Research suggests projects with great change management are six times more likely to achieve goals than those with poor change management. So change management is just about inevitable for any business looking to succeed for the long run, and since it’s so complex and challenging, a clear plan is critical.
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Let’s take an in-depth look at how two of the biggest companies in the world, Nokia and Coca Cola, used clever change management to adapt to new trends, technologies and markets to remain titans of their respective industries.
How Nokia used change management
Nokia was a top supplier of mobile phones before the smartphone entered the mainstream and claimed 40% of the market share in 2007. By 2012, however, the Finnish company was edging close to disaster with shares down to below $2 compared to nearly $40 just five years earlier and logging more than $2 billion in operating losses in the first half of 2012.
Recognising it had missed the opportunity to lead in the smartphone evolution, the company hired a new CEO and set out to reinvent itself. It sold its struggling mobile device division to Microsoft and shifted to concentrating on network and mapping technologies.
In 2008 the organisation introduced its Booster Programme, which sought to help the company match ever-changing customer aspirations and new technologies among competitors. It restructured from nine to four business units and streamlined manufacturing and development into just three horizontal business units.
The Finnish giant also bought out Siemens, a partner in its network infrastructure business since 2007, and turned its networks unit into its core business. The result was billions gained in shareholder value. With its purchase of Alcatel-Lucent and sale of its mapping business, Nokia completed its shift into becoming a full-service network infrastructure provider.
Nokia’s transformation from near-bankrupt hardware manufacturer to leading network infrastructure and technology players demonstrates how huge organisations can respond to serious disruptions by transforming itself.
How Coca-Cola used change management
Founded in the late 19th century, the Coca-Cola Company has been through many change management challenges. For example in the 1980s, as competitor Pepsi started aggressively targeting Coca-Cola, the company decided to release New Coke, a sweeter soda.
New Coke didn’t end up appealing to the public, and Coca-Cola quickly responded by deciding to replace it with the older formula. Coca-Cola was able to respond quickly to consumer preferences to maintain its product’s appeal.
Similarly, Coca-Cola stayed proactive during World War II. By offering free drinks for GIs, the company marketed itself as a symbol of the US war effort whilst boosting product recognition in destination countries the allied forces were occupying. In the process, it cemented its presence through 64 additional manufacturing sites across the world, which accelerated the company’s post-war global expansion strategy.
Coca-Cola has continued to adapt its strategy proactively in recent years. For example, Coca-Cola has released new products like Enviga, Diet Coke, and Coca-Cola Zero in response to greater health consciousness. During the Asian financial crisis, the company pursued an acquisition strategy to better deal with changing consumer preferences.
The Coca-Cola Company, by reacting quickly and acting proactively in anticipation of changing trends and consumer preferences, makes change management a part of its overall strategic vision.
4 key principles of successful change management to implement today
So change management is clearly essential to any business seeking to stay competitive, but how do you go about it? The following are 4 of the top principles to keep in mind.
- Support your HR team
- HR teams play a critical role in change management. Your HR team needs the right tools and innovative approaches to help manage change.
- Executive buy-in
- Make sure you have strong and effective executive buy-in or sponsorship for the change process. Without leadership getting on board, the change management process could be chaotic and it could even fail.
- Create a great plan
- Work to a a detailed, well-drafted change management plan. The plan should make clear all roles and responsibilities. It should clarify reasons for the change project and include a strategic communications plan to get everyone on board.
- Appoint an acquisition committee
- The committee’s role is to help streamline change management. The committee should have at least one person from each of the following: HR, IT, finance, and operations. It should also have an employee advocate or team lead.
Why is change management important for your business?
Trends like disruptive technologies and new ways and tools for achieving tasks mean organisations in all industries operate in a state of flux. Effective, ongoing change – through successful planning, implementation, and guidance of change initiatives – can be vital for ensuring businesses stay on the cutting edge. So leveraging new technologies typically requires effective change management, but so may non-technological changes like mergers, acquisitions or changes to support a shift in strategic direction.
Getting your people on board for any modifications in their roles and workplace is known as the soft side of change and is the most difficult and important aspect of change management because everything rests on your teams buying into the change. Hence change management arms you with the processes, tools, and techniques to help you manage the soft side of change – your people – to achieve your desired business outcomes.
With effective change management, you can avoid the costs of poor change management:
- Unnecessary productivity declines
- Low employee morale
- Lack of manager and stakeholder buy-in
- Negative impact on suppliers and customers
- Missed deadlines and overrun budgets
Sign up to a Change Management course with ALC Training
Great change management is vital for business success. Your organisation can learn how to be great when it comes to organisational change with an accredited certification course in change management.
A change management course will reinforce skills like communication, change practice, organisational change, and other vital skills. Find out more about ALC’s APMG accredited Organisational Change Management course here.