Change Management

By, Sundeep Mohanty.

Buckle-Up for the changes, it always not causes accident, mostly it is for

betterment. Planning properly and staying prepared for it makes everyone safe.

In Organizations change can be initiated at various level, upper management does

not always initiate changes, sometimes change get initiated by lower

management and/or by employees but later gets support from upper level

managements.. Not all changes are similar, sometimes it is difficult to foresee the

effect of change and that brings doubt about the change, again not all changes

are good or not all are bad. Some changes are hard, difficult, hurt some

employees, partners, etc. but again sometimes that are the right thing to do,

and sometimes changes makes no difference but Organizations go for it just

because management/employees wants to show they were doing something

different. If changes are initiated after creating proper strategy and backup plan

then I don’t feel it will affect much if the Organization takes the U-turn, it’s all

depends on how you are prepared and how you equipped your resources . One of

the key part of changes is communication, so it depends how effectively the

communication happening in the Organization. Changes are not all about what

change you want to bring, the success and failure of changes mostly depends on

who will be involved, impacted or work as catalyst for the change. I see

Organizations changes are just like products, you need to first market and sale it

to internal employees before it get reflected outside of the organization.

Sometimes, it also related to Organizations culture- trust, openness, helping

each other, looking for common goal to make Organization successful,

empowering others, knowledge sharing, etc.

Some changes also relates to leadership style- sometimes changes are enforced

(doesn’t matter whether for good or for bad) and sometimes changes are

collective decision, sometimes it is not widely accepted, sometime you get huge

support, but again in this dynamic and consumer driven market nothing

guaranties that changes will bring success.

One thing for sure, in Organizations when any change comes, it brings curiosity,

fear and for some opportunity, those who things they will get benefited they

advocate for it, some gets scared as they see the impact on them and all goes

curious by thinking what will happen.

In summary, any organizational changes need preparedness- it is not restricted to

assets, but also the mindset, cohesiveness and need plasmatic employees.

Just few examples from history:

1. Darwin E. Smith:

In 1971 he joined as CEO of Kimbely-Clark

Change he initiated: Decided to sell most of the paper mills and shift focus to

paper based consumer products.

Reaction: Business journals/media called move is not the right move, Wall

Street analysts downgraded the stock, but Darwin was much willful and he

envisioned the effect of change is good for the Organization.

Result: Darwin brought success to Kimberly-Clark, it became one of the leading

paper based consumer product company.

2. John Francis "Jack" Welch, Jr. :

In 1981 he became CEO of GE.

Changes he initiated: Reduced inventories, sold some of the units/factories

that were not much profitable for GE, reduced payroll, every year firing of

10% bottom line managers, rewarded those who are in top 20% with

bonuses and stock options. He adopted Six-sigma for quality control.

Reaction: Dubbed as “Neutron Jack”, fear among the employees, and

increases internal competition between the employees in GE as no one

wanted to be bottom 10%, mostly get criticized for layoffs.

Result: GE did very good under all these changes. Company’s market value

increased from $14 billion in 1981 to $410 billion by end of 2004 and

regarded as most valuable company in the world.

3. Southwest Airlines:

Established in 1967 has more than 46000 employees as of August 2012.

Southwest is one of the most admired US Corporation and is one of the

best companies to work in USA. In Southwest, employees are empowered

and employees and employee unions drive the changes. Southwest’s key

focus is establishing good relationship between the employees and with

business partners, so they can stand together in good times as well as bad

times.

[Read: http://www.theclci.com/resources/TheSouthwestAirlinesWay.PDF]

4. JC Penny and Ron Johnson:

Started in 1902 is one the American mid-range departmental store, it gone

through lot of changes since then. Ron Johnson became CEO in June 2011

and after becoming the CEO, he wanted to change JC Penny business

model. He introduced new pricing model and introduced the concept of

shops within the store (mini-store) to JC Penny. In August 2012, JC Penny

began rolling out shops strategy in stores and employees and other

management where buying into the concept, the market was curious.

However, the sales dropped and profit reduced with this transformational

change. CEO Ron Johnson emphasized his confidence on this change but

quarter after quarter the result indicated something else, JC Penny

performed poor in 2012 and its sales reduced, sales were of 28.4% from

year earlier. Finally, in April 2013 JC Penny announced Ron Johnson

removed from CEO post.

5. Yahoo and Marissa Mayer:

In 1994, Jerry Yang and David Filo founded Yahoo Inc. Yahoo saw the days

of glory as well as fall from stardom. In July 16 2012, Yahoo appointed

Marissa Mayer as its new CEO and gave her a challenging job to revive

Yahoo. In February 2013, Mayor announced a major change in personal

policy associated to Yahoo- Yahoo informed all remote working employees

to start coming office and work from office or may consider leaving Yahoo.

However, so far Yahoo is doing well under her leadership but this particular

change decision not gone all well with many insiders as well as by people

from outside of Yahoo. In the coming days we will see how Yahoo is doing

and how this change affecting Yahoo.