Change Management and Human Resources Strategy - Case Study Example

CHANGE MANAGEMENT AND HUMAN RESOURCES STRATEGY Table of Contents Introduction of Company 2 Introduction to HR and Change Management Problem 2 Research Methodology 3 Market conditions 3 Internal interviews 4 Best practice benchmarking 5 Academic Research 5 HR & Change Management Questions 6 Leading the program 6 Workforce Changes and how should they be carried out 7 Intellectual Property 7 Attracting Recruiting and Retaining Talent 8 Conclusion 9 References 11 CHANGE MANAGEMENT AND HUMAN RESOURCES STRATEGY Introduction of Company Founded in 1983 at the inception of networked communications with a simple vision - to do great things -Dimension Data is a specialist IT services and solutions provider that helps clients plan, build, support and manage their IT infrastructures. Today the company is positioned at the forefront of networking and communications in nearly 40 countries around the world providing more than 6000 clients with full lifecycle of IT services encompassing network integration, security, converged communications, data centers and storage, contact centre and Microsoft technologies. As a system integrator, the Dimension Data doesn't manufacture anything; they acquire hardware & software technologies from different vendors, then package them with services, and resell the bunch as so-called solutions. Introduction to HR and Change Management Problem Major changes occurred throughout the company's history from its inception. Founded 25 years ago in a South African garage by three young engineers, growing to a 4.5 USD billion organization, expanding worldwide through acquisitions, entering and exiting businesses, surviving the dot net collapse in the early 2000's and the combating the changes in the competitive landscape, facing changing market conditions and evolution of customer demand, portfolio migration from basic, one shot, hardware sales to performance based multi-country managed services deals - were some of the major changes that the organization has faced in the past. Bottom line, IP (intellectual property) management is key in this company because their intrinsic value is mostly people based, as they have no or little industrial assets. While recognizing the importance of IP as a factor of competitive differentiation (experience, proof points) and financial performance (repeatability, optimized learning curve), little has been done to establish and coordinate global and local HR strategies. Group HR develops very specific programs like the Leadership Forum (retention & development of key individuals) or DDU (on-line university) and leave country alone for day to day operations. As the market faces skills shortages, as the multi-national business is booming, and as the sales model moves from transaction to annuity, it is important to put in place streamlined HR policies and mechanisms that will support an expected organic growth rate of 15/20% per annum (2/3 time the market). Research Methodology There are many different research techniques that have been used by the company when recognizing and identifying the changes that are about to take place in the economy, the industry and within the company itself. The techniques that were chosen by the company differed based on the situation, the circumstances and most of all the information that needed to be gathered to make effective decision. Market conditions Market conditions are always bound to change and can never be expected to remain static even in the most stable economic conditions and therefore the company through the years has used many different techniques to keep and eye on the market. It was common knowledge to the senior management team that just looking at the external environment alone is insufficient and that the organization should look at both the micro and macro level environment as well as the internal environment of the company. Therefore the organization always carried out three different studies and used different frameworks to analyze the situation in the outside environment. In order to study the external environment or the macro environmental conditions the organization carried out a PESTLE analysis once a year. Through this analysis the organization has always been able to identify the obstacles and the opportunities that are posed by the Political, Economical, Social, Technological, Legal and Environmental changes that are taking place1. In order to study the micro environment and the changes taking place in the industry the organization carries out a competitor analysis twice a year as well as using Porter's Five forces framework to study the changes that are taking place and the challenges posed by the following five elements 1. Barriers to Entry 2. Barriers to Exit 3. Bargaining Power of Suppliers 4. Bargaining Power of Buyers 5. Competitors Finally the organization also carries out an analysis of the internal conditions and identifies its strengths and weaknesses and the opportunities that are available and the threats that need to be combated. This SWOT analysis is usually carried out by the organization on a quarterly basis. By doing so the organization feels that it can be very proactive, prepared and not be taken unawares should sudden changes take place in the market2. Internal interviews Employees of the organization have long been known to hold a wealth of knowledge that is hardly ever harnessed and used by the organization. Usually these employees take their knowledge with them to the competitors and the competitors benefit from information that could have been used by the organization so many years or months earlier and is not being used to the detriment of the organization3. In order to avoid such a catastrophe the organization always makes it a point to survey, interview and have frequent meetings with employees at different levels of the organization and working in different locations and different parts of the business in order to gather the information on the latest trends, the opportunities and threats that are looming as well as customer perception and expectations. In the past this method of information gathering has proved to be very useful and likewise is expected to continue to be so in the future as well. Best practice benchmarking Looking at the different strategies that have been adopted by the competition as well as other companies that may not be direct competitors like Microsoft, HP, Dell and even the Indian Software giants like Infosys, has been one of the key methods that the organization has been able to study the outside environment, look at the latest trends and then design and develop sufficient strategies to meet on coming challenging and also to the ensure the survival of the organization as well as the success and also to enable the organization to stay in the forefront of innovation and cutting edge technology as is necessary for a business of its magnitude4. Academic Research Gathering information from business, economy and other industry related magazines, journals and even management journals that are of a scholarly nature have all been the manner in which the organization has gathered information and data about the changes that are taking place in the market place5. In doing so the organization has been able to adopt itself as and when necessary to the changing needs of the market environment. Likewise the organization has also been able to anticipate looming threats and prepare its employees and even the strategies and the policies of the organization in a manner that would help it combat the threat and survive in the dynamic business world. HR & Change Management Questions The changes that are taking place today because of the global financial crisis, and the impending economic depression (even though it looks like the worst is over) is one of the biggest threats to the organization. Further when the economies do recover from the slump it is expected that there will be a surge of business and a boom period that will require huge numbers of human resources in the creative and technological fields. These are questions that need to be answered strategically. Therefore meeting the challenges ahead and even currently in these difficult times need very creative solutions, some of which have been used in the past and others that have to designed and developed in the coming days months6. Leading the program The changes that need to be adopted are many and will require the buy in of all employees irrespective of the business line, business unit and position in the organization structure. Therefore it is best that the leadership of the change management program brings together individuals from all the different areas and different levels of the business. It is the organization's objective and thought process that by bringing employees together from all the different segments of the organization, communicating the changes that need to be made and encouraging them to participate in the development of the strategy and to be change champions in their own areas of business - will help increase dedication to the changes that need to be made even though they maybe somewhat radical and difficult7. Further since all the employees participated in the change process, they are less likely to resist the changes that are made and even less likely to sabotage the changes or mistrust the management and its motives for implementing the difficult changes8. Workforce Changes and how should they be carried out The first thing that organizations attempt to do in difficult times is to cut down the staff because staffing costs are the highest proportionate costs in any organization9. However what most of the organizations fail to see is that employees are also the life-blood of the organization and without talented, dedicated and engaged employees an organization cannot remain profitable for very long10. Therefore the organization has always followed the strategy of reducing work hours, encouraging job sharing and flexible working during times of economic downturn. By doing so the organization is able to retain its core talent, ensure that the competition does not get them, while at the same time increasing employee engagement, loyalty and dedication and also increased productivity in difficult times, which can only result in putting the organization on a very strong footing both during the downturn and the upturn in the market. Intellectual Property The organization's intellectual property lies in the knowledge, skills and abilities that are held by its employees and therefore as stated before the organization has always strived to ensure that the employees are very happy and always well looked after. Due to the current changes that are taking place in the environment and throughout the organization, focus on the employees is of paramount importance and as a result the organization is doing the following to ensure that its most precious asset is happy content and will remain with it for a long time to come. 1. Open two-way communication that leaves no room for ambiguity or for any type of rumours. By communicating well before strategies are implemented the organization is able quell any fears of the employees as well as to increase trust in the management and reduce mistrust11. 2. Always encourage the participation of the employees in the development and design of new strategies that are essential to move forward - this ensures that the strategies and changes that need to be made are accepted and carried out without much or rather any resistance whatsoever. 3. Ensuring that every employee group and business unit has a change champion chosen from the ranks who will bring ideas from the different segment, help develop the strategy and will then take the ideas and strategies back to the segment for implementation - since one of their own representatives are seen as championing the change the changes will then be accepted more readily and most importantly they will be little or no resistance to the changes12. Attracting Recruiting and Retaining Talent Since the organization is undergoing a downturn at the present time with the economic crisis, it has been decided that there will be no additions made to the existing staff cadre, but that every effort will be made to ensure that the employees are retained and kept happy during these hard times. It is expected that such a strategy will only result in the organization being in a very strong position when the upturn starts to be at the cutting edge of technology and beat out the competition13. It is also thought that by doing everything possible to retain staff during difficult times will only result in the organization increasing goodwill amongst employees and this goodwill can be made use of the attract and recruit top talent from the competition when the labour market is very tight. Conclusion In conclusion it can be stated that the organization understands that the only factor that is constant is change because change is bound to happen. And the management of the organization understands that unless the entire organization anticipate the changes that are ahead of them, communicate the changes to the employees in a timely and accurate manner and likewise manage the entire change process in an appropriate manner then they would not have any problem to remain on the cutting edge of competition. Further looking at the manner in which the data is gathered to anticipate and understand the changes that will occur and the changes that will have to made in the future, we can see that the organization is not just making a half hearted effort at managing change but are rather doing everything in their power to ensure that optimal benefits of the change have been reaped. Likewise the organization has taken the advice of renowned management gurus and have invested their time and money in communication, in championing change, in ensuring that resistance is at a minimum by encouraging employee participation in the change management process and finally by ensuring that the change process is a "bottom up" process instead of a "top bottom" process. Further it can be stated that the organization is aware of the importance of its human resources, the knowledge that they hold and the competitive edge that they bring to the table and enable the organization to be profitable in the manner that it is. Therefore the organization has always gone out of its way to ensure that the reorganization in this difficult economic time will help engage and increase dedication and productivity of the employees now and in the future when the labour market is expected to tighten. Based on everything that has been stated throughout this case study it is evident that the organization is on the right track with regard to managing the change process, and protecting and investing in its most important asset its employees. References 1. Baden-Fuller, C., & Volberda, H. W. (1997). Strategic Renewal: How Large Complex Organizations Prepare for the Future. International Studies of Management & Organization, 27(2), 95+. 2. Li, L. C. (2005). Understanding Institutional Change: Fiscal Management in Local China. Journal of Contemporary Asia, 35(1), 87+. 3. Lewis, L. K., Schmisseur, A. M., Stephens, K. K., & Weir, K. E. (2006). Advice on Communicating during Organizational Change: The Content of Popular Press Books. The Journal of Business Communication, 43(2), 113+. 4. Olson, E. E., & Eoyang, G. H. (2001). Facilitating Organization Change: Lessons from Complexity Science. San Francisco: Jossey-Bass. 5. Page, B., & Theobald, R. (1989, September/October). Creativity in Turbulent Times: A Report from Robert Theobald's Workshops. The Futurist, 23, 25+. 6. Panel Discussion: Problem-Solving Mechanism to Achieve Consensus How Do We Ensure Successfull Resolution. (2008). Fordham Urban Law Journal, 35(1), 205+. 7. Poole, M. S. & Van De Ven, A. H. (Eds.). (2004). Handbook of Organizational Change and Innovation. New York: Oxford University Press. 8. Sauser, W. I., & Sauser, L. D. (2002). Changing the Way We Manage Change. SAM Advanced Management Journal, 67(4), 34+. 9. Sims, R. R. (Ed.). (2002). Changing the Way We Manage Change. Westport, CT: Quorum Books. 10. Stiglitz, J. E. (2002). Employment, Social Justice and Societal Well-Being. 9+. 11. Taplin, I. M and Winterton, J (2007) The importance of management style in labour retention, International Journal of Sociology and Social Policy, 27:1/2, 5-18 12. Weick, K. E., & Quinn, R. E. (1999). Organizational Change and Development. 361. Read More