Strategies to Manage Change Process - Telstra - Assignment Example

Table of Contents Table of Contents 1 Executive summary 2 Introduction 2 Nature and need for change 3 Change strategies 5 Challenges to initiate change 7 Strategies to manage change process 8 Conclusion 10 Reference: 11 Executive summary Telstra plans to restructure its senior management team to strengthen its customer service as well as address the problems occurring due to the possible implementation of the national broadband network in the next few years. The company is expected to undertake various comprehensive management changes in order to shift the focus of the company from technology to improved customer service and relations. In the past few years, customers are seen to be migrating to wireless broadband services and mobile phones from fixed-line telephony. This has resulted in decline in revenue and profits for the company in its fixed-line telephony business, which is also the core business of the company. Thus, the company has decided to undertake a change management plan to re-establish its dominance in its core business segment. This report would identify the nature and need for change and propose change strategies that could be reasonably considered by the organization. The report would also discuss the challenges the managers might face when initiating the change and provide strategies on how they might effectively manage the change process. Introduction Telstra, a leading Australia-based telecom company, is planning to initiate change management strategies by restructuring its senior management team. In order to strengthen its customer service and its market position in fixed-line telephony, the organization is planning to implement various changes. It is also shifting its image from being a technology company to a company driven by quality customer service and customer relationship. Due to the continued migration of the customers from fixed-line telephony to mobile phones and wireless broadband services, the company has been witnessing decline in its revenue and profits in the past few years. However, on the other hand, its competitor Optus has added new subscribers to its fixed line telephony, indicating that it is not technological shift that is impacting Telstra’s business. Instead, it is internal organizational issues that might be hampering the company’s profit in its core business segment, fixed-line telephony. Thus, the company plans to undertake change management strategies and regain its lost market in fixed-line telephony by emphasizing on customer service and realigning its higher management. In this report, the nature and the need for changes within the organization would be identified and thereafter, several change strategies would be proposed. The report would also focus on various challenges that the managers may face while implementing the change strategies. Thus, the report would also provide various strategies to effectively manage the change process. Nature and need for change The process of change management involves creating a planned approach for initiating changes within an organization. The major objective of change management is to provide maximum benefits to all the stakeholders involved in the change process as well as minimize the risks associated with the implementation of the change (Paton & McCalman, 2008). The subject of change management mainly deals with the changes in human capital and therefore has many psychological and perception-based implications (Anderson, 2010). The process of change management requires through planning and implementing the changes in a sensitive manner so that the people involved in the change process are not impacted. In case the changes are forcibly introduced, it might result into various issues within the organization. Therefore the changes need to be realistic as well as achievable (Green, 2007). In case of Telstra, the company is in need of initiating changes as its traditional methods of working have resulted in decline in revenue and profits. The company has always been criticized for its bureaucratic character and its laid-back attitude towards change. The organization which was previously a government-owned body has become a private company in the recent past after constantly changing its structure in the past few years. However, the company still needs to initiate these changes on a larger scale and consolidate its management to create a comprehensive company strategy and increase its revenues. The telecom market is witnessing rapid growth in technology in the contemporary society with wireless technology leading this development. The mobile phone market and wireless broadband services have swept the telecom industry with increasing number of subscribers moving away from fixed-line telephony to wireless mobility. This changing scenario has also impacted Telstra as the company’s core business is fixed-line telephony. Over the years the company has also diversified into various wireless services and has earned profits in that particular segment. However, its profits in the fixed-line services have constantly declined with the number of fixed-line subscribers decreasing every month. Although, market trend may reveal that due to changes in technology and consumer preference for wireless mobility, the fixed-line services have declined, it was found that Telstra’s competitor Optus meanwhile has been able to add subscribers to its fixed-line services. Therefore, the major problem for Telstra is not technological shift but internal organizational issues. Thus, the company needs to initiate organizational changes in order to survive in the intensely competitive market. Change strategies The structure used by organizational change management helps in preventing resistance and thus also reduces the chances of failure for the project as well. However, it has also been seen that many times a business implement changes without communicating them first to the stakeholders being impacted by such changes. This further result in creating discords and higher employee turnover rate within the organization (Ledez, 2008). Therefore, it is essential to implement the right change management method while initiating changes within an organization. Some of the commonly used change management methods are consultative, collaborative, coercive and directive changes. In consultative change the views of the stakeholders are sought for, while in collaborative change the stakeholders are actively involved in the process. Coercive change means that the stakeholders are only informed about the changes and asked to obey these changes. Directive change on the other hand means that the stakeholders are told about the changes and the reasons for undertaking such changes (Paton & McCalman, 2008). In case of Telstra, the company has already initiated several change strategies. However, the company needs to expand these strategies to make the change management process a success: Emphasizing on improved customer service: The company has admitted that there is a lack of quality customer service and it need to improve its customer orientation. It plans to provide superior customer service by initiating internal training programs for its employees, which would emphasize on the importance of customers in the contemporary telecom market. The company may also remove various confusing products and plans and introduce simple plans for its consumers. Such consumer-oriented strategy would mean lesser number of customer complaints to the Telecommunications Industry Ombudsman and therefore, reduction in the fees imposed by the Ombudsman. The company is also planning to implement an IT trouble-shooting service, which would help Telstra to address consumer complaints easily. It is going to invest around $400 million to upgrade its systems and improve the customer service division. The company should also focus on providing innovative customer service initiatives. It should provide a more proactive service rather than a reactive one (Balogun & Hailey, 2004). The company should invest in such technologies which would help it in receiving the details of the errors faced by the customer and instead of the customer calling the company with his or her complaints Telstra’s executives should call up the customer and ask if the customer faced certain issues. Further, the company should proactively call up the customers from time to time to understand if they were facing any issues or not. Also, Telstra should conduct customer surveys to receive product feedback and suggestions to improve the offerings. Lowering product prices: In order to match the prices offered by its competitors, Telstra has also initiated various price cuts to its products. It has been witnessed that the revenue from its fixed broadband services has increased in the recent past, with the margins increasing to around 41 per cent in 2009-10 from 27 per cent in 2007-08. This enabled Telstra to cut the prices of its product offerings. The strategy resulted in Telstra getting an additional 11,000 customers for its fixed broadband services in 2009-10. Together with lowering prices, the company should also increase its product portfolio. As the company would decrease its number of products which are deemed confusing, it is essential for Telstra to introduce newer products as well so that the consumers are not jittered by witnessing a lean product portfolio, which may indicate a bad financial position of the company. Telstra needs to introduce various combo packages as well to help in promoting all its products in the market. For instance, it can provide combined call and Internet packages at lower prices to its broadband customers. Further, various value-added services should also be given to the customers to retain them for a longer time (Green, 2007). Changing higher management: The company is also planning to appoint two chief operating officers so that the number of executive who report to the chief executive officer can reduce. This would also help the CEO to focus on his job in a better manner. Further, the company may make some external hires in order to induct new ideas into the company (Beerel, 2009). Challenges to initiate change In order to initiate organizational changes in a successful manner a company might have to face various challenges. It has been witnessed that most changes fail due to the lack of communication, perceived complexity, issues within the management, absence of goals and objective as well as technical problems. If the changes are not communicated or initiated in a proper manner, it may result into resistance from the employees and customers. If the employees or the customers are unwilling to participate in the change process, then it would become very difficult for the company to initiate any changes and even if they do, it would result in a failure (Burnes, 2004). In case of Telstra as well, the company may face several issues due to the implementation of change management initiatives. Some of these issues are discussed in detail below. Implementing a comprehensive customer feedback process might backfire as the customer’s might not be cooperative enough to answer such questions. In today’s fast world, customers do not have the time to answer lengthy feedback calls and may even get annoyed with such calls. Further, a customer might get suspicious if he or she receives a proactive call about the error faced while using the company’s telecom product. The customer may suspect that the company is able to monitor all his operations and may consider it as a breach of privacy. Although, the company has initiated the process of cutting its product prices, experts believe that such a strategy was implemented too late as its competitors are already selling similar products at lower prices. In a price competitive market, it is important to stay ahead of the competitor to garner better market position (Pettinger, 2004). However, Telstra lost its ground in the initial round and it might be difficult for it to regain its customers through the late initiative. Further, most competitors are already providing value-added services and combo packages in the market. Thus, the company does not have a novelty product to offer to its customers. Initiating changes in staff is the most difficult process in an organization. It often creates an environment of mistrust and suspicion among the employees. In case of Telstra, due to the possible announcement of appointing two COOs, many key senior management officials resigned from the company. The hiring from external sources would also lead to dissatisfaction among the existing employees in the company, who would further get de-motivated and may resign as well. Strategies to manage change process Initiating change management process is a difficult one. However, with careful planning and implementing the change initiatives in a sensitive manner the company may affect the changes easily. The changes should be realistic and achievable and should be initiated in such a manner that it does not create problems for the stakeholder involved in the process (Carnall, 2003). In order to implement innovative customer service initiatives, it is important to include the customers in the change process. The company should not implement such initiatives without the knowledge of the customers as it would result in a surprise element and possible distrust. Therefore, the customers should be involved in the process right from the beginning. It should be a collaborative change process, wherein the customer should be asked to provide their feedback on the proposed changes. The company can ask a few customers to check the proposed systems before its implementation and use their feedback as a marketing tool to initiate the changes (Ledez, 2008). For Telstra to regain its lost customer base, it is essential to provide not just value-added services and combo packages at lower rates, but also to offer customized products. Every customer has a different need and the company should recognize it. Some might require a telephone to serve Internet, while some may use it to make international calls. However, customized offerings by telecom companies are not yet aggressively explored. Although, some companies do offer some customized services, these are either expensive or not marketed properly. Telstra should capture this gap area and provide customized offerings to its consumers and market such initiatives in an aggressive manner. While implementing staff changes within the company, it is essential to create an environment of trust and belief. Further, the process should be transparent and the management should discourage any kinds of rumors surrounding the changes. The entire process should be consultative in nature, with the existing staff members being asked for their feedback for the proposed changes (Anderson, 2010). Further, the company may hire a human resource management leader in order to tackle the speculations around the staff changes. A leader who could motivate the employees and change the company culture from a bureaucratic one to an employee and consumer-driven one should be employed. The person should be given the responsibility to re-design the workforce of the company, create performance matrixes based on customer-relationships and provide succession planning for the future development of the company (Anderson, 2010). Conclusion Telstra has an ambitious plan of implementing change management within the organization and re-orient its focus towards customer care and building lasting relationships with its customers. The company has been facing decline in its revenue and profits in the recent past due to decrease in its core business of fixed-line telephony. Although, technological shift and perceptions of consumers are often blamed for reduction in fixed-line telephony, it has been found that its competitor Optus meanwhile has added to its fixed line customer base. Therefore, it might indicate that the company is facing organizational issues rather than technological one behind the decline in fixed-line subscribers. Thus, the company is required to change its orientation from technology to a customer-driven culture. The paper proposes various change strategies that the company may implement to regain its lost customer base and create a strong image in the market. It is proposed that the company should provide proactive customer service rather than a reactive one. However, such a process should be implemented after initiating a collaborative effort with the customers to eliminate any surprise element and possible distrust. Further, the company needs to offer customized products along with value-added services and combo packages at lower rates to its customers. The paper suggests that there is a huge gap area in customized telecom product offerings and Telstra should capture this area by providing customized offerings and marketing such initiatives in an aggressive manner. Most importantly, the company should create an environment of trust and belief within its existing employee base while initiating any staff changes. It should make the process transparent and consultative, while discouraging rumors surrounding such changes. Reference: Anderson, D. 2010, "Beyond Change Management: Advanced Strategies for Today's Transformational Leaders", San Francisco, CA: John Wiley and Sons. Balogun, J. and Hope Hailey, V. 2004, "Exploring Strategic Change,” 2nd edn, London: Prentice Hall. Beerel, A. 2009, "Leadership and Change Management", London: Sage Publications. Burnes, B. 2004, “Managing Change: A Strategic Approach to Organizational Dynamics,” 4th edn, Harlow: Prentice Hall. Carnall, C. A. 2003, “Managing Change in Organizations,” 4th edn, Harlow: Prentice Hall. Green, M. 2007, "Change management masterclass: a step by step guide to successful change management", London: Kogan Page Publishers. Ledez, R. E. 2008, "Change management: Getting a tuned up organization", Business Intelligence Journal, 111-119. Paton, R. and McCalman, J. 2008, "Change Management: A Guide to Effective Implementation", London: Sage Publications. Pettinger, R. 2004, “Contemporary Strategic Management”, Basingstoke: Palgrave MacMillan. Read More