Case: Managing Organizational Change

Organizational Change Model

Applying an appropriate change framework can help explain the challenges impacting Acme’s operations after the changeover. Kotter’s eight-step process can help explain the errors committed to implementing the new change (appointment of new leaders) leading to the current crisis. The model addresses “paradigms, attitudes, and beliefs” in the business that affect communication during change (Anson, 2011, p. 3). It supports a structured, proactive approach to implementing a transformation, managing resistance, and promoting communication to increase buy-in and support across the corporation.

Applying Kotter’s model will reveal the critical mistakes in implementing leadership change. First, Acme failed to create a sense of urgency, which is achieved by exploring new competitive realities (Kotter, 2007). It appears no frank discussions were done with the sales associates to demonstrate the necessity for the leadership change. Further, Acme’s new CEO – not a guiding coalition – unilaterally appointed the sales management team, including the vice president, directors, and managers. A vision was also lacking since a guiding coalition was not constituted. Additionally, barriers to the new vision were not addressed. Employees’ self-interest was inconsistent with leadership change; hence, an obstacle to the leadership transition. The change was not anchored in the organization’s culture – HR practices related to workloads and motivation. Group behavioral norms and shared values were lacking, contributing to the crisis.

Solution and Plan of Action

Acme should address the specific challenges resulting from a poor change management process. Among them are communication breakdown, resistance, low morale, and staff turnover. The solution proposed involves a structured, proactive approach that includes enhanced exchange, a plan for the transition, and training to deal with the crisis. Acme’s leadership and CEO need to be active and visible in the transition to deal with HR-related issues. They should address incompatible cultures between employees and the new sales leaders, leadership style (micro-management), poor communication, and distrust of the department’s management. Communicating the transition decision, addressing employee needs (high workload, motivation, and benefits), and managing the emotional impact of the turnover on the sales staff is needed.

A plan of action based on Kotter’s model can help Acme through the change management process. The first step is establishing a sense of urgency by explaining the current crisis and having honest discussions throughout the corporation (Kotter, 2007). The aim is to demonstrate that the status quo is untenable to gain the employee’s cooperation. The second step is building a guiding coalition with adequate power to lead the transition. Its membership should include the HR director and manager to ensure the sales staff concerns are addressed. Thirdly, the guiding coalition will create a strategic vision and initiatives for the sales department’s leadership transition. The general overview should give a clear direction and reflect the staff’s agenda. Fourthly, extensive communications about the transformation should be made focusing on how the new leadership will improve the department. They should involve feedback through multiple forums to address staff concerns.

The fifth step is removing barriers to the leadership change at the department. The obstacles to be addressed to support the transition include the new managers who micro-manage every aspect of the sales associates, poor staff-management relations, low engagement and motivation, and transactional management style. The sixth step is generating short-term wins to maintain urgency. Once sales start to improve, high performers should be rewarded to sustain the momentum. The seventh step is consolidating the gains – leveraging the short-term wins to address systemic, structural, and policy issues inconsistent with the change vision (Anson, 2011). For Acme, in-house hiring and promotions to the management level can address the crisis. The last step is embedding the change in the organizational culture by promoting positive group behavior and shared values. Leadership changes should be linked to productivity and long-term performance goals.

Completed Table 1: Expected Sales and Profit Forecast