Comparing Leadership during Change between Shell and Smart Products

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INTRODUCTION

As given in our third assignment we choose two different organizations which have recently changes its environment .I searched many organizations then selected two organizations. These organisations are

Shell - Shell is a large sized Company and it is managing IT transformation on a global scale. The CIO of Shell was Alan Matula, who undergone the challenge of the change management process of this company. He took a major change in the company and proved his leadership skills with innovative techniques.

Smart Products - Smart Products is a small business who is a leading manufacturer of spare parts of machines and vehicles. The head of Smart Products was Ravi Mehta and with his hard efforts and leadership, company got success in achieving new heights.

Explain briefly what kind of change has taken place in both the organizations, and discuss the reasons of the change, identifying whether it is a result of internal environmental factors or external environmental factors in both the organisations you selected.

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SMART PRODUCTS is a small spare part business that manufacture and sell spare parts of machines and vehicles for example three wheelers, two wheelers and other mechanical parts of machines in Ludhiana, India. It was established in 1993. Founder of this small scale company was Sri Bharat Patel. In the starting three years, SMART PRODUCTS was not making profit like its other units and also it was not successful in achieving its goals. As a result of the change management process by Ravi Mehta the head of SMART PRODUCTS, made an unbelievable change to the Company. Company achieved its financial goals of SMART PRODUCTS's earnings in his first three years phase. Company started to concentrate on growth & later on each employee put their full effort to retain that progress of the Company. There are internal factors which are reasons of the change of SMART PRODUCTS.

Increase in Productivity: Ravi Mehta improved the manufacturing unit to increase the productivity

Organisational structure change: Ravi Mehta made each unit responsible to improve its productivity.

Management changes: Ravi Mehta reduced the top management to 4 members, who just have to do adequate supplies for each units operation.

Change in policies: Ravi Mehta reduced staff members, also started to do performance review of each units every month.

There are also External factors which are reasons to the change of SMART PRODUCTS.

Customer: Ravi Mehta started to increase the customers for their product by creating needs in the customers mind for their products by highlighting the product quality.

Knowing level of Competition: Ravi Mehta gave a chance to the employees to understand how their competitors are performing & to implement some changes to their ways of performance.

SHELL is one of the world's largest organizations with 25 business portfolios and operations across more than 100 nations. It has under gone certain changes by its CEO Alan Matula. Shell had under gone IT transformation which reasoned to create a solid foundation. As from the article "IT is more important and intense than ever before and that requires an on-going effort to transform IT and improve its agility, to make the business more productive and competitive," Matula told McKinsey's Leon de Looff in a recent interview covering Shell's IT transformation, challenges, and the many lessons learned so far. It also reasoned to implement a standardise agenda in all nations. IT transformation also reasoned to reduce the total number of suppliers & enable them to collaboratively working to improve the overall delivery of Shell.

Below mentioned are the internal factors which affected the IT transformation of Shell.

Organizational structure change: IT transformation reasoned to implement a standardised agenda globally.

Change in Portfolio: They divided the business into portfolios to align IT directly to the business strategy.

They made portfolio transparent, showing the businesses the real cost and the complexity of what they had.

Productivity: IT transformation helped to speed up the business activities and thus improved productivity. It also helped very much in cost cutting.

Use your research and analytical ability and explain what was the role of the leader(s) in both organisations throughout the change. Also explain how various leaders applied their ideas and concepts in the process of change management.

Role of Leader during the change

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Ravi Mehta the head of SMART PRODUCTS had undergone a challenging role during the change management process. He did whole study about what is the present situation of the company, which all areas has to be improved, what should be the target & how to achieve that target and such things. In one word his role in SMART PRODUCTS was like a leader with his special skills. He motivated the employees, improved the manufacturing unit, sales marketing & purchasing areas. He always personally talked with his employees regarding the changes & also motivated them to bring suggestions. Within three years Period Company had achieved its financial goals and started making profits. Then he made the employees focussing on growth during its second three year period. In overall he made all the employees equally responsible to achieve the targets and made them understand the importance of team.

Ravi Mehta was a highly experienced person in the same industry, which has his own concepts and ideas in improving a firm. Below mentioned are his concepts & ideas which he applied during the change management process of SMART PRODUCTS.

Problem Solving: Ravi Mehta identified too much waste of resources in productivity sector. By improving the manufacturing unit he solved the problem with a vision of improved productivity.

Motivating Person: With a vision of stimulating the creativity of his staff he motivated them to be in some good positions in the business.

Communication: Ravi Mehta always wanted employees to have a personal talk with him regarding the change process with a vision of involving them also to bring up with suggestions.

Performance Reviews: Ravi Mehta did monthly performance reviews of the each unit with a vision to make them understand where they are now and where they had to be actually. It made him being updated with time and processes.

Perspective: The concept for leadership is perspective. He was a perspective leader and had clear idea about what was happening and what is going to happen next.

Role of Leader during the change

Alan Matula was the CEO of Shell during the IT transformation process. He did this to make the business compatible with other industries in the market. He defined it through four phases like back to basics, rationalisation & consolidation, investing in the future & harvest & sustain. As a CEO his main role was to ensure accountability for delivery of the benefit. He was monitoring the portfolio and examines where benefits are materialising and where they aren't. He stopped out sourcing for IT problems &found capable suppliers who can provide service across the world. He focused more on innovation in the marketplace and helps the industry. At the beginning of every year he appointed a technologist whose job was to look for those technology strikes that add the most business value. He always kept business at the centre & did all these transformations to the betterment of the business.

Innovation: He innovated that the current infrastructure is not good enough for shell to compete in the market &to improve the business. To make it compatible he started to bring innovate ideas. He did some very innovative things-in telematics, for example, using wireless technology to monitor auto fuel consumption and efficiency.

Self-confidence:- Confidence is the inner strength to overcome the difficult task. Keeping confidence in himself he brought the changes in organisation.

Performance reviews: Matula focussed on performance reviews every quarterly to examine where benefits are materialising and where they aren't, with a concept of making necessary changes accordingly.

Recruitment: He recruited talented people for the business inter phase with an aim to reduce unwanted man power

Implementing change: He always kept business at the centre & with a vision to improve business and implement changes like IT transformation.

Compare and evaluate the application of leadership in change management in both the organizations and discuss the similarities and differences in both organisations?

In First case study Shell, things depend on leader with a higher level of thinking. Both the organization had good leaders who can convince their employees and lead their business with hard efforts and unique leadership styles. SM was a small scale business, whereas shell is one of the world's largest & most complex organisations. In SM, Ravi Mehta held the command to the Change management process, where as in Shell the CEO of the company Alan Matula done the transformation. In SM, Ravi Mehta conducted a store visit and under stood that SMART PRODUCTS is not making much profit & he implemented a change management process to make the Company doubled its profit. Where as in Shell Matula realised that with the basic infra-structure Shell can't compete & survive in the market. In order to make it competent in the market & to excel in the business they did IT transformation in the company.

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In SM, Ravi Mehta did the change management process as three phases. He applied his leader ship skills in almost all areas like manufacturing units, sales, marketing & purchasing areas. He also tackled the employees efficiently and made them equally responsible for the constant growth of the firm. He always did performance appraisals to the leaders of each unit, ask them to self-evaluate & understand where they are at the moment & actually where they should be and make necessary changes. He clearly knows that once the Company reach the growth stage only the team work of employees can retain that growth & so he motivated his employees to work in a team to maintain the growth of company.

In Shell IT transformation was done as a four phase. Alan Matula divided the business into portfolios around key sectors such as upstream, downstream & corporate functions. He made the application portfolio transparent, showing the business the real cost & complexity of what they had. He always kept business at the centre & doing all the changes to improve the business only. He made a standardised agenda for shell globally. Alan Matula did the IT transformation to reduce the cost & improved the system efficiency. He gave some big challenges to the suppliers that gave rise to some innovative approaches like they started to work collaborate to improve the overall delivery to shell.

Similarities

In SMART PRODUCTS, Ravi Mehta motivated the employees & advised them to work as a team; in the same way Matula motivated the suppliers to work collaboratively to improve the overall progress of Shell.

SMART PRODUCTS & Shell had under gone change management process as different phases to enhance the progress of the company.

The leaders of both SMART PRODUCTS & Shell did performance reviews to understand where they are now and where they should be actually.

Both leaders changed the organisational structure for achieving the business goals.

Differences:

SMART PRODUCTS was a comparatively small scale business where as Shell was a worldwide complex organisation.

In SMART PRODUCTS Ravi Mehta concentrated in making the Company profitable whereas Matula had improved the shell technologically to a great extent

In Shell one new technology was implemented whereas in SMART PRODUCTS changes were made to different approaches.

In SMART PRODUCTS both internal & external factors had reasoned for the change, where as in Shell certain internal factors had reasoned for the change.