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Using Kotter's 8 steps, the three most significant errors made out of all the change stories presented were: McDonald's failure to create urgency when it implemented its initial menu changes; Kodak's failure to communicate its vision for change; and Fiorina's failure to form a powerful coalition prior to the merger between HP and Compaq Computer Corp. However, it is important to keep in mind that Kotter's approach may not best describe organizational change; its popularity may be more attributable to its usable format than from any evidence that Kotter's approach to change management is superior to competing approaches (Appelbaum et al., 20120).
McDonald's made half-hearted efforts to respond to consumer demands for healthier menu options. However, at that time, it had not seen any reduction in profits because of the perceived lack of nutritional value of its offerings and was not committed to expanding beyond its traditional fast-food repertoire. This resulted in efforts that lacked cohesion and did not flow with the other products offered. When Kodak decided to transition from a film company to a purely digital company, the decision required significant reorganization in the company. However, the company announced the decision without fully communicating its intentions to either shareholders or employees. The consequence of this was decreased employee morale, as employees did not know whether or not they would remain employed with the company and whether they would play a role in the company as it evolved. When HP and Compaq were about to merge, some of the people who had previously supported a merger became more hesitant about the companies merging. The CEO, Fiorina, found herself in the position of having to make last minute presentations to major shareholders in an effort to secure support for the merger. She had failed to form a powerful coalition prior to the merger. Moreover, this lack of a powerful coalition plagued her even after the companies merged; she did not have tremendous support in either of the two companies, which would have eased the process of combining them into a single unit.
The leaders in each of the change stories each had a change image. This image not only reflects the role that each leader played in the organization, but also the direction that they sought for the company. Fiorina played several different roles in HP, particularly surrounding the HP / Compaq merger. I think her image would have been that of the handyman. She made herself personally available to fix problems as they arose, and was directly involved in all aspects of the business. However, in a company the size of HP, taking a handyman approach was unsuccessful, because it resulted in short-term fixes to problems, rather than long-term solutions. At IBM, Grossman was a trailblazer. In 1994, the internet was relatively new, and Grossman was determined to lead IBM into this new territory. Moreover, his vision was for IBM to become a trailblazing company that utilized the vast resources of the internet in the best way possible. At Kodak, Carp's image was largely that of a fall guy; in order for the company to have a chance at long-term retained financial success, it had to make changes that would be painful for shareholders and for employees. Carp was the person to deliver those changes and took on the image of the corporate bad guy in order to effectuate those changes. That he left Kodak is no surprise, given that he knew reaction to the plans would be negative until success could be proven. Cantalupo's image was that of the makeover man. McDonald's had lost its relevance in the modern world, with other fast food restaurants able to offer higher-quality, healthier food at competitive prices. Moreover, while McDonald's had once been an occasional part of balanced diets, the shift in eating patterns meant that it had to develop products that would meet those needs, without losing its core based of consumers. Cantalupo revamped the image of the stores, reconnecting it with younger adults.
For the HP change story, the most glaring error was Fiorina's failure to gather support for the merger and to establish a strong coalition within either of the two companies. One of the problems was that there was opposition to the merger among some of the majors HP shareholders. The opportunity that Fiorina missed was to look lower in the organization for inspirational leaders. Like many people in leadership positions, she ignored the fact that oftentimes the people who set the tone for an organization are not executives but the people working in the organization. Cultivating supporters among the employees and managers would have enabled her to have a better understanding of the corporate culture of both HP and Compaq, which would have, in turn, allowed her to facilitate the actual combination of the two companies without such resistance. This would have provided her with more time to focus on outside challenges, such as the lawsuit challenging the merger. The problem with Fiorina's change management approach was not that it was a bad approach; it was that the approach was not well-tailored to the merger. The success of a change management strategy "depends on how well it can be adapted to the situation at hand. At Hewlett-Packard, design thinking turned out to be the glue that held everything together" (Sato et al., 2010). Fiorina simply was not able to transition to the focus on design that the company needed to become successful after the merger with Compaq.
For the IBM change story, the biggest recommendation would have been for IBM to realize that Sun Microsystem's use of the internet to show portions of the Olympic Games was indicative that there was a market for the games on the internet. Rather than simply shutting down Sun's ability to broadcast the games, IBM should have stepped into the internet and created its own web-based Olympic programming. Doing so would have required embracing technology that, at the time, was considered new or emerging technology. Eventually, Grossman was able to convince IBM to embrace the internet, but it could have seized the opportunity to do so earlier. It is almost impossible to predict where IBM could have been if it had seized the opportunity to be an early player in the internet, instead of following the lead of other companies. It could have been poised to be a major internet company, and, instead, it is not a major internet company. Even when the Web culture infiltrated IBM as a company, the endeavors were always bottom-up. IBM would have been well-suited to identify change leaders, like Grossman, and elevate them to leadership positions. In other words, IBM needed to be poised to be responsive to changing technology. Rapid changes in the modern business environment mean that organizations need to have the tools and techniques available to implement change as soon as opportunities arise, or else risk missing out on those opportunities (Parker et al., 2013).
For the Kodak change story, the biggest recommendation would have been to communicate more effectively with workers. One of the biggest challenges that companies face when they are downsizing their employee workforce is how to manage downsizing. On the one hand, they want to reassure the employees who will be staying with them. On the other hand, they do not want to provide information about layoffs and lose critical workers in times prior to layoffs. However, one part of leadership is focusing on the needs of all stakeholders in a company, and employees are critical stakeholders. Kodak could have been more effective in communicating its plans for layoffs. In addition, it could have helped alleviate some of the pain of the planned layoffs by engaging in buyouts of employees entering retirement and offering incentives and bonuses to employees who retired prior to a…[continue]
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