Locating Change In The Change Spectrum

Published Date: 02 Nov 2017

INTRODUCTION

This assignment tries to identify a change situation in Andreas Pakkoutis Ltd and the design of a strategy to effectively manage this situation. Andreas Pakkoutis Ltd (here after referred to as company) was established in 1980 as a limited liability company selling gifts, kitchenware toys and children clothes. The Company has a very successful growth rate for the years that followed and today sales a wide range of product in a privately-owned shop 300m². In the last decade the company expand its activities in other two areas. It’s importing fertilisers from UK and built in an area of 10.000 square meters nurseries in order to produce and sales outdoor plants.

The Company is co – owned by its two Directors and employs eight permanent staff. The eight permanent staff performs the company’s routine operation executing customer’s instructions with occasional consultancy.

The company is a traditional family company where the Directors being the central power source. In addition due to the age of Directors (over 55) there isn’t any information systems applied in the company. The first years when customers and sales were not as large in volume, the company ran smoothly without any problems. But over the years, both sales and customers were increased. Paper – based agreements of such magnitude are difficult to manage. The complexity comes from the different prices agreements with the customers. Thus a small nursery would purchase the same plant at different prices from a big nursery. In addition the sales force needed to know about new products releases and availability of existing products which was not going to the customers accurately. The end result is a confused customer and sales team.

DEFININIG THE CHANGE

Now the company comes to an end point and the directors decided to take the appropriate actions. They will implement a CRM system. The company will benefit since data and sales will complete faster by bringing closer the decisions made in sales and production or purchase of products. As a result the profitability of the company will increase and operational cost will be reduced.

But this will be a major change for the company. Managers as owners of the problem must be directly involved in the change process. In addition all the human capital of the company must have involvement in the change.

LOCATING CHANGE IN THE CHANGE SPECTRUM

In order to identify the nature of change we are going to use various models. The first model that we are going to use is the change spectrum. With change spectrum we can identified the nature of change and how much of the change is technical oriented and how much is people oriented.

1100% Soft/Complex

A.Pakkoutis Ltd

Flexi/grey

Hard / Mechanistic

0% 100%

Figure 1 The Change Spectrum

As we can see from the figure 1 the change in the company is between Flexi/Grey and Soft Complex. This is because the company will implement new software that has purely technical nature but it will have major impact in the way that the employees make their jobs. In addition this scale of change will not affect in any way the management structure of the company. But is expected to cause significant concern to human resources of the company.

THE TROPICS TEST

With the TROPICS test the directors will represent the general framework of the change process as specific steps. They will be able to determing the most appropriate methodology for the implementation of CRM.

Consideration

Hard, well defined issues

Soft, people focused issues

Timescale

CRM project is clearly time constrained

Recourses

Currently not clearly defined and open to suggestions from employees and the external associates in the project

Objectives

Clear & Quantifiable Objectives – Quality, Cost & Output

Perceptions

Consensus – in terms of problem and solution

Interests

Clearly defines

Control

Overall project management needs to be defined and agreed with external associates

Source

Originates Externally

TABLE A: THE TROPICS TEST

As shown in Table A at this point there are issues that are still unresolved and the management team should be cleared immediately. Thecompany will employ a commercially available software package that will be selected by evaluating the following factors ( Bocij,R et al, 2003):

Ease of Use

For both end – users and administration

Functionality

To address all business requirements

Interoperability

/Integrate – ability with existing systems

The company wants to retain its existing office automation software, as well as its accounting package.

Security

In particular the ability of the package to define user roles and restrict information access accordingly.

Local support

Being in different time zone from the common software reducing countries (U.S or U.K), it is essential that local support is available should any problems arise.

Product stability / maturity

Avoid early versions of package – opt for more mature products with (hopefully) fewer bugs.

Extensibility

Features that will cater for the company’s future needs.

Product lifetime – long term future

Although difficult to judge, the supplier’s future commitment to a product can be guessed by looking at its overall strategic directions.

Performance

Although, high performance is not critical success factor, performance must be within acceptable parameters

TABLE B: EVALUATION FACTORS

FORCE FIELD ANALYSIS: A POSITIONING TOOL

With Force Field Analysis we can make decisions by identifying the forces for and against the change and it is going to be a useful instrument to communicate the reasoning behind our decision.  

Forces FOR change

Score

Change proposal

Implementation of a CRM system

Change proposal

Forces AGAINST

change

Score

Management Team

5

Employees resistance to change

4

Increased Customer Satisfaction

3

Limited Time

2

Minimized Cost

3

Limited Resources

2

Cost

2

TOTAL

11

TOTAL

10

TABLE C: FORCE FIELD ANALYSIS

From the implementation of the model we find that there are significant forces against the change. The project owners must find ways that the forces resisting change to fade, so that the change is more successful.

They can introduce some actions prior of the implementation of the project as follow:

Train staff ("Cost" +1) to minimize the fear of technology and as a consequent the employees resistance to change ("Employees resistance to change " -2).

Show to employees that change is necessary for business survival (new force that supports the change, +1).

Show to employees that the new system will make their jobs easier (new force that supports the change, +1).

These actions would change the score from 11:10 to 13:9.

LEAVITT ‘S MODEL

This model does not define specific variables within organizations, despite the driving forces; These variables include: task variables, structure variables, technological variables, and human variables (Burke, in Howard, 1994;Leavitt, 1965).

http://psychologyface.com/wp-content/uploads/2011/12/Leavitt%E2%80%99s-Model.gif

FIGURE 2: LEAVITT’S MODEL

The structure refers to the systems principle, communication systems, and workflow within the organization. Technology includes all the equipment and software required in the organization. The variable task refers to all the tasks and subtasks involved in providing products and services. Finally, the person refers to human capital of the organization. The model is emphasizing the interdependence between the four variables. Leavitt has been assumed that a change in one variable affect other variables.

In our case the planned change in technology will result a domino effects on the other variables, one or more variables will be affected. The change will lead to improvement of service quality (Task Variable) and will also improve employees moral(People Variable). Another factor that may be improved through the new technology is communication (Structure Variable).

MAPPING THE CHANGE

Call sales represent by phone

to order

Cascade order to supervisor

Send order manually to warehouse

consultants and to accountant

Send order by track and

customer receipt.

Accountant

Fertilizers shops

Nurseries

Customers of shop

Shop

Suppliers

Cascade info sales repress

to collect money

Current Process

FIGURE 3: PAKKOUTIS CURRENT PROCESS

CRM

Accounting

Warehouse

Fertilizers shops

Nurseries

Customers of shop

Faxes

Scanned Paper documents

E – Documents storage

Notes from telephone conversation

Internet

Emails

Emails attachments

Invoices

Customers balances

Pc

Process after the Change

FIGURE 4: PAKKOUTIS FUTURE PROCESS

FIGURE 2: CURRENT PROCESS OF A.PAKKOUTIS LTDAs we can see from the charts, the whole process after applying the changes will be automated and simultaneously will be simplified. This will result bettter customer service and minimization of cost. It is of prime importance, the correct design of the team, that will lead the change process. They should also included in change team except from the director of the company and external asociates and employees from the lower layers.

DESIGNING THE CHANGE STRATEGY

CHANGE AGENT

A key question to be answered is 'who is going to be the change agent;’ In our case it should be one of the two directors of the company. Of course because it has no technical background there should be an external consultant from the company who will do the design and installation of the system. It must be existed a clear division of responsibilities between them in order to effect the change faster and gain the acceptance of the rest employees.

A second question to be answered ‘Why the director is going to be the change agent;’ here the answer is easy. Because management model which is ‘one man show’, leaves no room for another person to be used as a change agent. All major decisions are taken by the Director and all the other staff has limited responsibilities.

PERPETUAL TRANSITION MODEL

The first model we are going to use in order to design the change strategy is the Perpetual Transition Model of Buchannan & McCalman (1989). Buchannan & McCalman (1989, p.198) suggest that this process consist of four interlocking subprocesses as illustrated in figure 1.

Trigger Layer

Opportunity, Threat, Crisis, Clarify, Express, Communicate

Vision Layer

Define the Future(including Structure) Challenges, Excitement, Innovation

Conversion Layer

Persuade, Recrui Disciples Detail the Structure

Maintenance and Renewal Layer

Sustain and Enhance, Belief Reinforce and Justify Regression Advance (Ritual)

TABLE D: Perpetual Transition Model, Buchanan and McCalman (1998) High Performance Work Systems: The Digital Experience, Routledge

Stage 1: Identify current situation and develop a vision for change

At this stage will use an analysis known as PESTLE (Political, Social, Economical, Technical, Legal and Enviromental) so it is going to give a diagnosis based on many factors in both the internal and external environments of the company. Efficient understanding of what happens in the company must change the result through the processes of organizational diagnosis and creative thinking. Thus, the current phase is to identify the needs of the individuals in the form of the company and put them in the future

Stage 2 : Gain commitment to the vision

In the second stage, is crucial to receive feedback for the results obtained in stage 1. In any event, the commitment of individual’s access to the process of change is very difficult job. So the management team must deliver the new vision of the company and the need for change.

Stage 3: Develop an action plan

In this stage we will proceed to the development of an implementation plan to work. This is the sequel of a commitment to working with the vision of the future, although focusing on how the company would be able to achieve that vision. The process of developing a plan of action for the required change must involve the employees affected and to communicate to them the need for change.

Stage 4: Implement the Change

The last stage includes research on organizational development OD as a method of change, the details of various techniques and methods for change. There are many ways to achieve this goal, which varies according to different organizational levels, and must show each time the analysis is conducted, according to each management level; these activities vary depending on the area covered by the change.

MODEL OF CHANGE

There are various theories about change and as a criteria of which is going to use, is the change spectrum (Figure 1). To be more specific is at what point of the line is the proposed change. Change in situations that are characterised by hard / mechanistic complexity is usually easier to achieve. From the other site change in situations of soft complexity, where issues are contentious and there is a high level of emotional involvement among stakeholders is usually less easy to achieve.

As we have identified in the early stages of our study, the proposed change is above the middle of the line, so we will use a combination of System approach and OD model.

Organisation development (OD) is a long term effort, led and supported by top management, to improve an organisation’s visioning, empowerment, learning, and problem-solving processes, through an ongoing, collaborative management of the organisation culture — with special emphasis on the culture of intact work teams and other team configurations — utilizing the consultant-facilitator role and the theory and technology of applied behavioral science, including action research (Buchanan, D. and McCalman, J. 1989).

A system approach provides clarity, understanding and sense of direction. More importantly, it also provides a means of tackling knowledge management related change events and gets thinks started (McLaughlin et al., 2006).

Phase 1

In Phase 1 the Director/problem owner will choose the appropriate external partner whose system will be installed, based on the peculiarities of his business. Both the organization and the consultant must understand the situation and the change must be specified in systems terms.

Phase 2

In this phase the Director/problem owner and the consultant will enter in a negotiation to prepare the contract. The contract will setting out the objectives and the technical features of the program. It will also clearly state what things should be done by the consultant and from what from the company. An important aspect is the time of completion the change and the cost. Before agreeing the terms the Director must discussed the contract with its key employees.

Phase 3

After the successful negotiation of the contract the consultant must start the diagnosis phase. A PESTLE analysis must conducted to give a diagnosis based on many factors in both the internal and external environments of the company. There should also be explored the following aspects in more detail:

How motivated are the employees and their commitment to their work.

How company recruit employees and what opportunities are available to individuals in terms of career advancement.

Leadership style

The extent of training and development of employees.

Internal relations between individuals and organizational culture.

Phase 4

After collecting all data, the consultant should proceed in their analysis. This will form the proposed change and stages of implementation. It is important to take into account any concerns of staff and the proposed project is in a simple form in order to be fully understood by all. Upon completion of the plan, should be released a preliminary draft to all staff which would notice of proposed changes and asking for their opinion. If it was a large organization this would be time consuming, but in our case it will not take considerable time. After he receives the feedback from the staff, the consultant will have to discuss with the Director, so that the proposed changes to have his own approval.

Phase 5

This phase can be regarded as the beginning stage of managing the transition from the present situation to the desire future status. This is the stage where you focus on how the company would achieve the change. Here is going to decide who is going to be the change agent? What is going to change in order to achieve the desire results? It is one of the most important processes, because a mistake in the design will have consequences that might not be able to be reversed.

Phase 6

At this stage the company has decided what will be the actions and changes would be made. It is the moment in which we should make that change. Because of the size of the company, the change should be a big bang and will involve all employees. The consultant should have an important role in the implementation. The director as a change agent of the project must be the leader in order to follow and the rest employees.

To ensure the successful implementation of change the following key success factors must be adhered:

Proper training of the end users prior the implementation

Participation of those affected is crucial

Visible and tangible support senior management support is essential.

Phase 7

The change in the company is hard and complex but we have not finished yet. In order to maximize the probability of success and acceptance the director / change agent must monitor the new system. The people will resist and complain about the new system and procedures, until they get familiar with them. In addition bugs of the system will arise and the consultant should be able to deal with them. There must be a continuous monitoring of the system as well as use of quantitative benchmarks to measure performance makes this process simple and direct.

CONCLUSION

We have followed a process that will lead the company to change and progress. The company is not a static but a living organism which acts in a constantly changing environment. If it is not continuously improved then there will come a time when it will cease to exist. The change itself is something unknown and this has resulted in people causes resistance to change, which is why the management of the companies must find ways to overcome these difficulties.

Through the various models that we looked we saw how to recognize the changes that must be made to an organization and the various methods to be used. But no model can guarantee the success of the change unless the following conditions apply:

The true commitment of the management team for the change

Proper and thorough planning of change

Involving as many people as possible of those affected by the change.