The auto industry is intensely competitive and dynamic. In order to compete effectively in this industry, firms need to be adaptable and responsive to change in the operating environment. General Motors is among the firms which have remained competitive despite the numerous challenges that have rocked the industry. This is not to say that the company has been unaffected by the challenges. As a matter of fact, such challenges as safety issues have threatened to derail the company’s progress. As part of its efforts to secure its future, the company has implemented a number of reforms and strategies. While it is still too early to determine if these reforms and strategies will be effective, it can be concluded with confidence that the strategies are well designed. To understand these strategies and the impact that they have on the operations of General Motors, it is essential to view them through the lens of Kotter’s eight step plan.
Kotter’s Eight Step Plan Overview
Kotter’s eight step plan outlines the process that firms should follow when implementing and managing change. Creating a sense of urgency is the first step (Kotter, 2014). Here, the company needs to challenge its stakeholders to understand that change is needed desperately by highlighting the impact that the change will have when fully implemented. At the second stage, the firm builds coalitions and power that will be used to drive the change management process (Khan & Hashim, 2014). Creating a vision which captures the goals that the firm wishes to accomplish constitutes the third stage. It is vital for leaders to rally all stakeholders to fully support the vision and the accompanying goals. The fourth step of Kotter’s plan involves communicating the vision to stakeholders. Through communication, the stakeholders understand the essence of the vision and the need to support it. Stage five is concerned with empowering stakeholders while stage 6 involves establishing short-term rewards with the goal of creating momentum needed for the pursuit of the vision. At stage seven, any adjustments that are found necessary are made and focus is given to continuous improvements. The eighth and last step sees companies reinforcing change by enabling stakeholders to recognize that the change management process will only be successful if supported by behavior change. In general, the Kotter’s model offers an accurate depiction of the process that most organizations follow in their quest for effective change management.
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Change Management at General Motors
It has been established that the culture that an organization has adopted serves a critical function in determining its performance. A culture that encourages complacence and violation of policies creates an environment that yields failure (Kunert, 2018). On the other hand, firms which have established a culture that encourages all stakeholders to pursue their mission often achieve success. The change that General Motors wished to implemented involved reforming its culture (McGregor, 2014). Essentially, the organization observed that there were safety concerns which went unreported and threatened its success and future. In the following section, a discussion on how the company used Kotter’s eight step plan to change its culture is provided.
Creating Urgency
As noted earlier, the first step of Kotter’s model is concerned with creating urgency. In following this step, General Motors the company’s leadership released the results of a report of an investigation on a controversy involving ignition switches (McGregor, 2014). Through this report, the company reminded its stakeholders that the safety of its cars was at the center of its success. The report also noted that the culture at the organization was partly to blame for the safety issues. In essence, the report made it clear that unless it reformed its operations and culture, General Motors could lose its position of dominance in the auto industry. The company’s leadership understood that urgent interventions were needed if the firm was to reclaim its image and safeguard the wellbeing of its customers. They created urgency.
Building Coalitions and Power
The effective implementation of change hinges on stakeholder involvement (Bourne, 2016). General Motors recognized this in its response to the need for a culture change. As part of its efforts to establish a culture that prioritized safety, the company sought the support of such stakeholders as regulators, employees and its suppliers. For example, it announced that it would adopt better communication with regulators and improved interactions with its suppliers (McGregor, 2014). Essentially, by building partnerships with its stakeholders, General Motors recognized that to be successful, its change management initiative needed the full involvement of the stakeholders.
New Vision
A vision-driven approach holds the key to organizational growth. It is important for firms to create visions that represent the goals that they wish to accomplish and the strategies that will be implemented in the pursuit of these goals. General Motors created a new vision which pushed its operations in a new direction. The company announced its commitment to create a culture where all stakeholders would strive to ensure that the company’s cars satisfied the strictest safety standards. Dubbed “Speak up for Safety”, the new vision will challenge General Motors’ employees to report any safety issues that they witness (McGregor, 2014). It is clear that through the new vision, this firm acknowledged that it needed to adopt reforms so as to regain the trust and confidence of its customers.
Communicating Vision
Simply creating a vision is not enough to propel a company towards growth. It is vital for companies to communicate the vision to its stakeholders (Holland & Rohe, 2013). Through communication, stakeholders are able to understand the role that they can play to actualize the vision. In a bid to assure the public, employees and other stakeholders that it was committed to changing its culture, General Motors embarked on a publicity initiative through which it would inform the public about its “Step up for Safety” program (McGregor, 2014). This initiative serves as indication that General Motors recognized the importance of inviting stakeholders to participate in the change management process. In addition to admitting that its past practices were unacceptable, this initiative also enabled General Motors to seek and gain the support of its stakeholders.
Empowering Stakeholders
Stakeholders cannot participate in the change management process if they lack the authority and resources to do so. General Motors understood this when it decided to reform its culture. Employees are the key stakeholders that the company sought to empower. The empowerment involved creating a policy that allowed employees to report any safety violations and incidents that they observed (McGregor, 2014). Furthermore, the company advised its stakeholders such as employees and the top leadership to embrace personal accountability and integrity as part of efforts of establishing the new culture whose focus was safety (McGregor, 2014). Since they were empowered, the stakeholders could participate in the process with boldness and resolution.
Short Term Reward
It is generally understood that to motivate employees to pursue a particular objective, it is necessary to provide rewards (Yousaf et al., 2014). Essentially, rewards incentive employees and other stakeholders to support an organization’s mission. As part of its efforts to build momentum and support for its change process, General Motors established a reward program. To incentivize its employees, the company announced that it would recognize those who report safety issues (McGregor, 2014). It can be expected that the recognition that they receive will persuade the employees to come forward with information that can help the company to improve its safety record.
Continuous Improvements and Adjustments
It is difficult to sustain momentum for the change process. Stakeholders often lose sight of the vision and their commitment wanes (Hirota, 2015). It is for this reason that firms should invest in continuous improvements and make the changes that are needed to sustain the momentum. Given that the change management process that General Motors adopted is fairly new, it is too early for the company to need to make adjustments. However, as part of its plan, the company intends to promote continuous improvements. When announcing the plan to reform the firm’s culture, the leadership stated that employees would be reminded regularly of the need to remain committed to the vision (McGregor, 2014). Additionally, the company intends to ensure that the top leadership is engaged fully. These plans indicate that General Motors understands that constant improvements hold the key to successful culture change.
Reinforcing Change
Reinforcing change is the last phase of Kotter’s eight step plan. As already noted, this stage is concerned with refocusing the attention of stakeholders on the vision. General Motors demonstrated that it recognized that there is some risk that stakeholders may lose sight of the vision. This is why the company announced that it would remind its leaders and employees about the need for the company to embrace a new culture of safety. Through the constant and regular reminders, General Motors hopes to ensure that the stakeholders are fully engaged and work tirelessly to promote the successful implementation of the change. One can expect that the company will indeed achieve success.
In conclusion, General Motors serves as an ideal case study for understanding how organizations implement change. Confronted with a difficult situation that threatened its future, this firm embarked on a change process intended to reform its culture. Using Kotter’s eight step model, one is able to understand how the firm implemented the change. It began by creating a sense of urgency and concluded with the reinforcement of change. Kotter’s model outlines how firms can effectively implement change. Since it followed this model, General Motors will undoubtedly be successful in adopting the new culture.
References
Bourne, L. (2016). Stakeholder relationship management: a maturity model for organizational implementation. Boca Raton, FL: CRC Press.
Hirota, S. (2014). Corporate finance and governance in stakeholder society: beyond shareholder capitalism. London: Routledge.
Holland, D., & Rohe, D. (2013). Implementing lean healthcare projects on target on time on budget. Bloomington, IN: Xlibris Corporation.
Khan, M. A., & Hashim, M. (2014). Organizational change: a case study of General Motors. ASEE 2014 Zone I Conference.
Kunert, S. (2018). Strategies in failure management: scientific insights, case studies and tools. New York: Springer.
Kotter, J. P. (2014). Accelerate: building strategic agility for a faster-moving world. Boston: Harvard Business Review Press.
McGregor, J. (2014). What GM could do to change its culture. The Washington Post. Retrieved October 4, 2018 from https://www.washingtonpost.com/news/on-leadership/wp/2014/06/05/what-gm-could-do-to-change-its-culture/?utm_term=.c248cc1882e4
Yousaf, S., Latif, M., Aslam, S., & Saddiqui, A. (2014). Impact of financial and non financial rewards on employee motivation. Middle-East Journal of Scientific Research. DOI: 10.5829/idosi.mejsr.2014.21.10.21756
