IBM

Why Change Management is Important for Organizations

Discuss about the Change Management System of IBM.

The aim of any organization is to succeed in the market, get brand loyal customers and to earn profits. To establish these goals it is important that an organization functions in such a way that customers remain loyal to company. However, when organizations face problems it become shard to retain those customers after a certain time. This where change management comes into the scenario, to sustain an organization. Change management becomes an important part of an organization when the company starts to face problems. Changes are brought about in the organization to retain its position in the market and to upgrade itself according to the environment. In this essay various models and techniques of change management will be discussed to establish the need and the ways that change management occurs an organization. The case study of IBM is one example of change management which will be analysed to understand the need for change in organizational culture in the development of the organization.

Change management  is a systematic way in which an organization deals with the changes that are incorporated within itself like its goals, the process in which the company works or the changes in technology within the company (Hayes 2014). Change management is needed in an organization to provide ways in which the organization can manage the changes that occur within the company and how can the organization help the employees to adapt to that change. Calm waters and white-water rapids are metaphors that are used in the change management in an organization. The calm water metaphor describes the organization as a big ship which is floating through a calm water. The captain of the ship who is the head of the company and the crew who are the employees are patient in the ship and know which direction they are heading to as they have sailed in the ship before. The changes that come into the organization are the occasional storms which occur for a short time in the normally calm sea. This metaphor is best described by Kurt Lewin in his three step process of change (Cummings, Bridgman and Brown 2016). Kurt Lewin says that change has three parts namely unfreezing, implementing the change and adapting to it and refreezing. Unfreezing is the necessary to shift from the stability that the organization has. This stage is needed to prepare the organization for the incoming changes that are about to come. The second stage of change management is adapting to the change that has taken place. The new change has to be implemented into the organization to make the people of the organization aware of the change and give them time to get used to it. The final stage is refreezing which helps to keep the change as it is so that it stays for a long time. On the other hand, the white-water rapids metaphor states that the upper management of the organization should be adapt in fighting against the continuous changes and instability in the environment and organization. It also says that the situation of the environment is unstable and uncertain which makes it unpredictable for the managers to ascertain. Hence, they should be ready for any kind of change which occurs within and outside the organization. This is due to the world which is ever-changing and being dominated by various new ideas and new knowledge.

Models and Techniques of Change Management

It is well-known that an organization has to go through changes to adapt to the growing environment and to develop itself. John Kotter introduced the eight steps of the change process in the year 1995 which describes the process of leading the change (Sarayreh, Khudair and Barakat 2013). First of all, it is important that the management creates a sense of urgency for change among the people in the organization. This urgency helps the people to think about the need of a change. However, this need for change cannot be sparked among the people by simply stating the statistics or reasons for the change. The management needs to connect with the staff and make them feel the need for change on a personal level. Unless the employees feel the need for change they will not be able to accept the change that will occur. Secondly, it is mandatory to persuade the people that the change is necessary. Change is not accepted at once by people and a strong leader is needed who can manage the change properly. There is also a need for a strong coalition team who can lead the change and manage it in a proper way. The team could consist of political leaders or any other influential people who can have a proper viewpoint of the change. Thirdly, a perfect vision is important for the change to take place. It is normal that when a change is initiated there could various ideas and thoughts for that change among different people. Nonetheless, it is important to have a vision which would bring about a good change and also benefit the organization and its people. Fourthly, the vision should be communicated to the people of the organization. The vision should be fresh on the minds of the staff so that they respond to it in a good manner and do not forget it after a certain time. For this to happen, it is important that the managers constantly remind the vision along with taking steps that would actually implement the vision into the organization. Simply talking about the vision would not help in the success of the vision (Auguste 2013). Fifthly, make sure that any kind of obstruction or obstacle is removed which can stop the change to succeed. Removing these obstructions would also help to motivate the employees to help process the change. Sixthly, keep certain targets for short term within the long term goal which can help the employees to achieve the targets and motivate them. These targets will be able to create a healthy competitive environment in the organization and also make the change faster. Seventhly, Kotter states that many organization fail to achieve the goal and the change because they get more concentrated on the short wins and fail to improve themselves. It is necessary to make continuous changes within the organization so that the long term goal is achieved. Lastly, the change should become an integral part of the organization. It is necessary to give continuous support to the change for it to remain within the organization.

Case Study of IBM

As the name states, force field analysis is analysing and evaluating the different forces which brings about a change in the organization. Analysing the forces are important as it helps to understand the need for the change and also specify the ways in which the change could be implemented into the organization. There are two main types of forces which comes while analysing the forces of change. The forces are driving forces and restraining forces (Griffin 2013). Driving forces are those forces which helps the change to move forward whereas restraining forces are those forces which creates obstacles for the change. The force field analysis helps the organization to realise the force which acts stronger for the company. Once the organization knows if the driving or restraining force is stronger, they can work accordingly to sustain the change in the organization. If the driving forces are stringer then the organization can make decisions based on those forces for the betterment of the change. However, if the restraining forces are stronger then the organization can develop strategies to drive away the obstacles and make the change constant. The process of force field analysis is quite easy to conduct but could require a lot of work on behalf of the organization. First of all, the problems for which the change has to take place should be gathered and noted down. If the problem is not properly accesses then the change might not occur in the right direction. A perfect target for these problems should be fixed so that the change occurs in a correct manner and towards the right direction during the force field analysis. Secondly, the force field analysis diagram has two columns which states the driving and the restraining forces respectively. It is mandatory to list down the driving and restraining forces properly with the help of other employees to avoid any biasness towards the problems. Lastly, after the forces has been listed, the forces should be ranked from the weakest as one to the strongest as five. This total score will help in determining whether the change is appropriate for the organization or not. The whole process of force field analysis would require a lot of brainstorming session and discussion to find out the problems of the organization. One example of force field analysis is by the Food and Agriculture Organization of the United Nations, also known as FAO (ODI 2018). The FAO added an extra element in the force field analysis which was the control of the organization over the problems. They wanted to improve the success rate in the afforestation and reforestation programmes initiated by them. For this they listed down all the driving and restraining forces and then ranked the forces according to its magnitude. The force with the higher total got the higher importance and the organization paid more attention to the force. The FAO found out from the analysis that operational planning needed more attention to get the required result for their change in the programmes.

Force Field Analysis

Organizational culture is very important for the betterment of the organization. If the culture of the organization is not in favour of the employees then no change can be beneficial for the company or its employees. Hence, the first thing that should be concentrated in change management is changing the culture of the organization for the good future of the organization along with its people (Alvesson and Sveningsson 2015). It is the duty of the managers to look after and take steps to ascertain a good organizational culture. There are certain things that a manager could do in order to ensure a good culture in the organization. Firstly, the leader must always act like a leader. A leader never pushes the followers from behind to complete the work but leads from the front. The manager must ensure that he is able to motivate the employees in helping change the organization by taking active participation in the work himself. A speech is not always helpful, people do need to see some action on the part of the management, so that they feel that the management is also equally motivated and involved in the betterment of the organization. Secondly, constant communication and presence is required from the manager. If the manager fails to communicate the urgency of the change among the employees, then they will fail to understand the need for the change and its importance. If the leaders just explain and spread the change and then fail to keep constant communication and initiate the changes himself, then the employees fail to do so as well which results in total failure of the goal. The vision should be imbedded into the minds of the employees with regular communication in any way so that they realise that the change is what will shape the future of the organization. Thirdly, the manager should make sure that the vision has seeped into each and every level of the organization. Leader of every section should have the concept of the vision clear, so that they can also clear it in the minds of the lower management and each and every employee. Until and unless the vision is clear in everyone, and everyone works collectively, it would be impossible to achieve the goal. Fourthly, it is mandatory on the part of the manager to eradicate those who are not fully engaged in the change of the organization. If those employees are not eradicated then the organization will be pulled back each time it takes a step forward. This also sends a clear message to the other employees about the seriousness of the management in the change. Lastly, the manager should establish proper training structures and education to enable a proper and perfect change (Azanza, Moriano and Molero 2013). The employees need to change and upgrade themselves according to the upgradation of the organization, as only then will they be able to completely grasp and work for the betterment and the success of the organization and its development.

Conclusion

IBM was considered the second most profitable IT Company in the year 1990. As one of the most successful company, the future of IBM looked quite bright. However, the senior executives realised that the condition of IBM was not as good as it seemed. The executives were doing well in the company but not their best and they could understand that the issue was the structure of the company (Ahamed, Inohara and Kamoshida 2013). Gradually, IBM started suffering potential losses and the problem came into the view of the management. Gerstner took the control of IBM in 1993. Initially he started with the motive to sell the company but soon came to realise that the value of IBM was still not extinct and hence resorted to saving the company. The need for change was mandatory in the company because there were many problems that were faced by IBM. The revenues started to decline and the fixed costs started to pile up. This was a big setback on the financial front of the company. The company started to cut costs because of the financial problems and many benefits of the employees were taken away. Many people were fired from the organization as the company was unable to incur the cost of human resource. These were certain reason due to which the board decided that the company needed a change in leadership and hired Gerstner to take the reins of the company. He took feedbacks from the customers to understand the extent of the damage that had been done in the market. From those feedbacks he understood that rather than trying to sell the company, he could reinvent IBM in the market in a better way. Gerstner made sure that each executive had personal contact with the customers and also with the problems of the company, He urged them to submit two solutions which included one on the business done by the executives and another a set of recommendations that could be beneficial for the organization. This way the executives could give input on the betterment of the company. Gerstner made sure that all previous issues of the company were taken care of so that one IBM could reinstate itself as a better IT company in the market. From the case study of IBM, it is quite clear that change management and change in the organizational culture is very important for the success of a company. When IBM started to lose its value in the market, the management could understand that change was needed to rejuvenate the old company (Drucker 2107). Had there been no change, the name of IBM would have been extinct in recent times. The need for change is important for any organization to succeed in the competitive market. Change helps the organization to grow better and stronger and develop itself with time. In the same way, it is important to change the culture of the organization, as a company will only succeed if its employees are satisfied and involved with their work.

It can be concluded from the following essay, that change management is an important concept that every organization should follow. However, any change which occurs suddenly is not beneficial for the organization or its people. Hence it is important that a proper process is followed to initiate the change and a clear vision is incorporated to urge the employees in getting involved with the change. As discussed earlier there are various analysing process before implementing a change. However, it has been derived from the IBM case study that change is integral for the betterment and development of an organization.

References:

Ahamed, Z., Inohara, T. and Kamoshida, A., 2013. The servitization of manufacturing: An empirical case study of IBM corporation. International Journal of Business Administration, 4(2), p.18.

Alvesson, M. and Sveningsson, S., 2015. Changing organizational culture: Cultural change work in progress. Routledge.

Auguste, J., 2013. Applying Kotter’s 8-step process for leading change to the digital transformation of an orthopedic surgical practice group in Toronto, Canada. J Health Med Informat, 4(3).   

Azanza, G., Moriano, J.A. and Molero, F., 2013. Authentic leadership and organizational culture as drivers of employees’ job satisfaction. Revista de Psicología del Trabajo y de las Organizaciones, 29(2).

Cummings, S., Bridgman, T. and Brown, K.G., 2016. Unfreezing change as three steps: Rethinking Kurt Lewin’s legacy for change management. human relations, 69(1), pp.33-60.

Drucker, P.F., 2017. The Theory of the Business (Harvard Business Review Classics). Harvard Business Press.

Griffin, R.W., 2013. Fundamentals of management. Cengage Learning.    

Hayes, J., 2014. The theory and practice of change management. Palgrave Macmillan.

ODI. 2018. Management Techniques: Force Field Analysis. [online] Available at: https://www.odi.org/publications/5218-force-field-analysis-decision-maker [Accessed 15 May 2018].   

Sarayreh, B.H., Khudair, H. and Barakat, E.A., 2013. Comparative study: the Kurt Lewin of change management. International Journal of Computer and Information Technology, 2(4), pp.626-629.