Sustaining Change in Organizations
Instructor Resources
Communication and Change
Suggested learning outcomes
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Appreciate the importance of communication during times of change
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Outline the elements of the communication process
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Develop relevant communication strategies
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Identify the key elements of a communication plan
Overview of chapter
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Communication is integral to sustaining change.
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Communication enables leaders and managers of change to create a shared sense of direction, purpose and values, establish strategies, plans and priorities, reduce uncertainty, build trust, and empower and engage people in doing what needs to be done.
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Communication is an ongoing activity and should be adapted to the nature and stage of the change. The methods, messages, audiences and feedback are all vital parts of the communication process during change.
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Management by storytelling is a technique for inspiring and motivating staff by telling them fascinating stories. Storytelling helps to bring out the need for change. Stories engage people’s interest and can help to communicate the vision, purpose, and values behind change and transformation in a meaningful way that others can relate to.
Tips for running the class
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This is always a topic of interest to students as they will probably all received some form of communication about a change which affected them. It is worthwhile getting their views on examples of good and bad communication they have experienced about change which has affected them.
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To explore different ways of communicating show the YouTube clip from Southwest airlines of the crew member doing a rap of the safety instructions – usually gets a laugh!
Exercises and activities
- Discuss how the need for change is communicated in organizations, with which they are familiar. Is it communicated to everyone affected by the change? If not, who is left out? Identify how communication about change can be improved.
Case study: Change and communication at Norfolk County Counci l[43]
Local councils across England are remodelling their services to make cost savings. It is important that employees get a clear idea of what the implications are for their roles. Communications about change at Norfolk County Council (NCC) are specific, relevant and easily accessible. What NCC does to achieve this is not rocket science but does require planning and concerted effort. Email and intranet communications are tailored to different groups, so staff can find all the facts they need without having to wade through reams of information.
A monthly ‘core brief’ is also cascaded through all levels of management, which individual managers localize to their specific context, clarifying the implications for their teams. This is generally done face-to-face, although each assistant director decides what is most appropriate for their service. So for employees who work remotely, there is a phone number they can dial to listen to a pre-recorded brief from a senior manager in their service. This had proven to be very popular, as it involves employees who may otherwise miss out on key communications.
But employees need more than just information. People also identify with organizations on an emotional level and a key component in this is trust. It is therefore important that leaders remain visible, enabling employees to develop a personal connection with them. At NCC, the chief executive does this through a weekly blog, read by thousands of employees, where he covers both high-level strategic issues and more personal things, such as partners he has worked with, people he has met and things he has read. He also attends management forums and employee road-shows.
Face-to-face dialogue with leaders is an excellent way of maintaining their visibility and fostering trust. It allows employees to air their concerns, feel that they've been heard and have their questions answered in (hopefully) a personable way that really makes sense. For this reason, NCC specifically designs road shows to allow space for such reflection, discussion and feedback. The size of such forums and road shows varies depending on the subject. For example, a recent road show on the vision for a different type of council was run with large groups of a few hundred employees. By contrast, dialogue on redesigning specific aspects of services would typically be led by assistant directors for far smaller groups.
In addition to these techniques, the Council has set up reference groups that act as sounding boards. Here, employees from a range of functions are selected by managers, typically on the basis of who they think will provide good insight, to meet with senior leaders to discuss specific aspects of strategy, change programmes or communication. With clear messages on organizational priorities, open dialogue that gives employees a voice and explicit value placed on the work people do, employee engagement can be harnessed as a vital ingredient in successful change.
The case of Shanghai Michelin Warrior Tyre company demonstrates how effective communication helps to build trust and ensure the successful implementation of a management daily production (MDP) system.
[43] Adapted from Jonny Gifford, Guardian Professional, Wednesday 5 January 2011, downloaded from www.theguardian.com/local-government-network/2011/jan/05/strong-leadership-and-communication-are-at-the-forefrint-of-local-government-change
Case study: Shanghai Michelin Warrior Tyre Company[44]
In 2008 Shanghai Michelin Warrior Tyre Company was among the worst performing Michelin factories worldwide. The seven-year-old organization was a joint venture between Shanghai Tyre and Rubber Company, a Chinese state-owned enterprise, and the French tyremaker – Michelin. Its products were inferior and its safety record was very low by international standards. Reject rates for its tyres and turnover of production line staff were both high. There was a persistent cultural and organizational gulf between the two partners. Reversing the situation had been beyond successive plant managers.
Bertrand Ballarin moved from France in 2008 to take the role of plant manager. Michelin’s head office was pressing him to implement its own management system of daily production (MDP) to try to improve the factory’s performance. But Ballarin felt that employees were not ready for the MDP. He judged that the Chinese employees, especially the production line workers, had poor morale and discipline because of a lack of trust in the company’s management team. Even more difficult was that Ballarin lacked a coherent foreign-and-Chinese management team with sufficient leadership capabilities to help him. He had to make changes at the factory before the MDP could be implemented, but at a pace that would be palatable to both his reluctant employees and his anxious bosses at Michelin headquarters. Ballarin developed what became a six-part strategy. He began by identifying early supporters, and then consolidating their support by sharing his vision with them. The third step was to rebuild trust to help lessen resistance to management changes. Fourth, he trained a management team – including Chinese staff – to lead the changes, including helping to develop their leadership skills. The fifth element was a well-designed, step-by-step change process. The final piece of the puzzle was gaining autonomy from Michelin headquarters. The step-by-step process took three and a half years. Ballarin spent the first three months observing and assessing the attitudes, morale and capabilities of the management team and staff. In October 2008 he began making and celebrating small changes, such as improving the work environment and raising some employees’ salaries. In 2009 and 2010 he implemented initiatives aimed at equipping employees with new skills and motivating them. The latter included making some bonus-related targets more achievable and, for the first time, inviting all employees to a dinner to celebrate the Chinese New Year. Ballarin regularly communicated his intentions, the challenges the plant faced and its successes to the staff, including production line workers. One of the most important moves was convincing headquarters to spend Rmb45m on upgrading machines in 2009-10; this demonstrated that Michelin was willing to invest. Although it was difficult to persuade head office to delay implementation of the MDP, Mr Ballarin found the answer was to keep it up to speed on plans and progress. In this way, he won more time to prepare employees at the plant for change.
Once the MDP was implemented, the factory improved its industrial performance indicators substantially. By the end of 2010, the ‘first-pass rate’ rose 64 per cent, and the reject rate fell 32 per cent; productivity rose 20 per cent; satisfaction of white-collar employees rose 46 per cent; and turnover of production line workers dropped 44 per cent. Regular communication with employees at the plant and with head office helped smooth changes. It was possible to overcome cultural differences by listening and showing respect to employees.
Questions for discussion
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Evaluate Ballarin’s six part strategy. Why do you think it was effective?
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Based on your experience, what else could Ballarin have added to the strategy, and why?
[44] Adapted from Lee, J (2013) ‘Michelin overcame cultural gulf at Shanghai joint venture’ Financial Times, July 29th. Accessed at http://www.ft.com/cms/s/0/9e8ef2c2-f561-11e2-b4f8-00144feabdc0.html#axzz39WSeglMz (August 2013)
Case Study: ING[45]
In April 2007 the board of ING Group decided to merge its two autonomous subsidiaries, Postbank and ING Bank. Fierce competition in the banking industry and rapid technological developments had led to new customer demands, including call centres, internet banking and simpler products. In addition, Postbank and ING Bank were both experiencing challenges: Postbank had a large customer base but an out-of-date business model; ING Bank had strong sales but a relatively small number of customers in the lucrative mass consumer sector. ING Group wanted the merger to combine their strengths, mitigate their deficiencies and cut costs.
People in the Netherlands all knew Postbank. They were emotionally attached to its blue lion logo, which symbolized Dutch national values such as reliability and value for money. ING Bank’s strengths were in business lending and advice-related services such as mortgages. With Postbank customers already fearful of being forced into a more expensive banking model, to drop the blue lion would be risky. Moreover, only 30 per cent of the banks’ employees said the merger would succeed. The merger would require a new brand that was accepted by customers and employees, as well as emphasizing the strengths of both banks. The merger project was called ‘Tango: together achieving new growth opportunities, led by chief operating officer Bart Schlatmann. Using communication to gain understanding, acceptance and support among employees and customers would play a central role in the success of the merger.
Internal communication. The Tango team introduced three phases of communication. First came warming up; care rather than speed was the aim in explaining the merger to employees. Communication took place through meetings, informal get-togethers and through chief executive Nick Jue’s blog. Next was the integration communication phase: the aim was to unify employees from both banks around the consolidated organization. The core message was to appreciate the combination of the banks’ strengths. The team also introduced a new internal name that staff at both banks could identify with – NWE Bank (the New Bank) – and installed a countdown clock. In the final phase, living the brand, the focus was on creating momentum. The team devised 10 countdown episodes before the merger in January 2009. In each one, staff were given items such as a video or pencils bearing the new logo.
External communication. The aim was that the merger would not inconvenience customers. The Tango team spread its marketing messages over a year to allow time to build understanding among customers. As different customers had different questions, Tango reached them in different ways, such as using surveys to understand their needs, sending welcome packages and personalized letters, and calling them in person. In television and print ads, the campaign featured conversations between Postbank’s blue lion and ING’s orange lion. Through often funny exchanges, the lions addressed questions about the merger. During the campaign, the blue lion gradually became orange (the corporate colour of the new bank) until even the last blue tip of its tail changed colour. In a poll, 85 per cent of customers were neutral or positive towards the merger and 50 per cent expected to enjoy their existing benefits.
The strategic communication plan played a central role during the banks transformation. ING’s communications strategy worked because it understood the situation from the customers’ and employees’ viewpoints; it took time over the implementation; and it found ways such as the informal discussion meetings, the CEO blog, the countdown or the lion changing colour, to capture the imagination of internal and external stakeholders.
Questions for discussion
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What are the key parts of the communication plan?
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What benefits can you identify from having the communications plan?
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From your experience, what else could be added to the plan?
[45] Adapted from Yue, T. and van Halderen, M. (2013) ‘ Communications for a merger: ING took time over implementation’, Financial Times, July 9th. http://www.leading-thoughts.com/wp-content/uploads/2014/01/FinancialTimesCaseStudyING.pdf
Suggested exam or assignment questions
- Critically evaluate the importance of communication during a change initiative. Use a case study of an organization with which you are familiar to illustrate your answer.
Online resources
See the clip on YouTube of the innovative approach taken by Southwest airlines to communication:
(Full) David Holmes – Southwest Airlines – Rapping Flight Attendant http://www.youtube.com/watch?v=_3eNFdwn07g
Dr Kotter provides important tips about how to communicate a new vision.
On YouTube: John Kotter – Communicating a Vision for Change http://www.youtube.com/watch?v=bGVe3wRKmH0
Communication and Change
© Julie Hodges and Roger Gill 2015