Carlzon was a master at communicating. He spent at least half his time traveling and talking to frontline employees, throwing company parties and pep rallies, and using video and print sent to employees communicating his vision. A great example of this was his first print sent out entitled “Lets Get In There and Fight”. This was a simple little book using child like pictures as well as captions for those pictures explaining where the company had been, where it was now, and where the vision would take it for the future.
Even though it received some criticism for its simplicity, I think it was genius. Not only was it able to meet the needs of those who comprehend written language the best, but it also was able to communicate the situation to those who understand better by the visual method. It is also evident that Carlzon understands that the message needs to be in terms that are understandable by all in the company. He states in the case, “By listening to the employees and speaking in simple terms, I was able to articulate their own thoughts”.
8 What he actually meant was he was able to help the employees understand the message by using terms that they relate to and understand. Empowering Broad-Based Action The first sub step here is to remove all obstacles. I think it is evident that Carlzon was doing that by his firing 14 of the top 15 managers. Next, you have to change the systems and structures that undermine the change vision. Carlzon realized the frontline employees would drive the success of the change. He turned the corporate pyramid upside down as well as adding the customer to the top.
Essentially, the customer drove the business and the first contact with the customer was frontline employees. These were the ones who would make or break the company. Carlzon’s (and upper management) role was to make the environment one in which the frontline employees could make decisions quickly; a supporting role. By turning the corporate pyramid upside down and communicating that concept to the frontline employees, Carlzon was quite effective at letting those employees know that they were empowered to make decisions to reach the vision.
He also instituted training programs to train all levels of employees to arm them with the necessary tools to successfully implement the strategy thereby removing another obstacle (not having the capability to effect change because of lack of knowledge). Generating Short-Term Wins Kotter says that in this step you need to set short term measurable goals and visibly recognize the attainment of those goals. Carlzon understood this well. He would give individual rewards for particular individual efforts as well as wide ranging rewards when the company reached a major milestone.
The importance of recognition is that individuals feel their hard work is appreciated. When someone recognizes your effort in front of others they are telling others that they think you are doing a good job in attaining the goals set forth. This gives individuals a sense of belonging which makes them feel secure. People who feel secure do better work. As far as recognition of a major milestone is concerned, the importance here is that it allows the entire organization to see what the score is so to speak.
In a massive change effort such as the one this case discusses, it is easy for people to get disenchanted with the effort unless they know they are making progress towards the overall goal. What these small celebrations of milestones do is let them know they have completed one step of the process successfully. This allows them to know they are making progress. Consolidating Gains and Producing More Change I believe this is the point where SAS is at in this case. Carlzon is about to venture into what he terms the “second wave”.
Up to this point, most of the steps discussed previously were about Carlzon’s “first wave” of change. It appears from the increasingly good financials the first major change was successful. However, since employees see the company doing so well financially, they feel they should also reap some of the financial rewards for the immense effort they put forward to create a successful change. What is currently happening is the employees are beginning to revert to old habits of the bureaucratic SAS of old and complacency is setting in. This could sabotage all of the immense effort it took to create a [beginning] successful change.
This is the point where I believe the company has to start the process over again and go through the necessary steps once again. It appears that Carlzon is doing just that. In the case it states, “Recognizing the need for a new objective that would provide as much power as his earlier one, he began asking SAS employees… what they thought the company’s major challenges were”. 9 After gathering the data he once again found an underlying theme that deregulation was the company’s number one threat. The case leaves off here with Carlzon developing his vision and strategy for reaching that vision.
Anchoring New Approaches in the Culture As far as this final step in Kotter’s concept, he states that all of these new changes need to be anchored in the culture for the changes to remain permanent. The sub steps involved are 1) creating improved performance through customer and productivity oriented behavior, better leadership, and more effective management, 2) articulating the connection between new behaviors and organizational success, and 3) developing means to ensure leadership development and succession. 10 This case does not say what Carlzon and SAS are doing to reinforce this step.
However, I believe this step takes the longest to accomplish and stems from continuous change brought about via the previous 7 steps discussed. That is to say, by continuously going through the previous steps in change efforts to meet the continuously changing competitive environment, you are actually performing this step because you are constantly upgrading your performance standards based on market demands, which is bound to create better leadership and more effective management thereby developing the leadership necessary for succession.
Conclusion Many times when we review these case studies the question becomes whether or not they are successful. In this case under the auspices of this course, we would like to be able to judge whether or not the changes made at SAS were successful. This is a difficult question to answer. After all, what determines success? Is it increased revenues and profitability or perhaps it is increased employee satisfaction. None of these case studies can possible give enough information to make that distinction.
Furthermore what may be a good measure of success for on organization may be a dismal failure for another. All we can do is to grasp some of the right things being done and some of the mistakes in our own opinions and discuss what impact they are making on the organization. Only years later can we view whether or not a particular change effort was successful or not because only then can we see how it effected the organization long term, which after all is the ultimate goal of organizations-to be successful long term.
As far as SAS is concerned, I feel they are doing most of the right things to ensure long term success. They are following Kotter’s steps and in the short term it is evident by the turn around the company made the short term change were effective. In today’s global economy all businesses are in a dynamic state. Or I should say that if they want to be successful long term they must be in a dynamic state because the markets they services are continuously changing.
Consumer demands change on a dime in today’s world and in order to be an effective organization we must constantly change our way of thinking and doing things to meet those demands. If we do not, someone else will. Within the time frame of this case it appears that Carlzon understands this concept and is moving the company in a direction to keep pace with those ever changing consumer demands. In my opinion, from the information given in the case, there is one item Carlzon needs to address directly or it could come back to haunt him later.
That is the issue of sharing the benefits of a successful change with all of those involved in the sacrifices given to create that success. This not only means a pat on the back and some recognition. It also means sharing some of the monetary gains reaped. Individuals expect to be compensated for the sacrifices they make during crises situations. If those needs are not ultimately met, they will feel they have been cheated and will go elsewhere, or even worse, stay where they are and work to sabotage future progress.
