Change Management

In April 2009, a news report suggested that Air Canada was preparing to restructure its operations, possibly including a bankruptcy filing. The timing seemed right for WestJet to continue gaining ground on its chief rival who in support of its future growth was considering adding smaller airplanes. The addition of the new smaller jets for short-haul trips could be the catalyst for further growth and they considered how this would impact on their strategy and more importantly on its stakeholders.  Growth  and  success was part of WestJest’s culture  and throughout its history, it continued to align itself to its environment by making continues incremental changes .They initially started as a decentralised flat structure but had to employ level of executives to help manage the growth.  

WestJet SWOT Analysis 

Strengths

• WestJet is a lower-cost airline.
•  Westjet was one of the only three global airlines profitable during economic downturn in 2008.
• Known to be committed to passenger safety, efficient and cost reduction.

• Cheerful employees, irreverent culture, low fares and upbeat commercials.  
• Work culture was fun, casual and customer-oriented.
• Single type of aircraft meant that maintenance and operating costs were low.
• WestJets’s route structure was one of the most significant factors of its marketing strategy.
• Innovative - first to issue electronic tickets.
• Team Work – all employees including management and pilots worked together with flight attendants to prepare the plane for the next flight.
• Employee Share Purchase Plan allowed them to accumulate an equity stake in their firm.
• Non-unionized employees
• Entering code sharing agreement with other airlines increased passenger bookings.

Weaknesses

• Operating structure was initially decentralized now culture is bureaucratic.
• Minimum international presence
• New fleet of smaller jets requires huge capital outlays.

Opportunities

• Deregulation of the airline industry and having 30% more fuel efficient will increase revenue.
• Growth Expansion - With Air Canada who hold 57% of the domestic market proposing to file bankruptcy Westjet could use this an opportunity  to increase its domestic market.
• Growth International market.

Threats

• The airline industry was sensitive to macro factors such as economic conditions, weather, record high fuel prices, fierce competition and the appreciation of the Canadian dollar which all pose a threat to future growth.
• Long haul air routes would become increasingly targeted by restrictive taxation regimes.
• New competition, high fuel costs and terrorists attacks can negatively affect air travel.

WestJet Challenges

While adding a new fleet to grow domestic market and developing its international base is in line with WestJets vision, managing this growth and change is the most challenging task before the management. It is not easy for a company to move its initial operating structure that was decentralized to an alien culture that could be perceived as bureaucratic.  While there are positives on this move of changing management and leadership style, the transition could be challenging as some of the employees may resist this change. Another major challenge is on the airline industry which is being sensitive to macro factors such as economic conditions, weather, recording high fuel prices, fierce competition and the appreciation of the Canadian dollar which all pose a threat to future growth.

Literature Review on Change Management

The way in which individuals interpret organisational events, including change events, depend to a large extent on their previous history with the organisation and this according to Smollan (2006) is a major driver to encounter different individual responses to one that is more bureaucratic. Further to this Smollan (2006) suggest that  an organisation that seldom consults staff may find that a unilateral change, even an unpalatable one, is accepted as the norm, whereas an organisation that invites participation as a general rule, but fails to do so during a change, may find a surprised and somewhat hostile reception. Given this view, WestJest will have to deal with transitional changes from one style of leadership and management to another.

However Gersick (1991) cited by Smollan suggests that radical change is more likely to stir emotional reactions than incremental change.  With that said, as individuals respond to stimuli in the environment, they are more likely to consider the personal consequences before they engage in resistant behaviour.  The term resistance is criticised by Dent and Golberg (1999) and Piderit (2000), cited by Smollan (2006) as being inaccurate and overly used. Instead they argue that inertia and reluctance rather than refusal to engage are the key reason individuals resist change.

Smollan and Sayers (2009) et al suggests that organisational change has the potential to trigger positive and negative emotions and moods in the employee although this depends on a range of factors.  These factors could be the perceived valence of outcomes; the change processes used and thus include speed, timing and frequency of change, the nature of leadership and the employee’s personal and emotional intelligence.  The literature further suggests that the culture of the organization plays an important role in both generating emotions during change and influencing their expression or suppression.  This is supported by Tse et al. 2008 cited by Smollan and Sayers (2009) who assert that culture both engenders emotions and provides for their expression in socially accepted ways and culture is the ‘glue’ that binds people.  They refer to the emotional responses in organisation culture as the ‘affective culture’ and changing culture on a large scale is  a long term endeavour and causes pain and anguish, particularly when the change is legislated in a top-down fashion (Elsmore (2001) cited by Smollan and Sayers 2009).

It is therefore reasonable to suggest that employee assistance programs and other psychological support should be provided by organisations to help employees adjust (Smollan and Sayers 2009). Further to this, Hay (1999) cited by Smollan and Sayers (2009) suggests that organisations should develop the capability to responding to emotions and that helps to facilitate organization change. Given these views, it is my opinion that change agents, with high levels of emotional intelligence skills will be in a better position to detect emotional responses by employees and provide the necessary support and coaching while developing the overall capability of the organisation. Therefore Westject could consider contracting specialised change agents who could help to support the employees through the anticipated changes.

Proposed Change Management Model and its sustainability

Peripheral to organisational performance is how the new change is perceived, implemented and paced during the change process.  Effective feedback mechanisms during the transition will ensure sustainability.  Using Kotter’s (1980) Integrative Model of Organisational Dynamics as a framework we will explore how WestJet can lead and sustain change within its organisation.

Change Management Plan

Step 1: Create Urgency

WestJets’ vision is “to be one of the top five most successful international airlines in the world by 2016 “

Aligning the values is the foundation of successful organisational change.  If the CEO embraces the change and shows enthusiasm this is likely to motivate others to catch the vision.  Clive Beddoe needs to announce the change verbally and develop a communications plan outlining the new strategic direction.

The communication strategy is to incorporate the language of Appreciative Inquiry which is about celebrating the past, what was done well and how we can improve.  It builds on possibilities and engages in discussions that focus on success of the desired future.

Key stakeholders (employees, customers and suppliers) should be included in the planning phases.  Kurt Lewin’s Action Research module can be used to identify changes and who will be impacted as a result of the implementation.

Collaborative approaches to problem solving also builds commitment and facilitates the implantation of action designed to resolves the problems (Hayes pg. 288).

Step 2: Form a powerful coalition

Cut through the bureaucracy and build greater collaboration between divisions.  Identify leaders at all levels within the organisation.  Include PACT who already has a powerful voice within the organisation. Develop their emotional intelligence skills and get an emotional commitment from the newly formed coalition.  

Appoint transition managers in each division with both technical and leadership competencies.  According to Hayes (2007) the transitional state is one which is characterised by high levels of ambiguity and conflict and the individuals tasked with managing the transition needs the ‘clout’ to mobilise the resources necessary to keep the change moving; the respect of both the existing operational leadership and the ability to get things done in ways that will win support and commitment rather that resistance and compliance.

Step 3: Create a Vision for change

Earlier we mentioned that values, practices and norms shape the culture and when you change strategy you must align the cultural artefacts with the new strategy.  The simplest way is to communicate the new strategy at every opportunity, in workshops, meetings, until it is embedded into the culture.  Change leaders need to talk the language of change, know and reinforce the strategic vision of the organisation.

Step 4: Communicate the Vision

Change agents must be proactive and visible and lead by example and not revert to old patterns of behaviour and begin the implementation process.  

Prepare an Implement plan.  Identify resources, assign tasks and responsibilities and establish a timeframe to achieve goals.  Provide adequate training and staff acquisition planning. Develop behavioural skills and training programs on problem solving, conflict management, teamwork and negotiation. Distribute communication material. Establish a feedback loop and monitoring plan. Motivate and encourage participation.

Step 5: Remove Obstacles

Resistance to change impacts on performance therefore all barriers to the change process should be identified and managed.   Expectancy Theory posits that stakeholder behaviour is influenced by expectations.  With that said if inequity is perceived they are more likely to resist the change.  If the pace appears to be too fast they will react negatively. Change agents with emotional intelligence skills should monitor behaviour and provide the necessary coaching.  Strategies to reduce resistance to be applied:-

• An employee assistance program or well being program.
• Education and Persuasion– provide a clear understanding of how the change will affect their roles, processes and procedures and give them time to practice the new skills and behaviours.
• Participation and Involvement - including stakeholders in the planning might restore confidence in their ability to demonstrate the new behaviours expected of them.

Step 6 : Create Short-term wins

Most organisations have rewards and rewards systems that encourage and drive behaviour.  Higgins, McAllaster, Certo and Gilbert (2006) state that, “we know from motivation studies that people vary in needs and that different rewards satisfy different people’s needs in different ways.  However, some rewards, such as a verbal recognition or pay for performance are usually successful in unleashing or reinforcing motivation in most people. Rewarding people for engaging in behaviour that leads to the reinforcement or attainment of, certain values is a vital use of cultural artefacts is support of an organisations strategy”.

Celebrate and reward each milestone achieved during the change process.

Step 7: Build on Change

Reinforce the new competencies and give them an opportunity to practice the new behaviours.

Evaluate by doing sample testing to check if changes are implemented. Put systems in place to monitor performance and ensure that feedback is continuous.  If change is not working apply a new strategy. If the new system is working, analyze why is was successful and build on it. Create a culture of ‘kaizen’ and recognise and reward innovative ideas.  Celebrate the small wins.

Step 8: Anchor the Changes in the Corporate Culture

Lewin’s Change Model refers to this stage as ‘refreezing’ where the organisation has reached a new state of equilibrium.

Ensure that the new changes are documented into policy. Maintain competitive advantage by continually aligning systems to meet demands of the environment.

Publically acknowledge the change agents for their contribution as well as all the stakeholders for their participation. Identify new leaders and train them as change agents.

Conclusion

Culture is what groups learn in order to survive over time when solving its external and internal integration problems.  According to Smollan & Sayers (2009) “change triggers emotions as employees experience the processes and outcomes of organisational transformation” and that culture change provokes emotional reactions and I tend  to agree that change is fundamentally  about feelings  and that emotions need to be acknowledged and treated with respect   in order for people to engage in the process.  

Managing the change requires a holistic approach as roles, responsibilities, reporting and reward systems are affected.  It is essential to acknowledge the integration of the various components and encourage and value collaboration. Participation and involvement of all stakeholders is critical and adopting a participative approach to managing the change is vital.

Change Management Plans are designed to carry out the new strategy of the organisation.  Embracing the change and communicating the positive aspects helps mobilise employees towards the desired future state.  A robust Change Management Plan helps facilitate the sequence of the change and reduce disruptions of business operations.  Involving employees in the planning encourages participation and sustaining those changes.  Failing to address the concerns of the stakeholders, not providing the necessary training and communication will threaten the success of the organisational change.

References

Hayes, J. (2nd Edition.). (2007). The Theory and Practice of Change Management. New York: Palgrave MacMillan

Higgins, J.M., McAllaster, C., Certo, S. C., Gilbert, J. P. (2006). Using Cultural Artifacts to Change and Perpetuate Strategy: Journal of Change Management, Vol.6. No. 4, 397-415

Smollan, R.K., and Sayers, J.G. (2009). Organizational Culture, Change and Emotions: A Qualitative Study. Journal of Change Management, Vol. 9. No 4, 435-457.

Smollan, R.K. (2006). Mind, Hearts and Deeds: Cognitive, Affective and Behavioural Responses to Change: Journal of Change Management, Vol.6, No. 2, 143-158 

Caltrans Department of Transport Organisational Change Management Plan. Retrieved February 2, 2010 from

Leading Change: Why Transformation Efforts Fail, Retrieved January 27, 2010 from

Kotter’s 8- Step Change Model – Implementing change powerfully and successfully, Retrieved January 01, 2010 from