Change Management Report
Change management is a must if a company is to wrestle itself out of murky waters of mismanagement and underperformance. Change management is a technique aimed at transitioning individuals and teams in the organization as well as the organization as a whole from their current state, especially in terms of performance, to some desired state in future. Change management does not necessarily involve changing every aspect in the organization. Rather, it focuses on utilizing organizational resources for the purposes of transforming non-performing parts into performing ones. However, in a situation where some aspects cannot be transformed, doing away with some actors in the organization is necessary. In this paper, the focus is on how David Jones' stores could be transformed from their current state to desired performance levels in the future. This paper is going to analysis the current state of an organization and looks at it from the perspective of management concepts, the nature and the need for changes and proposes change strategies that could be reasonably considered by the organization are also be presented in the report, also Kotter's Eight Step Models will be integrated with the situation of David Johns.
Why companies change
David Jones is an example of an organization in the competitive market, which found itself in a tough situation simply because the management was not capable of handling urgent issues when they emerged. According to Richard & Murphy (2010, p. 63), the central concept in this situation is organizational life cycle. The argument is that at some point in time the organization is bound to have its operations decline. There are a number of issues that need to be overcome in this instance, especially in regard to organizational change management. Some of these include the need to focus on leadership, the need to maintain a sustainable organizational size, the need to review and change organizational culture, the need to specialize, the need to diversify and expand, and the need for proper consolidation.
Competitive markets are bound to change as time progresses. Companies continue to invent new things so as to keep the pace and to compete well. For the companies which continue to cling to the past, they are likely to lose a lot in the competitive market. This is very relevant when considering the situation at David Jones. Due to changes in market dynamics, companies have tended to go online. It is no longer fancy to buy goods and services from a physical store when a customer can get them by ordering online. David Jones has failed to catch up with this, and the results are that the company has been losing customers. If David Jones had read changes in the competitive market, the company would have adopted the new changes, and to an extent, it could invent more styles in management so as to retain its customers. It therefore remains that a company like David Jones can decide to change so as to be relevant in present times.
To rescue situations
Companies are bound to change their management style so that they can rescue a particular problem. In regard to David Jones, the management has already witnessed some bad happenings especially when it comes to losing customers. Such a situation has to be arrested and rescued. Losing customers can be hurting because it means that they are going to the rival companies. For David Jones, a crisis is evident, and if the situation is not solved, it is likely to affect the company in a bad way. That is why there has to be a way to change the past way and adopt the new ways of management.
Market decline pressures
In the environment where David Jones operates, the trend in market pressure is declining. According to Parsons (2012, p. 5), it is possible for market pressure to decline if there is not enough competition. Competition makes it hard for an organization to maintain stability and makes it face stiff rivalry to win the market share. This is connected with performance of an organization. In situations where there is stiff competition in the market, the organization puts extra effort to manage its operations and prevailing trends. Tate (2012, p.67) claims that the way to tame a market is by increasing competition and pressure in the competitive market. However, in the case study the real reason for the market decline is that the growth rate is very slow and there are a big number of job losses.
Market pressure is necessary in any situation. In the case study, David Jones stores used to perform in the competitive market. This meant that the organization always maintained high standards of performance in the market. When Paul Zahra came into the market to take over management, everything was running smoothly. The only problem was that he was not able to sustain company's performance, and lack of market pressure was to be blamed for underperformance. David Jones has seen other companies go above in terms of customer base simply because the company could not cope well with decreased market pressure. Zahra notes of sliding doors, where, despite doing the same things, other companies are getting better in terms of market success while the success of David Jones dwindles. The real issue is that when market pressures decrease, demand goes down. Such has affected David Jones where, with decreasing market pressures, the casualty is for David Jones who has not put enough measures to maintain demand for their products. If such continues, and if there are not enough changes on the part of David Jones, then, the company may continue suffering in the market.
Failure to understand changing times
Other than decline in market pressure, another reason why the organization found itself in its current state is because the management was not able to predict future changes. Today, departmental stores are not favored. Online stores have taken over in terms of competition, and more people prefer to make purchases on the Internet as opposed to a physical store. According to Black (2011, p. 349), this is significant in instituting changes. Paul Zahra ought to have understood that there were changes in the market competition, and probably also should have tried to be competitive by exploring the opportunities of the Internet. Failure to do this is to be blamed for the current decline in performance.
Making changes for David Jones
According to Pierson (2006, p. 369), there are two major types of changes: first order change and second order change. First order change refers to a type of change that involves adjustments of systems and does not necessarily involve fundamental strategic changer. On the other hand, second order change, or discontinuous change, is a kind of radical or transformation change. It implies a lot of transformation. In most cases, political leaders get into power with a promise of second order change. This is because they promise to change the status quo and deliver something better for the people. In regards to David Jones, the two forms of change are very much applicable. The following discussion focuses on the two types of change and their applicability in the situation of David Jones stores.
David Jones was improving the way in which it handled customers. The company realized that a major problem in its operations is that customers were not coming back. Therefore, there was a need to change the manner of handling customers. The company was also making changes in the IT department, where it was improving its information technology platforms. These were first order changes, which were not radical in nature. They do not involve a new operation; rather the focus is on making adjustments or improvements to what was done at first.
There were also the second order changes. David Jones was opting to go online, because the management realized that brick and mortar kind of operation was not paying off. The company was also planning to introduce a kind of bridal floor. In all of these, the realization was that there was a need to make radical changes. These changes had to be transformational in nature, and this was in line with what was needed for David Jones to gain market share again.
Kotter's Eight Step Model
According to Sabri (2006, p. 176), Kotter’s eight step model is a change model that aims at getting planned issues implemented. It has to start with planning because it is an essential part of change. Generally speaking, this model is a step-by-step model, meaning that it allows change agents to handle different parts of intended change. Generally, it is a way of breaking a change plan into goals that can be achieved in the organization. Other than implementing the change, Kotter’s eight step model helps sustain the new methods. This model was developed by Dr. John Kotter, and 70 % of organizations, which have used the strategy in implementing change, have reported success. This means that organizations, which use the strategy, have a very small chance of failing their strategy. David Jones as one of the failing companies and one of those willing to regain their market share has opted to use this strategy. The chance is that the company will achieve its objectives in the competitive market. In this paper the focus is on how David Jones can best manage change using the model.
Step one: Creating a need for urgency
This is always the first step in initiating change. Essentially, a company that wants to succeed in a competitive market has to understand dynamics of the market. Research has to be carried out to understand clearly the dos and don’ts as the company implements a strategy. There is a number of issues that a company has to address in initiating its change strategy. The most important in this is to create some urgency. If a company or the agents of change fail to do this, the organization will stagnate, and there will always be excuses to postponing change. Change may not be liked by everybody in the system, but since it has to be implemented, it is important for agents of change to create some urgency. (Sabri, 2006)
According to Cameron (2012, p. 187), the way to go is to categorize the problem and essentially, to perform some situation researches to understand the dynamics of change. For David Jones, a research is likely to show that failure to understand changes in the competitive market has made the company lose customers. Armed with such information, David Jones would know exactly what to do. The management of David Jones does not understand new customers and what exactly they want. Failure to go online has made the company lose considerable number of customers and there are no new customers coming to stores. (Cameron, 2002) Therefore, creating urgency for change would ignite the management to take appropriate measures to implement the change needed.
Step two: Creating a guiding coalition
The second step is very important. It comes after the first step of creating urgency for change. According to Palmer & Dunford & Akin, (2009), creating a coalition means putting enough people in the change group. It is difficult for change to be implemented by one person. This is because one person may not have adequate ideas on how to handle the market. After carrying out the research, the management of David Jones may understand that there are multiple reasons why the company has been on the down trend. Therefore, one person cannot effectively put together ideas that can transform the organization to introduce something new and something that can be liked by all customers.
For David Jones, it is recommended that put a group of people together under guidance of one leader so that there could be a common direction. The team must have sufficient power to handle the issues and essentially, this team must include experts in the field. The fact is that David Jones does not have people who understand the market well. Therefore, in order to move forward in the competitive market, it is essential that the members of the group are knowledgeable. They must be experts who have contributed effectively to the process of change in the past.
Step three: Development of a vision and a strategy
Perhaps, this is the most important part in implementing change in an organization. Change is best defined as something new being introduced to the organization. However, the implementation of this change should not be done carelessly. Rather, there must be a process and a goal. Goal setting is very important and as Cameron (2012, p. 187) writes, it forms a part of the vision for the organization. For David Jones, the vision is to rectify the problems and bring earlier success back to the company. This is never easy and it requires a lot of courage. Drafting a strategy and a vision allows to ensure that change agents know exactly what is required of them.
For David Jones, the needed change is to make customers come back to the store. The vision, therefore, must be focused on this. For example, when using the Internet as the selling point, the company management must understand benefits that would be derived from such. It is not only about putting something new into the organization. This vision must be developed and communicated as it will be noted in the next stage. The vision must be achievable and must be within capabilities of the organization. For example, David Jones cannot purport to go online when essentially most of goods and services of the company do not require doing so. Therefore, the vision must be articulate and to the point. (Palmer & Dunford & Akin, 2009)
Step four: Communicating the strategy and vision
As noted before, communicating the strategy and the vision is a responsibility of the change agent and the management of a company ‘change agents must understand one another and all of them must be reading from the same script’ (Lambert, 2008, p. 316). This cannot be accomplished if change agents and company’s management do not understand one another. This also cannot be accomplished when they do not clearly understand what is needed from them. Communicating the strategy in David Jones must be done in a most enthusiastic manner. This has a purpose to make all members motivated to perform their duties.
Perhaps, this is the second most important part of change implementation. This is because the quality of change would be determined based on how it was drafted and communicated to all people involved. Essentially, communicating the importance of change takes more than just writing letters to employees in the organization. Communication in David Jones must involve training people to do the right thing. This is because if they are not trained or well informed about it, then, they are not likely to make enough effort to implement the change. For David Jones, if the company wants to go online, then its employees must understand essentials of e-commerce and how is it possible to customers online in a best way. (Palmer & Dunford & Akin, 2009)
Step five: Empowering employees in the organization
As noted in step five, communicating a strategy must involve informing employees about what is needed from them. This is done by training them by using modern tools. David Jones wants to attract new customers as well as retain existing ones. If this is to be done online, then the employees must be trained on how to handle issues that emerge during online operations. For example, communicating with a customer physically or with a help of letters is not the same as communicating something to the customer online. There are lots of differences, which must be clearly understood by all parties involved. For David Jones, empowering employees means that they must be given full mandate to implement the strategies and visions drafted. They must be allowed to use their knowledge while dealing with issues instead of being constantly given directions as if they are not knowledgeable.
Step six: Generating short term actions
A strategy has to be long-term. This is because a company developing a strategy must do so knowing that it will last for long and it will be relevant for many years to come. Therefore, it is important to have a strategy that is well compounded and which has relevance to the company. However, it is important to make sure that the long-term strategy has short-term objectives. According to Geisce (2009, p. 45), it is hard to implement something meant for the future without putting some initial goals. The management of David Jones wants to take highly competitive niche in the market. Before doing so, it must foresee and correct few issues that are likely to prevent this from being achieved. For example, employees have to be trained on how to retain customers. This should be done even before crafting something that can help attract new customers. Before starting Internet operations, David Jones has to market itself effectively. These are short term goals, but they help in attaining the long term strategy.
Step seven: Consolidating gains for more change
As noted in step six, there have to be short-term strategies. If these strategies are well handled, they are likely to bring good returns. The problem that many companies have with sustaining these gains, therefore, there have to be concrete ways of staying in line with these strategies for the purposes of achieving the long-term goal. According to Blokdijk (2008, p. 29), consolidating short-term gains means that there is a room for moving up the ladder. If there are failures, it means that the company must first of all solve existing problems before going to the next stage. The management of David Jones must learn how to handle little gains it has achieved in the market, and essentially, the company must know how to win the market. Making the customers satisfied is good, but maintaining this satisfaction is even more important for David Jones.
Step eight: Anchoring the changes into the organization culture
The last of the steps in implementing change is cementing all gains to make them fit organizational culture. David Jones has its own culture, which has to be safeguarded. Organizational culture defines values and norms that are followed by everybody in the company. However, at times when things are not good, there is a need to modify the culture. All the gains made have to be made concrete. In the course of changing David Jones, it is expected that the management of a company will gain a lot in the market. Through training employees on how to handle new methods of operations, employees will adapt to new rules. However, the rules have to be in line with what employees are accustomed to. For example, there may be regular meetings of various stakeholders at David Jones. This step should not be skipped; even it means that employees will have to be more involved than before. It is a way of combining good attributes from the old strategy with new methods of operations.