Qantas and its employees in 2011-2012 due to the airline’s intention to launch a subsidiary airline in Asia. The company staff rejected this suggestion almost in totodue to the possibility of jobs being lost (Waddell, Cummings and Worley, 2007). When all was said and done it appears that the company failed to alleviate the fears of its staff through creation of a positive vision. This could have been achieved by making clear the benefits that the staff would gain by working for the new subsidiary. Qantas should also have taken steps to ensure that the move by staff to work in the Asian subsidiary would be worth their while. Matters like accommodation and transport being catered for by the company for the staff who transferred to Asia would have gone a long way in allaying the employees’ fears. The standoff resulted in company losses amounting in tens of millions of dollars. This shows that the vision employees had was negative with regard to that particular aspect of the company’s transformation agenda. Creation of a positive vision, however is not a short term thing, this is because the vision that a company is able to create is informed by the long term relationship between the management and stakeholders especially the staff. In the case of Qantas, there has been frequent layoffs as part of the company’s transformation agenda through the years which has resulted in dwindling goodwill towards the company by the staff. As a result, Qantas would be well advised to use retrenchment as a tool of very last resort going forward. The next step of great import is communication of the vision and strategy. This communication is particularly important as a way of bringing in cultural change within the company. In the face of greater challenges and a need to become a leaner, more efficient organization, through employment of strategic interventions, the drivers of these interventions are the company employees who have internalized a certain culture which might very well need change. In its attempt to become more market oriented, through the provision of value added services to its customers, as part of its Broad Differentiation Strategy, the company communicated change as a way of changing its employee culture through the use of internal marketing. This involved employment of roadshows where staff members were sensitized on the benefits that would come from ensuring customers enjoyed their travel experience. The strategies to be used were also communicated through the ‘road shows’ and memos. This initiative had the visible support of the company’s top management. The communication strategy also involved Human Resources Interventions in employees were taken through intensive training on the new organizational paradigm in the company. The trainings apart from ensuring that the coming change had been properly communicated and internalized also ensured that the company staff was empowered to undertake the new roles that would be brought about by the expected changes. This training ensured that they now focused on customers as the company strategic plan required. Kottler’s theory’s sixth step entails planning and celebrating success. Due to the change initiatives that the company has put in place, it has become one of the leading airlines in the world with a steady increase in the share price a fact that the company has celebrated and showcased at every possible opportunity. A casual look at the company’s website shows a company that is not afraid of trumpeting and celebrating its success. The company staff is also regularly appraised on the effects of the change initiatives they have been involved in. The seventh step in Kottler’s theory is cementing the change and keeping the momentum. This has been achieved by ensuring that the public information regarding the company is regularly updated so that the reality of the company activities in the public consciousness gets adjusted at the earliest opportunity. This has been achieved through regular updates of the company websites and signage to include new taglines and logo as appropriate. The final step in the process according to this theory is the institutionalization of the change. The train undertaken by staff regarding being customer focused has become a key part of the company requirement for all their staff. The ability of frontline staff members to take care of customers is a key component of the company’s staff trainings and customer feedback is a key determinant of staff rating during routine evaluations. Conclusion Change which has been managed effectively has led to Qantas surviving over the years to become one of the most profitable and highly regarded airlines after surviving for longer than most airlines in the world. Its Broad Differentiation Strategy has led it to be leaner and more efficient. Expansion through the establishment of subsidiary airlines for specific geographic and cultural areas had led to increase in its overall profitability. It is however, important for the company to enter strategic alliances with other airlines in order to avoid being locked out of certain routes by such alliances which are the trend in modern air travel. Such alliances would also play an important role in ensuring that Qantas widens its reach and also is able to provide easy and convenient connecting flights to customers. However, with regard to managing change, Qantas has done very well over the years; its very survival may be attributed to this knack. References Australian Associated Press (2014) Qantas shakes up management as international and domestic chiefs depart. The guardian. (online). http://www.theguardian.com/business/2014/dec/12/qantas-shakes-up-management-as-international-and-domestic-chiefs-depart Hansen, M.T. (2009). When Internal Collaboration Is Bad for Your Company. Harvard Business Review 87(4): pp. 82-88. [Online]. Available from Business Source Complete, EBSCOhost. Accessed 19th September 2015. Kotter, J.P. (2007). Leading Change: Why Transformation Efforts Fail.Harvard Business Review 85(1): pp. 96-103.Availablefrom https://www.ebscohost.com/academic/business-source-complete. Accessed 19th September 2015. 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Available from https://www.ebscohost.com/academic/business-source-complete. Accessed 19th September 2015. Waddell, D.M., Cummings, T.G., & Worley, C.G. (2007). Organisational Development and Change: Asia Pacific, 3rd edition, Melbourne, Cengage Learning Australia Pty. Limited. Read More