Change Management at Virgin Group - Essay Example

Change Management at Virgin Group Introduction Virgin Atlantic is a British airline owner by the VirginGroup and Singapore Airlines. The company flies over six million passengers annually to over 30 destinations around the world. To operate a cost effective airline business, in the highly competitive airline market, Virgin Atlantic requires an extremely efficient IT infrastructure to link its data centres, airport operations and globally distributed contact centers. Virgin Atlantic plans to deploy an integrated information system that will raise end-user satisfaction, reduce service disruption, increase application performance and enhance the visibility of infrastructure problems. Management strategies suggested by Koter, Satir and Kubler-Ross Kotter’s model The first stage involves creating a sense of urgency and advocating for change through strong leadership. Kotter advises organizations to hire new leaders or designate change champions who act as the driving force of change (Kotter, 1996, P. 125). The second stage is the engagement of senior managers in the implementation of change. Senior managers form a guiding coalition which is committed to excellence through renewal. This coalition exists outside normal hierarchy and is guided through efforts and the commitment of the top management. The next stage is the creation of a vision by the guiding coalition. The vision is a guiding strategy that clarifies the direction which the organisation intends to take. The ideal vision is brief and concise (Kotter, 1996, P. 125). The fourth step is communicating the vision through newsletters and speeches. If downsizing is part of the vision, new growth possibilities and commitment to fair treatment of those who are laid off is critical. Executives should constantly use the existing communication channels to broadcast the vision. The next stage involves removing of obstacles to change such obstacles include constraints in the compensation or performance appraisal systems and a rigid organizational structure. It is important for the appraisal and reward system to be consistent with the vision (Kotter, 1996, P. 125; (Wilson, 1999, P. 57)). The transformation process should accommodate short-term wins. As such, the process should set short-term goals to be met and celebrated. Managers should actively design ways to obtain performance improvements and to achieve objectives with the people involved being rewarded and celebrated. Victory is not attained until the changes are embedded in the organisation culture. Rather than declaring victory managers should use the milestones achieved by short-term gains to tackle bigger challenges (Kotter, 1996, P. 125). Finally, the changes should be anchored in the corporation’s culture. This is achieved by explaining the transformation and its effects on performance through the company’s communication channels. The next generation of top management should personify the new approach to ensure continuity (Kotter, 1996, P. 125; (Wilson, 1999, P. 57)). Satir’s change model Satir’s change model asserts that there are four stages of transformation. The late status qou is the familiar stage where a worker is comfortable, stuck, bored or frustrated with the system, and is characterized by familiarity. It is in this state that a new awareness is revealed usually from outside the individual’s world. This new awareness is called the foreign element and upsets all expectations and assumptions (Brothers, 1991, P.123). The new awareness precedes a state of chaos which is characterized by unpredictable events, and a drop in performance. The stress, urgency, and disorientation induce creativity. In the creativity phase, a transforming idea is born in an attempt to make sense of the foreign element. This transforming idea paves a way out of the chaos (Brothers, 1991, P.123). In the practice and integration stage the individual tries out the new ideas while practice improves skill leading to improved performance. The individual eventually reaches the new status quo stage where performance begins to level off as he/she masters the new skills. The individual excels and his/her interest reduces with learning taking the initial assumption and expectation process. Essentially, the new status quo reverts back to late status quo (Brothers, 1991, P.123). The late status quo is not suitable for making radical changes as the stress of chaos might cause a burnout. The Satir model helps managers know what stage of change the organisation is in and; therefore, they can choose the most effective strategies to manage the different stages (Brothers, 1991, P.123). Kubler-ross model This model is used to help people understand their reactions to change or upheaval. The first stage is shock and denial; shock is short-lived and leads to temporary loss of productivity. The shock is attributed to lack of knowledge and fear. After shock individuals experience denial with a focus on the past. At this point, people try to deny the existence of changes and look for excuses for not participating in it (Kübler-Ross, 1973, p.274). The second stage is anger and depression. Anger is directed at a perceived scapegoat. Anger soon wears off as the realization of the change dawns on the individual. This realization can lead to depression as the impact of the change is felt. Performance is lowest at this stage (Kübler-Ross, 1973, p.274). The next stage is acceptance and integration where a more enthusiastic and optimistic mood begins to emerge. There is excitement with new opportunities, relief that change has been survived and impatience for change to be complete. The final stage is integration where the focus is on the future, and real progress is made. The change curve is a useful tool for managers because knowledge of where a particular individual is on the curve helps determine the level of support such an individual needs (Kübler-Ross, 1973, p.274). Pitfalls of IT adoption The costs associated with new IT applications tend to be high and unpredictable while the benefits are hard to determine in advance. There are problems which are inherent to IT systems and which many organisations have had to contend with. Such problems include temporary or extended loss of service, data loss or theft and delays occasioned by unnecessarily complex system interfaces and limitations. This is in addition to, inaccurate information about customers from redundant or bugged systems (Luecke, 2003, P.87). For instance, Comair, a subsidiary of Delta Air Lines experienced a runaway IT risk incident in 2004 when the company’s crew-scheduling system failed. In this case, Comair had purchased a crew scheduling system from an external vendor, and which was capable of only handling 32 thousand changes a month. It can be argued that the company’s management failed in mitigating the system breakdown as it lacked a sound back up system. Therefore, the management lacked the skills required to manage the consequences of IT risk (Luecke, 2003, P.87; (Abrahamson, 2004, P. 86)). In yet another scenario, Tectronix learned that the key financial and manufacturing processes of three business units were riddled with undocumented links between critical systems. Disentangling the system required major restructuring of the whole IT system. The problem had built up over time, and at some point the management realised that changes took longer to implement, and it was extremely hard to get an integrated view of the company’s customers, products and orders. As the two examples illustrate due to the magnitude of IT break downs, sometimes companies can experience public disclosure like was the case with Comair. Such disclosures amplify the consequences of IT risk sometimes exceeding the initial economic loss (Luecke, 2003, P.87; (Abrahamson, 2004, P. 86)). Recommendations It is critical for senior management of Virgin Atlantic to actively participate in the implementation of the IT system at all stages. The implementation and the essential organisational change should be gradual in order to achieve the desired outcomes. The Participatory strategy of organisation change complemented by expert strategy is best suited for this project. The organisation culture and reward system should be aligned with the new changes so as to increase employee acceptance and motivation to adjust to the new system. Employee training especially for end users has been emphasised by experts as critical to the success of IT projects. Finally, Virgin Atlantic should guard against system break downs by putting in place back-up systems. Bibliography: Wilson, D. (1999). A strategy of change: concepts and controversies in the management of change. London: Thomson Learning, Abrahamson, E., (2004). Change without pain: how managers can overcome initiative overload, organizational chaos, and employee burnout. Boston: Harvard Business School Press Kotter, J. (1996). Leading change. Boston: Harvard Business School Press. Kübler-Ross, E. (1973). On Death And Dying. New York: Routledge Brothers, B. (1991). Virginia Satir: Foundational Ideas. New York: Routledge Read More