Changing Corporate Culture at Vodafone
French (1982, p. 640) defines Organizational Development (in the following abbreviated OD) as “long-range effort to improve an organization’s problem-solving capabilities … to cope with changes in its external environment with the help of…change agents”.
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Different from other change approaches, OD focuses not only on parts of a system but rather on relationships and the system as an interconnected whole (Cummings and Worley 2005). OD deals with planned, episodic change but is an adaptive process for planning and implementing change in the same time.
Focused on a core set of humanistic, democratic and developmental values (Palmer et al 2009), OD interventions may target changes in the organizational structure, mission, strategy, leadership or culture of a firm and wish to improve organizational effectiveness (Burke and Bradford 2005).
All this is the reason why Palmer et al. (2009) use the image of a coach when referring to OD and managing change. The coach, used as a metaphor, understands managing and thus implementing change as shaping capabilities inside a system. Possible actions might include the introduction of self-managed teams, quality circles and various methods for implementing and diagnosing change in connection with action research.
Change processes in accordance with the image of coach are often pictured using Kurt Lewin’s change process model (Palmer et al. 2009). This model contains the following steps: (1)Unfreezing the context
(2)Moving the situation
(3)Refreezing the new state.
In the following I will use this model to describe implications of the above introduced coach image when managing change. As a company of reference I chose Vodafone, a multinational telecommunications company, which was undergoing a larger change in organizational culture in the mid-1990’s (Eaton and Brown 2002).
As explained earlier, the first phase of managing change is meant to unfreeze the status quo and establish the prerequisites for change (Palmer et al. 2009).
Speaking in terms of OD, this includes the identification of the problem, subsequent engagement in a collaborative dialogue with an OD practitioner as well as gathering data for an initial diagnosis. According to the managing change image of the coach, classical OD interventions involve the top of the organization and are planned, action-oriented long-term undertakings (Palmer et al. 2009). Referring to the initial situation at Vodafone in the mid-1990s the company was facing an increased competition in the telecommunication market.
The Management at Vodafone saw the necessity for a change of corporate culture as the rigid culture of ‘command and control’ management was weakening the ability to remain innovative in their challenging market (Anderson 2011). Knowing about the necessity for a change, Senior Management started an initial dialogue with HR specialists of the firm. As a result of this collaborative dialogue with OD practitioners (Palmer et al. 2009) the company started an intensive assessment and feedback activity with their employees (Eaton and Brown 2002).
This was involving employees on different levels in the organization and resulted in more detailed information about the problem in the same time, which enabled the Management to detailed planning of necessary initiatives. The result clearly showed that the current culture was blocking teamwork and mutual accountability and employees wanted to be more included in decision making as well as participate in information exchange (Eaton and Brown 2002).
Following Lewin’s model, the second stage is moving and involves the effort to “new behaviour through cognitive restructuring (Palmer et al. 2009:195)”.
After the diagnosis actions are identified and implemented. As Palmer et al. state about the coach image of managing change, “he relies upon building in the right set of values, skills, and ‘drills’ that are deemed to be the best ones that organizational members, as players, will be able to draw on adeptly in order to achieve desired organizational outcomes (Palmer et al. 2009:31)”.
It means the coach image centres on altering attitudes and behaviours to effect the intended change and accordingly supportive should be the actions that are implemented. For Vodafone this meant that a number of initiatives were implemented, including the development of shared values, the introduction of IT systems that shared and exchanged information inter-divisional learning as well as setting up a team-building program (Eaton and Brown 2002). As a major support to all initiatives Vodafone implemented a leadership coaching program.
The goal was to teach top manager skills to conduct performance reviews, help employees to set goals, and general team coaching (Eaton and Brown 2002). Managers became change agents and sills training was used to reinforce and accelerate the change initiatives. Yet another advantage of using this method of supporting the transition to new methods was dissemination of information and individual objectives needed to create cultural change were actually carried out (Eaton and Brown 2002).
The image of coach to managing change is also partly based on assumptions of group dynamics (Palmer et al. 2009). That means if one property of a system is changed (or trained differently in the case), it will activate connected parts of the system to change as well.
According to Lewin’s model, the final step is refreezing the organizational operation again. This takes place after new behaviors have been incorporated into social and organizational relationships (Palmer et al. 2009). As mentioned earlier, managing a change according to the coach image is a long term undertakings.
For the case of Vodafone the refreezing phase only was reached after a management of mutual accountability, delegation and empowerment was established (Eaton and Brown 2002). The result of the program became visible and managers began to trust more in teams and these teams started to solve problems themselves because feeling more confident.
Palmer et al. (2009) conclude this process by referring to the importance of collecting and appraising post-action data. Even though, the change is implemented as intended, review seminars provide further data on possible follow up actions. Referring to Vodafone review seminars were held a couple of month after the leadership coaching program was finished.
As Eaton and Brown (2002, p.287) determine “cultural change takes time” and “traditional attitudes to management do not die away overnight”. However, as mentioned previously, the coach image regards changes as affecting an interrelated system rather than only a single, closed entity. It holds high values as growth, self-realization and involvement as well as integrity. Maybe an organizational culture does not change all of a sudden but giving a right foundation to an evolutionary change could make this change more sustainable.