Leadership and Organizational philosophy is one of the most strategic organizational assets which provide means to devise an efficient strategy for gaining a sustainable competitive advantage in the marketplace. We identified in our training presentation that organizations needed change to survive in the marketplace due to change in customer needs, competitors’ strategies and change in political, economic, social and technological conditions surrounding the organizations. Organizations need to undergo a strategic change process in which the stakeholders and employees of the organization play the most crucial role.

In this paper, assuming the role of a consultant to a business advice organization, the material of “Buck and Pulleyn” which is an American advertising agency has been selected for discussion. This case was written by Professor Louis B. Barnes in 1995 and it is one of the most prominent examples of strategic change management that how this organization has to undergone change. The discussion about the organization revolves around the following important points and it provides important insights about the strategic change management.

Develop systems to involve stakeholders in the planning of change and develop a change management strategy with stakeholders.

Evaluate the systems used to involve stakeholders in the planning of change.

Explain what systems and processes would need to be/have been developed to ensure involvement of the stakeholders in the change, and justify choice.

Create a strategy for managing resistance to change.

Review the effectiveness of management actions to overcome any identified instances of resistance

Describe 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.

The case was published by Harvard Business School in 1995 for class discussion. (The case study can be accessed online at: http://gwu-emse-211.wikispaces.com/file/view/Buck+&+Pulleyn.pdf)

Summary of the Analysis of Buck and Pulleyn Strategic Change Management

This case focuses on the issues faced by Buck & Pulleyn which includes restructuring of the organization, employees’ motivation and stationing of Creative Director, Robert Massimilian, as the president because of the conflicting feedback from different stakeholders. For Analysis, I have applied and reviewed Lewin’s Three-Step Change Model in this case. Firstly, in Unfreezing, Chris came up with a new structure which was formed by the consensus of all the employees and stakeholders. The resulting structure was less formalized and highly decentralized. In the Moving phase, the new structure was enriched with greater employees and stakeholders involvement and it consisted of external and internal teams to manage the strategic change process. The basic focus of change in organization’s structure was to anticipate the dynamic environment with changing needs/wants of customers and clients (The most important asset for any organization). The issue of conflict between cost and quality, issues regarding expertise database and concerns related to compensation according to the new system structure were also addressed. Review compensation group had to deal with a couple of issues such as the process, merits, implementation and criteria for the compensation plans. Now the organization is facing the problem to re-freeze the change process at an optimal point and this is the main problem for the case. After analyzing the case, I would like to make some recommendations which are:

Buck and Pulleyn need some visionary leadership to anticipate change with greater employee consensus and involvement.

The compensation plan by team needs some more compliance and focus. The Robert’s management practices should be reviewed.

There is a need for making sure that the organizational values and philosophy should be compatible with the new organizational structure because these values and philosophy are the building blocks of leadership and a sustainable competitive advantage. (Barnes, 1995)

Problem Statement:

“The Buck and Pulleyn needs major organizational structure changes due to changing environmental context and needs/wants of consumers and clients by keeping productive human resources enriched with motivation and enforcement of organizational philosophy and vision. The organization is looking to refreeze the change process at an optimal point”

Analysis:

The basic problems faced by this organization were poor leadership, inefficient decision making and cultural resistance. At the start, when the need for change in organizational structure realized by Chris, the efforts failed because of old cultural norms of organization and lack of confidence on the top management by the employees and stakeholders; a factor which had lowered the motivation level and increased the reluctance to change among the employees and shareholders. I have arrived to this conclusion by applying, a well-known approach for managing change that requires organizations to go through three separate processes. It is called Lewin’s Three-Step Change Model. The three steps are unfreezing, movement, and refreezing. First step unfreezing was done by understanding the need for organizational change due to change in environmental context and customer needs. In the 2nd step discussions were held with all the stakeholders to change the existing style of leadership and strategy but employees showed some resistance for organizational change. During this step, employees were a little uncomfortable, and there was a need for some strategies to encourage them for participating in decision making process in order to engage employees in decision making about the new system. Finally during refreezing, some issues arose due to poor leadership techniques, inefficient decision making methods and lack of confidence on the top management by the employees. (Barnes, 1995)

First of all, I would like to analyze the case with Lewin’s Three-Step Change Model to understand the change process and then I would generate some arguments to get understanding of issues to arrive at a conclusion of the case study with some recommendations. It is advised that the reader of this paper must read the case study originally published by Harvard business school. (Barnes, 1995)

Lewis Three Step Change Model:

Unfreezing:

The initial stages related to the restructuring of the organization were met with some problems, including the negative reaction of the employees when the first memo for the restructuring of the organization was sent. The employees were engaged in selective perception and believed that their feedback or participation in the new structure of the hierarchy would be insignificant, despite the continuous effort of the top management to involve them in the structural reforms through various procedures including group discussions. Stakeholders were involved in the strategic change management process by group discussions and training sessions to discuss the change in environment and to implement a strategy for gaining a sustainable competitive advantage in the marketplace. The approach to change was good and being in the place of Chris Pulleyn, I would not like to change differently from Chris because the approach used by Chris opened the way for stakeholders’ involvement to increase their motivation and to change their selective perception. Unfortunately, this effort to engage stakeholders was not very successful due to confusions among the stakeholders about the strategic change management. My argument supports this approach because despite this approach did not succeed but it provided some edge or initiative for change or in other words it worked as a slipping point to bring a change in the organization. All the remaining process of change in The Buck and Pulleyn started from this initiative. Therefore, the change management strategy was defined in such a way that different tools and systems were developed to involve all the stakeholders in the change management process such as training sessions, group discussion and seminars across the organization as has been mentioned in the case. (Barnes, 1995)

Moving:

The failure of the first memo was followed by the introduction of group discussions for all the employees – a factor which resulted in a relatively more positive increase in the response of the employees/stakeholders and motivated participation in the strategic change process, but still it did not meet the required objectives. The restructuring task force process resulted in formation of controlled command groups on intra-departmental basis, and as noted from the performance and the orientation of the external and the internal teams, especially the red team, it seems that the five-stage model had been adopted in the group development model. Problem solving teams both internal/external (red, green and blue) had been formed and the team leaders were selected by the team members themselves, thus increasing the cohesiveness amongst the teams and increasing the possibility of positive effect of performance expectations. Membership in the three external and three internal teams had been established. Each team was developing and clarifying its responsibilities and new working relationships, with the Red Team far ahead of the others. Most Red Team members had previous experience in one of Buck and Pulleyn earlier multifunctional teams. The Blue and Green teams were still in their early stages of formation. The Transition Task Force was also under way, had a mission statement, and planned to dissolve itself after a three-month work span. Robert Massimilian had agreed to spearhead the cost/quality initiative and another staff member was in the process of establishing an expertise database of internal resources for the coaching/consulting problem. The approach was successful because it motivated employees/stakeholders to take part in the change process and increase in response rate of employees is a clear indicator of this success. (Barnes, 1995)

Refreezing?? – We need to do something about this!

The time constraints in the decision making process had been relaxed to some extend by Chris so as to ensure optimal decision making. The process of rational decision making would have been used to get a better and much quicker solution. The organization is attempting to anticipate and refreeze the change process but still some concerns from the employees and stakeholders’ side exist. Moreover, some more brain-storming is required to refreeze the process as the new system is not fully mature (as mentioned in the original case study). For example, Domains for teams are being defined and teams are still developing their working relationships and therefore the process is actually in progress. Red teams may have some experience but the blue teams and great teams are in early days of their formation. Cost-quality constraints are being considered and new staff is being developed for expertise database etc. The current structure is different from organization’s previous structure and there are some contradictions which are confusing the company in efficient decision making and leadership. For example, now the compensations are to be paid on team performance basis while in the past compensations were paid on individual basis. In simple words, similar problems like the controversy between the old individual based performance values and new team based performance values are creating problems and a proper solution is required before re-freezing the change process. Some other problems like the issue of Creative Director need some immediate solution to complete the refreeze process. My point here is to explain that the organization is unable to re-freeze the change which it has implemented because of some problems and an immediate solution is required to address these problems before re-freezing the change process. Therefore, it is the basic problem faced by the organization in this case. (Barnes, 1995)

Argumentation

The focus of the various teams in Buck & Pulleyn was on customer retention and satisfaction, and this could be attained through highly motivated and highly satisfied teams. Also, smooth coordination and cohesiveness would be needed among the various team members. Scarce resources should be efficiently allocated amongst the teams to result in optimal performance through the formation of a comprehensive database for resource detection and an effective compensation policy to go along with both these factors. The factors highlighted by the Restructuring Task Force were related to the compensation and bonus of the employees, as well as job promotions and possible career expansions. Compensation plans would have a positive effect on the motivation and the productivity of the employees if they would be tied to both the team and the individual performance, with periodic reviews of the team members for allowing better performance. (Barnes, 1995)

Looking at the team effectiveness model, the teams had all the four components of Context, composition, work design and process and were moving to the path of success. Better teams would be made, with the passage of time, by providing training to the employees. (Barnes, 1995)

The organization had come out of the conflict process successfully. The conflict related to cost and quality was good for higher efficiency of the organization because the employees would have focus on using the optimal production procedures for the maximum output. Looking at the issue faced by Chris regarding the nomination of Robert as the president, we can see that there was a conflict only in the opinions of the employees. (Barnes, 1995)

If we see the above events which happened in the last then these events clearly support my conclusion given at the start of the discussion. For example, there are clear evidences of poor leadership techniques, inefficient decision making methods and lack of confidence on the top management by the employees. We can consider the start of this change process when employees declined the change process indirectly. Then at the moving phase, some conflicts arose. Finally at the case of Richard, some contradiction occurred. All the employees needed a unified line of command with motivation and leadership for strategic change management. This supported my point which I described in the presentation that leadership and organizational philosophy is the most significant and strategic asset of an organization and it is crucial for employees to understand the organizational philosophy to efficiently take part in the strategic change management process. (Barnes, 1995)

Recommendations:

Based on all our analysis, I would make the following recommendations for Chris in order to solve various issues:

Ensure that the company has string leadership, with a strong support from the employees.

The compensation plan, dealing with all the issues highlighted in the report given by the Restructuring Task Force, is needed to be considered in the light of the new system.

The organization has a very strong culture and employees are reluctant to change. This should be kept in mind before establishing any further change policies.

The company will now have a decentralized decision making and a horizontal hierarchy, in which the reliance will be on the decisions made by the team leaders rather than the top management. They will be in direct contact with the customers and therefore, they are the most valuable asset for the company if it needs to prosper. Therefore, I would like to recommend that for the external teams, motivated and customer friendly employees should be hired. Moreover, the teams should also be given training to strengthen the team dynamics. As a result, in the long run, they will generate very positive outcomes for the company.

The methods used for the compensation plans should be efficient and employee oriented like peer surveys, etc. The final decision should rest with the compensation team, while the bonuses should be given on both team and individual performance basis. The career paths and possible promotions should be made clear in the new structure by the top management to increase the motivation level of employees and to hire the best talent for internal and external teams.

Any policies which are radical, or are providing a deviation from the general norms or practices, need to be carried out with caution and precision. This is because as was seen in the restructuring process, the organization wasn’t very supportive of the change in the structure of the organization. Any change or major decision needs to be carried out with precision and in accordance with the possible reaction of the employees. It would be better for the organization to have the confidence of the employees or the team leaders before and during the implementation process and decision making of policies.

All the changes made should be tested empirically that whether these changes are compatible with organizational structure or not. Because organization philosophy and vision are the building blocks of organizations structure, a proper brain-storming and activity mapping should be done to check the feasibility of change process. This is because organizational vision and philosophy are transferred from leadership and supports the activity systems of organizations. Any change away for these constraints will cause is poor leadership with organizational collapse.

Conclusion

If we clearly analyze the above the case of Buck and Pulleyn, then it is obvious that every strategy to undergo a strategic change management was efficient but the only problem faced was lack of leadership and organizational philosophy in strategic change management. The same recommendations were given in the training slides other than the report. The organizational philosophy and leadership the most the strategic assets to undergo and manage the strategic change management process in organizations. The organization must enforce organizational and leadership philosophy to align the personal goals of employees with organizational goals to accomplish its goals and objectives with an effective and efficient strategy.