Hewlett Packard, IBM, Kodak, McDonald’s: Change Stories

Changes in organizations are often discussed as the approaches which lead to the company’s growth and development. However, changes in organizations are usually painful because different shifts and alternations can be interpreted by employees, stakeholders, investors, and clients as threatening to stability, success, and reputation. In spite of the fact that changes are often necessary, many leaders choose to ignore the opportunities because of the impossibility of adjusting to new conditions. Furthermore, leaders can demonstrate the lack of understanding of the nature and consequences of changes. As a result, there are often errors in implementing the change, companies fail to change the approach, and the predicted results become non-achievable. While focusing on the change stories of Hewlett Packard, IBM, Kodak, and McDonald’s, it is possible to analyze errors, propose recommendations, state the changing image, and focus on different strategies to manage the change effectively.

The Most Significant Errors Typical for the Change Stories and Ramifications

The cases of Hewlett Packard, IBM, Kodak, and McDonald’s should be discussed while focusing on John Kotter’s model, which describes the errors made during the implementation of the organizational change. In spite of the fact that there are eight typical errors associated with the process, the most significant errors made by the leaders of the above-mentioned companies during the organizational change are the focus on allowing too much complacency, failures in creating the powerful coalition or a team, and the problem of intercommunicating the vision (Kotter, 2012, p. 16).

High complacency levels can be discussed as typical for many leaders who plan changes in the organization. These persons underestimate their opportunities and resources, and it is difficult for them to recognize the real situation and conditions. For instance, Hewlett-Packard’s CEO Carly Fiorina and Kodak’s CEO David Carp focused on implementing the change without paying attention to any possible barriers (Palmer, Dunford, & Akin, 2009, p. 9). As a result, the reaction of Hewlett-Packard’s employees and stakeholders, as well as investors and the staff related to Kodak, was not positive. The ramifications of this mistake are the impossibility to control the changes appropriately and to spend more resources on overcoming the challenges.

The companies can also fail to create a powerful coalition, which can lead to implementing all the planned changes. According to Kotter, a team or a coalition has more resources to implement the change effectively and to build a new tradition while replacing an old one (Kotter, 2012, p. 6). The managers of IBM faced this problem while focusing on realizing the Internet Revolution. The efforts of David Grossman as a computer programmer and John Patrick as a representative of the company’s strategy task force were not enough to implement the significant change in the early part of the 1990s, and it became possible only in the 2000s (Palmer, Dunford, & Akin, 2009, p. 4). The ramifications of this mistake are the inability to implement changes in time and involve all the employees in the process to achieve higher results.

The vision associated with organizational change should also be effectively communicated. While intercommunicating the vision, it is impossible to receive the support of stakeholders. Referring to ramifications, it is necessary to focus on the stories of change. Thus, Fiorina lost the chance to communicate the vision and necessity of the merger and lost the time and resources accordingly. Carp could not communicate the vision to Kodak’s investors and staff and lost the support necessary for transformation (Palmer, Dunford, & Akin, 2009, p. 6). Thus, the change became time-consuming and rather provocative. The only example of the partially effective communication of vision is McDonald’s because CEO Jim Skinner used the opportunity to promote the new effective vision and strategy in 2004.

Recommendations for Stories of Change

To improve the effectiveness of the change process, it is necessary to focus on recommendations appropriate for each case. The main recommendation for Hewlett-Packard is based on the idea that it is necessary to communicate the vision and changes appropriately. The lack of negotiation led to the confrontation between the employees and managers from two companies because of differences in organizational cultures (Hempel & Martinsons, 2009, p. 459).

The use of more effective communication strategies is necessary because this recommendation also influences the increases in cooperation, performance, and productivity. The outcomes of the change implementation could be different for IBM, and it was possible to focus on creating an effective team or a powerful guiding coalition that could involve the representatives of all the levels in the organization in order to promote the change related to innovation. The recommendation to concentrate on building the team is effective because significant changes should be implemented by the group of creators and managers who can develop and control the process while having access to all the assets.

While referring to the case of Kodak, it is possible to recommend focusing on the communication strategy because the reactions of internal and external stakeholders became the main barriers on the path to the change. It is important to realize physical changes while describing their advantages and benefits, thus, while communicating the vision effectively. McDonald’s change strategy can be discussed as most effective among the discussed ones, but it is important to recommend focusing on choosing the strategy for the concrete situation while referring to the larger context (Hempel & Martinsons, 2009, p. 460). The managers of McDonald’s chose to focus on healthy meals and succeeded, but much time was spent on finding the appropriate way to address the challenges of the competitive industry.

Change Image Labels

A changing image as the mental model to follow is important to be discussed in relation to the leaders in Hewlett Packard, IBM, Kodak, and McDonald’s. Hewlett-Packard’s CEO Carly Fiorina can be discussed as a navigator because she planned all the aspects of the change process and paid attention to all the sides of the transformation while leading the company to the merger. David Grossman, a computer programmer in IBM, can be discussed as an interpreter who recognized the potential of using the Internet and focused on finding the most effective and even innovative resolution to cope with the identified problem (Palmer, Dunford, & Akin, 2009, p. 8-10).

Kodak’s CEO David Carp can be discussed as a director because he understood that it was his responsibility to direct the employees toward transformation and to propose an effective plan of changes without references to the opinions of the lead parties. Thus, he chose to direct the change process while relying on the credibility of being Kodak’s CEO (Palmer & Dunford, 2008, p. S20). While referring to the case of McDonald’s, it is important to note that Jack Greenberg, the former CEO in the company, also followed the mental model labeled as a director because of intentionally implementing the ineffective “Made for You” project. On the contrary, McDonald’s CEO Jim Skinner can be discussed as a caretaker because of developing the strategy under the impact of environmental factors such as the public’s opinion and increased competition.

Different Strategies for Managing the Change

In order to recommend a different strategy to follow while implementing the change, it is necessary to focus on what to change and what barriers to overcome. The effective strategy for Hewlett-Packard should be based on the effective approach to restructuring as the predicted result of the merger. Much attention should be paid to focusing on the organizational culture, which becomes different for two companies after the merger. Thus, it is necessary to develop a new approach to forming the organizational culture as a guarantee of the company’s stability. To promote the change at IBM, it is necessary to improve the approach to hierarchy in the company in order to affect the communication and interaction between different employees and managers (Kotter, 2012, p. 6). The exchange of messages with the help of the informal network within the company should be supported because of the company’s nature and focus on innovation.

The case of Kodak demonstrates that communication strategies should also become the basis for the business strategy in this company because internal and external stakeholders have different information about the risks and consequences of the change. The focus on empowering the employees can be useful to overcome the issue (Palmer & Dunford, 2008, p. S20). The managers in McDonald’s should not only act under pressure but also concentrate on promoting the organizational change with the help of internal stakeholders.

Conclusion

Although the change implementation in Hewlett Packard, IBM, Kodak, and McDonald’s, cannot be discussed as successful, the analysis of the identified errors is necessary to propose effective recommendations. Furthermore, while determining the changing image, it is possible to propose ways for improvement in order to achieve the desired outcomes. Thus, changes in organizations traditionally lead to the company’s development and improvement of performance and productivity. However, the period of adaptation should be overcome under the rule of an effective leader.

References

Hempel, P. S., & Martinsons, M. G. (2009). Developing international organizational change theory using cases from China. Human Relations, 62(4), 459-499. Web.

Kotter, J. (2012). Leading change. Boston, MA: Harvard Business School Press. Web.

Palmer, I., & Dunford, R. (2008). Organizational change and the importance of embedded assumptions. British Journal of Management, 19(S1), S20-S32. Web.

Palmer, I., Dunford, R., & Akin, G. (2009). Managing organizational change: A multiple perspectives approach. New York, NY: McGraw-Hill. Web.