The change management and the effective leadership strategies play crucial roles in the positive financial outcomes. First of all, the management needs to develop the skills of timely recognition of the factors provoking the change and adoption of the regulating policies that are aimed at the practice of a novel business strategy that is necessary for the business survival.
‘Leadership of major change in an organization presents substantial challenges’ (McDeavitt et al. 2012, p. 141). Along with the recognition of the changing factors, it is important to organise the appropriate changes within the enterprise. The well-elaborated strategy is essential in the maintenance of business and the organisational prosperity.
The given report provides the investigation of the current business strategy of the Insomniac Games Inc. The company is the software developer, and it is one of the most prominent representatives of the gaming industry.
Design and software markets are exposed to the continuous changes following the technological advancement and the shifts in the customers’ preferences. The capabilities of managing changes are regarded as the core competencies in the industry. The competitive advantages consolidated through the processes included in the strategic plan are equal to the high level of the organisational attractiveness, customer loyalty, and the increase of income.
Defining Leadership
Nowadays, the researchers make the distinction between management and leadership. ‘In time terms, ‘management’ action is often focused on current plans and their delivery, and ‘leadership’ deals with change, adaptability and the future’ (Carnall & Roebuck 2015, p. 9). Leadership involves inspiration, motivation, and the employees encouraging for achievements while the effective management is focused merely on the fulfillment of the basic working processes.
‘In an organisational context, most agree that, at the very least, leaders set the tone for their organisation and, therefore, questions about their leadership immediately raise broader questions about the organisation, and potentially the teams that they lead being a reflection of their leadership’ (Carnall & Roebuck 2015, p. 3).
Effective leadership is highly demanded because it provokes the favorable outcomes for the organisation. Leaders are responsible for the financial and non-financial performance of the organisation to a great extent (Pasmore 2014, p. 3).
The efficiency of a leader’s operation is grounded in the sound and open way of interactions both with the individuals within the company and outside of it. For the motivation of the subordinates, the leader must understand his/her employees. In some cases, the poor organisational performance can be caused by ineffective leadership.
The management of any organisation needs to adopt the leadership strategies that take into consideration the human factors and the other factors as well: financial, ethical, and legal. When all the aspects of the strategic decision-making are taken into account, the management becomes more efficient, and it helps to avoid the problems and systematic errors that can jeopardize the company’s stability and productivity.
The modern environment in the market is dynamic and constantly changing. The management needs to be flexible and capable of transforming according to the conditions. An excellent leadership strategy includes the methods to adjustment to the rapidly changing environment. The leaders who show competence can assess the inner and outer strengths and weaknesses that become the basis for the strategy design.
The strategic management is one of the crucial leadership methods. ‘Strategic management is all about identification and description of the actions that managers can undertake in order to achieve better performance and competitive advantage for their organisation’ (Atta-Panin 2013, p. 15).
The important steps of any strategic management in face of technologic and dynamic changes in the market include correction or ‘establishing vision, mission, and values’; the comprehensive analysis of the strengths and weaknesses as well as the evaluations of the external factors; the elaboration of the problem-solving strategy; practicing of the strategic changes and ‘exercising accountability to shareholders’, the constant monitoring of performance (Carnall & Roebuck 2015, p. 10).
The leadership strategy also must be concerned with the adaptation to changes, the appropriate response to external and internal threats and emergencies, and innovation support.
Leadership is determined to guide the organisation through the changes process. Therefore, leaders must show the behaviour ‘needed to implement the business strategy and create the desired culture (skills, competencies, knowledge base)’ (Pasmore 2014, p. 3).
Through the strategic decisions, leaders must engage all their subordinates in the processes of change by the constant learning, developing, and informing. The considerations of all the factors that cause the changes in the market by leaders contribute to financial sustainability, high productivity levels, and business development.
Technology and Change Management Strategies: Overview
Change is commonly understood as ‘the replacement, alteration or transformation of a process or phenomenon’ (Braica 2013, p. 138). The triggers for change may be of both the internal and external character (Susman, Jansen & Michael 2006). There is a great variety of causes that induce the organisational changes.
The decline in sales and profitability are the most frequent ones. No matter what was the impetus for the organisational transformation, it is important to recognize, evaluate, and control all of the external and internal change factors. Therefore, the competitive change management strategy contributes to the organisational success and financial growth.
Change management is meant to detect the ‘sources of resistance to change and providing ways to overcome them’ (Braica 2013, p. 138). The main activities involved in change management are the forecasting, evaluation, coordination, and control. The most vital activity involved in the strategic planning is forecasting. The changes happen frequently, and it often happens that the organization fails to plan and execute these changes.
When the organisational changes are reactive to the change in the external environment, it more often leads to failure. The greater opportunities for the success are influenced by the ‘proactive’ approach (Susman et al. 2006, p. 9). When a company anticipates and creates changes, there is more space and time created for the investigation of the potential problems and challenges. Thus, the proactive strategy supports the long-term survival in the market.
‘The received wisdom in much of the business world is that change has to be fast, large-scale and transformational if organizations are to survive’ (Burnes 2014, p. 303). The change management strategy must answer the questions of the reasons, extent and focus of transformation. The goals and objectives detection is also important.
In the modern world, most of the changes affecting businesses are related to the technology advancement. The technologic evolvement influences the industries and affects their productivity and performance. The technology management is ‘a process, which includes planning, directing, control and coordination of the development and implementation of technological capabilities to shape and accomplish the strategic and operational objectives of an organization’ (Cetindamar, Phaal & Probert 2009, p. 237).
The technological changes create challenges and opportunities for production and promotion of products. The technological advancement can be regarded as value and the competitive advantage in the market.
The changes and the strategies interactions are dynamic in nature. ‘It is true to say that change drives strategy as it is to say that strategy drives change’ (Burnes 2014, p. 306). The ‘dynamic capabilities are the ability to reconfigure, redirect, transform, and appropriately shape and integrate existing core competencies with external resources and strategic and complementary assets’ (Cetindamar et al. 2009, p. 238).
The dynamic management emphasizes the importance of integration of the external factors with the internal organisational skills and the development of the competitive organisational environment.
The efficient change and technology management strategies based on the dynamic approach build the sustainable business. However, the role of leadership is critical for the efficiency and the positive outcomes. The leadership strategy comprises all the mentioned approaches, aspects and techniques and becomes a cohesive force that leads the enterprise towards success.
The External Environment: Gaming Industry
Video games industry has a long history. However, the shift to the digital gaming development took place only a few decades ago (Research and Markets 2012). The industry experiences the rising popularity, and the expansion of the market takes place. ‘The game industry is quickly becoming a financial juggernaut’, the level of competition increases, and the companies need to make up new tricks to attract more customers and gain a larger profit (Egenfeldt-Nelsen, Smith & Parajes Tosca 2012, p. 7).
For the software developers in the industry, the issue of the collaboration with the gaming consoles manufacturers is of significant importance. The gaming machines are evolving through time as well. The newest models always attract great attention among the members of the gaming community, and the most popular models are often engaged in ‘console battles’ (Egenfeldt-Nelsen et al. 2012, p. 18).
Sony, Sega, Microsoft, etc. are the most prominent representatives of the console development business. For the company that is concerned with the software development, the collaboration with the console manufacturer can be regarded as the contribution to the business success. Therefore, the choice of the right and successful partner is a part of strategic planning that determines the profitability of business to a great extent.
The industry is constantly changing. The new informational and technological innovations emerge and require the developers to adjust to changes. For a long period, gaming included only the hardware and software programs, but, in the age of the internet, the online games gain popularity. Although the software development is still demanded, the companies need to consider the rapidly developing market of the online gaming as it provides a new direction for the organisational growth. The online gaming is a new source of profit as well.
Therefore, the evolving in internet games development is beneficial. Mobile phones gaming applications, online subscriptions, cloud gaming, and freemium games are ‘financially promising’ (Egenfeldt-Nelsen et al. 2012, p. 16). The other trends that will likely change the gaming industry in the future include the merging of the social media with games, the virtual reality entertainment, and the virtual physical activities.
A Brief History and Current Business Models of the Organisation: Insomniac Games Inc.
Insomniac Games is the independent game developer founded in 1994 in the USA. The organisation is engaged in the development of games and digital design. The sales of the games elaborated by the company are the main source of profit.
Recently the company has started the projects in the multiplatform and mobile development. Insomniac Games Inc. is a medium-sized enterprise. The company has nearly two hundred people in staff. In 2014, the total net income of the organisation was equal to US $3.596.125 (Financial Information for Insomniac Games Inc. 2016).
The first projects of the company were unsuccessful and faced a lot of criticism. Such projects as ‘Disruptor’ were regarded as a failure and even jeopardized organisational existence. However, the next projects were warmly accepted by the public and the gaming community. ‘Spyro and Dragon’ is one of the most recognized games created by Insomniac Games (Insomniac Games 2016). The franchise brought the company the large profits and the popularity among gamers around the globe.
Insomniac Games lead the client-oriented business. They emphasize the importance of transparency and the ethical approach. The company is involved in the several charity programs and collaborations with the charity ventures. The Insomniac Games’ approach is appealing to many clients and makes the company one of the most recognizable representatives in the visual design market.
One of the main features of the Insomniac Games culture and philosophy is the emphasis on the independence that allows the designers to express their creativity freely. The company’s leaders attempt to maintain the sound relations with the staff members and create a friendly environment inside the organisation. Due to the positive working climate and the strong corporate culture, Insomniac Games Inc. was recognized as one of the most attractive workplaces in the USA.
The Competitive Strategy Design
Te given strategic planning states the short-term and long-term goals to achieve by Insomniac Games Inc. These objectives are expected to increase the products diversification, make the company more flexible and perceptive in the face of the current changes in the market, and increase the financial profit by the attraction of new customers and partners. The stages of the competitive change management strategy are:
- Movement in the direction of the online and virtual reality gaming development: investigation and analysis of the environment; articulation of goals and the preliminary distribution of funds;
- The partnership expansion: the establishment of relationships with the developers of the online gaming technologies (i.e. NVIDIA GRID);
- Education and training of personnel: elaboration of the programs that are aimed at the refinement and advancement of skills in online programming, and graphic content designing;
- The work on the new project: elaboration of the game concepts, designing, programming, editing, etc.; distribution of tasks, duties and responsibilities among the staff members;
- The pricing regulations: analysis of the economic balance in the market and the application of the new low-cost and flexible policies;
- The new projects advertising: Internet resources, social media, and printed editions;
- The new products production: distribution and sales.
It is important to mention that the given plan is to be enforced within a year starting 1 February 2016. The results of the short-term objectives, such as the launching of the new online gaming projects and the employees’ education, are expected to be observed by the 1 July 2016. The fulfillment of the long-term objectives, such as a new product production, is time-consuming. Therefore, it will be possible to evaluate the outcomes and the strategic efficiency in December 2016.
Throughout the process of the strategy application and practice, the organisational management should monitor the execution of the day-to-day operations and the integration of the newly established behaviour into the corporate culture. According to the short-term results, the leaders should take corrections in the plan if necessary.
Implementation of Change Management Strategy
Based on the listed objectives, the leaders of Insomniac Games Inc. must elaborate the values and the vision statement that can become the basis for the organisational motivation. The strategic decisions and activities involved in the leadership strategy are listed below:
- Generation of urgency for change,
- Creation of vision and mission statements based on the current and new values of the company,
- Promotion of the new values and vision within the company, communication with the employees regarding the issues of organisational transformation,
- Implementation of the strategy in practice; the emphasis is on the staff members’ education and motivation towards the goals achievement,
- Monitoring the ongoing business processes, the short-term and long-term results,
- According to the evaluation of the strategic outcomes, the leaders make corrections in the strategy and improve it,
- Sustaining of the positive results.
‘Generating urgency begins with recognizing the need for change,’ and it is the essential role of leadership (Susman et al. 2006, p. 30). At this stage the leader weights and evaluates the importance of a particular project and its significance regarding the benefits of the company.
The identification of priorities and initiatives takes place. The elaboration of the online game project is an urgent issue for Insomniac Games Inc. The need for the personnel training is interconnected with the project development, and it is thus urgent as well. At this stage, the managers draw attention to the change factors and allocate the funds and resources for the project execution.
The main purpose of the vision statement is in the creation of the motivation and envisioning of the company’s future. At this stage, it is determined what a company should look like after change, what must be included or avoided throughout the process of the organisational transformation. The vision statement is the reflection of the company’s competitiveness.
Through vision, organisations address its employees, partners, and consumers. Insomniac Games Inc. sees its purpose in the creation of the original projects, and they care for the independent and distinct brand image. The vision statement thus must include these aspects, and it must address the clients and partners by focusing on the ethics of business and the uniqueness of products.
The statement also must ‘be challenging and encourage firms to grow’ (Susman et al. 2006, p. 32). The vision has to be realistic and inspiring at the same time. The vision needs to include the concept of the personnel as the highest value, the significance of creative and friendly working environment for the increase of productivity to encourage Insomniac Games’ employees.
During the period of change and adaptation of the new strategic policies, ‘reassuring statements should be made to employees to help them feel some level of security in the midst of change’ (Susman et al. 2006, p. 31). For the successful integration of the values and vision into the corporate culture, the leaders need to maintain good communication with the employees.
The next steps of the strategy (practicing, outcomes’ monitoring, and strategy corrections) ensure the organisation’s transition to change. ‘This step consists of empowering people by removing obstacles to change, reassuring that change is possible, planning activities and commitments, and managing structures’ (Susman et al. 2006, p. 36).
The staff members execute their daily tasks aimed at the achievement of the planned objectives. The functioning must be consistent with the values and goals, and it is the duty of leaders to evaluate and control the consistency of organisational work at this stage.
Following all the stages leads to the sustaining of the positive outcomes of the leadership and change management strategies. The plan must be adjusted through the process of the constant assessments and measurements. ‘Measurement should be considered during the planning of change and before any action is undertaken’ (Susman et al. 2006, p. 40). The measurements assist attaining goals more effectively. And the short-term achievements and efficient motivation provoke the lasting advantages in the market.
Analysis of the Strategy
‘Small companies often have less control over key environmental elements than do their larger counterparts’ (Susman et al. 2006, p. 10). The competitive strategy is vital for the small and medium-sized enterprises because it contributes to the sustainability and survival of the business.
Insomniac Games Inc. competes with the large enterprises in the gaming industry and the small highly competitive organisations as well. Following the new trends in the industry and the effective collaboration with the partners are crucial for the creation of the competitive advantage in the business.
Sony Computer Entertainment, the producer of the PlayStation platform, has been the main Insomniac Games’ partner throughout its history. In 2012, the company diversified the business by collaboration with Google and Apple. In 2013, Insomniac Games included Microsoft in the list of its partners as well. And the company plans the collaboration with the developer of the virtual reality device, Oculus Rift, in the future.
The most important strategic decision for Insomniac Games is its further expansion in the mobile and online gaming. In the gaming industry, working solely with the console producers doesn’t meet the increasing demands of the modern consumers. Online gaming is the trend that gathers pace and evolves through time. By and by, it becomes dominating in the market. Neglecting of this fact jeopardizes the organisational ability to sustain business in the future.
The technologic and informational changes in the external environment can be considered as the triggers for the organisational change. The consumer trends are one of the principal elements of the changes in the gaming industry. The consideration of consumer trends by the organisation provokes the development of the competitive advantage. The other elements of the environmental change that must be considered include legislation, labor market, and product market (Susman et al. 2006, p. 10).
The orientation towards the ‘innovation differentiation, marketing differentiation, and lowcost strategies’ are widely considered as the main features of each competitive strategy (Menguc, Auh & Shih 2007, p. 315). It is especially recognizable in the online gaming industry that now experiences a rapid growth. The environment is dynamic and constantly changing, and it provides opportunities for expansion of the consumer attraction.
The engagement in the online games developments put companies at the advantageous positions in the market. Esports and Cloud Gaming are the most popular trends nowadays. The exploration of these fields will expand Insomniac Games’ functionality and will contribute to the diversification of products. The collaboration with the Cloud Gaming and Esports technologies producers is a must for the increase of the competitiveness and is regarded as the innovative decision in the strategic planning.
The openness towards the external environment, interrelations and collaborations with the other organisations serves as the business leverage (Susman et al. 2006, p. 10). Both customers and partners help to generate new ideas and improve the efficiency of the production and services.
Communication with the shareholders contributes to the creation of the organisational image. It helps to understand the needs of the market and learn from the consumers’ feedback. Communication supports the diversification processes. Nowadays, the Internet resources provide the best ways for communication, promotion, and the novel projects launching.
The pricing policies play a significant role in business marketing, products promotion, and development of the customer loyalty. A free-to-play (F2P) business model offers the beneficial pricing strategy. ‘Free game distribution provides a marketing and business approach for developers and publishers to monetize games’ (Harris 2014, par. 2).
F2P is highly recommendable for Insomniac Games because it will help to attract new customers. Through the service, the gamers can try and assess the game and decide whether they want to purchase it for their PCs and consoles. The online service provides pricing strategy that is flexible and beneficial for both the customers and developers.
The expansion of the organisational functionality can be appealing to the employees in case it is appropriately integrated into the values system. The demand for the development of the new format content will help to reveal the staff members’ creativity and will contribute to their professional growth.
Insomniac Games strives to preserve its independence and considers it a significant part of the organisational culture. It can be considered as one of the internal factors that held the rate of the company’s products diversity low. Nowadays, the diversification is a necessity, and the expansion of partnership is vital. However, throughout the transition process, it is important to comply with the corporate philosophy conceptions, refine and transform them into a new value system.
The alignment of all the organisational elements is necessary for the diversification of the products from the competitors. Leaders need to encourage their subordinated to generate the innovative ideas regarding the projects development and the working processes. The changes in the structure of the personnel relations may take place to ensure the excellent level of contribution to success. Leaders may increase the responsibility of the certain subjects, promote, and involve them in the training programs.
‘In order to encourage teamwork and idea sharing, it is important that employees feel equal with their peers,’ therefore, there must be the free flow of information at all the levels in the organisation (Susman et al. 2006, p. 19). A well-elaborated vision statement helps to maintain the feeling of equality, team cohesion, and involvement in the transition process.
All the employees need to have the opportunity to discuss the current issues, exchange opinions, express themselves, and be recognized. The employees’ accountability is crucial for leadership strategy and is the most important factor inducing the organisational success.
Conclusion
Overall, the strategic management process in the Insomniac Games Inc. is comprised of scanning the internal and external environment, long-term and short-term objectives setting, assignment of the functional responsibilities, evaluation of performance and outcomes. The main objectives stated in the strategic plan are new project development, expansion of business functionality, services, and partnerships in the industry.
The additional goals include personnel training, pricing regulations, and advertising. It is expected that by 1 February 2016, Insomniac Games Inc. will successfully release a new online game. Nowadays, online gaming industry remains unexplored for the company, and the decision to become an active participant in the new market has a purpose of prevention the financial and organisational declines in the future.
It is claimed by many researchers in the gaming industry that online services are becoming dominant in the market. Therefore, the inclusion of the online gaming development into the company’s functional activities is a rational way to maintain the business survival and longevity.
For the successful transition to the organisational change, the strategic leadership is elaborated. It will take at least seven steps to attain the sustainable results. The leadership is responsible for the creation of vision statement and integration of values into the corporate culture, motivation of employees, communication, the monitoring of the practice and activities included in the strategy, and the outcomes measuring.
By evaluating the previous literature and research in the strategic change management and leadership management, it was proven that following aspects included in the strategy elaborated for Insomniac Games Inc. provides the high probability of the positive results achievement.
Reference List
Atta-Panin, J. 2013, ‘Leadership and strategic management’, GSTF International Journal on Business Review, vol. 2, no. 1, pp. 14-21.
Braica A. 2013, ‘Fundamentals of change management’, Studia Universitatis “Vasile Goldis” Arad. Seria stiinte economice, vol. 23, no. 4, pp. 138-149.
Burnes, B. 2014, Managing change, Pearson Education Limites, Harlow.
Carnall, C. & Roebuck, C. 2015, Strategic leadership development: Building world-class performance, Palgrave, New York.
Cetindamar, D., Phaal, R. & Probert, D. 2009, ‘Understanding technology management as a dynamic capability: a framework for technology management activities’, Technovation, vol. 29, no. 4, pp. 237-246.
Egenfeldt-Nelsen, S., Smith, J. & Parajes Tosca S. 2012, Understanding video games, Routledge, New York.
Financial information for Insomniac Games, Inc., Hoovers. Web.
Harris, T. 2014, ‘Top 5 online gaming industry trends for 2015’, Internap. Web.
Insomniac Games, 2016. Web.
McDeavitt J., Wade K., Smith R. & Worsowicz G. 2012, ‘Understanding change management’, Practice Management, vol. 4, no. 2, pp. 141-143.
Menguc, B., Auh, S. & Shih, E. 2007, ‘Transformational leadership and market orientation: Implications for the implementation of competitive strategies and business unit performance’, Journal of Business Research, vol. 60, pp. 314-321.
Pasmore, W. 2014, Developing a leadership strategy: a critical ingredient of organizational success. Web.
Research and Markets: Cloud gaming – how will it change the game* identifies the growth engines that will encourage development of this new market segment 2012, M2 Presswire. Web.
Susman, G., Jansen K. & Michael, J. 2006, Innovation and change management in small and medium-sized manufacturing companies. Web.