Abstract
This research paper entails a critical review of organisational change management strategy. The paper is based on Verizon’s case study, which is in the process of implementing an extensive organisational restructuring.
The firm’s decision to implement organisational change has been spurred by the need to achieve operational efficiency, hence coping with the turbulent business environment.
The purpose of this case study is to evaluate the change management strategy adopted by Verizon in order to determine its effectiveness in enhancing the attainment of organisational, cultural, and business goals. Furthermore, this paper identifies gaps within the organisation’s change management strategy.
The paper further proposes the change management strategy that the firm should consider in order to improve the probability of attaining the desired outcome. The potential benefits and risks that the firm might encounter in the course of implementing the proposed new change management strategy are identified.
Introduction
Organisations must respond to emerging circumstances and events in order to achieve sustainable development. This assertion underscores the significance of constant adjustment to the strategic and operational practices. Such transformations culminate in remarkable impact on organisations and their employees.
The significance of change to organisation’s long-term excellence is evidenced by the emergence of diverse change concepts. Some of the most notable concepts include right-sizing, total quality management, turnaround, organisational restructuring, and turnaround.
Despite the existence of diverse change concepts, Kotter (2007) argues that the objective of most change initiatives is to transform business operations and cope with the prevailing business environment. However, successful change implementation depends on the change strategy adopted by a particular organisation.
Ates and Bititci (2011) emphasise that managing change has become a major organisational challenge and it requires firms to be resilient in order to survive the turbulent business environment.
Verizon Communication, which operates in the US telecommunications industry, has encountered numerous challenges arising from technological changes over the past decade.
Moreover, the firm is facing intense competition from major telecommunication companies in the US such as AT&T, T-Mobile US Incorporation, and Sprint Corporation. In its quest to align with the prevailing business environment, Verizon is in the process of implementing a major change initiative.
The change initiative entails restructuring its workforce by reshuffling employees in some of its call centres in the US. This paper evaluates the change management strategy adopted by Verizon.
The purpose is to examine the extent to which the change management strategy aligns with the organisation’s pursuit for business, cultural, and organisational goals. Moreover, it identifies the existing gaps and the potential change strategy that firm’s management team should adopt.
Analysis
Verizon’s motivation to implement change
The contemporary telecommunications industry has become very turbulent over the past few years due to increased investment in research and development. Consequently, the market has been dominated by the emergence of new products.
The emergence of new Internet-enabled handheld devices and personal computers is a classic example of the extensive innovation within the industry. Moreover, turbulence within the business environment has further been increased by adverse economic cycles such as the recent global economic crisis.
These changes are progressively motivating businesses to engage in diverse change initiatives.
In an effort to minimise the cost of operation, Verizon Communications announced its intention to undertake a comprehensive organisational reorganisation by shutting down some of it call centres in the US. Some of the call centres that will be affected are located at Cranberry, Warrendale, PA, and Irvine in California.
Through the change initiative, over 3,000 employees will be affected. The change initiative will require the affected employees to relocate, take a buy-out package, or apply for a different job within the company. Moreover, the company’s reorganisation efforts will also entail the relocation of over 2,200 employees to new workstations.
The change initiative is intended to attain operational efficiency with reference to customer service. Additionally, the change is intended to improve the company’s effectiveness in delivering customer service, hence creating unique experiences.
Change management strategy
According to Pugh (2007), formulating the change strategy entails taking risk and developing an organisation’s culture that influences its ability to engage in future problem-solving activities.
In the course of formulating the change strategy, it is imperative for organisational leaders to consider a number of aspects, which include organisational characteristics, business environment, and people.
Pugh (2007) emphasises that organisations’ change efforts fail due to the lack of appreciation on the concepts of flexibility and adaptability. Consequently, the organisation’s ability to cope with unforeseen challenge is limited. The change strategy adopted by an organisation is a critical determinant of successful change implementation.
Verizon’s management team has adopted a power-coercive change strategy in its quest to undertake the desired change. The objective of power-coercive change strategy is to push organisational change. However, the effectiveness of this change strategy in implementing change varies.
Pugh (2007) contends that the “change strategy could be necessary at times in the change process to break an impasse or remove an obstacle that cannot be removed in any other way” (p. 62). The power-coercive change strategy mainly exists in organisations that have adopted a bureaucratic system of management.
Moreover, the implementation of power-coercive strategy is further enhanced by the integration sanctions and rewards. Alternatively, this strategy is further implemented through the withdrawal of resources. Verizon’s decision to adopt the power-coercive strategy aligns with its business, organisational, and cultural goals.
With reference to business goals, Verizon is focused on attaining economic profit. However, the probability of attaining this goal might be hindered by economic cycles such as economic depression and recession. Moreover, Verizon intends to attain a high competitive edge in order to cope with the intense competition.
Pugh (2007) accentuates that businesses operating in highly competitive markets should ensure that their costs are down.
The adoption of the power-coercive strategy underscores the extent to which Verizon considers downsizing as the most desirable move in order to sustain its operations at a point that leads to the generation of economic profits.
Moreover, the decision to incorporate the power-coercive strategy is further explained by its focus on achieving the predetermined cultural and organisational goals. One of the critical organisational goals in the firm’s operations entails lean operations.
In 2012, Verizon outlined its commitment to attain operational excellence by implementing the Verizon Lean Six Sigma [VLSS] program. Verizon intends to transform its organisational culture, improve the level of customer satisfaction, and attain results that translate into higher profitability through the VLSS program (Freefell, 2014).
Freefell (2014) further affirms that one of the core components of the organisation’s VLSS program is to reduce the amount of time used in training its employees. Through this approach, Verizon intended to save over $ 4 million by the end of its 2012 financial year (Freefell, 2014).
Pursuing the lean operations will strengthen the organisation’s culture by entrenching the employees’ commitment to their job roles. Subsequently, the organisation will develop a culture that is committed to attaining a high level of organisational productivity.
In the course of implementing the downsizing strategy, Verizon expected the affected employees to have fully complied with the given directives by February 28, 2015 (Willard, 2015). This aspect shows that the options available to the employees in implementing the change are limited.
Moreover, the power-coercive strategy shows that Verizon does not appreciate the importance of employee involvement and communication in the change implementation process.
Improving/creating new change management strategy
Despite Verizon’s management team capacity to implement the power-coercive change strategy due to its legitimate authority, the change strategy might limit the organisation’s ability to implement the desired change. One of the major drawbacks of the power-coercive strategy is that it might affect the organisation’s culture.
The directive for the employees in the affected call centres to relocate, take a buy-out package, or apply for a different job within the company might lead to a reduction in the level of morale amongst the remaining employees.
The remaining employees might develop the perception that the organisation does not appreciate the importance of job security.
Under such circumstances, the level of trust between the organisation’s management team and the ordinary employees might be affected adversely. Moreover, some of the employees who might not be affected by the change initiative might develop voluntary turnover intention.
This aspect means that Verizon might experience loss of key talent, hence increasing chances of failure to optimise its human capital (Deb, 2008). The organisation might also consume a substantial amount of time in filling the vacant job positions, which further limits its capacity to achieve the desired cost minimisation.
In order to increase the probability of attaining the desired outcome, Verizon’s management team should adjust its change management strategy. The firm should integrate the empirical-rational/educative strategy. This strategy entails ensuring that all employees understand that change is affecting the entire organisation.
Through this approach, employees understand that the change initiative is not targeting specific individuals, but it aims at enhancing its future sustainability.
According to Pugh (2007), the educative change management strategy underscores the importance of harnessing the employees’ values and attitudes in order to undertake permanent organisational modification.
The process of implementing the empirical-rational strategy is based on an organisation’s effectiveness in utilising the employees’ input. Moreover, the strategy emphasises consensus building between the management team and the lower-level employees as the foundation for implementing organisational change.
Kotter’s change management framework
In a bid to implement the educative/empirical-rational strategy, it is fundamental for the Verizon’s management team to conduct an extensive research on the impact of the change to the organisation, which is only possible through employee involvement.
Furthermore, it is imperative for the firm’s management team to integrate the Kotter’s eight steps for leading change. Below is an analysis of how the firm can adopt the Kotter’s 8-steps change implementation framework.
Establishing a sense of urgency
Verizon’s management team should integrate open communication in order to allow all the affected employees to understand the significance and urgency for the firm to undertake the intended organisational restructuring. Verizon should not conceal any information regarding the change.
Through open communication, the company will be in a position to limit possible resistance towards the change initiative across the entire organisation.
Guiding coalition
Implementing change is a complex organisational undertaking. One of the major sources of complexity arises from the view that the change leads to the establishment of new job roles. Thus, it is imperative for organisational leaders to ensure that employees are guided throughout the change process.
The guiding coalition should be comprised of leaders drawn from different departments within Verizon, whose responsibility should entail supporting the affected employees and encouraging the remaining lot to work as a team in order to sustain their morale.
Creating a vision
Influencing employees during the change process is essential in entrenching change initiative. Kotter (2007) affirms that the contribution of the change initiative to an organisation depends on the commitment of the lower-level employees.
Thus, the significance of ensuring that employees have a strong sense of vision regarding the intended change outcome should not be ignored. In a bid to create vision amongst its employees, it is imperative for Verizon’s management to adopt charismatic leadership style.
This style will translate into the development of a better understanding of how the change will be beneficial to both the employees and the organisation.
Communicating the vision
The Verizon’s management team should ensure that all employees understand the new vision regarding the desired change outcome. Therefore, it is essential for the organisation’s management team to use different communication methods in order to ensure that all employees understand the vision.
Kotter (2007) cites two-way communication as the foundation for successful communication of change vision Furthermore, communicating the vision should also entail developing the most appropriate behaviour amongst the remaining employees. Focusing on behaviour development is critical in attaining the desired vision.
Empowering the followers
Verizon’s decision to restructure its operations will lead to an increment in the degree of uncertainty amongst employees. This aspect might culminate in loss of organisational productivity due to lack of morale amongst the remaining employees.
Thus, the firm’s management team should be cautious in implementing the change. One of the primary issues that Verizon should consider in minimising possible resistance and loss of morale amongst its workforce is eliminating all the issues that may act as obstacles in empowering employees during the change process.
Verizon should give its employees an opportunity to exercise their ideas freely. This move will culminate in the generation of non-traditional ideas, hence improving the firm’s long-term performance.
Planning and creating short-term wins
The Verizon’s management team should be committed to developing a sense of ownership towards the intended change project. The firm’s change project is intended to improve its operational efficiency by minimising the cost of operation.
Furthermore, the organisation projects that the change project will enhance its effectiveness in delivering unique customer experience. In a bid to achieve this goal, Verizon should set benchmarks associated with the desired outcome. Employees who deliver the desired outcome successfully should be rewarded.
Consolidating improvements
Verizon’s management team should sustain the positive change outcome by investing in employee development. This aspect will play a fundamental role in sustaining the change outcome.
Institutionalising new approaches
The new change strategy adopted by Verizon should culminate in the development of positive organisational behaviour in order to achieve the desired corporate success.
In order to sustain the positive behaviour, Verizon should focus on integrating strong leadership in order to influence all the organisational employees successfully (Kotter, 2007). Through effective leadership, Verizon will be in a position to establish a strong connection with the employees.
Benefits and risks of the change strategy
Successful implementation of the new change strategy will ensure that employees develop a comprehensive understanding of the Verizon’s rationale to restructure the organisation. Therefore, the probability of influencing employees to support the change will be increased.
The new change management strategy will minimise the likelihood of turnover intention amongst employees. Furthermore, the new change management strategy will lead to the entrenchment of positive employee attitude towards organisational change initiative.
Despite the contribution of the new change strategy in improving Verizon’s capacity to achieve its desired change outcome, the strategy will face a number of risks. First, the employees might not develop adequate understanding on the sense of urgency associated with implementing the change.
Moreover, some employees might not be patient during the transition phase. The implementation of the change strategy will depend on the extent to which employees appreciate the importance of teamwork.
Therefore, the lack of teamwork will hinder the effectiveness of the change strategy in contributing to successful change implementation. For example, it will be difficult for employees to develop a shared vision regarding the intended change outcome.
Conclusion
The above analysis underscores change as an occurrence that organisations often encounter in their operations. However, successful change implementation presents a major challenge to most organisations. Therefore, it is imperative for organisational leaders to design and implement effective change management practices.
In the course of undertaking organisational restructuring, Verizon has adopted an ineffective change management strategy, viz. power-coercive strategy. This strategy might limit the organisation’s efforts to attain the desired level of operational efficiency.
Thus, it is imperative for the Verizon’s management team to adjust its change management strategy. One of the strategies that the firm should adopt entails the empirical-rational/educative strategy.
Furthermore, it is essential for the firm’s management team to consider the Kotter’s eight-change management framework. Successful integration of the eight steps will translate in the attainment of the desired change outcome.
References
Ates, A., & Bititci, U. (2011). Change process; a key enabler for building resilient SMEs. International Journal of Production Research, 49(18), 5601-5618.
Deb, T. (2008). A conceptual approach to strategic talent management. London, UK: Indus Publishing.
Freefell, L. (2014). Training top 125- Verizon’s # 1 calling. Web.
Kotter, J. (2007). Leading change; why transformation effort fail. Harvard Business Review, 2(3), 1-10.
Pugh, L. (2007). Change management in information sciences. Farnham, UK Ashgate Publishing.
Willard, M. (2015). Employees at local Verizon call centre offered buyouts. Web.