Huawei's organizational change management strategy and implementation challenges

Organizational Management: Change Plan

All organizations are vulnerable to change (Langvardt, 2007). A few will claim that the pace of change has slowed down in the globally interactive society. The magnitude of change however has, increased rapidly in the immediate couple of decades back (Langvardt, 2007). We, therefore, can only expect this rate of change to rise in the future (Langvardt, 2007). Some observers have pointed out that such business actions as mergers, re-strategizing, the Six Stigma plans, renewal of cultural approaches and trends, reengineering and downsizing of the operational scopes and manpower will soon come to an end. Yet, even in the face of these observations, it is highly unlikely that change will slow down (Langvardt, 2007). There are, already, dynamic and forceful economic currents underway; that can only cause change to increase. In order to cope with the paradigms that influence business, social, demographic, technological, competitive and economic trends, and business leaders must evolve methods of coping with these ever changing conditions. Such evolution means, that the ways businesses operate, is likely to change fundamentally (Langvardt, 2007). The expectation is that organizations will cut down on operational costs, produce better quality, increase productivity and find new markets to allow them expand (Langvardt, 2007).

The field of organizational change has introduced a variety of models, concepts and labels (Mats & Stefan, 2008). There is plenty of literature regarding aspects such as structure, strategy, culture. The process of accomplishing change, internal and external forces that trigger, deter or accelerate change, problems regarding implementation and even the magnitude and scope of such change and more (Mats & Stefan, 2008). In the past 15 years, we have witnessed the emergence of improvements such as Balanced Score Card (BSC), Business process Reengineering (BPR), Total Quality Management and Just in Time (JIT) and many other organizational and culture change models (Mats & Stefan, 2008). There has been an obsession with three letter programs. There has been an increase in the programs that inspire and teach how to carry out organizational change, however, it is accompanied by the high failure rate of the programs (Mats & Stefan, 2008).

1.1. The Problem Statement

Technological successes that cause a shift in customer preferences and requirements trigger the need for change. Indeed, any readjustments in the global or national economic environments, inevitably lead to local changes within organizations (Bharijoo, 2005). The digital media market is a perfect example of the technological markets that has triggered change within organizations. DVD and CD have become part of our entertainment lifestyle and indeed, preference. The cassette has seen the last of its days just as the reel in the movie industry paved way for the new technology storage media (Bharijoo, 2005).

Huawei is an example of a company that has withstood the forces of change locally and internationally. Even with its resilience, the company is faced with a decision dilemma (Holly & Michael, 2014). It is not easy to keep trying to cope and beat competition. Thus, Huawei grapples with whether to continue reinventing and pursuing new technology avenues or just settle and focus on its current products and services (Holly & Michael, 2014).

1. Company Overview:

Huawei Technologies Inc. is a leading ICT industry firm that we shall variably refer to as Huawei in this document as has already been used in the earlier paragraph. The company has emerged as a world leader in telecommunications equipment production. It overtook giants such as Sweden's Ericson, as apparent in the annual revenue reports of 2012. Huawei has been cited as a remarkable growth case (Holly & Michael, 2014). The company was started by a Chinese war veteran named Ren Zhengfei as a private sales agent. In 1987, the company started by selling Private Branch Exchange (PBX) (Holly & Michael, 2014). Ren had set up a Research and Development team by 1993. Then, the company developed its own digital PBX. The company launched into the overseas markets in 1995 (Holly & Michael, 2014). The company is priced over $35.35 and employs in excess of 15,00,000 workers across the globe today. The company's products are available in over 140 countries. Indeed, data reports indicate that the company serves one third of the total world population (Huawei, 2013). This success has been achieved in a period of only 25 years. Therefore, it would be fair to brand Huawei as an expert of change (Holly & Michael, 2014).

2. Diagnosis:

The raging academic question at this point in Huawei's business musings is why they should change and even whether there is need to change. We need a clear cross examination of the company if we are to address these weighty questions (Holly & Michael, 2014).

The present business, social and political environment necessitates continuous change in Huawei if they are to remain leaders in the industry. The company has adopted a functional approach that incorporates their drive for success, their staff and inspiration to win. The company is bound to contend with a lot of competition and even opposition that makes it thrive (Holly & Michael, 2014).

Changing economic environments and uncertain complex political dynamics continue to influence how the company handles the change and achieves success; the fast evolving technological challengers notwithstanding (Holly & Michael, 2014). The company also has its unique vision, culture and immediate objectives (Holly & Michael, 2014). The unified vision focused on by the top and bottom level teams in the face of uncertain business environments seem to play a significant role in its resilience. There is a steady and established feedback system that the company embraces. This helps it succeed against all odds (Holly & Michael, 2014).

Kotter's 8-Step Approach:

The analysis of this case is hinged on the responses and the resultant theory that was forwarded by Kotter (2012a). Dr. John Kotter conducted his study in a period of thirty years. This leadership Guru concluded in his studies that over 70% of efforts geared towards change in organizations come to null. He explains that these efforts to change fail because the organizations in question do not use a holistic method. He outlined an 8-step change process that he believes can help such business entities avoid failure, and even flourish by incorporating change (Kotter, 2012b). For any organization to continue thriving, they must adapt to the ever changing dynamics. They can make use of the 8 step approach in order to achieve success (Kotter, 2012b).

Setting Up the Sense of Urgency

One of the proven elements that enhance the chances of success in organizations is to shun complacency and adopt a sense of urgency (Kotter 2012a). He explains that it is a good idea to stir people's emotional disposition if a company is to achieve significant levels in the staffs' sense of urgency in business (Lewin, 1951, p. 229). Ren is reported to have quipped in one of his speeches to his staff that their company did not enjoy as much established networks as their international rivals did. Therefore, he advised them to work in overdrive. Thus, in order to catch up, they would have to take advantage of their rivals' "coffee" time (Luo et al., 2011). The pioneer cautioned his employees that complacency was the main cause of crisis in the prevailing competitive telecommunications environment. He used a number of analogies that are suggestive of the need to keep focus and work steadily so as to prepare to face competition effectively (Wagstaff & Yee, 2012).

Forming a Powerful Guiding Coalition

In Kotters view (2012a), in order to succeed in the change effort, a company needs to incorporate powerful coalitions that include the shareholder, strong titles, relevant experts, and the appropriate skills. Learning is a central element in the effectiveness of an organization (Lank and Lank 1995). In another observation by De Geus (1988), the fast learning may be the only advantage an organization has over others in the face of the changing trends. Huawei is a classic example of an organization that applies learning in order to stay ahead of the game.

Creating a Vision

It is also essential to bear a change plan that can easily be understood and promoted by the various stake holders is yet another critical tenet in successful organizational change (Kotter, 2012a).

Huawei seems to have a clear vision to enhance the quality of life through telecommunication products and services. They are focused on customer satisfaction (Huawei, 2013). The company comes with a triad pillar set up; the carrier network, consumer business and the enterprise ventures. There are two clear themes in the organizations operational plan: innovation that is inspired by the customer and the shared win policy of cooperation (Holly & Michael, 2014).

Relaying the Vision

Whereas having a strong and relevant vision is a good thing, there is need to internalize the need to change and commit to a new direction. It is not easy, though, particularly for large organizations (Kotter, 2012b). Little communication that leads to stagnation of the effort to change is common (Kotter, 2012b).

Organization leaders exploit every possible communication channel to relay their vision. They change the mundane business reports and articles into discursive and engaging agenda items in an organization's meeting. The usually boring routine meetings become opportunities to look at transformational opportunities (Kotter, 2012b). Repetitive educational programs are thrown out the window and replaced with problem solving focused courses and workshops (Kotter, 2012b).

The forceful effect of action oriented Leadership

You must act on what you preach as a leader (Kotter, 2012b). Such a leader is preoccupied with a search of a way of becoming the vision that the corporate seeks to achieve. If a leader acts in ways that seem contrary to what they are communicating, they are effectively destroying the chance of transformation and achievement of the organization's vision. Actions and speech must be in tandem (Kotter, 2012b). The message is strongly enforced when behavior and action are in agreement. The whole team in management needs to walk the talk. When this happens, the rest of the crew is inspired and reduces cynicism (Kotter, 2012b).

Ren uses his inner convictions and shares them in speeches and articles with the teams at Huawei to inspire change. The sense of urgency that he exudes is a major trigger that motivates others in the company to embrace change (Kotter, 2012b).

Planning and Initiating Wins in The Short-Term

Short-term wins break monotony on two fronts. Active players are given more synergy while the reserved types are thrown into activity and live to the calling of their roles. Priorities at Huawei are granted on the basis of relevance, strategic impact novelty and the size and cost. It is a ground to start change processes. Still, half of Huawei's staff is focused on reengineering and design. There are 28 centers for joint innovation and 16 R&D centers that host about half of their staff across the globe (Huawei, 2013). They provide the traditional network products but avail optical networking, wireless infrastructure, Datacom, enterprise options, Smartphone and other devices including modems. Huawei has been the leading player providing the first 3G network. The company is a notable player in the 4G network (Telecoms 2012) evolution at the moment. It is perhaps, a matter of time before 5G is practically reflected in the dynamic evolution characterizing Huawei (Forbes, 2013). If 5G is achieved, users get a network enhancement of up to 10 gigabytes per second in internet speed. 5G effectively means that the internet signals will be delivered 100 times faster. The R&D initiatives are clearly major players in the evolution of Huawei as a leading company in its niche; globally.

Consolidation of betterments as more change is introduced

Kotter's 7 nth step was enhanced and actualized by the existence of pressure that always existed at some point. These realities kept the enemies of change at bay. There are potential players lying in wait to spot this kind of opportunity and make the most of it (Zec & Shurrab, 2013).

Suggestively, Huawei may want to create a fresh brand of devices at a lower cost to serve as an expansion into new markets. They also have an option of looking inwards and ensuring an efficient production and delivery and management mechanism. The company could even decide to evolve and focus on high end products and services. They may even just need to focus their energies on the executive and staff into desirable resources that are icons of change in the telecommunications technology stage (Holly & Michael, 2014) in order to highlight their leadership stature.

Institutionalization of the New Methods

The stage highlights the importance of pointing out the effort required so as to get into the change situation they are in at present. If this is not done, the gains made may be lost (Zec & Shurrab, 2013).

Factors such as price, quality, competitive advantage, effectiveness, or even timing may play into the level of effectiveness and competitiveness (Holly & Michael, 2014). The company has numerous competitors including Cisco Systems, Dating Telecom, Alcatel-Lucent, Nokia, among others. These companies and others (that are not listed (public enterprises)) work to retain their market share. This leads to high competition (Holly & Michael, 2014). Holly and Michael (2014) point out a peculiar characteristic of this market by highlighting the fact that it presents an artificial threshold in premature obsolescence, and a rapid growth in technological innovation. A classic example of these happenings can be observed in the incidence of the release of mobile phones with a heightened functional addition into markets with equally high or even higher expectation on the same front (Holly & Michael, 2014). These developments lead to shorter lifecycles for new technologies and subsequent lower returns on the same. The telecommunications companies have been given a fresh impetus in their bargaining power because of the increased mergers that have characterized the telecommunications carriers (Holly & Michael, 2014). There is, then, a 'Red Ocean' environment (Kim and Mauborgne 2005). Huawei is under pressure to release products onto the market against the background of unmeasured ability to do so at such a pace (Holly & Michael, 2014).

Conclusion

If Huawei had not undergone evolutionary transformation, it would not have achieved as much (Holly & Michael, 2014). Although it is a tremendously successful entity, the future remains a challenge for everyone in the highly technical and specialized industry. Nortel was a giant at one point in history but it is almost obsolete now. Blackberry is dead. Huawei must brace for even tougher times (Holly & Michael, 2014). Huawei is at a critical point that could see them excel or tumble. The big question is how they can sustain their momentum in the 'Red Ocean' as referred by Kim & Mauborgne (2005). How can the company counter the market perception of cheaper products and lower quality and continued market leadership in the face of competition (Holly & Michael, 2014)? How can the organization avoid stagnation against the possibility of long-term success (Holly & Michael, 2014)? The answers for these questions revolve in Huawei's ability to sustain its zeal for change. They may even need radical changes to sustain and maintain their market share (Holly & Michael, 2014). There is no ideal answer to these dilemmas, though (Holly & Michael, 2014).