How to Implement Organizational Change at Walmart Inc Lewins Change Management Theory

OD CONCEPTS AND THEORIES 10

Lewin’s Change Management Theory: How to Implement Organizational Change at Walmart Inc.

A diverse workforce, technological advancement, continuously changing customer preferences, and highly competitive business environments are some of the fundamental factors that drive change in the modern-day organization. However, the success of any change effort depends on how well the organization’s leadership manages the change and guides employees through its implementation. Change management theories provide a framework that organizational leaders could adopt to manage change effectively. As Hussain et al. (2018) point out, change management is the continual renewal of an organization’s capabilities, structure, and direction to serve the dynamic needs of customers. This text demonstrates how managers at Walmart Inc. could use the concepts of Lewin’s theory of planned change to implement a successful change initiative around a specific organizational problem. It begins with a brief introduction to Walmart Inc. and the organizational problem to be addressed.

Introduction to Walmart Inc.

Walmart Inc. is a multinational retail chain store operating a range of grocery stores, discount department stores, Sam’s Clubs, and hypermarkets in over 20 countries, including the United States. The company began as a small discount retailer in 1945, and has since grown to become the world’s largest company by revenues, with over 2.1 million employees globally (Walmart Inc. Annual Report, 2023). The company’s growth is attributable to its philosophy of everyday low prices, which ensures that it capitalizes on economies of scale to offer lower prices than its competitors so as to help its customers live better and save money. Today, Walmart operates over 10,500 stores and Sam’s Clubs globally. The company serves approximately 240 million customers across the globe every week. Headquartered in Bentonville, Arkansas, Walmart Inc.’s operations are divided into three segments: Walmart International, Walmart US, and Sam’s Club. The company is listed on the New York Stock Exchange, with its stock trading under the symbol WMT. In the US, Walmart operates in all 50 states, Puerto Rico, and Washington DC. In the year ended 31st January 2023, Walmart Inc. reported annual revenues of $611.3 billion, with sales revenues contributing $605.9 billion (Walmart Inc. Annual Report, 2023).

Introduction to the Organizational Problem

The retail business is evolving and becoming increasingly competitive. More and more customers are embracing digital shopping, forcing retailers such as Walmart Inc. to increase investments in store remodels, supply chain automations, technology, and ecommerce. As consumer shopping trends change, retailers have to develop innovative ways of delivering effective omni-channel shopping experiences to maintain customer loyalty. This calls for capital investments in automation, talent, technology, and ecommerce (Walmart Inc. Annual Report, 2023).

To improve its online shopping experience, Walmart has upgraded its mobile apps to include advanced features such as integrated store maps, mobile updates that notify customers of available in-store services and allow them to make appointments, and a returns feature for purchases made online. In the area of automation, the company has invested in robots, which are used to restock shelves, track inventory levels, identify out-of-stocks, and ensure that shelf tags are accurate, all in a bid to improve accuracy in inventory management and enhance customer experience. The company has also automated its backroom processes in the offloading of trucks and sorting of inventory, a task initially carried out by hand. The automated unloaders use artificial intelligence tools to accurately sort merchandise offloaded from trucks and load them to carts for replenishment to shelves in minutes.

It would be prudent to note that the success of this digital transformation and automation depends on how well the company’s associates can work with such tools to drive business results. The main headache lies in getting the company’s associates to adapt to the automated systems and integrate the new technologies into the organizational culture.

Lewin’s Theory of Planned Change

Lewin’s theory of planned change, according to Deborah (2018), draws on the ideology that change is a complicated process for any individual or organization and, hence, a proper framework ought to be used to guide the individual through the transition before they can regain stability. Lewin uses the idea of an ice block to explain his analogy. In his view, if one wishes to transform an ice cube into an ice cone, they first need to transform the ice into liquid to make it responsive to the change process (unfreeze) (Deborah, 2018). Once in liquid form, they have to mould it into the desired shape (change), and finally coagulate the new shape (refreeze) (Deborah, 2018). Thus, in Lewin’s view, effective organizational change occurs in a series of three steps: unfreezing, change, and refreezing (Deborah, 2018).

Unfreezing is the first phase of the change process. Burnes (2019) indicates that it involves contravening the current situation to allow a change to take place. The primary objective of the unfreezing stage is to improve the people’s willingness and readiness to change by getting them to realize the importance of moving from the current to the desired state (Burnes, 2019). According to Deborah (2018), this could be done using three approaches: enhancing the powers that drive the individual to shift their conduct from the current state, reducing the powers that limit the individual from shifting, or amalgamating the above two approaches.

Change is the transition stage, where the actual transition is implemented (Burnes, 2019). At this stage, individuals begin to act in line with the new state and gradually begin to accept that the old state no longer exists (Burnes, 2019). Effective communication, careful planning, and involvement of the individual are crucial at this stage to help them endorse the change (Deborah, 2018).

Finally, refreezing is the stage where the transition has taken place and people move to a state of greater stability (Deborah, 2018). As Deborah (2008) further observes, the primary aim of the refreezing stage is to get people to internalize the change and integrate the new way of working into the organizational culture. In the refreezing stage, the leader helps in internalizing the change by developing supportive policies to strengthen the new way of working, offering positive reinforcements, and advancing rewards and recognition (Deborah, 2018).

Applying Lewin’s Model to Walmart’s Planned Change towards Automation and Ecommerce

Unfreezing

Automation and digitalization change the nature of work, creating new jobs, eliminating the need for other jobs, and transforming the way work is done. Speaking during the 2017 annual shareholders’ meeting, Walmart’s chief sustainability officer Kathleen Mc Laughlin pointed out that, “we are now a tech company as much as a retail company. This digital transformation creates new jobs, but more important, it changes the nature of jobs, even entry-level ones” (Hanna, 2019, n.pag). Workers grapple with uncertainties in the face of automation due to the risk of job losses. Even those who may not lose their jobs face demands related to reskilling as they seek to remain relevant and work with the new technologies. For these reasons, it is crucial that Walmart’s leadership effectively visualises the need for change and guides employees to accept the change by listening to, and addressing their concerns and uncertainties (Saleem et al., 2019).

In the unfreezing phase, the organization’s leadership could create forums and compelling messages explaining to employees the benefits of adopting automated and digitalized systems. In this case, the leadership could explain that there is a growing trend towards online shopping and there is a need for digitalization as a means to improve the customer experience and maintain loyalty (Walmart Inc. Annual Report, 2023). At the same time, there is growing competition in the retail industry, which forces the company to come up with innovative ways of improving in-store shopping experiences through automating offloading and inventory management processes (Walmart Inc. Annual Report, 2023). This creates in employees an open mind to accept the change and enhances the understanding that automation and digitalization align with the organization’s context, beliefs, and effective service delivery (Saleem et al., 2019).

Saleem et al. (2019) propose using the concepts of transformational leadership at the unfreezing stage to persuade employees to unlearn the old and adopt the new technology and automated systems. The first concept is individualized consideration, where the leader attends to the needs of each individual follower as a guide, coach or mentor (Saleem et al., 2019). This involves creating room for each employee to voice their concerns about automation and the leader taking the time to address these concerns. For instance, the unit or store leaders may address concerns around job losses by explaining the organization’s plan about employees whose roles will be automated. There is a need to communicate possible plans, for instance, that they will move to other labor-intensive departments or will undergo training to improve their skill-set in using the new technologies.

The second concept of transformational leadership relevant to the unfreezing stage is inspirational motivation. This involves articulating the vision and goals of the change to encourage all employees to perform beyond expectations (Saleem et al., 2019). This is where the unit leaders clearly visualize the need for the change and guide employees to understand why it is necessary, and how the change aligns with the organization’s vision and strategy. According to Deborah (2018), employees are rational and will question to what extent the change is necessary and whether the organization presents a promising future for them. There is need for the leadership to provide an official cause for change and develop written visual statements to prove that the organization has a feasible plan (Deborah, 2018).

Change

In the transition phase, the leadership could apply the third concept of transformational leadership, intellectual stimulation (Saleem et al., 2019). This has to do with challenging assumptions, taking risks, and soliciting ideas from employees because as Deborah (2018) points out, real change takes place at the lower levels of the organizational hierarchy. Throughout the implementation phase, it is vital to periodically measure the change, evaluate what has already been done and what is yet to be done, and interact with employees regularly to understand their progress, address new concerns that may have come up, and dispel rumors. An effective leadership strategy is to keep sending messages on why the change is necessary and organizing sessions with employees to respond to questions arising from implementation and communicate short-term successes as a way of encouraging them (Deborah, 2018).

Refreezing

This stage focuses on integrating the change into the organizational culture. One strategy that leadership could adopt at this stage is idealized influence, where the leader serves as a role model for their followers by modelling the new behaviour (Saleem et al., 2019). In this case, the unit leaders could serve as role models by adopting the new technologies in their own work and attending training sessions to upgrade their skills on the same. Employees are more likely to sustain the change if they perceive their leader as a role model (Saleem et al., 2019). Further, the leadership could sustain the change by putting in place a reward mechanism to encourage employees to integrate the new system into their work culture (Deborah, 2018). The leadership could offer rewards and recognitions to employees who make the best use of the new technologies. At the same time, it would be prudent to support employees in efforts to integrate the change through continuous feedback, celebration of milestones, and regular training sessions (Hussain et al, 2018).

Barriers to Effective Organizational Change and Strategies for Minimizing Risk

One of the primary barriers to effective change implementation would be lack of employee participation and involvement (Bennett & Soylu, 2021). As Bennett & Soylu (2021) further indicate, when employees are not involved in the planning and implementation of the change, there is a risk of resistance. Resistance limits one’s ability to unfreeze the old and adopt the new way of doing things, partly because they are uncertain about the future and do not understand the reasons for the change. Towards this end, it is important for the company to engage employees in the change process from the onset by communicating why the change is necessary, welcoming their ideas, and addressing their concerns.