The changing customer preferences, increased competition, changes in technology and the impact of economic downturn had made change an inevitable process for organization (Cameron & Green, 2015). When organizations respond to consumer needs, it may require redesigning of product attributes, which may need change in production systems. Similarly, increased competition and new innovations can lead to design of production process to produce new products in the market. All these and many more types of changes demand effective change management. For example, the changes in technology and creation of the smart phones completely altered Nokia’s market strategy.
Background of Problems in Nokia Inc
Since its inception in the early 1990’s, Nokia had been a mobile telecommunication leader in the market for over 14 years (Xia, 2012). The company first launched its mobile phones in the 1980s and followed it with the launch of innovative mobile devices in the 1990s in response to customer needs. The ability of Nokia to be innovative and respond quickly to customer needs allowed the company to become the largest manufacturer of handsets in the world.
Beginning mid-2000s, Nokia begun to experience some competition from new players in the market. Some other manufacturers, such as HTC, Sony and Palm, had been manufacturing touch-based mobile phones that ran on the Microsoft operation system. Although these devices had desktop windows like interface with restrictive touch screens, they were well received by the market and customer became accustomed only to touch screen smart phones.
In 2007, iPhone introduced revolutionary Smartphone that included multi-touch capacitive screen (Kwak, 2013). This interrupted the smart phone market and set a high bar for other mobile manufacturers in the market. Although Nokia introduced its own touch-screen smart phone in 2008, the company became unaware of the risks. In 2008, Google set up and introduced the android platform, which set unprecedented growth in the smart phones.
Many companies such as HTC, Samsung and iPhone migrated to android, leaving Nokia to lag behind in the mobile world. Since Nokia had become the leading mobile phone manufacturer in the 1990s, the success of its symbian platform has prompted the company to become inward looking. The company was innovative as it had a number of portfolios of innovations and patents at hand. The bureaucracy could be blamed for the inability of the organization to implement their innovative ideas. The company had many presidents in various regions of the world and this made it hard to implement even a simple idea.
Application of Kotter’s 8-Step Change Management in Nokia Inc
Kotter developed an 8-step process to guide transition process in organization (Kotter, 2012). The change management initiative can be applied to guide Nokia’s transition from symbian to Smartphone platform. The Kotter’s 8 steps are creation of a sense of urgency, creating guiding coalition, developing change vision, communicating vision, sustaining the change initiatives, creating short-term gains, empowering employees for broad based actions and anchoring the change into the organization culture.
The initial step in Nokia change management process would be the development of a sense of urgency for the change process. According to Kotter, (Cameron & Green, 2015) change has to be taken seriously if it is to succeed. One strategy of doing so is making impacts of absence of change visible to the company employees. In the case of Nokia, the sense of urgency could be developed by highlighting the dwindling market sales of the company mobile devices, the decline in its market share in the years after the introduction of smart phones by competitors such as iPhones, Samsung and HTC. The employees would be guided and shown the need why change process is important for the overall success of the company and their professional growth.
The successful creation of sense of urgency will be followed by the formation of a powerful coalition. Kotter points that employees are likely to accept new change initiatives if they are handled by the people in higher power (Kotter, 2012). The powerful coalition in Nokia change management will include the company chief executive officer, the departmental manager, representative of employees, human resource manager and company chairman. This would ensure that whatever change initiatives will be outlined is well communicated across all sections of the company.
The third step would be the formation of a change vision statement to guide the change management process in Nokia. Change initiatives can only be achieved if there are proper framework that guides the process, defining how the goals will be attained and the duration. The development of a change vision complements this function. Kotter asserts that change vision is important as it acts as it simplifies decisions, motivates people and helps in coordination of actions of different people (Kotter, 2012). The change management vision would be “To transform Nokia into a leader in Smartphone manufacture and sale in the next five years”.
The next step will be the communication of the change vision to the employees and other stakeholders. The success of change management depends on the communication of change vision. The change vision will be communicated to the employees through the departmental heads and through special notices. The purpose of the communication is to create an understanding and get the people to accept the vision, thus gaining their commitment. This will take the forms of newsletters and quarterly meetings.
According to Kotter, effective communication helps in creating awareness on the change process. It helps inform and direct employees about the new direction. The author points that most change initiatives fail because the change team fails to communicate clearly the change process. Poor communication leaves employees in a state of confusion, with poor direction on what to do and the implications of the change process. This often leads to resistance to change as the employees prefer the current working conditions they are accustomed to. Providing good communication ensures that the goals and objectives of the change process are well understood.
The next step will be the empowerment of broad-based action. Kotter points that sometimes organizations wish to make change initiatives but fail to achieve the desired outcomes due to institutional barriers. To ensure the successful management of change initiatives in Nokia, internal barriers will be determined and eliminated. (Xia, 2012) notes that Nokia has bureaucratic leadership. This creates poor decision making, due to ineffective communication. The change team will work with the organization management to evaluate the organization leadership and identify possible adjustments to facilitate communication. In addition, the change team will rally the leadership to support the change management process as a strategy of overcoming the leadership barriers.
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The process of changing the firm’s production has far reaching impact on the workforce (Millar, Hind, & Magala, 2012). The shift from symbian to smart phone platform has the potential of leading to job losses, changes in job descriptions and possible implications on the organizational structure. This can lead to lack of motivation and resistance to change process. The change team in Nokia Inc. would provide short-term gains during the proposed change process. These include undertaking those processes that provide immediate results with less or no impact on the people. The changes that would provide short-term gains include changes in organization leadership communication structure. This will take considerable shorter than six months and comes with the benefits of improving communication, which will acts as a source of motivation and gear the employees to support the change process before embarking on long-term production process and strategic marketing change processes.
There is often a tendency to announce prematurely before it is engrained in the organization culture. Kotter points in his book that the reason why change initiatives fail to attain the intended goals is letting up and allowing resistance to fight back. Change often creates new work schedules, job descriptions and organizational structure. There is often a tendency for resistance to change owing to employees’ desire to remain in the comfort zones. There is need to ensure the new change initiatives have become part of the organization culture before announcing the success of the change process. In Nokia, the new change initiatives can be sustained through constant efforts to keep urgency high to consolidate gains and produce more change. Finally, the new approaches will be anchored in the organization culture for sustained change. This will involve making the change success in Nokia visible and their effective communication to the people. New norms and values will be reinforced through moral support, rewards, and incentives. In addition, there will be loss and gain of some employees. The new culture will be reinforced among the new employees.