Adapting to change continuously is something that's very essential for an organization to survive and prosper into today's business environment.The focus of customer value is changing focus from product innovation to business innovation .
Companies today need to evolve with customer needs, especially companies in the technology sector where innovation is fast paced and obsolescence is always around the corner .However trying to implement changes without adapting its strategy ,structure and processes to the change being implemented would almost surely lead to failure because a successful change needs to be a synergy of all the components /processes within the company.
There are many companies which failed to capitalise on their success and lost out to their competitors over time because they were unable to successfully adapt themselves to the change . some of the examples of such stories are Canon , Nintendo and now Nokia ( Nintendo however managed to recover from the setback and that is something Nokia is looking to learn from/replicate) .
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Nintendo was the leader in gaming consoles till the years leading to 2000s but then Sony with it Playstation 2 took over the game and was the leader in gaming console but amongst the current generation of gaming consoles Nintendo has managed to recapture its position as the market leader with its offering the Nintendo 'Wii'.
Same was the case with Xerox , who was the leader in photocopier machines however it failed to evolve with the market and eventually lost out to Canon and Kodak and never manage to recapture its initial position of the market leader.
The lesson to learn from the above cases is that being the market leader doesn't necessary guarantee you security from the environment , there is still a dire need to evolve with the market . infact the company at the front has to LEAD from the front .
Changes - the Source of Opportunities
Innovation is the weapon of choice for entrepreneurs. Doing things in a different improved way or trying to do old things different is how organizations leverage changes as a business opportunity.
Innovation need to be approached systematically , with a watchful eye for changes and by looking for the opportunities that the company can capitalise on .
In todays market innovation is the key driver towards success if the current success stories are anything to go by ranging from the iPhone to the Nintendo Wii.Companies look to knock out the competition by leading from the front .
There are 2 trends that are successful and are popularly known as 'leap frog' and second one is known as 'disruptive technology'.
The leapfrog strategy basically implies that you leap over the competition ,it might be developing new technologies or using a new business model to completely bypass the competition.The idea is as the name suggest to jump over the competition so that the competition .
Disruptive technology is an innovation that disturbs the market forces. It basically refers to do innovations which improves on a product or service in a way not expected by the market , it typically could be by lowering the price or even offering a lower quality product which caters to a different customer segment such as in the case of Ryanair .
Models of change management :
There are a few models proposed for effective change management ,I will discuss a couple of them so that they can be leveraged to study the given case in a more analytical manner ,namely Kotter's 8 step model and ADKAR model.
Kotters 8 step model has the following steps:
1)a sense of urgency : for a change to occur there has to be a sense of urgency around the need for change .this help motivate other people so that you have more support you and help you build a sense of urgency .
2)form a powerful coalition: You have to make sure that the people around you believe in the change being necessary . This requires convincing key people in the organisation so you can garner their support and approval which helps you build momentum . For that you will need to find the non traditional /radical leaders ,people who are willing to adapt change and approach with an open mind . Once the coalition is formed , sense of urgency has to be continued and built upon .
Always on Time
Marked to Standard
3) create a vision for change : There would be many ideas/concepts for the change but the idea here is to link all of them so as to have a coherent vision for change providing a more holistic view of the change to occur and also a better understanding . This will the people around you understand your ideas better as well as help them help you better by having a better sense of your objectives.
4) communicate the vision : The vision needs to be communicated in a clear ,succinct manner on a frequent basis so it can compete with the other messages being broadcasted daily and stands out .
5)Take care of the obstacles : After all the above steps , it is highly likely that you will come across some obstacles maybe on an operational level or at a support level where you will have people questioning your ideas or resisting change , afterall its innate to every human to resist change as pointed out the only person who probably likes change is a wet baby.
6) create short term victories : the short terms victories as in positive feedback from the initial steps of change will help convince both the company and the support about the positive effects of the change being brought about . It will reaffirm the faith of your supporters as well as silence the critics .
7) build on your success: often many changes fail because victory is declared too early . Build on your initial success to keep up the momentum and see it through till the end . You should continuously be looking to make improvements.
8)ingrain the changes into the corporate culture : the changes need to be ingrained into the culture of the company to keep up the success else it will fail as soon as the processes and culture returns to its original state. So the change has to be maintained inorder to ensure long term success.
The ADKAR model
[Source: http://www.change-management.com/Tutorial-ADKAR-series-1.htm ]
The ADKAR model
What is 'change' ?
Change as per Webster's dictionary is described as :
To make something different in some particular way
To replace with another
To give a different direction , position etc
And so on
[Source : http://www.merriam-webster.com/ ]
So what is change management ?
Change management can be defined in many different way but some of the best ones as per the KISS ( Keeping it short and simple ) are mentioned below :
'The systematic approach and application of knowledge, tools and resources to deal with change. Change management means defining and adopting corporate strategies, structures, procedures and technologies to deal with changes in external conditions and the business environment.'
-SHRM Glossary of Human Resources Terms, www.shrm.org.
Change management can be divided into three phases :
Adapting to change
Controlling the change /trying to manage it
Effecting the change
Successfully adapting to change is as crucial to the business world as it to the natural world , however in business the change is much more rapid and the pace at which an organization needs to adapt has to be much quicker than in the business world since the pace of change is also much quicker and the magnitude of change more extreme, so the change has to be well planned and well thought out to ensure maximum efficacy.
'Leading from the front '
Leading from the front is a commonly used term in business jargon ,but if you stop and think about its exact meaning it can be interpreted in 2 ways:
that you as a leader expect everyone else to follow the exact same route
That you do whatever you've been asked to do ,exactly as per instructions
Now these 2 interpretations may not seem that different at first but on deeper inspection it has to be realised that a person /organisation may only have 'x' capacity or 'y' resources and that these are the limitations of the organization.
no matter how many years or how many tournaments of golf you may have played in your life , its still next to impossible to be as good as Tiger Woods at golf because there are just some inherent resources which are at Tiger Woods disposal that you may not have such as a natural deep swing etc .
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so the second interpretation in most scenarios is the most feasible one on account of the fact that it takes into account the limitation factor. I will later extend on this argument to explain Nokia's position in the current market .
Leading from the front driven change
Leading from the front driven change would imply going ahead and being a source of change . Instead of following a leader , you try and be the leader of that particular change .Its best explained with an example, like in case of Apple when they came up with the iPhone they went ahead and made the key differentiator to the be the user experience , they didn't go over board in the hardware war against Nokia instead they created a niche for themselves with the user experience . The key to the iPhone was the sheer simplicity and joy of using one , infact in terms of hardware Nokia was way ahead ,Nokia offered a camera of resolution of the magnitude of 5 megapixels with a xenon flash ( N82 announce 2007) as compared to a measly 2 mega pixel with no flash offered by the Apple iPhone first generation . There were a lot of similar points of comparison where in terms hardware Nokia was way ahead of the offering made by the Apple iPhone ( first generation ) and yet the Apple iPhone did really well despite being the company's first offering in the mobile phone market .( Apple sold 2,70,000 iPhones in first quarter and till Q1 2010 had sold over 42 million handsets put together)[Source : http://gorumors.com/crunchies/quarterly-breakup-of-iphone-sales/ ]
What Apple did right was they didn't try and race ahead in the handset war against Nokia instead they formed a new class and started a new race where they were the leaders and now Nokia has to play catch up .
Another example of such a story can be found in the gaming console wars between the 3 biggies of the industries : Nintendo , Microsoft and Sony.
Nintendo , Sony and Microsoft each had their gaming console and while Microsoft and Sony were busy with their hardware wars for their Xbox and Playstation console in system in the mid 2005-2008 trying to outdo the other in terms of sheer processing power ,Nintendo decided to change game by concentrating on the gaming experience rather than the hardware specifications of the machine . What this resulted in was 'leading from the front' driven change scenario .
Nintendo lead from the front and while Microsoft and Sony were busy in their hardware specification war (which eventually escalated the prices of the consoles further up : eventually close to double the price of a Nintendo Wii ) came out with a gaming console which was so different (with the Wii stick ) that it actually has outsold both Xbox and Sony Playstation in the current generation of gaming consoles in terms of sales .
As mentioned in the case this success story is something Nokia can learn from since Nintendo has been through a similar change of fortunes over the years, initially it was the leader, then it lost out to the play station and Xbox and then it recapitalised it position as the market leader in the current gaming console generation similar to what Nokia is planning on replicating through it new CEO.