ABC was established in 2005 as registered law firm and chamber regulated by SRA with a strong vision of providing legal services to individuals and corporate clients. Chairman is a qualified solicitors and a barrister with great technical and professional skills.
Initially chairman was actively involved in company's operations and he implemented good polices and procedures from taking a case from a client to settling it.
After UK Govt. announced CFA (no win no fee) scheme, whole structure of legal profession changed and millions of new cases came to Law firms. Which provided a golden chance SMEs to expand their business. ABC solicitors also started receiving more then 2000 new cases every month to deal with this they had to recruit more then 400 staff. Chairman of ABC started to realize that expansion could result in a cash flow crisis, as no income will be generated from these cases until final settlement. Which diverted his focus from cultural aspect to financial. He made an agreement with TIM litigation fund for a loan to run each case at 15% interest p.a payable within 24 months. Loan capital was insured with FGI and BTE insurance.
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Chairman promoted s senior solicitors as CEO of the company, who has great technical but not enough operational skills. Company stopped using previous polices and procedure due to new recruitment and peak workload and each department started delaying work e.g. Client department was responsible for paper checking and AML, but due to high volume of cases they started delaying and sometime moving the cases to relevant department without proper checks. Same thing happen at other departments. Each department manager was busy in getting more and more cases rather then settling the previous ones, which resulted in serious delays for settling the cases and no income was generated for couple of years. Chairman did not realise that early as they were getting sufficient funds from TIM to run day-to-day business of ABC and normally cases takes time. But after 15months, when they had to make first loan repayment they realised most of cases are at initial stages and case management system is not updated a panic situation created in company. People started gossiping that company will not survive.
2.2- Situation as at 2012
2012 was "annus horribbilus" for ABC.A temporary management was hired by the company as a result of resignation by three directors who could not cope with a pressure of settling the cases. There was a general feeling that company was caught in a vacuum. Both managers and employees of the company had lack of belief in the future of company and most of them had started to look for new jobs.
Looking at the sate of the firm, TIM set up an advisory board to help ABC's chairman to to get out of this scenario and to recruit new CEO. Advisory board recruited David shaw as new CEO on the 20th June 2012. David's first impression met the same picture drawn up by the advisory board.
ABC was in the worst state since years of its establishment.
Trust had been lost within the company's employees due to uncertainty and lack of clear vision.
Employees were leaving the company.
But David's first impression shows that there is still a lot of heart left in the company and with devotion and right policies company can still become one of best Law firm in UK, but first thing ABC needs is a clear vision for future.
3- Analysis of Problem:
3.1- The Change Process in ABC:
a) Vision creation:
In order to revitalize ABC, New management attempted to give the organisation a "sense of influence" of its own future by raising the questions: what should be the future of the ABC? In various meeting they raised same question and demonstrated the will to fight together for the better future of Enterprise.
Which future ABC should choose?
One of best legal service provider
A Surviving Law Firm
No major changes and business as usual
Closed down the law firm
Figure 1- ABC at crossroad
Always on Time
Marked to Standard
Management team answered this question in response to the atmosphere of resignations with an announcement of a new vision: Our vision is to become the best law firm in UK by 2015; we have the resources and funds to do that.
This announcement was elaborated at the same time " better to best" means the best leadership, implementation of better to best strategy, better processes and best results in terms of time management, quality, customers, employees and finances.
This statement, which showed a clear commitment from management to change the firm, brings an instant response. Every employee of the company started talking about this and discussion were everywhere how will we do that?
Now the big issue was how to manage the answers, change and pressure started building up for rights actions and results.
Source: http://trainteachassess.wordpress.com/2009/04/20/the-trainer-aka-change-manger/ taken on 29/12/2012
Figure 2- People's impressions with announcement of change
B) Building the management Infrastructure:
Management infrastructure was developed and adapted by ABC to build the change process. Three principles were considered for the development of new process.
Changes in management infrastructure should fit in ABC.
All old terminologies should be replaced by new ways of thinking in new management infrastructure.
Keep the new management infrastructure simple which focuses on what really matters in change process, people rather then introduction of new complex ERP systems or glittery new management models.
Therefore question was not just to implement some new IC systems but also to develop some management processes and creating common "mental maps of the world" and to build the right competencies in people to handle the management process.
The whole of development phase was management in four phases Idea, plan, action and daily operations
As per the figure new management infrastructure was built on four blocks.
This was a similar model used by Enterprise rail, Denmark in 2007.
ABC's balanced scorecard
ABC's Process Map for business Process & Support
ABC's planning & control systems
ABC company model
EFQM Excellence Model
Figure 3-The new management infrastructure
Three blocks has been built to implement principles of EFQM model and to provide useful management tools for daily business. ABC process map focuses on processes and how to improve them, planning and control block helps to achieve firm's ultimate goal for 2015 and balanced scorecard to measure and track the performance.
We interviewed the management team and they made us clear that change process is on a very satisfactory track according to their perspective.
Interview quotes: Appendix 3
D) Not been successful-Yet
Changing a cultural is very large scale undertaking as cultural elements fit together as mutually reinforcing system and combine to prevent any attempt of change and eventually all of the mind tools will be needed to put together in right order as order in which we will deploy them will have a critical impact on the likehood of success. (Forbes,2011).
While doing further analysis and interviewing management we find out that too many projects were started at same time, which resulted in less attention was given to some of the projects and as a consequence they had to shut off from the change process like a new case monitoring system was introduced which was shut off as necessary data was not been provided by different departments also process map and continuous improvement suffered due to workload experience by management.
According to our analysis one of the major threat to change process is the fast visible change in patterns of behavior and thinking of ABC employee's. Management team was confirmative when we asked them that if change can happen that quick chances for it's disappear would be the same.
Major external threat to change process is the pressure from TIM that can change the whole process. Another internal threat is relying too much on the new management as any change in the current management can lead to a serious setback; all the achieved results so far are fragile.
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It will be much too early to declare the victory as Winston Churchill says " Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning".
3.2) Use of Kotter's Model of 8 errors in change process:
ABC did not use Kotter's change model to plan and implement change even tough kotter's 8 errors are considered common knowledge in transforming change. So we will analyse change process retrospectively. We shall look for the evidence of errors and to check whether 8 errors actually apply in the change
Non-anchoring of changes in culture
Early declaration of victory
Incorrect Planning for creating short term wins
Not removing the obstacles
Under communicating for buy-in
Lack of clear vision
Not forming a Powerful enough coalition
Not creating enough readiness for Change
Model of Kotter's 8 Potential Errors in Change Process
A) Not creating enough readiness for Change- Error 1
Kotter suggest that for change to be successful, 75 percent of the company's management needs to "buy into" the change (mindtools.com). ABC did not spend much energy to explain why there is need for change process so quick. So why did the company not take a rocky start and how all this happen and what about the corporation of many individuals at early stage of process? People were neglected, frustrated for not getting right opportunities as soon as management announced new vision and need for change they responded skeptical due to bad past experience but supportive. For them it was not important whether "is it really necessary " but rather are they really serious this time.
Therefore for them urgency was not key word but the trust."
B) Not forming a Powerful enough coalition- Error 2
ABC hired a new team under the supervision of internal advisory board and due to bad history of pervious management everybody was open to change in the company. The coalition was very powerful and they showed their intentions to take necessary steps if things will not go according to plan. So we can conclude that ABC has dealt effectively with Kotter's Potential error-2.
C) Lacking a Vision- Error 3
Management gave a very clear, easy to absorb, appealing and ambitious vision to people and dealt effectively with error-3. At the same time the introduced a new common language before breaking the vision down to specific strategic initiatives. They introduced the concepts of NPV, targets, time frame, and customer focus and how to improve the processes continuously.
D) Under communicating for buy-in -Error 4:
During the interviews with management one of their top concern was that even tough people have welcomed change and are responding very positive still they should had to communicate the vision properly as it is one of the most important on going step for change. So we can conclude that Kotter is absolutely right that we can very easily underestimate the need for comminuting the vision.
E) Not removing the obstacles- Error 5:
We revealed two sides of obstacles from the interview with management, one management has taken some serious step to remove the obstacle like introduction of the time frames for each phase of the cases, which will help company to settle their cases on time and on other side they were failed to implement a new online case monitoring system due to non cooperation from managers. But management did give us solid reason how hard it was to provide that information. So we can conclude that management should keep focus on improving by using motivation and empowerment tools for the company.
F) Incorrect Planning for creating short term wins Error-6
New management introduced a lot of new polices and processes after the "annus horribbilus". They also created a new call center, which was responsible for brining new business, and saved time for professional staff and transferred their attention from bringing business to settling the cases. They also introduced a fixed bonus for everyone despite of their position if company will achieve the budgeted targets. Bonus was paid first time when company made their first repayment to TIM. We can conclude that all the employees felt the flavor of short time win and they consequences of high performance.
G) Early declaration of victory- Error 7
Change process is so young that temptation for declaration of victory become to limited. But the temptation will grow with passage of time and excellent results. We can conclude that management should be very careful and must resist the temptation to declare early victory.
H) Non-anchoring of changes in culture -Error8
This is a premature stage for new processes at ABC, but it still underlines importance of creating new procedures, processes and systems to support the change.
We can draw a conclusion from this analysis of Kotter's eight errors in change process that change is currently on track at ABC but still requires some adjustments.
3.3) Further analysis
Although Kotter's 8 step model is valuable for companies to plan a change process in 8 steps (e.g Kotter 2007) . Further reflection of complex and dynamic change process will be of high value for companies. We achieved this reflection through an intense dialogue amongst the management team, advisory board and both. ABC's new management developed a model based on their previous experience and common sense (Figure-3).
Although this model has helped management in defining, developing and communicating new infrastructure at ABC's change process but was unable to capture the soft elements in change processes e.g leadership, people and clients. Dahlgaard and Dahlgaard (2006:2007) have defined a 4P quality strategy for a sustainable and breakthrough development in context of excellence strategy.
That put's a people-oriented perspective on organizational excellence by use of 4Ps at different levels. (Dahlgaard & Dahlgaard, 2007)
People (Individual level)
Partnership (team Level)
Process (Organisational Level)
Products/services (organizational level)
For the implementation of 4P strategy, Dahlgaard and Dahlgaard 2007, have suggested to craft a plan that will help to enable people for carrying through improvements that should have an impact on least one of the following processes on organisation.
Production, delivery and marketing,
Development of new product.
Administrative and supportive processes
In AbC's case, the interview with management showed one of main concern for management team now is processes management and how to involve people in continuous development. 4P strategy is best tool to deal with this issue.
The change process has been successful so far and ABC's new management has able to achieve some remarkable results, but they are still a long way from their goal.
Change process like ABC is very complex and it is very hard to answer why it become successful at ABC as many companies struggle hard to change the culture. At ABC a skilled management team with similar and right chemistry, hard work and implementation of right policies and process are the specific traits of successful change.
If we have to point out a single factor for the start over of success of the change process at ABC, it is because they have managed to focus on what really matter in change process: People!
"Management team is focusing first time on a common goal and has never work together like this in the past"
We can feel the change in every department of organisation"
" we were never been so helpful to each other within organisation at each level from top management to bottom"
" People can see a secure future in ABC and a lot of new people have joined us:
Just within 5 months of this change, company has managed to settle many old cases and made their first two repayments to TIM, which shows that company's fighting spirit is back.