Change management in an organization is one effective way of acquiring and maintaining customer loyalty and subsequently satisfying customer needs. Changes occur in terms of technology, environment, political situations and even economic situations (Bank & Raza, 2014). It is therefore mandatory for organizations to adapt to changes in order to continue being successful. Organizational change in structure and strategy helps organizations to maintain effective performance. As a matter of fact, any changes in the market dynamics of organizations require subsequent alterations in the strategy employed in the achievement of organizational goals. For change to be managed effectively and profitably, the key objective of organizational change is to keep in step with market changes (Nestle, 2012). This is because market changes are the drivers for innovation in any organization. Changes may include: variation in product demands, variation in product supplies or supplies of raw materials, price variations, and variation in customer preferences.
Organizations that fail to adapt to environmental and market changes fail in their operations. For instance, it is reported that more than 70 percent of organizations fail in their initiatives due to a myriad background factors. However, it can be said that the background factors that contribute to organizational failure such as lack of understanding and dysfunctional communication, resource deficiency, and/ or poor resource allocation are all a result of inability to adapt to change (Bank & Raza, 2014).
Bank & Raza (2014), describe innovation as “the lifeblood of a business.” In business, the ability to adapt to change makes it possible for firms to create value and uphold competitive advantage. Resistance to change proves detrimental to the organization. It is however important that any organizational process of change should take into consideration the capabilities of the business partners as well as the competencies of the organization. Although change is continuous in every organization, resistance to change in organizations is inevitable since not all changes are welcome.
This paper aims at exploring the change management initiatives at Nestle Beverages, finding possible ways in which organizational change can bring about innovation, and to analyze the problems or challenges that an organization might face in managing innovation driven change. The justification behind this proposed study is that many companies, as has been outlined previously, fail as a result of inability to adapt to changes.
Action Plan for Change at Nestle
The laid down procedures for change management at Nestle are based on the company strategic plan. First, the adaptation of the company products to the market requirements is based on customer feedback. Their purpose is to produce high quality products. The set of strategies that have been created by Nestle for stake holders is aimed at improving the business in a way to produce food and nutrition products (Nestle, 2002).
By collecting customer feedback, Nestle effectively follows innovation needs and operation strategies. Innovation needs are met through effective marketing, advertising, intense sales and channels of distribution and service improvement (Nestle, 2014). In addition to this, leadership has to be integrated with innovation in order to efficiently manage change. Moreover, the leaders are selected from various departments then trained to handle change demanding situations in ways that result in innovation. Consequently, it becomes very easy for Nestle to achieve efficacy through innovation (Nestle, 2002).
Another key concept in the operations of Nestle is the collaboration between various management levels aimed at idea sharing. The project dubbed Ideastore, trains managers at different levels, to understand various innovation strategies that can be used in its improvement. The purpose of the Ideastore project is to collect all information that can aid in effective change management, by engaging all the available human resources (Nestle, 2012). Apart from this, Nestle upholds the value of professionalism in its operations. Professionalism is deemed important and all the laid down strategies are implemented with utmost responsibility by both management and employees. This aids in the furtherance of the innovative process of change management (Nestle, 2002).
Nestle Case Positioning
Currently, Nestle places immense value on nutrition. The operation strategies of Nestle are aimed at providing value in terms of nutrition and food products. The nutrition purpose of Nestle is built on consistency in terms of quality and safety. In addition to this, Nestle focuses on the provision of value for money in their nutrition as well as food products. The primary function of leading in innovation is assigned to Research and Development department in the organization. The R & D team specializes in’ finding information that can lead to the development of new products and the renovation of the already existing products in order to align them to the customer needs (Nestle, 2006).
Nestle had a global wellness team that aims at producing high quality and better tasting products to maintain the existing customers. With increasing public awareness achieved through intensive advertising, Nestle advances into new and existing markets, providing exactly what consumers need. The main advertising strategy that is currently used by Nestle is the packs they use for marketing their products. Nutritional innovations in the organization are based on a science led research, carried out with the aim of adding specific benefits to the products. The Nestle Company believes in the effectiveness of rigorous nutritional testing in the accomplishment of the innovation needs in terms of delivering quality products (Nestle, 2002).
The concept of incremental collaborative change is effectively applied at Nestle with consultation also playing an important role in change and innovation strategizing. In this aspect, Nestle operates by first assessing the necessity for change in the environment through the vibrant Research and Development team. After understanding the needs of the customers, Nestle aligns its operations to the needs for change (Nestle, 2006). The success of the change initiated by the need for innovation depends on the unity of purpose between the various levels of management (Bank & Raza, 2014).
Techniques that may help Nestle
The role of change in organizations’ innovativeness is undeniable. It is therefore understandable that organization seek change processes that can aid in attaining innovation. For an organization like Nestle, one of the changes that can assist in accomplishing profitable innovation is through collaboration in idea management. In collaborative idea management, various departments interact with an aim of collecting and sharing ideas which can be beneficial in innovation and renovation of products and services. An example of collaborative idea management is the Ideastore developed by Nestle. However, there can be modification to this concept in which other employees as well as consumers are involved in the idea sharing process.
Secondly, structural changes in organizations can also aid in innovation (Bank & Raza, 2014). The idea behind structural changes would be to achieve flexibility and thus be capable of adapting to various environmental conditions. The organizational structures must be in support of the strategic plan of the organization as well as in alignment with the needs of the consumers. Furthermore, organizational structures can be changed through division or delegation of power at various levels.
A change in organizational culture, attitudes and behavior can also aid in innovation achievement (KPMG, 2013). Organizational practices form a basis for the success of organizations. Organizational practice should be guided by the core strategic plans of the business. Based on the research and development team’s research results, the organization can manufacture improved products. Practice must thus be modified to befit the achievement of the organization’s core objectives.
In order to change the organizational attitudes and beliefs, it is important to comprehend the role of individual beliefs and attitudes to the organizational practice. The change desired thus must begin from change in individual attitudes (KPMG, 2013). This can only be achieved by growing in the support of major power groups in the organization, using effective leadership in gaining support through motivation. Motivation amongst employees drives them to attain the desired productivity levels (Bank & Raza, 2014).
Problems Associated with Change Management
In effecting organizational change, there are various challenges that may arise to cause restrictions on the innovative potentials of the effected change (Bank & Raza, 2014). One of the major challenges that face organizational change is communication break downs. As a result of communication break down and failure of organizational managements to delegate decision making duties, organizations fail to take opportunities that require change thus resulting in a failure to innovate or renovate.
Another challenge that is prevalent in organizational change is disunity in purpose between various employees. According to Soosay & Sloan (2005) organizations face 20-25 percent resistance to change from employees. This is however explained to be a result of misunderstanding the company objectives and mission statement, a fact which results in lack of interest in organizational operation and subsequently resistance to change. In order to effect change in spite of this challenge, Soosay & Sloan suggest that managements should confirm that employees understand the implications of organizational strategic plan and thus work in unity towards the achievement of organizational goals.
Apart from this, the quick pace of technological advances also poses a challenge to practice changes in organizations. As organizations strive to adapt to new technologies, other more efficient ones arise in the market. As it is said, necessity breeds innovation. It can therefore be said that for any innovative product or technology of manufacture, a need existed that led to the development. It is the role of organizations therefore to engage their Research and Development teams in the determination of existing needs and finding ways of addressing the needs (Soosay & Sloan, 2005).
Organizational change is an important factor in organizational innovation, a factor which, if not well managed, can lead to failure on the organization’s part. For companies like Nestle Beverages which have well laid down structural, cultural and strategic organizational plans, effecting change becomes the norm rather than the exception. Despite challenges such as the occasional communication breakdown and resistance to change from employees, it is possible for such companies to accomplish innovation through change processes that address the market situation. Another challenge that exists in organizational change is the advancement of technological methods. Collaborative and consultative changes play an important role in the change management process. It is also necessary that organizations put in place structural and cultural practices that are aligned to the organizational goals and mission.
Bank, J. & Raza, A. (2014). Collaborative idea management: A Driver of continuous innovation. Technology Innovation Management Review.
KPMG (2013). HR as a driver for organizational innovation. KPMG.
Nestle. (2002). The Nestle Sustainability Review. Nestle.
Nestle. (2006). The world of Nestle. Nestle.
Nestle (2012). Nestle in society: Creating shared value and meeting our commitments. Nestle.
Soosay, C. & Sloan T. (2005). Driving change: Innovative management in distribution centers. Journal of Asia Entrepreneurship and Sustainability.