The goals needed in planned change
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Published: Mon, 5 Dec 2016
There are many goals of a planned change. Basically the goals are aimed to improve the ability of the organisation to adjust to changes happening in the environment. Change in employee’s behavior is expected and these changes to lead to improvement in organizational effectiveness and efficiency.
In this assignment we will discuss a case study on the strategic change management in the AEGON Company. As we have discussed in the training presentation the different aspects and reasons of strategic change management and the process of strategic change management involves developing an innovative vision for where the company needs to be, and then developing an equally innovative path for achieving the goal. This can only be done through the combined effort of all the company, its employees and the stakeholders.
The discussion of this case reflects the following points:
Develop systems to involve stakeholders in the planning of change and develop a change management strategy with stakeholders.
Evaluation of the systems used to involve stakeholders in the planning of change.
Explanation of what systems and processes would need to be/have been developed to ensure involvement of the stakeholders in the change.
Strategy creation for managing resistance to change
Review of the effectiveness of management actions to overcome any identified instances of resistance
Discussion of the most important features in the successful implementation of organizational change, drawing upon at least two organizational models
Plan to implement a model for change and develop appropriate measures to monitor progress.
With the changing prospects of customers, organizations persistently require to adapt to stay competitive. Managers might look for situations which are common to them when experience pressures for change. It involves civilizing the traditions in which they function, gradually. This is incremental change. But improving gradually may not be adequate. The need is to adjust to all of the main changes in the surroundings. Lack of it results in strategic drift. When a company undergoes strategic drift, it does not make tough and major decisions to deal effectively with all of the changes in its business environment. Managers within the organization have to accept the change completely to let alone strategic drift. It results in a responsive organisation. (AEGON-Embracing and pursuing change, n.d.)
AEGON Group is one of the world’s largest life insurance and pensions companies. AEGON owns pensions, life insurance, asset management and adviser businesses in the UK.
The AEGON Group has 27,000 employees and over 25 million customers worldwide. Its major markets are in the USA and Netherlands. Since 1994, the UK has become another major and increasingly important market. In 1994 AEGON bought a large stake in Scottish Equitable. Scottish Equitable was a strong brand with a heritage that went back to the 1830s. Since then AEGON’s UK business has grown both organically and by acquiring other businesses. As most of the acquired companies kept their existing identities, awareness of AEGON in the UK remained relatively low. AEGON realized that such low levels of awareness could impact on its ability to achieve its ambitions. Therefore, it needed to combine the global strength of its parent with the experience and reputation of the domestic company brands, like Scottish Equitable, that made up AEGON in the UK. (AEGON-Embracing and pursuing change, n.d.)
In this assignment we’ll discuss the success that accepting and practicing change has brought to AEGON in the UK. This change is helping AEGON move towards its goal of becoming ‘the best long-term savings and protection business within the UK’.
Kurt Lewin’s change model
In early 1950s Kurt Lewin a psychologist developed a model of change management. He described the freeze model of change which suggests that change involves a shift from one still condition by means of a state of activity to a different still condition. This involves a three-stage process of managing change: unfreezing, changing and re-freezing.
Stage 1: Unfreezing
This stage implies getting prepared to change. It involves getting to a point of consideration that change is compulsory and getting ready to alter from our current comfort zone. (Kurt Lewin change management model, n.d.).
Stage 2: Change – or Transition
The second stage of transition is known as change. Transition is the internal faction or voyage we make in response to a change. This occurs as we accept and make the changes that are required. (Kurt Lewin change management model, n.d.).
Stage 3: Freezing (or Refreezing)
The third stage is freezing, while many people refer to it as ‘refreezing’. As the name suggests this stage is about instituting stability when the changes have been made. The changes are acknowledged and turn into norms. People form new contacts and become contented with their routines. This will surely take some time. (Kurt Lewin change management model, n.d.).
The 8 steps of John Kotter’s change model
Each stage of Kotter’s change model acknowledges a key principle identified by him linking to people’s response and approach to change, and in which people see, feel and then change. For change to occur, it helps if an adequate number of people within an organisation want it. By developing a sense of urgency around the need for change it helps management to start the initial inspiration to get things moving. (John Kotter’s guiding principles for leading change, n.d.).
According to John Kotter the major challenge in front of leadership in a change process is just getting people to change their behavior. People modify their behavior when they are motivated to do so, and that can be done when you speak to their feelings.” (John Kotter’s guiding principles for leading change, n.d.).
AEGON UK had the following driving forces for organizational change.
Financial restructuring in the United Kingdom.
Growth in population and changes in demographic attributes.
Cultural diversification in the UK.
Changes in social dimensions of the United Kingdom.
Evolution of political orientation and policies.
Increase in the domestic purchasing power.
Institutional and policies neglect regarding the financial products.
High competitiveness and consequent challenges.
Deficient Management practices.
Inefficiency in processes
The most suitable change model fitting to AEGON UK will probably be Kotter’s Eight Step Change Model. As it fully prepares the employees of the company before even the vision is created that will eventually helps in the change in the long run. There are some disadvantages as well to this model. This model is mostly suitable for the companies because of its simplicity and applicablity as considerable change is required for the divisions. This will also facilitate in the transition because the division has a long history comparable to rest of the company and people are not as set in the ways, as they would be if the division had been around longer. (Strategic change management, n.d.).
AEGON UK strategic planning implies planning for the long-term. The time frame associated with this type of planning is from three to five years into the future. Due to this timeframe, there are several challenges associated with long-range planning. These include: creating a plan that is breakthrough in its orientation rather than “more of the same,” getting all stakeholders to commit to the organization’s strategies and to follow through on implementation of critical activities, and decreasing cycle time in the planning process. This sort of orientation necessitates approaches to strategic planning that involve all employees and stakeholders in the planning process and a planning process that can occur within a shortened time frame. The researcher will prefer to adopt Large Group Interventions Technique to address the proposed change in the chosen organization AEGON. (Strategic change management, n.d.).
In case of the AEGON UK there were many deriving forces that caused the background of change in AEGON UK. AEGON UK was although was bearing international repute but still it didn’t had band awareness by the name of AEGON in the United Kingdom. The philosophy of the financial services products that were being sold by AEGON UK or its competitors were quite difficult to understand by the potential customers. Life expectancy in the United Kingdom has increased in the recent years so people can expect to be retired for longer age and similarly many individual never think it worthy to plan about their retirement properly, on the other hand there was a derive from the government to reduce dependency on the state in old age so there was a need to make a social awareness among the people for the benefits of having the financial products sold by the AEGON UK to secure their future because benefit of these investments usually realized in later years. AEGON was not well recognized in the areas other than pensions. Above stated reasons are the few of those that lead management to introduce change in the corporate structure and strategy of the AEGON UK Limited. (Strategic change management, n.d.).
People who are directly affected by the decisions of an organization are the stake holders. Stake holder may be internal (management, employees etc.) and they may be external (government, suppliers, banks, media, shareholders etc). Every stake holder has different expectations from the organization. In the process of change, stakeholders can be involved in a number of ways like:
Involve them in problem solving.
Keep them up to date of standing towards corporate objectives
Take actions on feedback received by them
Mobilize the correct resources at the right moment to recognize the implementation plan (Strategic change management, n.d.).
Involvement of stake holders to the process of change was done by the new chief executive officer of AEGON who carried out the following actions;
Simplification of Financial Services
The Chief Executive Officer of AEGON adopted a customer focused approach. The CEO simplified the complex financial services in terms of their understanding and it was now made very simple to understand.
The clients which know that what they are investing into and what investment they get back at the end of the contract. To date back customers have always been disturbed doing complex calculations. Now the customers are happy because they don’t need any financial interpreter to understand the ins and outs of the products offered by the AEGON. (Strategic change management, n.d.).
The most important stake holder of the organization is the employees’. These are the people who are practically liable make the change process successful. New CEO took the employees in confidence and told them about the fact that what AEGON stands today and what AEGON wants to stand in the future. He explained the factors behind this change. The CEO introduced job rotation which involves prospects from one job to the other job. Hence it provided individual employees’ with a career path. CEO also arranged a Management Development Program in collaboration with a leading management college for the training of the workforce. (Strategic change management, n.d.).
Creating Distinct Market Place
To let revisit the brand identity of AEGON into the minds of the people, the CEO carried out an external promotional campaign to highlight the relationship between the locally famous Scottish Equitable and AEGON. The CEO spoke to the media stating the reasons for the change and how the change will be beneficial for the stakeholders. (Strategic change management, n.d.).
As we know that the stakeholders are critical to the success of initiating change in the organization. Stakeholder Management Strategy is an important discipline that successful people use to win support from others. Stakeholder Analysis is the technique used to identify the key people who have to be won over. Stakeholder Planning is done to build the support that helps organization to succeed. (Strategic change management, n.d.).
The benefits of using a stakeholder-based approach
The opinions of the most strong stakeholders to shape change implementation at an early stage. They will support the company as well as their input can also improve the quality of the project
Getting support from strong stakeholders can help you to win more resources There are more chance to achieve strategic goals successfully.
By communicating with stakeholders early, you can ensure that they fully understand what you are doing and understand the benefits of your aim. By this they will throughout support you actively.
By anticipating what people’s reaction to your project may be, and build into your plan the actions that will win people’s support. (Strategic change management, n.d.).
Strategy for managing resistance to change in the organization
Following strategies can be implemented for managing resistance to change in the AEGON.
â€¢There will be a workflow process in order to achieve results for mutual benefits for employees and organization.
â€¢There will be an Authority Process in order to direct behavior in the interests of the organization and its participants.
â€¢There would be a Reward and Penalty Process to induce people to behave in away required by the interests of the organization and its participants and / or to behave in a way making associated activity possible.
â€¢There will be a Perpetuation Process to maintain, replenish, and make adequate the quantity and quality of social and natural resources utilized by the organization and its participants.
â€¢There must be an Identification Process to develop a concept of the wholeness, uniqueness and significance of the organization.
â€¢ There will be a communication process to provide for the exchange of information, ideas, feelings and values etc utilized in all activities to the stakeholders.
â€¢ There must be an evaluation process which establishes criteria for and defines levels of utility and value for people, materials, ideas, and activities and which rates them and allocates them to these levels. (Strategic change management, n.d.).
Model for implementing change in the organization
Model for change implies towards the overall strategy to incorporate change into the organizational culture. Model of change is usually implemented into the following steps;
Access the necessity of change
Forming a powerful alliance
Creating an idea for change
Communicate the vision
Incorporate the change into organization. (Strategic change management, n.d.).
The CEO of AEGON implemented the same model to inculcate change into the organization. The CEO realized the need for change and he came to the conclusion that the company is not doing well comparable to its competitors.
The legislative restriction of price decreased the profitability
Lack of brand awareness getting worst
And difficulty of the customers understanding the aim of the services offered by AEGON
The above mentioned were the factors that required an immediate change into the organization at a large scale. The CEO conducted a SWOT analysis of the company and decided to develop a new behavioral framework for the staff which was known as 8 behaviors framework and also arranged managerial training for the workforce. He further addressed the stakeholders of the organization to communicate his vision to them by simplifying the financial services, developing a workforce and arranging a brand awareness campaign. (Strategic change management, n.d.).
The CEO also communicated to the media about this change process and the reasons for change. Hence model implemented by the CEO of AEGON UK brought about evident positive change to the organization and gave it a new line of direction towards the desired goals and objectives. (Strategic change management, n.d.).
Implementation of the model in the organization, expected improvements and appropriate measures to monitor progress
The plan for the change was implemented into the different stages like discovery phase to analyze where the AEGON is right now, where it wants to be and what actions are required to meet the objectives set by the head to become the best long term saving and protection business into the UK. First phase revealed the reasons for changes and weaknesses and strengths of the organization. After the discovery phase the next step was to involve the appropriate stake holders into the process of change. The head of the AEGON involved various stakeholders in different effective manner as mentioned earlier. The CEO further redeveloped the organizational behavioral framework and arranged the training of the staff members. (Strategic change management, n.d.).
The outcomes of the efforts made by the CEO were extremely cheering and rewarding for the company. Before the change there was confusion among the people about the recognition of AEGON but after the strong promotion of the brand AEGON with Scottish-Equitable created a more reliable image of the AEGON into the minds of the people. Moreover the brand carried a new more powerful and prestigious look as AEGON Scottish-Equitable. (Strategic change management, n.d.).
The behavior of the employees altered altogether. They behave with more customer oriented approach. Now the employees are concerned to provide beneficial services to existing and prospective customers and the organization is always doing its level best to do what is really important to their customers. (Strategic change management, n.d.).
AEGON providing the levels of return guaranteed and being liable for any risks associated with doing so it reflects more probability about levels of income for the clients. As a result of the change applied by the CEO of AEGON, the company reconstructed its brand reputation, became more customer oriented, started to provide more innovative services and became more popular amongst the consumers and finally the business has grown to a huge extent. The CEO planned to develop a new organizational behavior framework to align the brand values of AEGON. (Strategic change management, n.d.).
To entrench this culture, AEGON developed a behavior structure to maintain its brand values. It was intended to persuade how people at all ranks within the organisation might work and make decisions. These behaviors highlight the values of the organisation. They have assisted to build AEGON’s culture and have also impacted its performance. AEGON also introduced a Management Development Program, supported by a top Management College. The eight behaviors are:
â€¢ Think customer
â€¢ Embrace change
â€¢ Encourage excellence
â€¢ Act with integrity
â€¢ Decisive action
â€¢ Work together
â€¢ Learn and grow
â€¢ Relate and communicate. (AEGON-Embracing and pursuing change, n.d.)
There is nothing permanent except change. It is continuous. The process of change is an expedition. Business organizations will always be influenced by external factors. AEGON responded to these factors by simplifying, clarifying and strengthening its brand in the UK. As organizations change, their patterns of behavior and business culture flourish. For AEGON, this is a cycle in which the business uses its knowledge to learn from its experiences. This has assisted AEGON as an organisation to move positively towards achieving its full potential and to stay competitive in a progressively difficult market. (AEGON-Embracing and pursuing change, n.d.)
AEGON recognized a need to give itself a greater market presence. The change has made the organisation much more customer focused. As a result it is more effective.
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