Organizational Innovation and Change

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Introduction

There are several reasons for change, and many large organizations that are implementing change not only to improve their sales and their image but their customer service as well. The following three articles are examples of large companies that underwent an organizational diagnosis to implement changes to policy, product, and others.

The first article, “Inside the Netflix-Comcast deal,” comes from Fortune Magazine. It was published on the website on February 24, 2014. According to the article, all of the rumors about this deal are untrue (for example, Netflix will not be raising its monthly price), and that Netflix made this decision to use Comcast, instead of a third party, for their connectivity. The article debunks many, if not all, rumors about the new deal. The deal is described as a “commercial interconnect relationship” and is based on “based on balanced and shared network investment” (Rayburn, 2014). Netflix is coming together as a way to make each company better, and this is a positive change.

The second article comes from CNN, and is entitled “BlackBerry going back to basics, says new CEO.” It was published on the website on February 26, 2014. The article reports that the CEO, John Chen, will focus on attracting new business, and keeping customers, in order to reverse the fall that BlackBerry has been facing as of late. A part of this new plan of change is to introduce new smartphones this spring, in connection with Foxconn. The article writes: “He (CEO John Chen) said raising confidence inside and outside the company is the biggest challenge he faces in the next 12 months” (Boulden & Reynolds, 2014). The recent changes with BlackBerry are all about showing consumers that they are able to keep up with the changing market.

The third article comes from the official website of Whole Foods Market, and is entitled “Square and Whole Foods Market® partner to create faster, easier payment and checkout experiences.” It was published on their website on February 11. The article discusses Whole Foods’ new partnership with the company Square to offer customers an easier way to check out. The plan for this change is for the smaller counters – the deli, bakery, coffee bar, etc. – will have these quick check out machines, Square Registers and Stands, so that these customers can skip the main check-out lines. This saves time and frustration for those who only come in the store for deli meat or a quick coffee break.

Rationales for Change

There must be a rationale and a plan for each company’s change. According to the 2005 article “Scope analysis: identifying the impact of changes in business process models,” changes may be a result of “ongoing improvement efforts, changes in the business environment, and advances in technology” (Soffer, 2005, p. 393). Changes are only made as decisions to better the organization, its products, and its image. However, the changes must be made for good reason because they cost the company money and, if they do not work out well, the company’s image is sacrificed along with their finances.

As well, modifications to an organization’s present process “can range from an overall redesign to local modifications. An overall redesign implies that the BPS system is to be adjusted to a new business process not supported before, while a local modification is when one point in the process is modified” (Soffer, 2005, p. 395). Modifications made by each of the examples are being made as an important step toward improvement.

Change in a network involves changes in both companies and relationships. A company seeking change is always dependent on the approval and actions by the other actors. The ‘individual actors' perceptions are important because bonds arise in business relationships as the two related parties mutually acquire meaning in their reciprocal acts and interpretations (Corsaro & Snehota, 2012).

Change is inevitable and is a very important part of a company’s success.The first article is about the changes taking place between Netflix and Comcast. The deal was implemented Sunday, February 26, 2014. The changes being made are that Netflix is switching to Comcast as their internet and service provider. Although many reviewers are spreading rumors that this will mean that users will now need higher speed internet, or that they will now be paying nearly double in fees every month for the service, but these are simply untrue. Netflix only seeks to improve how their consumers watch their favorite shows and movies. Making this change is an important step because, as a company that streams video from so many devices, technology truly dictates how far that the company can go as far as their services and the films and television shows that they can provide. Technological changes need to be followed for a company like Netflix, and that is the main rationale for this organizational change.

The second article was about the changes that BlackBerry is applying in order to reverse its fall in profit and consumer satisfaction. It is commonly known that Android is the most popular company for smartphones. The market is dominated by Android, and it holds more than ¾ of the total smartphone sales in recent years. Of course, BlackBerry, being a well-trusted company, is willing to make a few changes in order to save the company and preserve its name in the market of mobile devices. The big changes mean that BlackBerry will be releasing new smartphones this coming Spring, and they will be able to compete with those that are already flooding the market. These are external because they lay in the creation of BlackBerry’s new cellular devices.

The third article is about the changes that are being implemented as a part of Whole Foods Market’s new deal with the technology company Square. These changes will improve customer service and allow their customers to avoid the main check-outs. This will improve customer satisfaction because it will decrease the frustration of waiting in a very long line when you simply need something from the deli. The pressure for this rationale and the changes is mainly external. It is a way in which to use technology to the company’s benefit, and as a way to make customers happier as they shop. From a company perspective, this could mean better sales profits. More happy customers mean that more money will be coming through.

Compare and Contrast

Generally, it can be assumed that the sources of change are going to be internal or external. A common view of these changes is that it is triggered by technology and that this is a great driving force behind planning a change. When it comes to change in networks, technological ideas are no longer relevant (Corsaro & Snehota, 2012). The changes that take place within business networks reflect on the employer (the company as a whole), their employees, and any other businesses that they may connect to.

The first article is about the fusion of Netflix and Comcast. This change reflects a network change and is a little more complicated than any external changes. The change involves two companies working together for a given cause. In this case, that cause is to improve the technology that runs Netflix’s streaming abilities. The rationale for this change was to improve the technology that Netflix was currently using. Millions of people use Netflix, and it is a very popular alternative to cable, it is crucial that the company is able to keep up with the flow of users. Netflix is a company whose very service depends on how well they are taking advantage of technological advances because it allows users to stream and view millions of video in a matter of seconds: it is absolutely crucial that Netflix is able to keep up with the best technology that they can possibly afford for the sake of their millions of consumers.

The second article is about BlackBerry and the changes that they are implementing within the smartphone market. This is an external change and it depends greatly on how the customers take to the new smart devices that BlackBerry will be releasing. BlackBerry’s current audience is very specific, and their current models have lost popularity; in this, the company is losing money. This is an important part of the rationale for this change. It is important for a company that markets cellular devices to ‘move with the times,’ and cater to the customer. “The first step in determining whether there is a business need for a new technology is to identify a problem or opportunity” (Brusco, 2012). The problem identified is that BlackBerry is losing money because of their phone’s very limited market, so they are reaching out to others outside of these limitations. The rationale is a very good argument because it is a very simple argument to make. BlackBerry simply needs to move with the times, and the technology, so that they can be a successful company.

The third article is about the changes that Whole Foods is implementing in order to improve their customer service. Like the change with BlackBerry, it is external. The change is dependent on how the technology will work for the customers. As long as it runs well, the customers will be satisfied with the new change. The rationale for this change is justified, even at its most simple. One of the more frustrating aspects of shopping is the lines that people have to wait on in order to pay for their purchases. To create a system that means that the lines at Whole Foods Market will be shorter, to put these smaller registers at the deli and at the bakery, will make shopping at this store a more enjoyable and less stressful experience for all customers. The most powerful rationale in the case of this change is that customers are Whole Foods’ audience; the people who come to their stores every day to shop and expect the store to have what they need, and to treat them as if they are welcome. This change places smaller registers from Square in front of the deli, the coffee bar, and other smaller services within the store so that customers are able to check themselves out, and simply to check out more quickly. This allows the shopping experience at Whole Foods Market and, at its core, that is the only true rationale that is necessary.

Reflections for the Practicing Change Manager

The changes that a company implements to improve functions are the job of the practicing change manager. This person must manage how the changes are being made, and how they are going to hurt or help the company. As a change manager, it is important to identify all possible environmental pressures that may propel your organization toward change. “A win-lose perspective considers that, with increasing regulatory and societal pressure, firms cannot ignore anymore their negative environmental externalities without risking losing their legitimacy or license to operate” (Houdet, Trommetter, & Weber, 2012). This is relevant to the changes that are happening with BlackBerry because they were forced to carefully examine their environment, the smartphone and smart device market, and adapt to what that market is looking for out of a cellular phone company. They are releasing new smartphones because the original BlackBerry model only sells to a very specific audience. This change is going to help BlackBerry to market to a wider audience, improve their sales, and revitalize their image.

Sometimes it is easy, at other times difficult, to raise issues in an organization about the rationale that is specific for engaging change. “The resulting costs they incur, seen as proportional to the intensity of external pressures, cannot be easily avoided, and far outweigh the environmental benefits” (Houdet et al, 2012). This is the main reason why it is very important to know the plan for a change before it is carried out. Asking questions and understanding every aspect will allow a practicing change manager the input that they need to present the idea to executives, those who make the larger decisions, in a more confident fashion. As well, when the idea for change gets approved, this plan will not have to ‘make stops’ with any other planners or managers, as far as its compilation, because of the initially detailed plan.

The goals and objectives describe what the project will accomplish and why it is important. Goals are high-level statements, similar to a mission statement that provides an overall context to the project or business. In fact, project goals should align with the overall business goals or mission statement of the organization (Brusco, 2012).

As a practicing change manager, it is important to know that each change and its process must have goals, identified problems and solutions, and of course, the proper rationale to present for these changes.

The personal criterion that may be adopted to ensure that the manager is able to initiate a specific change dictates that all changes must be made for the right reasons. There are questions that need to be asked in order to guide the process so that both the rationale and the decision itself. “When an organization is so large and has unlimited resources, they can buy their way out of any predicament. What motivation does a large organization have to be accountable for its actions? Accountability, meaning the willingness to be held responsible, is far more important” (Karnes, 2009). The changes, internal and external, are reflective of the company and rationale is the responsibility of the practicing change manager. However, the company is accountable for the implementation of these changes because they mean that the customer really is most important. In all three examples of change, the major rationale behind the change is that the customer will again be able to trust the company, and it means that the customer can feel as if they are important to the company.

There are questions to be asked during the planning of such changes: will this positively affect both customers and the company’s image? Can we afford this change? Will this change create a negative impact on the environment, or even, does that matter in this case? Other questions include collecting surveys and data to make sure that said changes are going to be a positive change.

Use your goals and objectives to outline your specific strategies. If you think about a hierarchy of goals and tactics, you would have an overarching goal that aligns with the mission of your organization, followed by lower-level strategic objectives to meet your goal, and finally the specific tactics you will use to reach your objectives and ultimately your goal (Brusco, 2012).

These questions are important in the presentation of these changes. Whether they are based in technology or interconnected systems between two big companies, change has to be monitored carefully and carried out just as carefully as in the planning stage. The practicing change manager knows that these changes could serve to ‘save’ a company’s sales or image.

Conclusion

Change is inevitable, especially in the world of business. Change begins with consumers, technology, new or depleted resources, and it is dependent on the reaction of those in power per organization. The changes that are being taken on with Netflix, Comcast, Whole Foods and BlackBerry are all changes that need to be implemented in order to change the direction of their organization’s development in a positive way.

References

Boulden, J., & Reynolds, D. (2014). BlackBerry going back to basics, says new CEO. CNN. Retrieved from http://www.cnn.com/2014/02/26/business/business-customers-key-to-turning-blackberry-around/index.html.

Brusco, J.M. (2012). The Business of technology. AORN Journal, 95(2), 279-285. http://dx.doi.org/10.1016/j.aorn.2011.11.012.

Corsaro, D., & Snehota, I. (2012). Perceptions of change in business relationships and networks. Industrial Marketing Management, 41(2), 270-286. Retrieved from http://dx.doi.org/10.1016/j.indmarman.2012.01.002.

Houdet, J., Trommetter, M., & Weber, J. (2012). Understanding changes in business strategies regarding biodiversity and ecosystem services. Ecological Economics, 75, 37-46. Retrieved from http://dx.doi.org/10.1016/j.ecolecon.2011.10.013.

Karnes, R.E. (2009). A change in business ethics: The impact on employer-employee relations. Journal of Business Ethics, 87(2): 189-197. Retrieved from http://www.jstor.org/stable/40294915.

Rayburn, D. (2014). Inside the Netflix-Comcast deal. Fortune Magazine. Retrieved from http://finance.fortune.cnn.com/2014/02/24/inside-the-netflix-comcast-deal/?iid=F_F500M.

Soffer, P. (2005). Scope analysis: Identifying the impact of changes in business process models. Software Process: Improvement & Practice, 10(4): 393-402. doi:10.1002/spip.242.

Whole Foods Market. (2014). Square and Whole Foods Market® partner to create faster, easier payment and checkout experiences. Retrieved from http://media.wholefoodsmarket.com/news/square-and-whole-foods-market-partner-to-create-faster-easier-payment-and-c.