Dynamic of change
marlon0510
WK4CaseStudyGroupbedited.docx1
7
Group Case Study Project
Group D
Walden University
Prof. Sandra White
BUSI-3003
December 23, 2020
Change Management
Oticon was a family-owned operation that imported hearing aids to Europe. In 1956, new management moved the company into mass production and became the organization became a leader in miniaturization. Around 1979, Oticon ran into trouble when the company lost competitive power. In 1988, Oticon decided to bring in new management to overcome this crisis. Lars Kolind’s method for bringing about change at Oticon followed closely with Nadler’s integrated change agenda. The integrated change agenda is referred to as an umbrella type agenda because it covers all elements of the change effort: values, governance, operating environment, talent, operational performance, organization, strategy, and purpose (Nadler, 1998).
Analyze the change effort using Nadler's integrated change agenda - values, governance, operating environment, operational performance, organization, strategy, and purpose.
In order to internally compete, grow and ultimately survive against their competition Oticon A/S needed to look within as an organization and find meaningful change, this led to the forward-thinking business strategies with their new CEO Lars Kolind. A business vision known as integrated change agenda collectively brings an organization’s key philosophical attributes together to move in a forward direction. According to Nadler (1998), a business’s structure, strategies and systems from its values and internal processes to its talent, skills and performances are all umbrellaed and enforced to be the ingrained in the company culture. (pp. 138, 139). CEO Lars Kolind had a forward thinking in the late 1980’s and early 1990’s to shake up the organization by blending resources talent across multiple disciplines to streamline productions this empowered everyone and forced the team to be accountable for their actions.
According to Nadler, communication of the organization’s values is the most important step to change. While some elements such as strategy may change as needed, the values for which a company stands remains the same and guides the decision-making process (Nadler, 1998). Kolind released a statement of values for Oticon which clearly identified the organization’s nine core values:
1. All human beings like to take responsibility if they are given responsibility.
2. The people we are willing to trust will return that trust.
3. People innately wish to develop and make progress. People, then, prefer to be challenged and, while they may be afraid to change, don’t like things to be always the same.
4. People want a clear understanding of the structure and overall objectives of their work environment, but also like the freedom to fulfill these objectives. People like to have influence over their daily work situation.
5. People wish to be paid according to their performance and their results in a way that is fair and justified.
6. People prefer to be partners in their companies, in both good and bad times.
7. Job security is best achieved through developing individual competence, so that competitors will compete for your services.
8. Every person should be treated as an individual and assisted in his career development.
9. People are interested in knowing how their work relates to the strategy and goals of the company and wish to fully understand the company’s general situation and development.
By developing these values and communicating them to the employees of the company, Kolind set the guideposts for which all decisions would be based moving forward.
Kolind made drastic changes to the operating environment within Oticon. To promote efficiency and conversation, Kolind removed the paper communication process and replaced it with a computer information system. With the new computer system, any employee could work from anywhere. Another environmental change that Kolind initiated was to remove all the walls or partitions within the company. By doing so, Kolind encouraged employees to work together as one big team.
To achieve the goal of a 30 percent increase of in profitability in three years, Kolind had to rethink operational performance. Each employee was asked to examine their own job and focus on what they did well. Employees that excelled in one area of the process was less efficient if time was spent doing something else. Every employee was asked to eliminate activities that did not add value to the process. Employees were also required to learn a new activity that that would keep them productive when one area of the process had slowed down. This enabled each employee to maximize their individual contributions to the organizational mission and goals.
The re-organization of Oticon removed most of the middle managers and project teams became the basic organization frame of the company. Top managers decided on projects to start and appointing project leaders. Project leaders had the responsibility for managing the resources, outcomes, budget, and schedules of the projects they lead. Titles and job descriptions within the company were abandoned. The organization only acknowledged three managerial roles: project managers (responsible for overseeing individual projects), senior specialists (provided professional expertise), and coaches (mentors and other human resource related roles). All employees were eligible to become a project manager and all employees were encouraged to submit project proposals (Larson, 2002).
Originally the strategy for Oticon was “to be the biggest, the best, to do everything for everybody.” This strategy was no longer working. Lars Kolind’s new strategy was to run not just faster but better. Kolind believed that with the increase in competition, having the best product was not enough. Oticon’s new strategy was to create an increase in profitability by 30 percent over three years. Titled Project 330, the proposal was to move from a purely manufacturing company to a first-class service company with products developed and fitted for individual customers. This was to be accomplished by all departments: sales, marketing, service, production, and administration, working together in unison (Sull, 2003).
The purpose for the changes at Oticon was transforming the business’ market focus to giving greater attention to end-user satisfaction and partnering with dispensers. The goal was to develop and maintain activities that created customer satisfaction.
Lars Kolind’s new strategy was to create a faster and better company. He was not satisfied with his first strategy, so he created a new and better strategy. He needs his costs to go down by 30% to be in competition and this had to be done in 3 years. He asked his employees to cut back and eliminate non-value-added activities. Lars took away paper since he felt that it slowed him down. His next barrier that he took down were walls. He felt that his employees needed to work better together and communicate effectively to reach their goals. His main purpose was to create customer satisfaction.
The CEO received some opposition and negative feedback to his memo. Utilizing Nadler’s change agenda—values, governance, operating environment, operational performance, organization, strategy—an analysis of Lars Kolind’s change effort will be made, along with a recommendation on how Lars should proceed with the given resistance. Lars Kolind came in and fixed the money problems for Oticon by lowering their overhead cost and deleting items that was killing their shelf live. 10 up to 15% of the employees lost their jobs. It was time for a change within the company so he gave the employees charge, Mr. Kolind believed that the best strategy would be to create a work environment that gave the employees power therefore he believed he would achieve his goals.
Include any other important components you believe should be part of a complete case analysis.
Additional significant components that are part of a complete case analysis for change management is diving deeper in the purpose principle where leadership engages to truly listen and communicate with everyone in an organization in all phases of change. Upfront and constant clarity, whether it benefits the worker or the organization, is needed to remove any assumptions of false information that could be detrimental to the definitive goals of change. At times perception can sway in one direction unbeknownst the another one or group’s insight; proper direction and expectations from the leadership team needs to be clear to remove any potential undermining circumstances. Groth (2003), stated that managers started to resist and then outright revolt against a CEO’s forward-thinking change management vision, where in turn the CEO had thought that he did everything to be transparent with his team. (p. 280).
1979, Oticon faced a financial crisis, 1986 they lost 4 million dollars, 1987 the lost was 44 million. The foundation Board made the choice to get a new management team. Lars Kolind was not the first choice for CEO because he had no previous experience his experience was producing scientific instruments. Mr. Kolind’s aim was to develop and maintain customer satisfaction. He promoted younger managers who had been working in middle management, their responsibility was to make sure the company survive the transition. it was clear that Kolind’s vision was the right choice for Oticon. In today workplaces, employees take ownership and will make their own decisions. When it comes to productivity and performance Mr. Kolind’s expectations were relayed to management, and it was up to them to make sure the task was completed in a timely and productive manner.
Make a team recommendation on how Lars Kolind should proceed, given the resistance he is facing.
Given the resistance that Kolind is facing, my advice would be to continue in the same manner of leadership as he has thus far. When he first initiated the change process, Kolind gave the power to the employees to decide whether they wanted to try the change. Throughout the transformation, Kolind had given power to the employees by including them in the decision-making process. I believe that Oticon can continue to overcome resistance by continuing to involve the employees and allowing them to decide for themselves whether they want to continue with the vision (LaBarre, 1994).
Lars had a strange method of in getting companies back into a good financial standing. From what I can tell he has method to his madness, and it works. He should continue to use it. Nobody likes to change, but these companies must change in order to operate back in the black.
It seems that his profession is to rebuild companies that are facing financial crisis. His way may seem unorthodox to people, but it seems to work for the company. His specialty is getting companies out the red and back into the black numbers. I think he should continue to proceed in the manner that he thinks is best. He has a proven track record to show that his method works and gets results. Change is uncomfortable for a lot of companies, but success is the main goal of all companies. Those that are resisting may have to compromise, if things are not working the way they are going right now then changes are necessary. The ones that are resisting can be offered the option to compromise or resign.
CEO’s and Executive teams have the task of trying to create a vision of change. Identifying certain areas in the organization that change is most needed; change can be in several forms and ways. The integrated change agenda is an umbrella that comes in all the elements of the change effort. They may include the organization's purpose, strategy, values, operating environment, talent and skills. The CEO that takes over the company includes his agenda and how he plans on incorporating the changes that he thinks is best for the company.
References
Groth, T. (2003). Revolution at Oticon A/S (A): Vision for a change-competent organization. In T. D. Jick & M. A. Peiperl (Eds.), Managing change: Cases and concepts (2nd ed., p. 280). Boston: Irwin/McGraw Hill. ISBN 0-25-626458-9.
LaBarre, P. (1994). The dis-organization of Oticon. Industry Week/IW, 243(14), 22.
Larsen, H. H. (2002). Oticon: Unorthodox Project-Based Management and Careers in a “Spaghetti Organization.” Human Resource Planning, 25(4), 30–37.
Nadler, David A. (1998). Champions of change: How CEO’s and their companies are mastering the skills of radical change. (pp. 138, 139). San Francisco: Jossey-Bass. ISBN 0-7879-0947-5.
Sull, D. N. (2003). Think the unthinkable: The Oticon story. Retrieved from How to Rescue a Dying Company - Stuck in Gear: Why Managers Don't Act - HBS Working Knowledge - Harvard Business School
