In dynamic business environment, enterprises have to maintain a continuous pace for change to deal with the emerging competitors aggressively. Change is inevitable in the business world because without change, organizations would lose the competitive edge and fail to meet the increasing customer needs and requirements. I have chosen Wal-Mart for diagnosis of change needs for this assignment. Wal-Mart is the largest departmental store in the US. This paper will apply Kotter’s 8-step approach to changing Wal-Mart enterprise towards a successful perspective. John Kotter designed the eight-stage process to introduce a sense of change to the corporate leadership. Change is considered paramount for solving problems of the day. Conventional methods of change results into a return of approximately 20% per dollar whereas modern approaches to change results into returns of approximately 80% per dollar that is more appealing to the investors and shareholders (Cohen, 2005). Since Wal-Mart has not optimized the modern transformation methods, a model for introducing change to its corporate culture is crucial to prepare the organization for change.
Wal-Mart store Inc is a multinational corporation with operating retail stores across the world. It was incorporated in 1969. It operates in 3 segments; the Wal-Mart international, Sam’s club and Wal-Mart U.S (Brunn, 2006). The company has established its operations in all the 50 states in America and 26 countries globally. It has fully owned subsidiaries in Brazil, Japan, Argentina, United Kingdom, China and Canada. Further, it has majority owned subsidiaries in Central America, Mexico, China, Chile and some parts of Africa. The company rose from a regional store to a global giant transforming the lives of numerous communities and customers live better lives. Wal-Mart concentrates on providing seamless shopping experiences to its customers whether online, on mobile devices or through their stores. Today, Wal-Mart is the largest retailing supermarket in the world whose model is emulated by many emerging retailers both in the US and other areas across the world. Wal-Mart deals with six merchandise units including grocery merchandise, entertainment, hard lines, health and wellness, apparels and home furnishing merchandise. The Wal-Mart US also provides financial services such as wire transfers, check cashing, bills payment and money orders (Fishman, 2006). Wal-Mart shares trade in the New York stock exchange and other regional and international financial markets. Today the share is trading at USD 84.62 at the New York Securities Exchange. Wal-Mart is recognized globally because it is the 3rd largest public company. It has over 8500 stores operating under 55 different names across the world. It is the largest retail stores in the world with over 2 million employees’.
The perception about change being the only thing that is constant in the world is relevant even today. Change is a common denominator particularly in the world of business. New ways such as project-based working, staying competent, technological improvements meant to drive ongoing changes in the most effective manner are necessary. Whether it is necessary to take into account a small change in processes or transforming the whole system of the organization, it is common to feel inconvenient and intimidated by the degree of the problem. To succeed in reacting to innovation, growth prospects, technology, culture, leadership and cost structure in the organization, change is inevitable (Cohen, 2005). Numerous theories and models are available to manage change in organizations that demonstrate clearly how to implement change, but for the purposes of this assignment, we will focus on Kotters 8-step model for change.
Kotter developed the model to introduce change and innovation sense to the corporate leaders. The model comprises of the following identifiable stages; developing sense of urgency, establishing a guiding coalition, creating a strategy and a vision, communicating your change vision, empowering the employees’ for broad-based action, generating the short-term wins, consolidating the gains and driving more change and last but not the least anchoring new strategies in the organization culture.
Utilizing the Kotter’s 8-stages approach to bring change in Wal-Mart
Step 1- building a sense of urgency for change
Due to the intensive competition at global level resulting from reduced merger activities and rising economies, the need for change has skyrocketed. The biggest challenge involves understanding why companies are not pursuing the change with some sense of urgency in order to accomplish organizational goals. A different perspective for business is crucial so that the purpose of the company should not be limited to making money but providing value to the society and customers. If the organization serves its customers well, it will generate revenue and profit. The leadership of Wal-Mart enterprise should focus on serving more customers to enable the company grow progressively. To develop some sense of urgency necessary for change, Wal-Mart should be committed to allocate resources optimally for growth and execute strategies to develop a portfolio of change for both long-term and short-term growth. Absence of these approaches indicates depending too much on the existing products and ineffective performance. During hard economic times, Wal-Mart management should turn to the basic idea that business and the community needs each other (Kotter & Rathgeber, 2006). To succeed, the company requires support from the community for infrastructure and employment and the community needs the company support for new solutions and employment opportunities. Sustainable growth creates a better company and community relationship that sours if the firm focuses purely on profit without focusing on the growth of revenue. The leadership of Wal-Mart should articulate the fundamental strategies for sustainable profits growth and the importance of change in accomplishing business objectives. This way, it will create some sense of urgency for change.
Stage 2-Developing a guiding coalition for change
A guiding coalition is a recipe for initiating change in the behavior of employees’. The change team organized to drill down change at Wal-Mart should represent the company not just the management. It should consist of powerful people without ego, people from all levels of management from both genders who embrace culture and diversity. A more diverse coalition is likely to be innovative in its strategies to introduce the anticipated change (Gupta, 2011). The guiding coalition should demonstrate enthusiasm, care for the people, company’s success, tools and methods applied. During this internet era, Wal-Mart guiding coalition should consider including outside members including consultants, associates, professors and professional bodies in diverse or related industry. The coalition should also utilize the social media platforms for spreading change message to supply chain, stakeholders and employees (Gupta, 2011). The guiding coalition should realize that employees make change happen in an organization with their support. Care and empathy for employees is necessary for building trust. Coalition members should acknowledge that employees have to be inspired to become innovative. When an organization is run for short-term gains, the environment is destructive and competitive because employees fear being laid off. Consequently, employees show up to pass the time, become nub because of stress since nobody is mindful of their ideas. However, if the company is run for long-term growth, failures are acceptable, employees’ develop a risk-taking culture and the environment becomes friendlier (Gupta, 2011). Company’s drive to change should persuade the employees’ that change is crucial for the success of the company as well as their personal growth. Drive to change should be an interesting experience that is worth sharing with families and friends.
Stage 3-designing a strategy and a vision for change
For Wal-Mart to develop a vision, it should think like a newly formed company all over again. The company should adjust its strategies and vision to meet the evolving customer needs and existing market conditions. The company management should review the existing business models including internal competencies, processes, product mix, resources and services. The review will allow the management to learn the trends in technology and growing customer and consumer demands. For Wal-Mart, the fundamental strategies should be profitability, growth and sustainability. This will require a combination of change and acquisitions to ensure that growth is attained profitably by utilizing resources optimally. Sustainability requires developing a portfolio including long-term and short-term changes (Gupta, 2011). Such a portfolio will allow Wal-Mart management to allocate financial and intellectual resources for change. The management should realize that change can be achieved internally by improving the current products and processes. The corporate managers should design a futuristic portfolio of changes and vision prior to formally launching the change initiatives.
Stage 4- Communicating change vision
Clearly communicated visions lead to organizational success. For Wal-Mart, frequent and clear communication of the corporate vision is crucial. There are numerous ways a company can communicate its vision succinctly such as through pocket cards, emails, story boards signs and posters or bulletin boards. Any Wal-Mart vision for change should be straightforward without apple pie jargons in order to vividly benefit all the stakeholders without inconsistencies. The best method of communicating a vision is to lead by example. The vision should be in a manner that challenges intelligence of the employees as well as demanding for collaboration from all stakeholders. Accomplishing corporate vision requires making decision quickly and accepting experimental failures. Communication of change vision should clearly allay employees’ doubts and instill confidence to all (Gupta, 2011).
Stage 5-Empowering the employees for broad-based change
Empowering employees involves making them responsible for company’s accomplishments, educating them and listening to their ideas. For employees to become intellectually engaged, Wal-Mart should give them more authority to the make decision related to change in the company. To deploy change in the most pervasive, profitable and predictable manner, the management should consider giving employees incentives. Incentives in this sense mean eliminating bureaucratic procedures and policies, communicating openly. Incentives also include encouraging reflective and thing minds through activities such as games. Wal-Mart Company should invest in its employees by training them on innovation and creativity concepts, tools, methodologies and techniques (Cohen, 2005). Further, employees should be exposed to launching of innovative products process. The management in different stores should develop in-house change competencies by setting up innovation laboratories. Checks must be established in order to develop a change routine. Employees’ empowerment should also involve supervisors who are supportive of the change practices in the Company.
Stage 6-Generating small and short-term wins for the change
Small and short-term wins will occur at Wal-Mart if the company’s management launches innovative products, embraces new cultures and ensures traceable financial impacts. The company must set up a system and process of dealing with surprise and expected elements of change (Gupta, 2011). Change comes with some chaos and the organization needs a high level of reproductively. Wal-Mart has to change from its existing rigid structure and shift to a more flexible structure that offers innovative and customized solutions as demanded by customers. It is possible that while working on short-term wins for the change, some of them are unsuccessful. Initial failures are necessary since they provide lessons of what needs to be avoided. Short-term wins are a source of visible evidence that change is worthwhile because they justify the desired changes in the company. Experiences from small and short-term wins for the change will strengthen Wal-Mart management to drive change throughout the company. Enthusiastic and well-informed company executives will provide more transforming and charismatic leadership for pursuing change (Gupta, 2011).
Stage 7-Consolidating the gains and driving more change
Publicizing the company’s success will influence employees to join the change bandwagon. Success is a good way of inspiring employees. A major challenge during selection of change projects involves collaboration by the various departments. The management of Wal-Mart should accelerate the drive for change after the short-term wins by fostering teamwork. To ensure that changes introduced are sustained for years, the Company should redefine its culture accordingly. Corporate procedures and policies, vision, informal rules, work environment, behaviors, organizational structure and rules should be amended to perpetuate change. Innovation certification and training should be utilized in acquiring change expertise (Gupta, 2011) .Periodic reviews, measures of change and action plan for nurturing change at departmental levels should be deployed and developed. This is the stage where change becomes a standardized procedure throughout the company.
Stage 8-Anchoring new strategies in the organization culture
The changing technology and customer demands create expectations for a dynamic and enjoyable experience. Wal-Mart has the responsibility developing portfolios of change for both long-term and short-term benefits. Anchoring change is crucial for perpetuating a culture of change (Gupta, 2011). The company should reinforce change in every step through environment, expectations, activities, decisions and measures. If Wal-Mart establishes fundamental strategies of sustaining profitable growth through change, infrastructure will grow significantly nurturing the culture of change continuously. From orientation of new employees to the exit interviews, the company should emphasize change to maintain the change awareness inside and outside the organization (Gupta, 2011). Once this is achieved, the society and company’s stakeholders will expect change. Without anchoring change in the corporate culture, this will be difficult to deliver.
In conclusion, the management of Wal-Mart is not quite sure how to pursue change. The reasons behind their change averse nature includes little confidence in change processes, long product development period, measures, little accountability for change among other reasons. As a result, the company provides limited incentives, questions investments channeled to driving change and has no plans to handle failures. There is a need to address the management’s inability to manage change and the little involvement of employees across the board to speed up change process. The ultimate goal is to sustain profitability, progressive growth instead of aiming at profits alone. The drive for change provides the company’s executive with a proven framework for executing their strategies successfully. The paper has explored in details the need for change at Wal-Mart Company and suggested the ways of addressing the change needs by utilizing Kotter’s 8-steps strategies to change.
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