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Transcript of Telstra Case (Exam)
Telstra case Page 1 of 21___________________________________________________________________________________
Telstra Case Scenario 2 (12 Marks, 4 marks and 8 marks each)
PORTER 8 FORCE, PAGE 38 Case study 1
Monopoly until 1997, wholesale and retail Telecommunications Company
Fixed line copper wire network fast become obsolete
Strategy:
Former CEO say adding value for our customer base is our driving force and idea of
service and the drive for improvement must be at the core of the culture of the
organsiation
CEO David Thodey said the company need to transform from an engineering and
technology led company to a truly sales and marketing led company, and he the first
one have really did sth
13 years later, still try to make customer service part of its corporate structure
Need to implement strategy for increasingly competitive and technologically evolving
environment and marketplace
Continue to redefine itself as distributor and retailer offer competitive products and
pricing
Government:
either adopt super fast fibre to every home and structurally separated Telstra (sh will
not buy its shares until govt bb policy is finalized) or pull it back to market driven
environment with tougher competition rules but No structural change
Misalignment of CEO and senior executives:
Telstra senior executives seems not align with the CEO by admit the company is not
managing customer service and announce a 1 billion transform project to fight for
customers in mobile, fixed bb and wireless bb markets
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Telstra case Page 2 of 21___________________________________________________________________________________
New measures:
Educate customer importance in employee training
Removing and simplifying bundle and package product and services to make
customer less confusing
Fewer customer complaint reduce number of staff in complaint dept and fee imposed
by telecommunications industry ombudsman
From CEO Thodey (the first CEO to):
first to open customer services lines 24 hours a day
cut mobile and broadband price to competitive levels
send technicians out on weekend
other initiatives: new IT troubleshooting service, higher subsidies for mobile
handset and possibility of “welcome” credit for new customers
Financial performance:
Last yr, net revenue fell 2.3%
Expect to fell up to 9 % due to transformation cost
(400 mil go to improve customer service and upgrade system)
(600 mil go towards subsidizing mobile phones, t-boxes and t-hubs to attract new
customers)
steady decline in market shares and traditional sources of revenue
1.5 fewer residential home phones (fixed line) today than 97, number of calls made
from home phone drop my half – as no need to have a second line used for dialed up
now
CEO and CFO met investor to explain how a yr of pain will lead to better returns over
the long run
CFO gone to US to meet foreign investor
Bottom line is must invest to grow, win customers and lower cost base to make room
for a lower-margin product mix world to grow gross earnings
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Telstra case Page 3 of 21___________________________________________________________________________________
Share price not bounce back from 9.5 % drop on the poor annual result day
sh will not buy its shares until govt bb policy is finalized or
sh unconvinced they can get the customer service right
Former CEO: expand Telstra overseas and build a new 3G national network, but
cannot stop the steady decline in market share and traditional sources of revenue
Labor government policy is to build a fibre network to 93 % of houses, with the rest
serviced by wireless and satellite (this will structurally separate Telstra)
Or pull back in market driven environment with tougher competition rules with no
structural change
This will see Telstra transfer copper network customer to govt-owned national
broadband network company’s wholesale fibre network and receive 9 billion in cash
as compensation and for leasing pipe network
Statistical figures:
1.5 mil fewer residential home phones (fixed line) then 1997,
home phone calls drop by half
decline as previous need a second line to use dial up internet but now no need
They will be in much worse position if former CEO Sol Trujillo had not invested in
the new billing system and the 3G network
Opportunities, Advantages:
Goldman Sachs analyst, the whole world is going wireless and they can leverage it
when going forward with this phenomenal network, because smartphone users need
3G everywhere
Competitors:
2G network of Optus and Vodafone incomparable to Telstra network now
Going forward:
start cut price in early 2010 to match competitions
must win ex customer back with better service
this aggressive market share push to catch up but not an ongoing thing
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Telstra case Page 4 of 21___________________________________________________________________________________
Standard and poor rating:
The short term cost of winning back market share will not affect the company long
term credit rating, providing it is successful in regaining mkt share and turn Telstra
into a more competitive company
Tyndall investment analyst Michael Maughan: this is a delay reaction and the large
profit margin of recent yrs will prove unsustainable
Fixed line services not dead yet:
Optus add 25000 customer
Telstra add 11000 for fixed bb subscribers after lower price and reveal new devices
like T hub and T box in the first half of the financial years
Add 11000 customer after new price and increase data allowance, but
But still end the financial yr of 09-10 with 19000 fewer retail fixed bb customers
New Vision to enable further change:
Setup a new division focused on customer experience, simplicity and productivity
Reduce mgmt jobs to streamline decision making, get rid of overlaps and duplicated
reporting
ULTIMATE goal:
Transform into a new streamline company that operate as a retail telco provider (one
can retain customers, provide better service, pricing and content, and deliver a good
profit margin without the advantage of being the only really integrated provider)
Key functional areas Key activities
Finance - Credit rating will not affected
provided they can regain market
share
- Meet investors in US explain yr of
pain will be better in the long run
- Must invest to growth, lower cost
base to make room for the lower-
margin product mix world
4
Telstra case Page 5 of 21___________________________________________________________________________________
Operations - Remove and simplifying products
and services
- cut mobile and broadband prices to
competitive level and send
technicians out on weekend,
- new IT trouble shooting service,
higher subsidises for headset and the
possibility of welcome credit for new
customers
- Setup new division focus on
customer experience, simplicity and
productivity
- Fewer customers complaint will
reduce staff in complaint department
and less fees imposed by the
telecommunications industry
ombudsman
- Remove and simplifying products
and services
- Remove mgmt jobs to streamline
decision making
Marketing - they got to move from engineering
and technology led company to
being a truly sales and markeing led
company. (13 years still doing this)
- need to redefine itself as a distributor
and retailer offering competitive
products and pricing
- Remove and simplifying products
and services
- Must win ex-customer back with
better service
Human resources - Setup new division focus on
customer experience, simplicity and
productivity
5
Telstra case Page 6 of 21___________________________________________________________________________________
- Customer service: employee training,
remind staff about the importance of
customer
-
Communication (e.g. to stakeholder) - Misalignment, senior executives
admit company is not managing
customer service
-
IT - Competitors 2G network
incomparable to the 3G network
- Fixed line copper wire network fast
becoming obsolete
- The previous 26 billion investment
in billing system and 3G network is
great
- Can leverage the 3 g network by the
smart phone and mobile device
7S:
The McKinsey 7-S model is used as the framework for analysing the integration
issues. This model specifically shows that change is complex and requires the many
interconnecting variables involved to be simultaneously and actively managed.
You can use the 7S model to help analyze the current situation
(Point A), a proposed future situation (Point B) and to identify gaps
and inconsistencies between them. It's then a question of adjusting
and tuning the elements of the 7S model to ensure that your
organization works effectively and well once you reach the desired
endpoint.
Hard Elements Soft Elements
Strategy Shared Values
6
Telstra case Page 7 of 21___________________________________________________________________________________
Structure
Systems
Skills
Style
Staff
Strategy: Strategy—a set of actions aimed at gaining a sustainable advantage
over the competition. What is our strategy?
How do we intend to achieve our objectives?
How do we deal with competitive pressure?
How are changes in customer demands dealt with?
How is strategy adjusted for environmental issues?
- Ultimate aim for leader is to transform Telstra into a new streamlined company
that will operate as a retail telco provider, one can retain customers, provide a
better service, pricing ad content, and deliver a good profit margin without the
advantage being the only really integrated provider
- Misalignment, senior executives admit company is not managing customer service
- Recently announce a 1 billion plan to fight for customer in mobile, fixed bb and
wireless bb
- move from engineering and technology led company to being a truly sales and
markeing led company
- Recently announce a 1 billion plan to fight for customer in mobile, fixed bb and
wireless bb
- Setup new division focus on customer experience, simplicity and productivity
- Reduce mgmt job, streamline decision making, get rid of overlaps and duplicated
reporting
- Remove and simplifying products and services
- Setup new division focus on customer experience, simplicity and productivity
- improve customer service by 24 hours hotline, cut mobile and broadband prices to
competitive level and send technicians out on weekend, new IT trouble shooting
service, higher subsidises for headset and the possibility of welcome credit for
new customers
- Customer service: employee training, remind staff about the importance of
customer
7
Telstra case Page 8 of 21___________________________________________________________________________________
Issue :
1) uncertainty of the Government broad band policy have a huge baring of how
Telstra should go (a detail review and what if analysis may help)
2) no commonly understood strategy (?)
3) misalignment between CEO and senior executives (talk about diff things)
4) why no specific strategy to leverage the advantage in having the 3 G network but
target to get fixed line and BB customer
Structure: Structure—the organisation chart and associated information that
shows who reports to whom and how tasks are both divided up and integrated. How is the company/team divided?
What is the hierarchy?
How do the various departments coordinate activities?
How do the team members organize and align themselves?
Is decision making and controlling centralized or
decentralized? Is this as it should be, given what we're doing?
Where are the lines of communication? Explicit and implicit?
- Previously is a bureaucratic organization bloat by the high margin, now reduce
mgmt job, streamline decision making, get rid of overlaps and duplicated
reporting
- Setup new division focus on customer experience, simplicity and productivity
Issue: 1) Communication more effective due to less mgmt job, get rid or overlaps and
duplicated reporting
2) did not mention any ownership and measurable goals customer satisfaction
effort
3) did not mention whether there are any ownership and measurable goals for the
new division
4) Did not mention a formal communication channel
Systems: Systems—the processes and flows that show how an organisation
operates on a daily basis (e.g. information systems, capital budgeting systems,
manufacturing processes, quality control systems and performance measurement
systems).
8
Telstra case Page 9 of 21___________________________________________________________________________________
What are the main systems that run the organization?
Consider financial and HR systems as well as communications
and document storage.
Where are the controls and how are they monitored and
evaluated?
What internal rules and processes does the team use to
keep on track?
- The previous 26 billion investment in billing system and 3G network is great
- Can leverage the 3 g network by the smart phone and mobile device
- Reduce mgmt job, streamline decision making, get rid of overlaps and duplicated
reporting
Issues: 1) Billing system is good 2) reduce mgmt job to lose fat is good
3) do not have local performance measures to motivate them 4) employee training and
stress the important of customer is ok, but can do more
Shared Values: Shared values—the values that go beyond, but usually include,
the statement of goals and objectives in determining an organisation’s destiny. These
values are shared by most of the people in the organisation.
What are the core values?
What is the corporate/team culture?
How strong are the values?
What are the fundamental values that the company/team
was built on?
- need to redefine itself as a distributor and retailer offering competitive products
and pricing
- they got to move from engineering and technology led company to being a truly
sales and markeing led company. (13 years still doing this)
- Still trying to make customer service a part of its corporate structure
Style: Style—what managers consider to be important by the way they
collectively spend their time and attention and how they use symbolic behaviour. It is
9
Telstra case Page 10 of 21___________________________________________________________________________________
more important how management behaves rather than what management says. How participative is the management/leadership style?
How effective is that leadership?
Do employees/team members tend to be competitive or
cooperative?
Are there real teams functioning within the organization or
are they just nominal groups?
- CEO thodey do: improve customer service by 24 hours hotline, cut mobile and
broadband prices to competitive level and send technicians out on weekend, new
IT trouble shooting service, higher subsidises for headset and the possibility of
welcome credit for new customers
- Setup new division focus on customer experience, simplicity and productivity
- Reduce mgmt job, streamline decision making, get rid of overlaps and duplicated
reporting
- Misalignment, senior executives admit company is not managing customer service
- Issue: 1) Misalignment, senior executives admit company is not managing
customer service
Staff: Staff—what organisations do to foster the process of developing managers
and shaping the basic values of the management team. What positions or specializations are represented within the
team?
What positions need to be filled?
Are there gaps in required competencies?
- Customer service: employee training, remind staff about the importance of
customer
- Setup new division focus on customer experience, simplicity and productivity
- Reduce mgmt job, streamline decision making, get rid of overlaps and duplicated
reporting
Skills: Skills—those dominant attributes or capabilities that are possessed by an
organisation.
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Telstra case Page 11 of 21___________________________________________________________________________________
What are the strongest skills represented within the
company/team?
Are there any skills gaps?
What is the company/team known for doing well?
Do the current employees/team members have the ability
to do the job?
How are skills monitored and assessed?
- The previous 26 billion investment in billing system and 3G network is great
- Can leverage the 3 g network by the smart phone and mobile device
- Issue: don’t focus on the 3 G network instead focus on BB
8S:
Note that a similar analysis can be made using the eight ‘S’s of strategy execution
model. In essence, the two models (the McKinsey 7-S model and the eight ‘S’s of
strategy execution model) are very similar in content; however, they merely express
the components differently. As such, to make the extension to the eight ‘S’s of
strategy execution model, it is necessary to re-assign the issues noted above under the
appropriate component. This can be done by using the comparison summary of both
models in Table B.6
Table B.6
McKinsey 7-S category Eight ‘S’s of strategy execution
Structure Structure
Systems Systems and processes
Skills reSources
Shared values Shared values (organizational culture)
Strategy Strategy and purposes
Style Style (leadership/management style)
Staff Staff
All 7 above contribute to Strategic performance
To check alignment
11
Telstra case Page 12 of 21___________________________________________________________________________________
Start with your Shared Values: Are they consistent with your structure,
strategy, and systems? If not, what needs to change?
Then look at the hard elements. How well does each one support the
others? Identify where changes need to be made.
Next look at the other soft elements. Do they support the desired hard
elements? Do they support one another? If not, what needs to change?
As you adjust and align the elements, you'll need to use an iterative (and
often time consuming) process of making adjustments, and then re-analyzing
how that impacts other elements and their alignment. The end result of better
performance will be worth it.
General issues from the Telstra artcles:
- need to implement a strategy for increasing competitive environment
- need to redefine itself as a distributor and retailer offering competitive products
and pricing
- they got to move from engineering and technology led company to being a truly
sales and markeing led company. (13 years still doing this)
- Still trying to make customer service a part of its corporate structure
- Uncertainty waiting for govt to announce the broadband policy
- Misalignment, senior executives admit company is not managing customer service
- Recently announce a 1 billion plan to fight for customer in mobile, fixed bb and
wireless bb
- Customer service: employee training, remind staff about the importance of
customer
- Must win ex-customer back with better service
- Remove and simplifying products and services
- Fewer customers complaint will reduce staff in complaint department and less
fees imposed by the telecommunications industry ombudsman
- CEO thodey do: improve customer service by 24 hours hotline, cut mobile and
broadband prices to competitive level and send technicians out on weekend, new
IT trouble shooting service, higher subsidises for headset and the possibility of
welcome credit for new customers
- Setup new division focus on customer experience, simplicity and productivity
- Reduce mgmt job, streamline decision making, get rid of overlaps and duplicated
reporting
12
Telstra case Page 13 of 21___________________________________________________________________________________
- Second half of 09-10 financial yr, 11000 customer sign up after new price release
and increase data allowance
- Credit rating will not affected provided they can regain market share
- Shareholders remain unconvinced that they can get the customer service right or
waiting for the govt bb policy (as the poor share performance show)
- Pervious CEO, expand overseas and build 3G network but still not working well
- Receive 9 billion if labour government broadband policy to build fibre network go
ahead
- Fixed line decline due to no need for dial up
- The previous 26 billion investment in billing system and 3G network is great
- Can leverage the 3 g network by the smart phone and mobile device
- Competitors 2G network incomparable to the 3G network
- Ultimate aim for leader is to transform Telstra into a new streamlined company
that will operate as a retail telco provider, one can retain customers, provide a
better service, pricing ad content, and deliver a good profit margin without the
advantage being the only really integrated provider
Rothschild organisational life cycle and strategic leadership model. (Q6.15)
Q: Given the life cycle position, what is the most appropriate strategic leadership style
required for Telstra ?
This question refers to the Rothschild organisational life cycle and strategic leadership
model.
Telstra was in the maturity stage of its organisational life cycle. As such, the most
appropriate leadership style is that of a caretaker; that is, it helps the organisation to
bring a different style, nurtuiring a more orderly, evolutionary growth and long term
persperity. They add structure, direction and stability and establish process to embed
operations for sustained long term success, they are cautiously adaptive, experienced
and administrative.
Dunphy and Stace model
Q Assess the type of leadership and change management adopted by Telstra for the
using the Dunphy and Stace model for transformational change.
13
Telstra case Page 14 of 21___________________________________________________________________________________
The type of leadership and change management required is an important
consideration. The Dunphy and Stace model provides a useful framework against
which to assess the most appropriate style of leadership and change management the
organisation requires at this time.
The Dunphy and Stace model considers transformational leadership as a continuum
moving through the following stages of change:
Fine-tuning—ongoing refinement of existing strategy and processes. (At
departmental level. Making re-alignments to ensure that there is a match between
strategy, structure, people and processes.)
Incremental adjustment—making distinct modifications and adjustments. (Bit by
bit changes to match the changing environment. Minor modifications to strategies
or structures…..)
Modular transformation—where large re-orientation occurs in a major component
of the organisation. Major realignment of one or more departments or divisions.
Downsizing, re-engineering.
Organisational (corporate) transformation—significant or radical change
throughout the whole organisation (major, rapid (spread over 18-24 months) and
revolutionary changes in strategy, structure, people & processes in order to meet
radically new or different circumstances. Also termed upheaval.’)
From Telstra’s point of view, it would most likely assess the change requirements to
be “corporate transformation” as there will be radical change throughout the whole
organisation (to transform from an engineering and technology led company to being
a truly sales and markeing led company.) There are also revolutionary changes in
strategy, structure, people & processes in order to meet radically new or different
circumstances which can be achieved by charismatic transformation (inspirational
change) and turnaround (frame breaking) to address the significant gaps identified
between the current and future objectives.
Page 6.48 Burns say corporate transformation is preferred style to achieve positive
outcome.
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Telstra case Page 15 of 21___________________________________________________________________________________
Not Modular transformation as the scope of change is more than re-orientation occurs
in a major component of the organization. Major realignment of one or more
departments or divisions. Downsizing, re-engineering.
Not Incremental adjustment because it is not just bit by bit changes to match the
changing environment and minor modifications to strategies or structures, it is sth
more.
Not fine-tuning— because it is more than refinement of existing strategy and
processes. It is more than that and it is not just change in at departmental level.
These changes should address significant gaps that have been identified between the
current approach and future objectives.
Kotter’s eight steps (why implementation fail or 8 requirement of successful
change)
Q: How was the integration handled in relation to Kotter’s eight steps for
transformation, and what was the result?
Strategy implementation in essence consists of a range of hands-on tasks to make
strategy work. Such tasks are generally concerned with:
Aligning strategy with an organisation’s environment;
Exerting leadership to drive strategy throughout the organisation;
Configuring organisational structure and culture with strategy; and
Managing the politics of strategy implementation.
The challenge of implementation and the reason why there is sometimes a failure to
implement strategy is often related to an inability to execute one or more of the tasks
set out above, and may also be a consequence of uncertainty or unforeseen changes in
an organisation’s environment. Leaders are sometimes limited or constrained in their
ability to anticipate and manage events both inside and outside the organisation that
impact on performance.
Kotter identified eight key requirements for strategic success and successful change,
and notes that poor performance in any of the eight areas will lead to failure. The
eight key requirements are as follows:
15
Telstra case Page 16 of 21___________________________________________________________________________________
1. Establishing a sense of urgency;
2. Forming a powerful guiding coalition;
3. Creating a vision;
4. Communicating the vision;
5. Empowering others to act and eliminating obstacles;
6. Planning for and creating short-term wins;
7. Consolidating improvements and producing still more change; and
8. Institutionalising new approaches.
Kotter’s eight areas also provides a useful framework and checklist against which to
assess the integration plan of Chasseur and Notting, as illustrated in Table B.3.
It is clear from this analysis that, with the exception of financial performance which
improved substantially postacquisition, the integration was not successful overall. In
fact, more so from Chasseur’s perspective as the two parties entering the acquisition
had very different expectations from the acquisition. However, stakeholder values are
an important criteria in assessing the success of strategy implementation. From
Notting’s point of view, performance improvement targets were achieved and,
therefore, the integration was seen as successful, with issues arising along the
way perceived as teething issues only.
Step How the integration should have been implemented using Kotter’s model :
borative approach.
Step One: Create Urgency
For change to happen, it helps if the whole company really wants it. Develop a sense
of urgency around the need for change. This may help you spark the initial motivation
to get things moving.
This isn't simply a matter of showing people poor sales statistics or talking about
increased competition. Open an honest and convincing dialogue about what's
happening in the marketplace and with your competition. If many people start talking
about the change you propose, the urgency can build and feed on itself.
What you can do:
16
Telstra case Page 17 of 21___________________________________________________________________________________
Identify potential threats, and develop scenarios showing what could
happen in the future.
Examine opportunities that should be, or could be, exploited.
Start honest discussions, and give dynamic and convincing reasons to get
people talking and thinking.
Request support from customers, outside stakeholders and industry people
to strengthen your argument.
Kotter suggests that for change to be successful, 75% of a company's management
needs to "buy into" the change. In other words, you have to really work hard on Step
One, and spend significant time and energy building urgency, before moving onto the
next steps. Don't panic and jump in too fast because you don't want to risk further
short-term losses – if you act without proper preparation, you could be in for a very
bumpy ride.
Step Two: Form a Powerful Coalition
Convince people that change is necessary. This often takes strong leadership and
visible support from key people within your organization. Managing change isn't
enough – you have to lead it.
You can find effective change leaders throughout your organization – they don't
necessarily follow the traditional company hierarchy. To lead change, you need to
bring together a coalition, or team, of influential people whose power comes from a
variety of sources, including job title, status, expertise, and political importance.
Once formed, your "change coalition" needs to work as a team, continuing to build
urgency and momentum around the need for change.
What you can do:
Identify the true leaders in your organization.
Ask for an emotional commitment from these key people.
Work on team building within your change coalition.
Check your team for weak areas, and ensure that you have a good mix of
people from different departments and different levels within your company.
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Telstra case Page 18 of 21___________________________________________________________________________________
Step Three: Create a Vision for Change
When you first start thinking about change, there will probably be many great ideas
and solutions floating around. Link these concepts to an overall vision that people can
grasp easily and remember.
A clear vision can help everyone understand why you're asking them to do something.
When people see for themselves what you're trying to achieve, then the directives
they're given tend to make more sense.
What you can do:
Determine the values that are central to the change.
Develop a short summary (one or two sentences) that captures what you
"see" as the future of your organization.
Create a strategy to execute that vision.
Ensure that your change coalition can describe the vision in five minutes or
less.
Practice your "vision speech" often.
Step Four: Communicate the Vision
What you do with your vision after you create it will determine your success. Your
message will probably have strong competition from other day-to-day
communications within the company, so you need to communicate it frequently and
powerfully, and embed it within everything that you do.
Don't just call special meetings to communicate your vision. Instead, talk about it
every chance you get. Use the vision daily to make decisions and solve problems.
When you keep it fresh on everyone's minds, they'll remember it and respond to it.
It's also important to "walk the talk." What you do is far more important – and
believable – than what you say. Demonstrate the kind of behavior that you want from
others.
What you can do:
18
Telstra case Page 19 of 21___________________________________________________________________________________
Talk often about your change vision.
Openly and honestly address peoples' concerns and anxieties.
Apply your vision to all aspects of operations – from training to
performance reviews. Tie everything back to the vision.
Lead by example.
Step Five: Remove Obstacles
If you follow these steps and reach this point in the change process, you've been
talking about your vision and building buy-in from all levels of the organization.
Hopefully, your staff wants to get busy and achieve the benefits that you've been
promoting.
But is anyone resisting the change? And are there processes or structures that are
getting in its way?
Put in place the structure for change, and continually check for barriers to it.
Removing obstacles can empower the people you need to execute your vision, and it
can help the change move forward.
What you can do:
Identify, or hire, change leaders whose main roles are to deliver the change.
Look at your organizational structure, job descriptions, and performance
and compensation systems to ensure they're in line with your vision.
Recognize and reward people for making change happen.
Identify people who are resisting the change, and help them see what's
needed.
Take action to quickly remove barriers (human or otherwise).
Step Six: Create Short-term Wins
Nothing motivates more than success. Give your company a taste of victory early in
the change process. Within a short time frame (this could be a month or a year,
depending on the type of change), you'll want to have results that your staff can see.
Without this, critics and negative thinkers might hurt your progress.
19
Telstra case Page 20 of 21___________________________________________________________________________________
Create short-term targets – not just one long-term goal. You want each smaller target
to be achievable, with little room for failure. Your change team may have to work
very hard to come up with these targets, but each "win" that you produce can further
motivate the entire staff.
What you can do:
Look for sure-fire projects that you can implement without help from any
strong critics of the change.
Don't choose early targets that are expensive. You want to be able to justify
the investment in each project.
Thoroughly analyze the potential pros and cons of your targets. If you don't
succeed with an early goal, it can hurt your entire change initiative.
Reward the people who help you meet the targets.
Step Seven: Build on the Change
Kotter argues that many change projects fail because victory is declared too early.
Real change runs deep. Quick wins are only the beginning of what needs to be done to
achieve long-term change.
Launching one new product using a new system is great. But if you can launch 10
products, that means the new system is working. To reach that 10th success, you need
to keep looking for improvements.
Each success provides an opportunity to build on what went right and identify what
you can improve.
What you can do:
After every win, analyze what went right and what needs improving.
Set goals to continue building on the momentum you've achieved.
Learn about kaizen , the idea of continuous improvement.
Keep ideas fresh by bringing in new change agents and leaders for your
change coalition.
20
Telstra case Page 21 of 21___________________________________________________________________________________
Step Eight: Anchor the Changes in Corporate Culture
Finally, to make any change stick, it should become part of the core of your
organization. Your corporate culture often determines what gets done, so the values
behind your vision must show in day-to-day work.
Make continuous efforts to ensure that the change is seen in every aspect of your
organization. This will help give that change a solid place in your organization's
culture.
It's also important that your company's leaders continue to support the change. This
includes existing staff and new leaders who are brought in. If you lose the support of
these people, you might end up back where you started.
What you can do:
Talk about progress every chance you get. Tell success stories about the
change process, and repeat other stories that you hear.
Include the change ideals and values when hiring and training new staff.
Publicly recognize key members of your original change coalition, and
make sure the rest of the staff – new and old – remembers their contributions.
Create plans to replace key leaders of change as they move on. This will
help ensure that their legacy is not lost or forgotten.
21