Employees and the human capital are becoming more and more important form of intangible asset in current times, which need to be invested in and managed effectively. It is the company's culture and the values it instills in its employees that actually become a competitive advantage in this age (Henry, 2007). Hence, Virgin Trains has developed its vision statement around the needs of the current times and its own goals and objectives, thus providing a clear path for the development of the company's culture.
Relationship between vision and culture of Virgin Trains:
The vision statement of Virgin Trains forms an integral part of the organization and its culture. It serves as both a constitution for the company's culture and policies, and also a set of goals that have to be achieved by means of such a culture.
The vision statement encompasses clear expectations and foundations for the company's culture. By asserting that the organization shall have a climate of openness and honesty, and that it shall respect different views, it has expressed exactly what kind of behavior shall be administered by the organization, its managers and employees. A culture so described can only be one where managers respect the views of their subordinates and where bureaucracy is at its minimum (Sinclair-Hunt and Simms, 2005). To ensure openness, the first thing such a culture has to exude is trust, and trust can only be given through empowerment of employees. Thus, from the vision statement, the organization drives out its core company culture: one without hierarchies, where team-work and inclusion is encouraged, and decision making is delegated to employees so that they can be a wholesome part of the organization (Sengupta, Bhattacharya and Sengupta, 2006). This is evident in Virgin's workplace where employees are encouraged to contribute ideas, give feedbacks and take an active part in improving the organization's function.
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It is through its vision statement that Virgin is able to determine the core values of its employees, which then reflect in the behavior and personalities. For example, a climate of openness and honesty reflects in the company's culture by changing the core values of the employees. An employee at Virgin becomes more open to the customer's problems by being a good listener, which subsequently helps the organization to learn more about its customers and the customer to be able to get his or her problem across. This results in a win-win situation for both the employee and the company. More importantly, it helps Virgin Trains fulfill the other part of its vision, which states "To become the most safe, consistent, reliable and profitable of the train operating franchises". Hence, the organization's vision statement is not only serving as a tool to determine culture, it is also being driven by the organization itself. By changing the values and behaviors of its employees, Virgin Trains is becoming more successful, and pursuant of the vision to become a safe, consistent and reliable train opening franchise.
It is empowering its employees to innovate, to reach performance standards and to bring about ways to increase profitability. One important point to consider is that Virgin could have achieved any or all of these goals in any other form of the cultural environment. However, it is necessary to see the organization's culture and values as an integral part of the organization itself.
Impact of organizational culture on change management:
Managing change within an organization is a crucial task, which requires a proper strategy and execution. Without a clear plan, change executed in an organization can result in negative result, no matter how good intentions of change might be (Hill and Gareth, 2009). Change can repel, or scare off employees, managers, and shareholders, and in some cases even customers of the company. This is because all those who have a stake in the organization are faced with a clear degree of uncertainty and fear whenever change is implemented. Employees can become repulsive to the new policies, which may not benefit them. There is a chance of relocation, new job needs and even simply lay-offs. Shareholders are afraid that the changed strategy may not result in positive effects for the company's future, and customers may be afraid to make long-term contracts in the wake of new risks about the company. Hence, change in the organization has to be implemented carefully and strategically keeping in view the best interests of all stakeholders.
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According to Franken et al (2007), this is becoming even more important as in present times, organizations are met with the need to change very frequently facing extreme competition and demands from their external environment. Also, organizations are becoming more complex and widely dispersed, which means that greater inclusion and management of change has to be undertaken. Management is often faced with the challenge of meeting performance standards, while at the same time allowing for the implementation and successful coordination of change. Hence, change management has to involve effective communication strategies which develop trust in all the company's stakeholders.
In the light of the above problems, change management can become easier if the company has the right kind of culture, one which has a tendency to support and nourish change. Culture is a composition of a company's shared beliefs and values as reflected in the company's behavior, strategy and philosophy, and in how employees achieve the company's mission and goals (Hill and Jones, 2001). This definition clearly takes into account the importance of employees with respect to culture. An inclusive culture ensures that employees trust the organization, and are inspired by the core values of the company. A company where employees are empowered and included in the key decisions of the company finds it easier to implement change. This is because a key element in managing change is to take employees into trust, by providing them as much information and making them part of the change. Employees have to be communicated exactly how the change will affect them, why it is beneficial for the organization, and how their ideas are a useful input in the whole change process (Sengupta, Bhattacharya and Sengupta, 2006).
An inclusive culture, such as the one Virgin Trains has, allowed for such communication with the employees. In an atmosphere of openness and trust, employees feel less reluctant to adopt change as they are more or less, the people behind that change, the ones whose ideas are resulting in the new directions for the company. For example, if an employee provides an idea for change in reward systems, and it is implemented, the organization as a whole will be open to change because it comes from an employee, and also because the adoption of the idea shows the organization's trust in the company. On the contrary, a place where the top management implements change in the reward systems without informing the employees its costs and benefits, and the reason behind, will take up repulsive behavior from employees due to lack of trust building.
Moreover, culture also determines the level of innovation and the behavior of the company's employees. A culture which is adapted to continuous change, for improvement of quality and a drive towards its goals is better aligned to managing change (Franken, et al., 2009). An inclusive culture is also better in this regard, because it seeks out the best of people, expecting them to achieve more. When change is implemented, employees are naturally reluctant because they are unsure of their abilities with respect to the new environment and tasks. In inclusive, empowering cultures, however, employees are more positive than negative, because change encourages them to find something new. People in empowered environments are more ready to try new things because it encourages trial-and-error and tendency to make mistakes. A culture of continuous change thus removes the alienation related to change that employees feel, and makes it an essential and integral part of every-day workplace environment.
Organization structure and change process:
Virgin Trains' organization structure is a reflection of its organizational culture. Instead of a regular hierarchy where top management has the highest say in decision making, it has turned the pyramid upside down, beginning with its customers and front-line employees. This allows for a truly inclusive empowered culture, one where people who are the biggest source of interaction with customers, and thus the greatest source for information, research and ideas are actually the ones given prior importance. This upside down hierarchy of the company has resulted in great benefits for the company, especially in the context of the complex nature of the industry. The trains' industry companies operate in vastly stretched locations, with a great number of dispersed customers. Unlike a retail company or a B2B organization, where companies can develop extensive databases regarding the purchase buying behavior and reactions of their customers, train companies cannot have such ready information about their customers. Thus, faced with such difficulties, Virgin Trains has mobilized its front-line employees to become the active source of this information.
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Employees are encouraged to understand and know the needs of the customers i.e. passengers, their problems and their reactions to different aspects of the service. These employees then become part of regional 'priority meetings' where they share their experiences, opinions, and ideas regarding improvement and change. The entire process of change is thus enabled by the degree of empowerment that is given out to these employees. This is an effective way of implementing change as it wholly transforms the organization structure. Without such a transformation in structure, perhaps the implementation of change would not even have been possible because had the traditional level of hierarchy remained, there would be no way the company could enjoy the openness of its employees and the new ideas, fresh insights and honest opinions they had to bring in. The traditional organization structure, would in fact have been at odds with the entire vision of the company, hence, change in organization structure has been a big step towards implementing overall change.
Strategies adopted by Virgin Trains for managing change process:
Virgin Trains has been extremely successful in implementing change in the overall organization. To achieve this, it has implemented several strategies that involve greater inclusion and better management of its organizational resources. The steps taken by Virgin are discussed below:
Mobilizing and empowering employees: To generate an atmosphere of openness and trust, Virgin Trains has empowered its front-line employees making them the key source of change and decision-making. In this manner, the company inculcated its human resource, by getting them to work to their fullest potential.
Customer orientation: A huge aspect of Virgin Trains' strategy is to trust and follow its customers, to know them well and to encourage feedback. Taking into account customer insights has itself been a valuable driver of change, whilst also helping the company to develop a clear strategy to fulfill its vision of becoming profitable, safe, secure and consistent. For example, its strategy to provide toys in the waiting room was derived from the customers' needs communicated via its front-line employees.
Developing training workshops: One key way Virgin has managed change amongst its employees is by establishing three-day training programs for employees. Empowerment is a difficult process, which does not come easily to everybody. Many employees are used to systems of traditional hierarchy where not much is expected of them in a job. The concept of empowerment can thus become confusing, even scary for some. Virgin Trains, understanding this need, has managed its change very strategically. The workshops help the employees become oriented to the new expectations and job designs, especially front-line employees who are now expected to be more active, as they are playing the role of key decision making personnel. The workshops develop confidence in employees, and explain to them how to give feedback and why their opinion matters. Thus, as a result, employees feel more intrinsically motivated when their job is a meaningful portion of the overall organization processes, and when their tasks give them immediate feedback as to their performance. Training workshops by and large help employees understand their higher needs, and become motivated towards working for the new job design.
Effective HR strategies: Virgin Trains also has developed effective Human Resource strategies so that it can manage and implement its culture change. This includes all aspects of the Human Resource management, including hiring, training and rewarding. Reward systems are becoming performance oriented rather than experience oriented. Employees are rewarded for their ideas and contribution in the organization, and given special recognition besides material benefits. This enhances an employees' feeling of self-worth, developing into him or her greater bond with the organization. It also encourages and motivates employees to contribute more to the change process, and become more included. Also, Virgin has encouraged a team-based environment, by handing out team rewards, as well as individual ones.
Virgin Trains' recruitment strategies have changed too, with the organization selecting and recruiting those employees who are aligned towards the company's vision and mission. Since it needs energetic people-oriented workers, Virgin Trains has focused on its job description and specification to develop employee personality that fits the entire strategic environment and expectations of the company. This is of importance, as not everyone can fit into the role of the employees that Virgin Trains needs. Hence, this was a much need strategy as it helps clarify and define the company's culture more clearly. In addition, the Talent Wheel program is also very useful as it manages and develops the existing workforce of the company who also need to be trained towards the changed cultural dynamics. One problem when creating change is that employees feel uncomfortable regards to the new position in the organization. Those seeking or waiting for a promotion may be discouraged. Pay and rewards may change in disfavor of some. Virgin Trains has however, developed the element of trust in its employees by means of its Training and development program.
Ensuring Continuous change: As discussed above, organizations that implement change continuously as a part of their culture are more likely to be better at managing it. Hence, Virgin Trains has developed the strategy to embed this value in its culture, by becoming a key advocate for change. Virgin has kept performance standards, on which the organization is constantly expected to improve, thereby increasing the company's performance and making it better and better adapted to the changed culture. Also, this has made the employees more change-oriented, opening them to new ideas and aligning their personalities to think, to develop, to initiate. Thus, change is not a one-time happening at Virgin Trains, it is an everyday affair the way it should be.
On the whole the strategies undertaken by the company have been very useful in implementing and managing change, because they target and direct the core problems that companies face regarding change. Virgin Trains has successfully involved its employees in the change process, and even placed its customers as managers and introducers of this change. Hence, there is no doubt that the current organization model is running very successfully, and that the company is fulfilling the key elements in its vision. Through its effective change, Virgin Trains has been able to grow more profitable (cost-cutting measures), safe, consistent and reliable.