Change Efforts For Competition And Survival: Reasons For Failure And Recommendations

Reasons for Failure of Change Efforts

Discuss about the Change Effort for Competition and Survive.

Every business hopes to run in the long race of competition and survive it. But that is only possible if it bring changes in the organisation at least once during its lifetime. These change efforts can be determined under many headings like reengineering, restructuring, total quality management, turnarounds, and cultural change. For this the organisation needs to have the change effort introduced in the business which will make it more coping with the challenges of the business (Guo and Wang, 2015). These changes prove to be successful in some cases and an utter failure for some. But most of them fall towards failure side.  IBM has conducted a study on the companies who failed in the change effort process and the reason behind their failure. In this essay, the reasons and the nature of change effort failure along with the recommendations to bring success in change effort are discussed (Howsawi et al., 2014).

Each organisation planning to introduce changes in their organisation first plans a strategy and then implements the changes required by the organisation. Still, there are many examples of organisations that failed in the attempt of bringing change in their organisation. The various reasons for a failure of effort change are explored here. The first reason is lack of communication or failure of management to communicate exactly what are the changes and how they are supposed to look like. Incomplete knowledge or information will never give the desired result to the organisation. The second reason is a part of communication. People having different agendas may take the communicated message regarding the change in their own way. Hence, the effort required for the change is also as per their understanding. Some employees may feel threatened by the change, or the change may affect their ego or self-interest. Some may feel that they are totally alienated from the change. This may again act as a hindrance for the successful outcome of the change effort (Johnson, 2011). The third reason for the failure of change effort can be insensitivity. Many people cannot accept change easily. The ultimate aim of an organisation is to earn a profit and for that changes becomes necessary but the employees of an organisation may like the change or not, and that depends on person to person. Fourthly, it is management’s duty to create an atmosphere so that employees can easily adjust to the changes, but most of the time organisation’s management fails to do that. This makes people feel alienated, and they do not perform the way they are expected to (Klein, 2016). The next reason for the failure of change effort is the poor planning. Changing directions of an organisation’s working process require foresight. If any changes are done in an organisation without proper planning, then the result is eventually failure. The sixth reason for the failure can be a lack of commitment. Introducing change in an organisation requires hundred percent commitment from the management as well as from the employees for making it a success. Finally, the success of a change requires proper processes, which is necessary for the implementation of the change. Therefore, if the process is poor, then the result will also be poor (Pieterse, Caniels and Homan, 2012).

Examples of Change Effort Failures

Few examples of the failure of change effort are discussed here. A company called ‘Borders’ founded in 1971 by Tom and Louis Border was the biggest bookseller in the 1990s. The company was on its top when it took some missteps (Newby, 2010). The company planned an aggressive expansion of the company’s retail footprints which left it with long-term leases that later took the company to bankruptcy. Second, the change in the sales channel to internet sales through a deal with Amazon, and through their own website which came much later in the picture. Next, it decided to support an e-reader Kobo but were not able to give sufficient support. All this unplanned and badly processed decisions of Borders led the company to total bankruptcy, which also did not help it a lot (Johnson, 2011). Another example of the change effort failure is of a well-known company ‘Kodak.’ Kodak was founded in 1888; soon it created a monopoly in the camera and film developing market. To continue the monopoly in the market, Kodak has to consider changes as the time progressed.  It didn’t adopt the changes at the right time. In 1990, when Polaroid was taking a huge gain in the market, Kodak also decided to change its strategy and entered the instant photography market. This proved to be the wrong change that the company decided to make. The Polaroid Company sued the Kodak for stealing their technology and selling it in their own name. It also becomes unattached with its customers and smaller companies took over the market and Kodak came to an end (Pandit, 2014).

Leavitt offered a new theory for the success of the change efforts in an organisation. This theory was known as the change diamond that was a combination of four different interactive components of an organisation. According to Leavitt’s theory, the four components that are people, structure, task, and technology determine the fate of an organisation regarding the change effort. He says that if there is any change in any one component then all the other components will also be affected. Thus, if any one component is changed then all the other components are also needed to be tweaked to adjust as per the change (Lunenburg, 2012). According to the change diamond the employees are the people of an organisation. Their skills, efficiency, knowledge, and productivity, are considered as their main initiative. If there is a change in the task, then training the employees becomes necessary to make them familiar with the change. If their job structure is getting changed, then proper information about new responsibilities and duties should be conveyed to them. In the same way, if any, changes are being brought up in the technology, and then an extensive training is required so that the employees can efficiently handle the new technology (Hornstein, 2015). A task in an organisation refers to the achievement of the goals of the organisation and by doing that these goals are being achieved. The focus should be on the qualitative aspects of the goals and tasks. If there is a change in the man power, then the task and goals should also be redefined so that an organisation could use the skills and knowledge of its people to the optimum. Change in hierarchy structure requires a change in the tasks and goals. If there is a split or merge of a department, then the company cannot continue with the same goals and task. Introducing a new technology also requires a change in tasks and goals to cover the cost of the new technology (Edmondson, 2011).

Leavitt's Change Diamond Theory

The structure of an organisation includes the hierarchy, communication pattern, and coordination in all the levels of an organisation. Also, the flow of authority is also included in the structure. If more skilled and qualified manpower is being hired in an organisation, then the hierarchical needs will also change. There will be less amount of supervision required. If a company changes their set of goals, for example, a new customer support department will be required in an organisation if they change their retail department to customer centric. This will bring a change in the structure of the company. When a company introduces a new technology like computerisation or automation, then requirement new staff may be required, and old post may need to be closed (Decker and Durand, 2016). Technology is the component that helps people in performing their tasks easily. LAN lines, computers, software applications, etc. all come under technology. If there is a change in the other components of the Leavitt’s diamond, then technology also has to be changed. Like, if a company is hiring a computer expert then the company also has to provide a computer to use its skills up to the maximum limit. If a company is going computerised then, the tasks and goals will also change as different processes need to be added in the tasks. The technology reduces the workload of a man. Thus, the requirement of manpower also decreases. But, advance technology needs advance technicians to run them, which opens new posts in the company. Thus, this leads to a change in the hierarchy of the company (Grills et al., 2016). For the success of the change effort, it becomes necessary for the organisation to make sure that all the components of the organisation are getting the right amount of focus, and planning. If they all are in sync with the change, then only change effort can lead to success of the organisation (Grills et al., 2016).

An organisation has an ultimate goal that is to earn a profit, but with the changing demands, and an introduction of new technologies by the competitors it becomes necessary for the organisation to adopt and introduce changes. IBM’s study regarding the failure of change efforts and its reason is a good step towards the success of the change effort, as the future of the organisation lies in the change. It becomes very necessary for an organisation to adopt changes at the right time and also in the right way that it helps the company to grow and claim its market share in the industry better than before. It is true that the failure ratio is a bit high, than the success ratio when an organisation goes for the change effort. But if an organisation plans and then follows the plan according to the organisational demand then it will definitely lead to success of the company. Hence, it can be concluded that for the successful change effort all the different components of the organisation are need to be focused (Guo and Wang, 2015).

References

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Guo, Y. and Wang, C. (2015). Effects of organisational culture on post-implementation success of ERP systems: a case study. International Journal of Information Systems and Change Management, 7(3), p.203.

Howsawi, E., Eager, D., Bagia, R. and Niebecker, K. (2014). The four-level project success framework: application and assessment. Organisational Project Management, 1(1), p.1.

Johnson, D. (2011). 2 Big Companies That Missed The Opportunity To Adapt To New Technology. [online] Business Insider. Available at: https://www.businessinsider.com/overcome-by-change-the-failure-of-two-companies-to-seize-the-initiative-and-master-oncoming-change-2011-11?IR=T [Accessed 13 Aug. 2016].

Klein, L. (2016). Exploring the Organisational Collage of Memetic Paradigms for (a) Change — A Research Note. Journal of Organisational Transformation & Social Change, 13(1), pp.54-63.

Newby, P. (2010). Accuracy, error, uncertainty-and thanks and organisational change. The Photogrammetric Record, 25(130), pp.101-104.

Pandit, B. (2014). 10 Businesses That Failed to Adapt. [online] Business Pundit. Available at: https://www.businesspundit.com/10-businesses-that-failed-to-adapt/3/ [Accessed 13 Aug. 2016].

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Edmondson, A. (2011). Strategies for Learning from Failure. [online] Harvard Business Review. Available at: https://hbr.org/2011/04/strategies-for-learning-from-failure [Accessed 16 Aug. 2016].

Hornstein, H. (2015). The integration of project management and organizational change management is now a necessity. International Journal of Project Management, 33(2), pp.291-298.

Lunenburg, F. (2012). Approaches to Managing Organizational Change. [online] https://www.nationalforum.com/. Available at: https://www.nationalforum.com/Electronic%20Journal%20Volumes/Lunenburg,%20Fred%20C%20Approaches%20to%20Managing

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Pieterse, J., Caniels, M. and Homan, T. (2012). Professional discourses and resistance to change.Journal of OrgChange Mgmt, 25(6), pp.798-818.