Introduction
I will reflect and explain how organisation-wide change was managed in my previous company (LG Electronics India), considering change management and motivation theories.
LG Customer service in India was managed through a franchisee network of service centres. A new customer-centric process along with an improved CRM was adopted to build customer confidence in the brand and drive sales growth.
I was a part of the core team of 6 managers, responsible for the implementation of the new process. West India zone( APPENDIX : LG Operations and Zones), a high revenue-generating and strategic market for the company was my responsibility.
Organisation
The organization is defined as a social arrangement in the pursuit of a common goal through achieving controlled performance (Huczynski and Buchanan (2001, p.884)(Organisational Behaviour Chapter 1 )
The organisation is a large scale multinational consumer durables company, involved in the production, marketing and sales of Consumer Electronics and Durables and employed more than 12000 direct and indirect staff in India.
Scenario
The sales were stagnant and profits were on the decline for the second consecutive year. Aggressive pricing strategies by competition brands like Samsung and new Chinese companies were further resulting in loosing LG market shares. A root cause analysis identified poor customer satisfaction as one of the major reasons. This was also reflecting in the increasing number of customer escalations and consumer forum lawsuits. A renowned global consultancy (Mckinsey) was brought on board to find solutions. Through a rigorous consultation process, spread over 4 months, a strategy was developed to bolster customer confidence. It involved Staff’s behavioural change towards customers, process change ( 211) ( APPENDIX OLD and New Process) and CRM change. Customer feedback and Net Promoted score (NPS) was captured (APPENDIX NPS Process) for every job completed through the call centre(CIC). The performance of each Technician was measured through behavioural feedback and NPS. The objective was to change the Customers’ perception of the brand by providing differentiated Service and drive brand advocacy, which in turn will drive sales.
This was an organisation-wide change at LG Customer service department, involving 280 direct and more than 5200 indirect employees of 436 Franchisee Service centres. A timeline of 3 months was set for implementation after the necessary new CRM development, behavioural pieces of training and the new process was communicated. This was a Hercules task considering diverse cultures, vast geography, linguistic barriers in India and the dynamics of business. However this change was successfully implemented by dedicated teams under the able guidance of LG management, but there was a delay of 35 days due to unforeseen challenges and resistance to change. Methods and strategies emerged were contested and were modified to achieve the goal. Motivations played a key role in overcoming the resistance. This overhaul of the service process was hailed as a transformative change in the Indian service industry and bagged numerous awards.
Organisational Change
Change is in evitable to organisations of all sizes, types and shapes, in the current dynamic business environment and evolving technology. (Pansegrouw.G 1996).Edward E.Lawler and Christopher Worley (2019, p.28) argue that to survive in a world that is changing quickly, business need to be able to anticipate change and keep reconfiguring themselves. Organizations, which wait to engage in change efforts for an overwhelming mandate are often left behind and may struggle to survive(Lawler and Worley, 2009)
less woral and cary cooper (1997) state that the most common forms of change in organisations across industries are cost reduction, redundancies, culture change and performance improvement. http://dro.deakin.edu.au/view/DU:30010399
LG’s decision to change was in the direction changing with time to sustain and grow in the market. The cultural change was driven in this case.
Change Type
Teleological theory states that a change is guided by desired end state or a goal (Ven and Poole 1995)
The change was teleological, necessitated by management dissatisfaction. Identifying root cause, the corrective action to regain customer confidence by providing differentiated service was initiated. Implementation goals were set for all the involved staff.
Change Trigger
The initial awareness of a need to change may either be in response to external or internal pressures for change (reactive), or through a belief in the need for change to meet future competitive demands (proactive).
Organizations are faced with a number of external and internal change triggers, such as new legislation or emerging markets. Consequently, change is almost inevitable. This view is further supported by Kanter, Stein and Jick (1992, p.490), who state that: ‘deliberate attempts to change organizations, whatever the specific form they take, are ultimately driven by someone’s belief that the organization would, should, or must perform better’.
The company acted reactively, triggered by stagnant sales and declining profits. The consumer expectations were changing and what worked earlier did not work, as the emerging market trends and cut throat competition set higher expectations. The deliberate attempt to revamp the customer brand perception was a failure induced change, which is in line with Carnegie school theory of Organisational Change that states “ An Organisation will change its strategies, technology, culture and other features in response to failure in an attempt to reach its goals.”
Leadership From Outside
Hofstede et al. (1990) and Cameron and Quinn (1999) provide useful advice on measuring, diagnosing and changing organization culture. A proactive approach enables early recognition of the need to change, thus increasing the probability of successfully managed change. However, as stated by Gagliardi (1986), the need for large‐scale change is rarely perceived by those deeply involved in the existing culture and is often first recognized by outsiders. Culture change therefore often requires leadership from outside the main culture.
https://www.tandfonline.com/doi/full/10.1080/01446190500227011?src=recsys
The company’s management was not impressed with the action plan, the internal employees came up with. This led to on boarding, Mckinsey to evaluate, conduct gap analysis and recommend the change required.
Change Approach
Roberts and Brown’s (1992) composite model, based on the ideas of Lewin (1952), Beyer and Trice (1988) and Isabella (1990), separates change into three phases: unfreezing mechanisms; experimentation; and refreezing mechanisms.
The company choose to implement the change in one go. This was considering the technology change (CRM). The management’s trust on the indirect staff to accept and adhere to the changes and belief in capabilities of Customer service department to drive the change effectively was the reason for decision to change like this.( reframe the sentence) Drawbacks of this type of change
Resistance to Change
Buchanan and Huczynski (2010) suggest lack of understanding the reasons and consequences can create resistance to change because it might cost them more than what they will gain. Such misunderstandings most likely occur where there is lack of trust between manager and employees. This is also explained by Kotter and Schlesinger (1997),that very few organizations have high level of trust between employees and managers. Hence misunderstandings are obvious when organizational change is introduced. Lack of timely and clear communication will lead to resistance.
The new process was transparent and the company had total visibility of every customer complaint, job status. The customer feedback and NPS scores reflected removed the opacity between the customer and the company. This resulted in company evaluating every technician’s job and micro managing the performance at every level. The company staff was constantly communicating with and directly controlling franchisee staff. Company staff was more informed than the franchisee owners and managers, who felt power no longer exists with them on their own employees. The process also exposed manipulations and wrong practices of franchisees. As a result audits conducted and penalties were imposed appropriately. High level of scrutiny resulted in attrition of skilled technicians, as competition brands readily hired them.
Well‐planned change helps ensure the change process is successful, but change is a politically charged subject and whatever results are expected, the unexpected should be accounted for (Paraphrase ) (Elving 2005).
https://www.emerald.com/insight/content/doi/10.1108/13563280510596943/full/html#idm45554166685248
The company executives were micromanaging in place of handholding, which was mis-understood by franchisee owners as political behaviour( Pg 11 Power Politics and Organisational Change : Dave Buchanan & Richard Badham) and that the company’s intention was to audit and penalise franchisees in disguise of new process implementation. Attrition of skilled workforce also resulted in insecurities on future of business.
Addressing the Resistance
The very reason people resist to change is evaluation of costs and benefits differently. According to Buchanan and Huczynski (2010), it is the result of poor communication and inadequate information that causes contradictory assessments. But such resistance to change may lead to constructive criticism and improved proposals to achieve better outcomes since people have different perceptions and knowledge.
Majority of the franchisee owners were now reluctant to work with the company formed a union to serve a notice to go on a strike in the event the new process was not rolled back. It was day 35 of new process implementation. Customer service being the core support function , any disruption would be a big blow to the business. Company was not prepared with any alternate to tackle this. It was a big challenge considering the size of operations and work load.
The west zone Franchisee owners were instrumental in the union formation and I was responsible for west zone. I tried to understand the concerns by initiating talks with every franchisee owner individually and also the union representatives. The resistance was mainly on directly controlling the franchisee staff, penalties being imposed for non adherence of new process and remuneration being the same in-spite of additional work load. They also insisted on doing away with penalising actions taken for manipulation and wrong practices.
Similar talks were held by my other core team members in their respective zones. The demands and possible approaches were discussed while company staff was instructed to tone down the scrutiny and stay away from micromanagement, which paved the path to uninterrupted services, while we were working to iron out.
Emergent Strategy
According to Henry Mintzberg, emergent strategy is a set of actions, or behaviour, consistent over time, “a realized pattern [that] was not expressly intended” in the original planning of strategy. The term “emergent strategy” implies that an organization is learning what works in practice.
Drawbacks of This Strategy
The plan for change was basic design school model which didnot consider any unforeseen resistances. Initial planning locked organisation into inflexible mode, so we had to come up with an emergent strategy.
After through consultations within the departments, gauging the risks involved and potential problems in-case of extreme steps and also considering the legal advice, we negotiated the middle ground. Franchisee owners were made responsible for implementations of new process in their areas and were assured that company will ensure their autonomy is maintained. Other motivations including incentives were offered, however the penalising actions for wrong practices and manipulations were up-help to so as to convey the right message.
Now the strategy was to drive change and retain skill through motivation at the same time ensuring zero tolerance to unethical practices
Motivation
Conflict theory states society and organizations should motivate individuals and groups to work and maximize their benefits, which in turn drives social and organizational change.
According to Spector (2012) defines motivation as an internal state that induces a person to engage in particular behaviors”(p.194).
Motivation can be defined as process of initiating, directing, energizing and maintaining the goal directed behaviour through cognitive decision making (HUCZYNSKI AND BUCHANAN, 2013: 291-292
The company, decided to drive the necessary change through motivation, as the authoritative approach had resulted in dissatisfaction. Both intrinsic as well as extrinsic motivations employed by LG resulted in successful process change. The criteria for qualifying for each motivation was carefully planned to achieve company goals.
