Change Management Essay (By: Reem Fahmy - Egypt)
Co. X was one of the pioneers that produced Egypt's first packaged dairy products. By the mid 1990s, it led tremendous expansions & grew to be a highly-respected household name for dairy, yogurt and juice products.
In 2007, Co. X's founder & chairman, took a strategic decision to raise capital in order to finance further expansions through issuing an IPO in two years time. At the time, the company was perceived to be a family business that has been a market leader for years primarily due to its heritage. In parallel, there were persistent rumours that Al Marai, a dairy market leader in the gulf, was planning to put a huge investment to enter the Egyptian market.
Consequently, the founder decided that this anticipatory change approach called re-orientation - as per Nadler & Tushman (1989) - entailed recruiting a team of senior executives with a solid multi-national background to lead the corporate restructure & uplift the company's image, since companies with well structured leadership teams were highly valued in the stock exchange.
The arrival of the new deputy chairman:
When the new deputy chairman entered his office in early 2007, Co. X's employees had mixed feelings. He had outstanding credentials given his 30 years experience at P&G in different countries, however, it was obvious that he was extremely sharp, pragmatic, impatient & ruthless. He spent his first month entirely in unannounced relentless trade & factory visits as well as customers' focus groups nationwide to gain industry understanding & identify potential issues or opportunities. It was his way of demonstrating his values through his actions.
Two months after he joined, he fired the Sales Director for failing to meet the desired monthly target. It was a clear message that he had a sense of urgency to achieve a certain mission & that you were either with him or against him.
New leadership team:
Upon assessing the existing capabilities & mapping stakeholders, the new deputy chairman (the change agent) took the driver's seat & quickly hired a Marketing Director from Uniliver, two Marketing Managers, a new Sales Director, an R&D Director & an HR Director to be the core change team that will guide the transition. Together the newly assembled team developed a shared commitment to outstanding performance.
Driving forces vs. restraining forces:
As one of the newly appointed Marketing Managers, I was quick to identify both driving and restraining forces to this transition. It was evident that the chairman, his deputy & the newly hired coalition were adamant to elevate the company's image & make a cultural turn-around that matches multinational organizations (while acknowledging that the ultimate goal was to successfully launch the IPO with a high share value).
On the other hand, Co. X had an enormous number of old school family members in various positions that were on the fence towards this change. As Bert Lance once said (1977) "If it ain't broke, don't fix it", they just couldn't understand the need for change but were playing along only because it was the chairman's wish (just like the 1972 movie - The God Father).
Laying off the foundation - The Vision & Core Values:
Our starting point was to articulate the company's vision & core values that were never put on paper before. It took us several meetings to collectively agree on the final vision that will direct the change efforts but when it came to the core values, we decided to engage the rest of the organization through a basic survey that was slightly similar to IBM's Sam Palmisano 2003 experiment* until we reached the final five core values.
To prove that the new values were more than window dressing, the deputy chairman called on the HR Director to add a new KPI to performance appraisals called "Demonstrating & living Juhayna's core values - the HOW" (with a 30% weight) which caught...
References: Nadler, D. and Tushman, M. 1989. Organizational frame bending: Principles for managing reorientation. Academy of Management Executive, 3(3): 194-204.
Bert Lance, May 1977. Nation 's Business magazine.
Leading change when business is good: An interview with IBM 's Sam Palmisano by Paul Hemp in Harvard Business Review, December 2004.
Bob Waterman, Tom Peters, and Julien Phillips, June 1980. Structure Is Not Organization article in Business Horizons.
Donald Sull, February 2009. How to survive in turbulent markets article in Harvard Business Review.
Kathleen M. Eisenharde & Shona L. Brown, March - April 1998. Time Pacing: Competing in markets that won 't stand still article in Harvard Business Review.
Tiziana Casciaro & Amy C. Edmondson, May 2007. Leading change at Simmons case in Harvard Business Review.
Michael Beer & Nitin Nohria, May 2000. Cracking the code of change article in Harvard Business Review.
Frank V. Cespedes & Sunro Yong, February 2013. Andrew Ryan at VC Brakes case in Harvard Business Review.
Please join StudyMode to read the full document