An organizational change in a company involves a major change in processes or systems such as organizational structure, business model, leadership direction, strategy, objectives and technology. In the retail business the focus is on customer service and growth often brings about changes. This paper will explore the organizational change happening in a regional retail store selling home furnishings and art.
The store desires to expand its product offerings by opening an art gallery in the store and offering a wider range of furniture and decor in the store. The planned gallery will sell art from local artists on a consignment basis. The store's business model is offering handmade items from different countries priced for average consumers with a few high end pieces for the occasional collector. In order to facilitate this change the store needs to hire additional staff and reorganize its existing layout. The store has developed this change as a strategy for continuing growth and increasing sales. The store hopes that having a wider range of decor and art will appeal to a broader range of customers.
III. Organizational Change Pitfalls
In any business environment change is inevitable, but many companies don't handle organizational change well (Mirza, 2008). Instead of focusing on building the competencies and framework to make a culture and system of change, many companies only focus on making one change without thinking about future changes. Creating a culture for change includes getting employees to believe they are good at change, modeling the change that's being adopted and reminding employees of past success at making changes (Gurchiek, 2008). This creates a cycle where companies are really learning and growing during the change management process instead of merely reacting to it. There are many pitfalls in the change management process that can derail a change or even make it fail altogether. It's important to understand how change management goes wrong in order to avoid problems during the process.
Organizational change fails in many businesses, often from a failure to manage the employee side of the change rather than the technical issues. Despite the fact that organizations change frequently, most employees are resistant to change due mainly to a lack of information from the employer. Rumors and gossip will fill the void if an employer fails to give accurate and timely information on the organizational change which can be a major derailer.
Holding to a change management plan too strictly can cause a change to fail. This can happen when managers work the project plan from start to finish without making any adjustments (Mirza, 2008). This narrow focus on sticking to the plan often leaves out important communications and tweaks that should be made to the plan by considering its effect on all of the stakeholders.
Failure also occurs when leaders relate their vision of what the end result of the change initiative should be, but don't give direction or communication on how the managers should make the change happen (Miraz, 2008). This lack of leadership makes managers play a guessing game with executives that leads to the development of unclear objectives and goals. This can also happen when the organization's leaders don't plan on how to manage the change for the employees, but only have a vision of the change (Mirza, 2008).
IV. Preparing for Change
A successful change initiative begins and ends with a clearly defined goal or business intent (Hughes, 2008). In this case the store wants to add a gallery and add additional product lines in furnishings and decor to increase sales and grow the company. This clearly defined business goal will help the change initiative succeed.
Preparing a change management plan begins with understanding what needs to be included in the plan, who will be affected by the change and what tools will be used in the process. Businesses often need objective help for effective change management, and should consider outside help such as consultants to assist with the design and implementation of the process (Miraz, 2008). Most of us have an idea how to change the oil in our cars, but we rely on professionals to do the work because we aren't sure exactly what to do. The same is true with change management in organizations. The owners of the store have considered hiring a change management consultant, but have decided to manage the change themselves with the understanding that help is available if they need it. The store has five employees including the two owners which should make many issues experienced in change management easier to deal with including communication and teamwork.
Preparing for change requires that everyone have the right mentality and be committed to the process. The owners' first priority is to get the employees on board with the change. Given the small staff this should not be too hard however the owners should consider how the change will impact the existing staff. Adding additional people, including managers and salespeople may impact the existing staff who may feel they are being passed over for management positions or slighted by not being given preference in positions. This is where frequent and effective communication will be necessary in overcoming any issues. The owners should provide employees with as much information as possible about the upcoming change, repeat the information in different ways, and be as open as possible (Gurchiek, 2008).
The owners will meet with the staff and evaluate their current skills to know where they need to add people to obtain the necessary skill sets to grow the store. In this instance, adding a gallery will require someone with experience in selling art that knows the work of the local artists and can best represent the store's gallery to its customers. The owners will evaluate all employees to find out if anyone has any experience in this area before seeking to bring in an outside manager. The owners understand the importance of the loyalty the employees have shown over the years and want to reward current employees to make sure the process goes smoothly. An evaluation of the current staff reveals that an outside gallery manager will need to be hired and additional sales people will be needed for the store.
V. Assessing Change Readiness
Even in a small organization it's necessary to know if the organization is ready for change. There are six states of change readiness: indifference, rejection, doubt, neutrality, experimentation and commitment (Mirza, 2008). The owners of the store will need to evaluate all employees to find out where the employees stand and to know where they will need to do the most work (Mirza, 2008). Examining dimensions of change like culture, coaching, direction, communication, accountability, resilience, skills, knowledge, recognition, managing projects and involvement is important because depending on the strength of these traits and skills, the change can either be helped or hindered (Mirza, 2008). In the case at hand the workforce is relatively small making communication and involvement easier. On the other hand having a small close-knit staff can cause problems if one or more members of team began to resist the change because they will have the power to undermine the whole process. Once companies have assessed their employees' commitment and the strengths and weaknesses of their dimensions of change, it's time to customize and implement the change (Mirza, 2008). The store evaluates the staff and feels that the employee's are on board with the change and ready to start the change process.
VI. Creating the Change Management Plan
Identifying stakeholders that have the power to block the change or to help it succeed is important to preparing the change management plan (Austin, 2009). Any change effort will be short-lived and deeply resented without identifying and responding to the needs of each affected stakeholder and stakeholder group (Hughes, 2008).
The following stakeholders have been identified in the change management plan: the owners, employees, local artists, regular customers, suppliers, and the bank that will finance the addition of the gallery and additional operating costs. Local artists will be interested in consigning their art pieces in the new gallery. The current suppliers of products to the store will be interested in knowing how the addition of the gallery will help or possible hurt the sales of their respective product lines and local shoppers will also be interested to see if prices change because of the added gallery and products. New suppliers will be interested in offering new product lines for the store. The local community will also have an interest in the change for the jobs that will be created by the addition of the gallery. The change process can create an opportunity to strengthen bonds between the key stakeholder groups by linking their underlying values (Austin, 2009).
VII. Implementing the Change
A strong implementation plan builds momentum for the change among key stakeholder groups (Austin, 2009). The bank, the employees and local artists and new suppliers are all going to be part of the implementation and the owners plan on making it clear…