Kotter's eight stages of Change "A sample project of a fashion company's transformation"

FASHION

LAMISSIMO TEXTILE CO.(Kotter’s 8 stages Approach)

FEYZA ALTOO HALL MBA

STRAYER UNIVERSITY

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Lamissimo

APPAREL

L

ORGANIZATIONAL CHANGE PROCESS

LAMISSIMO TEXTILE CO..

Occupation Fields: Textile & Fashion-Apparel & Accessories

Basic industrial formation: Family owned company ‘s occupational field is fashion and textile industry. Manufacturing own designs, retail, whole- sale and exporting. Manufacturing fabrics by using contracted manufacturing for its own merchandize.Size: Before change: Employee: 45 - 50 Machinery: 39 After Change: Employee : 130- 146 Machinery: 127Short History:Lamissimo co. was a small, well known fashion and textile retailer in Bursa Turkey with two retail stores. This small business decided to manufacture certain goods and add to the merchandizes that they were buying from upscale fashion wholesale companies.Started with eight machines and increased to 18 machines in 4 months. After increased demands, the company increased the capacity constantly and started hiring contract manufacturing in addition to increasing its own machine parque. This rapid growth drove the company to change its business identity from LLC to corporation and Lamissimo ’s transformation journey started.

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ORGANIZATIONAL CHANGE PROCESS

LAMISSIMO TEXTILE CO..The main goal was generating surplus revenue, maintain a competitive advantage over other competitors, institutionalize and globalize the company and gain nationwide reputation.

Globalization, economic crisis and pressures: We, as Kaftan Textile Co have to grow, adopt new market requirements due to the global environment. We must expand our borders in marketing modernize our systems and technologies,Eradicating Performance Gaps: Due to our newly set goals and objectives, we must reorganize and develop new organizational structure, hire new talents , implement new performance booster and capacity increaser systems. We need to close the gaps, expand our machine parque, train our employeesNecessity of upgrading to a new technology :There are some new specialty machines that save time and money, increase capacity and accordingly performance. More advanced technology, more capacity and higher performanceResults of SWOT Analysis : Identification of strengths, weaknesses, opportunities and treats Opportunities are identified in the market place that the organization needs to pursue in order to increase its competitiveness. Knowing strengths and improve them, identifying the weakness and try to eliminate should be our main consideration in order to stay competitive and always stay strongReaction to Internal & External Pressure: Management and employees, particularly those in organized unions often exert pressure for change. External pressures come from many areas, including customers, competition, changing government regulations, shareholders, financial markets, and other factors in the organization's external environment. We will have special study for pressure and prepare a road map for guidance.

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ORGANIZATIONAL CHANGE PROCESS

LAMISSIMO TEXTILE CO..

Defining strategy

Selecting Change Leaders

Choosing Change Model

Developing Change Plan

Setting priorities

Taking Action

Collecting t& AnalyzingDiagnosing gaps and Managing ResistanceImplementing Corrective Action and following

PHASE 1 PHASE 2 PHASE3

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ORGANIZATIONAL CHANGE PROCESS

LAMISSIMO TEXTILE CO.

Phase1: Preparing change*Defining Strategy, clarifying expectations and roles*Measuring Organization’s readiness for change*Preparation of forms and assessments*Choosing and assigning leaders*Building supportive groups by choosing digested and dedicated employees*Identifying departments and hiring new employees *Choosing the Change Model*Starting communication

Phase2:Implementing Change*Developing change implementationplan by tuning to Kotter’s model*Identifying and setting priorities and communicating*Scheduling actions , communicating

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Phase 3:Reinforcing change*Following, and evaluating day to day activities and developments*Diagnosing gaps and managing resistance*Implementing corrective actions when necessary, following and communicating

lAMISSIMO’s Implementation Phases Descriptions

ORGANIZATIONAL CHANGE PROCESS

LAMISSIMO TEXTILE CO..

The purpose of a change readiness assessment is to analyze the level of preparedness of the conditions, attitudes and resources, at all levels in a system. The readiness assessment also questions the preparation of the people in the organization, asking whether they are adaptable to change or understanding

Organization’s readiness for changeOur triggering fact of change decision is our dissatisfaction of coming short for the high demand to our designs, desire for increasing existing business volume. We as Kaftan family are targeting to be more modernized, institutionalized, globalized and nationally recognized organization

After making some inquiries internally and externally we realized that:: We have the right conditions and resources in place to support the change process We have a clear vision and objectives for the intended change We have the motivation and attitudes to engage with the change and make it work

Everybody is excited about the growth We are ready for CHANGE

Preparation, assessment and strategy development

YES6

Phase 1

ORGANIZATIONAL CHANGE PROCESSLAMISSIMO TEXTILE CO.

Followings are widely used Change Models:

Which change model? Change Model

Theories

Phase 1

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Lewin’s Change ManagementMc. Kinsey’s 7S ModelBridge’s Transition ModelRoger’s Technology Adoption CurveKubler-Ross Five Stage ModelProsci’s ADKAR ModelKotter’s Eight Steps Model

After examining the benefits and limitations of various models, we decided to go with KOTTER’s Eight Step Change Management Model

YES John Kotter

ORGANIZATIONAL CHANGE PROCESSLAMISSIMO TEXTILE CO.

. Kotter’s Eight Stages Change model

Phase 1

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REMOVE OBSTACL

ES EMPOWER ACTION

PLAN AND

CREATE SHORT TERM WINS

CONSOLIDATE GAINS

PRODUCE MORE CHANGE

ANCORE NEW

APPROACHES IN THE

CULTURE

ESTABLISH

A SENSE OF

URGENCY

CREATE GUIDING COALISI

ON

DEVELOP VISION AND

STRATEGY

COMMUNICATE THE

VISION

Prof.Dr. John Kotter Studied the progress over Hundred companies during their Transformation. This model turns Change process into a campaign

This model is an appropriate Organizational Development guide providing a three dimensional linkage between individuals, groups and the organization

ORGANIZATIONAL CHANGE PROCESSLAMISSIMO TEXTILE CO.

Phase 1

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Change Process Implementation Plan The

Guiding framePlanning Sustaining Change

Engaging & Enabling the stages

Implementing successful Change

Defining the problemDocumenting the current situationClarifying the prioritiesVisualizing the ideal situationDefining measurement targetsCreating change climate

Brain storming for adding new approaches and solutions

Building Teams and leaders, setting goals and assigning duties

Clarifying the development plan and scheduling Implementation

Eliminating Obstacles &Resistance

Measuring, recording and comparing results, creating short term wins

Communicating

ORGANIZATIONAL CHANGE PROCESSLAMISSIMO TEXTILE CO.Phase 2

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1. Establishing Sense of Urgency

The state of the organization should be determined before conducting this stage as:• Complacency• False Urgency• True Urgency

• Explain and create awareness for the benefits of this growth

• Create and develop some new opportunities for supporting employees

• Convince and motivate these employees

• Create value and inspiring proposal for Change

Strategy to follow for the Stage:

After increased demands, the company increased the capacity constantly and started hiring contract manufacturing inaddition to increasing its own machine parque. This rapid growth drove the company to change its business identity from LLC to corporation and Lamissimo’s transformation process started.

Tuning Lamissimo’s Change Process to Kotter’s Six Stages Model

ORGANIZATIONAL CHANGE PROCESSLAMISSIMO TEXTILE CO.Phase 2

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2. Creating the Guiding CoalitionTeams and LeadersIn order to perform certain activities, it is necessary to build a guiding, supporting and acting groups and leaders. These groups will support the implementation and communication of vision, help to ease the resistance, increase the sense of urgency and spread trust

Team ProfileTeams and leaders should be capable to build and deliver trust.These teams should be able to understand and digest the change, the benefits and disadvantages in order to mentor and explain the entire organization.Team should be generated with go gettersAnd persuasive personalities for influencing the entire employees for commitment and should prevent or eliminate the resistance

ORGANIZATIONAL CHANGE PROCESSLAMISSIMO TEXTILE CO.

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3.Developing vision and strategy

Vision provides appropriate feel of understanding the reason for the change, and the ways to follow. It is like a road map to the destinationDeveloping vision carries vital importance for the change process. It simplifies all complexities and every diminutive detail. Lamissimo developed an excellent roadmap which was extremely helpful while getting over the hardest stages of the process.Imaginable: They convey a clear picture of what the future will look like.Desirable: They appeal to the long-term interest stake holdersFeasible: They are form with realistic and attainable goals and decisions.Focused: They are clear enough to provide guidance in decision making.Flexible: They allow individual initiative and alternative responses in light of changing conditions.Communicable: They are easy to communicate and can be explained quickly.

Phase 2

ORGANIZATIONAL CHANGE PROCESSLAMISSIMO TEXTILE CO.

Communicating this vision is another important part of the successful change mechanism. It is the key of “buy-in.” Lamissimo provided great communication facilities for all stakeholders.

Phase 2

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4.Communicating vision for “Buy-in”

To be effective, the vision must be communicated in hour-by-hour activities. The vision will be referred to in emails, in meetings, in presentations – it will be communicated anywhere and everywhere.

There are things to keep in mind. In communicating the vision for the transformation, The vision should be:Simple: No complexity, no interpretation necessary.Vivid: use A verbal picture ,metaphor, analogy, and example.Repeatable: Ideas should be able to be spread by anyone to anyone.Invitational: Two-way communication is always more powerful than one-way communication.

ORGANIZATIONAL CHANGE PROCESSLAMISSIMO TEXTILE CO..

Before implementing the change, during the preparation stage, it was a great project to work on for the leading team. They spent a remarkable time for identifying, discussing and eliminating possible barriers to efficiency to empower broad-based action in company’s employees and the guiding coalition.

5. Empowering broad-based actionManagement information systems have a big impact on the successful implementation of a change vision.

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Throughout the change process,Kaftan did not face with any barrier to interrupt the smoothly flowing operations. The company had crisis team whom were immediately address solutions to any barriers if all of a sudden, any mishap happens.

Empowering broad based action also involves investment in employee and managerial training and development. This is a necessary expense, not a “nice to have” expense.

ORGANIZATIONAL CHANGE PROCESSLAMISSIMO TEXTILE CO.

During long, tiring change efforts, short-term wins are life savers for teams. Researches show that companies that experience significant short-term wins by fourteen and twenty-six months after the change initiative begins are much more likely to complete the transformation

Short term win must follow these criteria*Its success should be Unequivocal*It should be visible throughout the organization*It should be related with change effort 15

6. Generating short term wins

Lamissimo’s executives were organizing company dinners, jamborees and award ceremonies to motivate and encourage the employees and administrators which were working as performance boosters.

Set the small targets.each smaller target needs to be achievable, with little room for failure. Change team may have to work very hard to come up with these targets, but each "win" that you produce can further motivate the entire staff.

ORGANIZATIONAL CHANGE PROCESS

LAMISSIMO TEXTILE CO..

Resistance is always behind the door and waiting for occasion to emerge in the process and assert itself. The early stages of change are always tougher stages and demand to be watchful. The new deeds and practices must be accompanied the organization’s culture to guarantee the long-term success. If backslidden is being observed, rebuilding momentum may be an unnerving task.

In a successful major change initiative, by step 7 you will begin to see: More projects being

added Additional people being

brought in to help with the changes

Senior leadership focused on giving clarity to an aligned vision and shared purpose

Employees empowered at all levels to lead projects

Reduced interdependencies between areas

Constant effort to keep urgency high

Consistent show of proof that the new way is working

7. Consolidating gains and producing more change:

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Kotter suggests that, if an organization starts implementing change initiative successfully and maintains steadily, it creates strong motivation and opens the doors for more projects.

Kotter offers these tips to remember when anchoring change in the culture (P: 157):1 ) Culture change comes last not first2 ) It is dependent on results3 ) It will require a lot of talks4 ) May involve turnover5 ) Makes decisions on succession crucial

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8.Anchoring new approaches into the culture: New practices must grow

deep roots in order to remain firmly planted in the culture. Creating a company culture from the start-up phase helps your business thrive. Doing things right from the beginning will save the organization from undesirable behaviors of the employees or to change their attitudes at a later date.

Tradition is a powerful force. We keep change in place by creating a new, supportive and sufficiently strong organizational culture. A Guiding Coalition alone cannot root change in place no matter how strong they are.

CHANGE

LAMISSIMO TEXTILE CO. ORGANIZATIONAL CHANGE PROCESS

ORGANIZATIONAL CHANGE PROCESSLAMISSIMO TEXTILE CO.

Lamissimo’s Change areas:Mission, Vision, & Strategy: Our questions will be: "What is our business and what should it be?" Answers to these questions will lead to changes in our organization's mission (the purpose of the business), vision for the future (what the organization should look like). It also will form our competitive strategy.Technology: According to the targeted capacity, we need to improve our technologic formation. Need to upgrade machineries, buy new specialty machineries, some technologic devices and software in order to increase efficiency and lower costs.Human-Behavioral Changes: We need some new talents to hire. Our existing employees are lucky, we are not downsizing. We must provide some more efficient training for new knowledge and skills. Task-Job Design: As we are changing the ways of work flow, and operations, we are applying new procedures and methods for performing work.Organizational Structure: Organizations can change the way they are structured in order to be more responsive to their external environment. Organizational Culture: Entities can attempt to change their culture, including management and leadership styles, values and beliefs. Of all the things organizations can change, this is by far the most difficult to undertake

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Setting Priorities (Change Areas)

Staying On TrackMonitoring day to day activities, and evaluating the results and taking appropriate action when necessary is crucial for the success of change management process. It supports supervision and gives vital clues about issues requiring attention or action. Getting feedback indicates the palsied points and areas which would cause larger gaps if not corrected properlyPut in place the structure for change, and continually check for barriers to it. Removing obstacles can empower the people you need to execute your vision, and it can help the change move forward.*Identify, or hire, change leaders whose main roles are to deliver the change.*Look at your organizational structure, job descriptions, and performance and compensation systems to ensure they're in line with your vision.*Recognize and reward people for making change happen.*Identify people who are resisting the change, and help them see what's needed.*Take action to quickly remove barriers (human or otherwise).

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Following, and evaluating day to day activities and developments

Diagnosing gaps and managing resistance

LAMISSIMO TEXTILE CO. ORGANIZATIONAL CHANGE PROCESS

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Implementing corrective actions when necessary, following and communicating

• Identify the problem;• Investigate to identify the root cause;• Come up with the solution;• Implement the solution;• Document the solution;• Communicate the solution; and• Evaluate the effectiveness of the solution

Focus on correcting and preventing problems.Preventing problems is generally cheaper than fixing them after they occur. Start thinking about problems as opportunities to improve!

• Poor communication;• Faulty or missing procedures;• Equipment malfunction or lack ofmaintenance;• Lack of training;• Lack of understanding of requirements;• Failure to enforce rules; and• Corrective actions fail to address root causes of problems.

Causes of possible general problems

Steps for solution

ORGANIZATIONAL CHANGE PROCESS

LAMISSIMO TEXTILE CO.

References

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Besson, T. (n.d.). CMF, CareerCast.com Senior Columnist Keys to a Great Corporate Culture: Improving Employee Engagement. Retrieved 09 09, 2014, from Careercast.com: http://www.careercast.com/career-news/keys-great-corporate-culture-improving-employee-engagement

Brookins, M. (n.d.). What Causes Resistance to Change in an Organization? Retrieved 09 11, 2014, from Demand Media, smallbusiness.chron.com: http://smallbusiness.chron.com/causes-resistance-change-organization-347.html

Change Management Coach.com. (n.d.). Change Management Models. A Guide to Best Practices. . Retrieved 09 08, 2014, from Change Management Coach.com: http://www.change-management-coach.com/change-management-models.html

Change-management.com. (n.d.). An Introduction to Change. Retrieved 09 14, 2014, from Change Management Learning Center: http://www.change-management.com/introduction-excerpts.htm

References

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D’Ortenzio, C. (2012, 08 09). Understanding Change and Change Management Process. Retrieved 09 11, 2014, from University Of Canberra (Canberra.edu.au): http://www.canberra.edu.au/researchrepository/file/81c02a90-6a15-91ae-c7a2-ff44c96d60b2/1/full_text.pdf

Hr.uq.edu. (n.d.). Kotter’s Steps to change. Retrieved 09 10, 2014, from University of Queensland , Human Resources Division: http://hr.uq.edu.au/step-1

Kotter, J. (n.d.). 8 Steps to Change. Retrieved 09 08, 2014, from Kotter International.com: http://www.kotterinternational.com/our-principles/change-leadership

Mc.Connel, B. (2010, 04 19). Sustaining Change with the SUCCESS Model. Retrieved 09 07, 2014, from isixsigma.com: http://www.isixsigma.com/industries/financial-services/sustaining-change-success-model/

Prosci. (n.d.). Change Management, The Systems and Tools for Managing Change. Retrieved 09 12, 2014, from Prosci (Change-management.com): http://www.change-management.com/tutorial-change-process-detailed.htm#Process