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Telstra Organizational Change Management Analysis

Contents

 

Executive Summary

The change management of any organization can be a disaster if it is not managed. Therefore the organization should never just assume things or behaviors during a change process. Similar to other important projects organizations should also formulate feasibility reports before any change initiative has been taken. Different aspects of the organization should be​​ taken into account before making a decision on change management. The effects of change management can be very bad for employees because they are not ready to give up their personal power and therefore prefer the status quo. In many cases the change is welcomed by some employees. This again can depend on position and personality of an employee. Younger employees prefer change because​​ they are more prone to find opportunity than threat. Employees who feel that they can find a greater opportunity to flourish in the new environment also prefer and support the change initiatives.

Telstra is one of the biggest communications companies in Australia. The company is listed on the Australian exchange with the symbol TLS. Telstra is also listed on the Newland’s stock exchange under the same symbol. The company was created by Australian government of operate and control the communication network​​ for the public. The aim of this change management initiative is to regain ground lost in the area of customer services and expand network capacity. The first part of the initiative would change the current methods of doing business. The second initiative is a reevaluation of current forecasts of future network capacity and demand. The management team is being restructured as part of the change initiative. The role of implementing change is being handled by the CEO himself. ​​ The changes are being made in at​​ the highest level possible in the organizations.​​ The CEO is creating two new high level executive management posts in Telstra. These are operational posts and are titled as COO. The officers appointed would work directly under the CEO, Mr. Thodey himself.​​ The report would find a feasible way to reduce the destructive effects of the change. Moreover it would recommend a step by step approach to tackle the issue at hand.​​ 

Introduction

The recent growth in information technology has totally revolutionized the​​ business environment. The old methods of doing business are now​​ obsolete. This is because the business processes are deeply and closely linked to technological evolution. The advancement in technology would therefore automatically shift the methods of doing business. Very good examples are the advancements in lean manufacturing. The availability of information technology tools has totally revolutionized lean manufacturing. ​​ Operations managers have used computer generated software tools to improve lean manufacturing systems to a great extent. The highly computerized JIT systems are just one example of this phenomenal revolution. These highly computerized systems have proved to be a competitive advantage in them for organizations such as DELL and Wal-Mart. ​​ These organizations have used these tools to become leaders in their own respective fields. Therefore it is evident that with these changes in revolutions in business process, new and better methods of management are also required. The organizations are trying to find different methods of building a competitive advantage. The effective ways of management different organizational issues and problems is another method of building this competitive advantage.​​ 

The different strategic shifts taken by organizations can cause a great deal of disturbance and turbulence for organizational processes. Thus during these change initiatives organizations are under a great deal of threat both​​ their external and internal environment. If these environments are not handled, an​​ organization can end up losing its market share or even its human resources. ​​ The effect of any change is the most radical and dangerous on the human resources. This is because human beings are the most vulnerable to person emotions and attachments with the status quo. This is because the status quo is a tried and test environment. This tried and tested environment can give employees the sense of safety and comfort. Therefore if any initiatives are taken to make changes in this environment, the employees would automatically shows a strong resistant to change. There can be many different reactions of employees to change initiatives. These can depend on a number of different factors. The nature and individual personality of an employee is important. Some personnel naturally have a low tolerance for ambiguity. Therefore they show the strongest resistance to change. Moreover the personal position of specific employees can be negatively affected by change management initiatives. The introduction of a flatter hierarchical approach to organizational decision making can have a very severe negative reaction for managers. This can be because they are not ready to give up their personal power and therefore prefer the status quo. In many cases the change is welcomed by some employees. This again can depend on position and personality of an​​ employee. Younger employees prefer change because they are more prone to find opportunity than threat. Employees who feel that they can find a greater opportunity to flourish in the new​​ environment also prefer and support the change initiatives. Therefore the change manager has to first of all identify and predict the different reactions expected from employees. The employees are expected to be positive about the change initiatives should be considered change agents. They should be used to communicate to the entire team the positive aspects of the change initiatives. The employees which are expected to show a negative reaction should be communicated and explained the positive side of the​​ process.​​ 

Telstra Change Management

Company Profile

Telstra is one of the biggest communications companies in Australia. The company is listed on the Australian exchange with the symbol TLS. Telstra is also listed on the Newland’s stock exchange under​​ the same symbol. The company was created by Australian government of operate and control the communication network for the public. The name of the company under the ownership of Australia government was Telecom Australia. The company was renamed under the​​ brand name of Telstra. ​​ However following a​​ change in policy it was privatized in 1997. The entire privatization process was carried out in different stages under a series of public offerings. ​​ The company has an unquestionable dominance on the Australian​​ market in its own business segments. Telstra is the largest provider of local and long distance telephone services, mobile services, dialup, wireless, DSL and cable internet access in Australia. The company's offices are also based in Telstra Corporate Centre in Melbourne, Australia because the focus of Telstra is the Australian market.​​ 

Change Scenario​​ 

 

Background of Problem

The organization has been the biggest corporation in its segment of business for many decades. Therefore the mind of the management​​ had Telstar has mostly been of a running a monopoly. Thus the company did not adequately prepare itself for recent innovations and changes in the telecommunication industry. Thus the top management has seen a decline in the demand of Telstra products. Therefore a change management initiative has been approved.​​ 

Aim

The aim of this change management initiative is to regain ground lost in the area of customer services and expand network capacity. The first part of the initiative would change the current methods of doing business. The second initiative is a reevaluation of current forecasts of future network capacity and demand.​​ 

Actions

The management team is being restructured as part of the change initiative. The role of implementing change is being handled​​ by the CEO himself. ​​ The changes are being made in at the highest level possible in the organizations. The CEO is creating two new high level executive management posts in Telstra. These are operational posts and are titled as COO (Chief Operating Officer). The officers appointed would work directly under the CEO, Mr. Thodey himself. ​​ 

Reaction

The initial reactions shows by management show that the change management process was not handled effectively by the CEO. Due to this mishandling high management has​​ witnessed a sense of insecurity about​​ their future and roles in the organization. The most severe reactions have been seen in BigPond. BigPond is an important part of Telstra’s business franchise. It basically deals with online and mobile properties of Telstra’s business franchise. This was being handled by an executive and senior manager Justin Milne. Justin Milne was the group managing director of media. He immediately resigned after hearing the news regarding the restructuring efforts of Mr. Thodey. This very sudden and severe action taken by Mr. Milne can have a drastic affect on other employees of Telstra.

Potential Resistance

The initial results of Telstra’s change management initiatives have not been very positive. The employees have shown a very negative reaction to change initiative. The company therefore has to analyze the potential avenues of resistance before proceeding to propose a change management initiative.​​ 

The potential resistance in any change initiative is faced because of the following​​ four basic reasons as proposed by​​ Kotter and Schlesinger:

Parochial Self Interest

Different employees can have their own self interest in the status quo and therefore would resist for it to change. This is because all individual​​ employees would always think of themselves first before anything else. In the case of Telstra, this can be a cause of concern for the organizations. This is because the introduction of new posts at the high level would mean that power would be shifted. The managers currently holding​​ those responsibilities would not easily let go of this power. The resignation given by a top manager can be due to this reason.

​​ Misunderstanding​​ 

The employees are usually kept in the dark before big management changes. This is because top management does not only focus on the employees. They have to take into account the perceptions of other stake holders as well. For example large management changes can have severe impacts on share prices, which can impact shareholders. Thus this miscommunication can create fears in the minds of employees. As the old saying goes that people are afraid of that they do not understand. The introduction of two new managerial posts has raised the doubt in minds of employees. They expect that the CEO might introduce new posts​​ and reduce the old ones. This could lead to layoffs and thus the discomfort and resistance.​​ 

​​ Low Tolerance of Change

The two reasons given above can lead to a sense of insecurity in the employees. The different personality types can react differently to this insecurity. The impact can be very drastic in employees with a low tolerance of ambiguity. Other the other hand sense of insecurity can be even higher for employees who cannot understand their situation in the new setup. This is because once they do not understand their position they automatically do not see it at all.​​ 

​​ Disagreement Over the Need for Change

This factor is the most important and is the most relevant to this situation. The board meetings usually create many differences of opinions in senior management especially when decisions are taken without unanimous backing. This is because different managers have their own unique style of leadership and management. This means that they assess the situation differently. This deem the whole change management initiative seem as a mistake to them. They in their best intentions would resist change because they feel that the initiatives being taken can have a negative impact. The disagreement here could be on the existence of the need for change or the route taken to fulfill the need. The leading indicators of Telstar’s​​ performance show that there is an obvious need for the change. Thus it can be said that the resistance in top management can exist on tackling the existing need for change.​​ 

Organizational Barriers to Change

There are a number of organizational barriers which can stop and slow down the process of change. These barriers must be overcome before any change program is implemented. The structural inertia of an organization can be a big hindrance to any change program. This is because the organizational structure would always drag itself towards the status quo. This is why most change management programs usually start with a change in the structure of the organization. Moreover in any every organizational body informal or formal power centers exists. The power structures usually build and thrive on existing conditions i.e. the status quo. Therefore if there are any changes these power structures are threatened. The failure of previous change initiatives can also be a reason barrier to change.​​ 

Inappropriate Change Management

The methods of introducing change can also lead to barriers to change. The lack of communication is usually one of the biggest barriers to change. Communicating the need for​​ change is the most important aspect of a​​ change management communication effort. The employees and all stake holders involved in the change process should be onboard. Complete information should thus be provided not only about the need for change but also​​ the different stages involved in the change process. The management should than provide support and training for the transition phase. Employees sometimes do not welcome change because they think that they do not have the necessary training needed to succeed in the new system. Therefore the organization must ensure that it acts as a facilitator in the process and provides growth opportunities. The building of trust and sense of security would be the basic step for achieving these targets.​​ 

​​ Change​​ Models Telstra

The change model appropriate for Telstra would be a combination of more than a single model. The figure below shows a three phase and eight step change model.

 

This model should be combined with Lewin’ Change model.​​ 

Unfreezing

Initiation​​ 

Change

Adoption Adaptation

Refreezing

Acceptance Use Incorporation

 

Unfreezing

The first step from the Lewins Change model is the stage of unfreezing. At this stage the first steps of the model shown above should be implemented. This is because​​ this is the initiation stage and should focus on creating the positive environment for the steps which follow the change process. The first three steps of the Unfreezing stage would be as follow:

Increasing Urgency

The CEO will have to create an​​ environment of change in the organization. This can be done by telling everyone to be on their toes for the coming quarter (or any designated period). Moreover the employees should be told the reason the change is needed in Telstra. This will ensure that the people are focused and in a state of expectancy. This would ensure that there is minimum resistance from the people. Moreover the CEO must make small changes in order to motivate the people to accept the bigger changes when they come. The best way to achieve this is to change office settings etc. The change in environment would put the employees in mind frame of change.​​ 

Build the Guiding Teams

The second aspect of unfreezing and preparing for change is getting the right people on board the process. The​​ CEO of Telstra will have to find and identify change agents in the organization. These people would carry forward the banner of change. The CEO can point out the people who would most benefit from this change process to make them change agents. Therefore the company would not come to a standstill because of the change initiative.​​ 

Get the Vision Right

​​ Mr. Thodey will have to lay out a step by step strategic plan along with a strategic mission for the organization. This will ensure that everyone is the on the same page. For example the appointment of any new officers should be directly in line with the aim of change. ​​ The CEO must than communicate this to the employees.

Change

In this phase the actual process of change takes place.

Communication for Buy-In

The stakeholders involved in the change process should be directly contacted and kept up to date on the entire change process. If this is taken there will be fewer incidents of employees resigning for the organizations altogether.​​ 

Enable Action

The change​​ system or strategy should be launched. In this case it should be improving the CRM systems. This can be done by introducing new and fresh people into the system. Moreover the previous members of the CRM team can also be trained to follow new methods of managing customer relations.​​ 

Create Short Term Win

The goals for the change initiatives should always be long term and short term at the same times. In fact the long term goals should be measured with short term measures. For example the daily increase in customer feedback can be a short term target. Achieving these targets plays a number of important roles. First of all the employees feel more energetic and warmer towards the change initiatives taken by the CEO.​​ 

Refreezing

This is the final phase of the change process. This ensures that the change initiatives that have been taken sustain themselves and that employees do not go back to their old habits.​​ 

Don’t Let Up

The organizations should not go soft on ensuring that the changes made in Telstra are for the​​ long run. Therefore the vision of the change should be integrated in the daily operations. This would only ensure that the people do not go back to their previous routines. This can be done by implementing new organizational controls. Organizational controls for Telstra can include reward systems linked to company performance both on CRM and financial fronts.​​ 

Make it Stick

The CEO must continuously monitor these controls to review employee’s performance. An intelligent strategy would be to review the performance of employees after every two years.​​ 

Conclusions

The different aspects of the change models give above would ensure that the change is as smooth as possible. Another important step is the formation of a contingency plan. This is because organizational change does not always go as planned. Therefore organizations need a strategy which would ensure that the organization has a strategy in place in case the change program fails. The failure can be due to failure or implementation or unforeseen consequences which can render the very initiatives useless. The proposed models would ensure that the implementation is smooth and better performance can be expected from Telstra in the future.​​ 

References: 
  • Miner, J. B. (2005). Organizational Behavior:​​ Behavior 1: Essential Theories of Motivation and Leadership. Armonk: M.E. Sharpe.

  • Weisbord, M. (2004).​​ Productive Workplaces Revisited​​ 

  • Hiat, J. (2006). "The definition and history of change management

  • Filicetti, J. ( 2007). "Project Management​​ Dictionary"

  • Iles, V and Cranfield, S. (2001). Managing Change in NHS

  • Dutton, N. (2008). BPM Case Study: The Car Phone Warehouse

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