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Strategies for Change Management

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Jan Carlzon: CEO at SAS Case Study ECBU 585 Strategies for Change Management University of La Verne Instructor: Nelly Kazman, M.B.A., A.E.M.B.A. Bruce D. Hill 9/18/04 Introduction To set the stage for any type of a case study--concerning change--it is important to take into account three areas; 1) where has the organization been and how has it done things in the past, 2) where is it at this point and how is it doing things, and finally, 3) where should it go to eliminate threats and weaknesses, and take advantage of opportunities, and how should it do it. Within this context, we need to look at how the organization is moving through the eight step process that creates successful change. I will cover the fist two points in the balance of this introduction and cover the last point by looking at how the change process is taking place (or has taken place) within each of the 8 steps individually. Based on this process, I will conclude with some closing thoughts on whether or not SAS (Scandinavian Air Systems) was successful in it's past change effort and whether or not it may be successful in its latest effort. First, let us look at the history of SAS and how it has operated in the past. After WWII, three Scandinavian airlines merged to form SAS; Swedish interest was 3/7, Norwegian interest was 2/7 and Danish interest was 2/7. Within this, 50 % was held by private investors while the other 50% was held by the government. 1 While the company was never subsidized by the government and operated in a free market, it did have some protection in the form of having first right of refusal for domestic flights and exclusive rights to international flights. What this did was to lessen the impact of free competition on SAS which allowed it to generate profits while not being fully efficient. ...read more.


create a vision to help direct the change effort, and 2) develop strategies for achieving that vision. In developing a vision for the future, it is important to understand what opportunities exist and remove any obstacles within the organization that will keep from taking advantage of those opportunities. Carlzon was good at gathering information to use to develop a vision and a strategy. In developing his vision, he gathered all the managers and asked them to gather data on customers. He then used this data to develop his vision. His vision for this change was to become "the best airline in the world for the frequent business traveler".6 He understood that this vision could not become a reality unless SAS could provide the service business travelers required. He also understood that those who know the customer best are those on the front line servicing them. In order to develop strategy to reach the vision, he gathered hundreds of employee focus groups to brainstorm how to meet the customer's needs. Many new ideas were generated. The common theme among them was the human factor was the key to meeting the customer's needs. These frontline employees also noted that if SAS was going to reach the new vision, they had to be empowered to make quick decisions. Carlzon also understood this, he stated, "We have to place responsibility for ideas, decisions, and actions with the [front line] people who are SAS during those 15 seconds [the initial meeting with the customer]".7 The strategy developed was to offer more amenities for the same fare, upgrade punctuality, change mix of aircraft to accommodate more comfort for the business traveler, better flight scheduling to accommodate business travelers, and revamp the corporate image. Communicating the Change Vision Carlzon was a master at communicating. He spent at least half his time traveling and talking to frontline employees, throwing company parties and pep rallies, and using video and print sent to employees communicating his vision. ...read more.


All we can do is to grasp some of the right things being done and some of the mistakes in our own opinions and discuss what impact they are making on the organization. Only years later can we view whether or not a particular change effort was successful or not because only then can we see how it effected the organization long term, which after all is the ultimate goal of organizations-to be successful long term. As far as SAS is concerned, I feel they are doing most of the right things to ensure long term success. They are following Kotter's steps and in the short term it is evident by the turn around the company made the short term change were effective. In today's global economy all businesses are in a dynamic state. Or I should say that if they want to be successful long term they must be in a dynamic state because the markets they services are continuously changing. Consumer demands change on a dime in today's world and in order to be an effective organization we must constantly change our way of thinking and doing things to meet those demands. If we do not, someone else will. Within the time frame of this case it appears that Carlzon understands this concept and is moving the company in a direction to keep pace with those ever changing consumer demands. In my opinion, from the information given in the case, there is one item Carlzon needs to address directly or it could come back to haunt him later. That is the issue of sharing the benefits of a successful change with all of those involved in the sacrifices given to create that success. This not only means a pat on the back and some recognition. It also means sharing some of the monetary gains reaped. Individuals expect to be compensated for the sacrifices they make during crises situations. If those needs are not ultimately met, they will feel they have been cheated and will go elsewhere, or even worse, stay where they are and work to sabotage future progress. ...read more.

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