Project value and innovation
The Air Space Heaters Case Study
Air Space Heaters is a UK-based manufacturer of domestic space heaters which are sold to customers in the UK, France, and Germany. Air Space Heaters was founded as a sole trader business in 1947 and became a private limited company in the 1960’s. The organisation remains family-owned with strong links to traditional methods of manufacture. The granddaughter of the original proprietor of Air Space Heaters is both chief executive and a main shareholder. The remaining shareholders are all descendants of the family. Three of them are directors of the business, while the remaining two directors are not members of the family.
The company is organised into five functional areas – Marketing & Sales, Design, Finance & Procurement, Human Resources and Manufacturing Operations. A breakdown of the number of people currently employed at Air Space Heaters in each of these functional areas is shown in Table 1.
Functional breakdown of staff employed at Air Space Heaters as at year end 2012
Marketing & Sales Design Finance & Procurement Human Resources Manufacturing Operations
Directors 1 1 1 1 1
Line Managers 1 2
Engineers and Designers 7
Administrators 1 1 1
Skilled Workers 14 7 6 35
Air Space Heaters manufactures two types of space heater. The first is its traditional design which uses smokeless-coal and has changed very little since the company started trading in 1947. However, the rise of cleaner, more efficient ways of space-heating and the problem of CO2 emissions have resulted in sales in traditional coal-fired space heaters becoming more, or less, static. But the company still wants to increase sales in this market. The second type of design is Air Space Heater’s modern glass-fronted, clean-burning, efficient space heater appliance, which uses bottled bottled-gas. Despite intense competition and recessionary pressures in the UK market for space-heating appliances, the sales of this particular product continue to increase steadily and account for some 85 percent of Air Space Heaters’ annual revenue.
The retail prices in 2012 of Air Space Heater’s traditional and modern space-heating appliances were £450 (€560) and £250 (€310) per unit, respectively. These prices exclude the costs of buying the coal and bottled-gas, which were £0.05 (€0.06) per kWh and £0.16 (€0.20) per kWh, respectively. Table 2 gives the sales between the years 2010 to 2012 of Air Space Heaters’ traditional and modern space heaters in the UK, France and Germany.
Air Space Heaters traditional and modern space-heating year-end appliance sales, 2010-2012
UK France Germany
Year 2010 2011 2012 2010 2011 2012 2010 2011 2012
Traditional Space-Heating Appliances Sales (Units) 1676 1763 1750 300 335 371 150 200 247
Modern Space-Heating Appliance Sales ( Units) 8520 9467 10150 1000 1500 2104 1350 1375 1403
Total Appliance Sales (Units) 10196 11230 11900 1300 1835 2475 1500 1575 1650
(note: assume appliance sales to be equal to actual output)
Air Space Heater’s key business objective is to achieve an average year-on-year sales growth of at least 10 percent in all segments to which it supplies appliances. On the other hand, Air Space Heaters Executives are concerned about the potential risks to the organisation of overdependence on UK sales, particularly as the UK economy could possibly enter an unprecedented ‘triple dip’ recession. Given the appliance growth potential that appears to exist in France and Germany, some members of the Executive feel that at 20,000 space heater units per annum Air Space Heaters not only has the necessary design capacity for growth, but needs also to be less ‘inward-looking’. So it is high time to review the organisation’s key business objectives and strategy.
As much as overdependence on UK appliance sales is a problem for the Executive, it is equally concerned about the potential impact of a number of other business environment issues, which if not tackled effectively, could threaten Air Space Heaters future viability. At a recent weekend retreat of the Air Space Heaters Executive a number of business issues were identified as priorities for the organisation.
An important part of the Coalition Government’s Carbon Emissions Reduction Target (CERT) is the obligation it places on energy suppliers with 50,000 or more domestic consumers to reduce carbon dioxide emissions. Since the coal and bottled-gas used in Air Space Heaters appliances are supplied by other companies, Air Space Heaters is not an energy supplier. Recently, however, these two suppliers with whom Air Space Heaters has a long-standing relationship have become increasingly critical of Air Space Heaters apparent complacency on this issue. As responsible organisations, these suppliers are convinced that Air Space Heaters too ought to be working alongside them in supporting initiatives to promote more efficient energy use and reduce carbon dioxide emissions.
The Directors of Marketing & Sales and Design (who are not family members of Air Space Heaters Executive) are concerned that the organisation’s survival owes more to good-fortune, than on a systematic assessment of underlying demographic trends and technological know-how. For example, factors such as smaller households, increases in the rented sector, changes in expected levels of home comforts, lifestyles, and greater awareness of green issues, are all likely in one way or another to impact on product sales. Likewise, there is a danger that domestic customers may become increasingly dissatisfied with the growing technological ‘gap’ between coal/bottled-gas space-heating and other appliances, especially in relation to ease-of-use, automation, control and design for safety.
The Director of Marketing also feels that Air Space Heaters traditional approach to the sales and delivery of its space-heaters could benefit from immediate investment in on-line sales capabilities. In this way, the firm may be better equipped to service and possibly grow the UK market, but more particularly in France and Germany. The concern to develop the business in this way relates to the risks to which the business is likely to be exposed should an unusually cold winter ensue in the UK as this could result in a downturn of sales in the UK and lead to reduced revenue and profits. While there appears to be some in-built flexibility at the current overall manufacturing efficiency of 60 percent the Director of Manufacturing and Operations still remains sceptical about the ability of the business to respond effectively, should the fear of a long hard winter become a reality. A further concern for all directors is the issue of the technical barriers Air Space Heaters may need to confront such as the tighter fuel burning efficiencies in the French market, should the business decide to increase its trading in the European Single Market.
The Director of Manufacturing and Operations is not against the notion of taking a systematic approach to improving the business. However, she feels very strongly that improvements to the manufacturing operations and supply chain for both the traditional and modern space-heaters might be a more efficient short-run approach to increasing sales revenue. Long-run approaches such as the establishment of an on-line sales capability, argues the Director of Manufacturing and Operations, are important but could be quite risky, especially that the current sales and revenue trends are still rising. The current average order fulfilment time agreed with Air Space Heater’s sole distributors of seven days from initial customer order to home delivery, works well. Also a recent customer survey commissioned by Space Air Heaters indicated that its customers in the UK were more than satisfied with the personal touch associated with the home delivery, installation and after-sales services provided by this distributor. Currently, this approach is to deploy a purpose-built fleet of transit vans, each with a well trained (technically and in terms of customer services) craftsman-driver who delivers targeted service to the customer. Moreover, although a survey was not commissioned to elicit customer’s views in France and Germany, the anecdotal evidence suggests that these overseas customers appear in general to be satisfied with the road-transport based delivery service which Air Space Heaters provides from the two small deliver hubs located at strategic points in these two countries. So it is the Director of Manufacturing and Operation’s considered opinion that the current supply channels are working reasonably well and should remain substantially unchanged, at least in the medium term.
In terms of the reliability of Air Space Heaters products, while the survey did reveal that customers were in general satisfied, a small proportion of customers (approximately 5 percent of those surveyed) complained of cracks appearing in the glass panel of their space heaters, often following a prolonged period of use. Coincidentally, so as to increase the product throughput of its modern space heaters, Air Space Heaters had also installed and commissioned a new robotic assembly line, which the Director of Manufacturing and Operations suspects may have been the source of this problem. But at the prevailing five percent failure rate of these glass panels, it may not necessarily be viable for the business to expend its scarce resources to resolve this problem.
With retail prices for electrical domestic space heaters of between £35(€44) and £50(€63) most customers could make the switch from coal or bottled-gas space-heaters to alternative substitutes. Also with a comparable price per kWh, barriers to exit from the coal and bottled-gas space-heating market are relatively low. Fuel poverty – defined as households which spend more than 10 percent of their income on fuel – could also drive poorer customers to switch to electrical space-heating because of the added flexibility to target electricity consumption to actual need.
Once a customer buys an Air Space Heaters space-heater, most of the costs incurred will be to purchase either the coal or bottled-gas. The demand for Air Space Heaters space-heaters is derived from the demand for energy. In turn, the demand for energy depends on the global price of oil, which is determined on a monthly basis by the Organisation for Petroleum Exporting Nations (OPEC) – an international group of oil producing nations. The popular view among oil analyst and the suspicion among members of Air Space Heaters Executive is that at USD110 per barrel, the global price of oil is being kept artificially high. The real worry for the derived demand market in energy products and services and for Air Space Heaters products in particular, is what might happen to the price of oil.
The Air Space Heaters Consultancy Assignment – PVIC Module
The context of the consultancy assignment
Following the recent weekend retreat the key strategic business issue upon which the Air Space Heaters Executive Board cannot agree is whether or not it should be adopting short-run, or long run project approaches to improving manufacturing performance and customer satisfaction. On the one hand, short-run project approaches do tend to deliver revenue in the immediate term but fail to address underlying change issues. Yet on the other hand, long-run project approaches are more likely to sustain revenue streams in the longer-term as well as to deliver more fundamental and lasting change within the organisation. Short-run project approaches are also much less challenging than long-run project approaches in terms of navigating the consequential organisational change issues and associated business risks.
Never before has an issue resulted in such soul-searching within the Air Space Heaters Executive Board and there are now real concerns within the Air Space Heaters Executive Board to resolve this problem one way or the other.
The consultancy assignment
As a specialist consultant in projects, innovation and change management you have been head-hunted and tasked by the Air Space Heaters Executive Board to present a consultancy report to support discussion and decision-making at their next planned retreat. This report should contain the following:
a) A written review of the organisational innovation and change issues of which the Air Space Heaters Executive Board should be aware in deploying approaches to project management for the delivery of short-run and/or long-run improvements to manufacturing performance and customer care.
(Word length: 1400)
b) A critical analysis of the project management, innovation and change issues arising from the case study which may flow from a decision to adopt a long-run approach to improving manufacturing performance and customer satisfaction at Air Space Heaters. This should be presented in the form of a written narrative addressed to the Air Space Heaters Executive Board and should make clear the key related issues of which the Executive Board should be aware in going ahead with the decision.
Amongst other things, your written narrative might address the following issues:
• The challenges which lie ahead for the Air Space Heaters Executive Board in managing the organisational change issues stemming from a decision to adopt a long-run approach to improving manufacturing performance and/or customer satisfaction.
• How the likely costs and benefits associated with going ahead with the decision might be analysed.
• How the decision might impact the quality assurance and control of Air Space Heaters products
• The way in which emergent political and cultural issues may be navigated in bringing about this change at Air Space Heaters
• The impact on human resources at Air Space Heaters
• Strategies for minimising the potential business risks associated with the decision
• Possible ways by which lessons emerging from the change process may be embedded at Air Space Heaters
• The international implications of the decision
• The reduction of Air Space Heaters carbon footprint.
You should use the relevant innovation, project management and change concepts, tools and techniques with which you are most familiar to support the written narrative to the Executive Board.
(Word length: 1000)
c) On the basis of the critical analysis of the key issues identified in section b), above:
a. justify to the Air Space Heaters Executive Board the reasons why they should adopt the chosen long-run project approach to delivering the desired manufacturing performance and customer satisfaction;
b. devise a strategy for implementing the change process. This strategy should also advise the Board of the key benefits and risks of the decision.
(Word length: 600)
The assessment criteria
In assessing your consultancy report due regard will be given to the following assessment criteria:
i. The synthesis of the project, innovation and change management ideas discussed in the literature review
ii. Grasp of the practical project, innovation and change management issues which impact and may be impacted by deploying approaches to project management which deliver short-run and long-run improvements to manufacturing performance and customer care.
iii. Critical demonstration of knowledge, awareness and insight of the relevant project, creativity and change management concepts, tools and techniques
iv. The viability and practicability of your proposed strategy for change
v. The visual quality of the report, its readability and engagement
Progress and feedback milestones
The seminar activities in weeks 9 and 10 (Session 5 for block learners) will be given over to the critique, oral presentation and defence of your draft narratives with your fellow students and tutors acting as critical commentators. This will provide useful feedback with which you can improve your draft narrative and section c) of the assignment in good time for its submission by the due date on Friday 22nd January 2016.
The assignment carries a weighting of 100 percent and should be no more than 3000 words and is to be submitted via Moodle with an accompanying turnitin report.
MSc Business Project Management
Module Name: Project Value, Innovation and Change
Assessment Report by
1.0 Introduction 4
1.1 Background 4
1.2 Project Required 4
2. Change Management Concepts, Models and Approaches 6
2.1 Organisational Change Management Concepts 6
2.2 Organisational Change Management Models 8
2.3 Possible Approaches for RegencyHealth 10
3.0 Narrative on Expansion Strategy 12
3.1 Change model analysis 12
3.2 Narrative to CEO 12
4.0 Executive Summary 15
5.0 Conclusion 17
6.0 References 18
6.1 Reference 18
6.2 Bibliography 18
This consultancy report is for the CEO of RegencyHealth to submit to their forthcoming executive board meeting. The report includes the proposal of a change model to implement an expansion plan project, proposed model’s analysis, concepts and possible approaches for RegencyHealth. It also has a written narrative to illustrate the likely benefits, risks, evaluation of the model, change management agenda for during and post expansion project and an overall strategic change management process for delivering the key project goal of expanding into the four major UK cities.
RegencyHealth is a renowned private healthcare services provider in London. It was established in 2005 after receiving a substantial amount of money from a benefactor. It is a dynamic player in London’s healthcare market with high quality healthcare services at affordable prices. Their principle is that the ‘client experience’ matters. Although they are based in London, clients from other UK cities often visit RegencyHealth to use their cancer screening services as they are specialise on this service.
1.2 Project Required
RegencyHealth is specialised in cancer screening service however it also provides some other services which shows in Figure 1.
Figure 1: Structure of RegencyHealth Healthcare Services
Due to the increase demand of RegencyHealth’s services, clients travel from different UK cities to London. It was therefore proposed to expand the organisation’s services into other cities, however the executive board are uncertain if they should expand to other cities or not. If the organisation go ahead with the expansion plan then it will require huge financial support, which will need to be raised either through a share issue or loan capital. The planned expansion project will take place in two phases over a period of 24 months. Phases are:
Phase 1: Establish healthcare centres in Cardiff and Birmingham.
Phase 2: Establish healthcare centres in Manchester and Newcastle.
As a specialist consultant in the management of organisational change, innovation and creativity, I have been appointed and assigned by the CEO of RegencyHealth to present a consultancy report for the forthcoming executive board meeting. The report will include:
1. A contemporary change management concepts, models and possible approaches to the expansion project of which RegencyHealth should be aware of when implementing both phases of the project. Also advice the CEO for the necessary steps he needs to take to gain greater innovation and creativity.
2. A critical analysis of the project will be presented in the form of a written narrative addressed to the CEO in order to give a clear and precise organisational change strategy of which the CEO should be aware of in implementing the change project.
3. A summary report which will include an overall strategic change management process for delivering the key project goal of expanding into four UK cities and the advantages and risks of the expansion.
2. Change Management Concepts, Models and Approaches
Organisations go through change process for many reasons in order to achieve their business goal. RegencyHealth also needs to go through organisational change of expansion. The following paragraphs will explain what type of change RegencyHealth will go through, required model to implement the change and the approaches necessary to gain the end goal of the project.
2.1 Organisational Change Management Concepts
There are many reasons organisations require change process to operate their business activity. According to Palmer, Dunford and Akin, the following are some of the reasons an organisation may need change:
“Environmental Pressure for Change: These often occur where an organisation’s resource base decreases as a result of reduced demand for products and sales, decrease in market share, and bad investment decisions. These pressures include:
• Fashion pressures: Organisational change can occur in response to the latest management fashion in order to be seen as professional, modern or progressive managers.
• Mandated pressures: Sometimes change is forced onto an organisation through formally mandated requirements where organisations are forced to take on activities similar to those of other organisations because of outside demands placed on them to do so.
• Geopolitical pressures: This change requires in the form of immediate crises or longer term geographic realignments.
• Market decline pressures: Declining markets for products and services place organisations under pressure to remain relevant.
• Hypercompetition pressures: Aligned with the rise of e-commerce, and the use of the internet, organisations are confronted with global changes in consumer preferences, industry boundaries, social values, and demographics.
• Reputation and credibility pressures: This change process is associated with maintaining proper corporate governance mechanisms to ensure a positive corporate reputation. Corporate reputation is intangible but important corporate asset, being positively correlated with organisational performance” (Palmer et al., 2006, p. 50-57).
“Organisational Pressures for Change: Theses changes are internal to the organisations. It includes the following changes:
• Growth pressures: As companies age, change in the form of growth is brought about. Organisations sometimes go through this change process due to the rountinisation of work practices. This change process is sometimes implemented to expand the business, attract clients from various locations, for the demand of clients’ needs etc.
• Integration and collaboration pressures: Some changes are made in order to better integrate the organisation or create economies of scale across different business units.
• Identity pressures: These pressures related around establishing or re-establishing organisational identities in new eras.
• New broom pressures: These pressures associated with the appointment of new CEOs or directors” (Palmer et al., 2006, p. 61-64).
We can see that RegencyHealth is currently facing reputation and credibility pressures as well as growth pressures. Although RegencyHealth currently have a reputation of above 90% client satisfaction, it may not preserve for the long-term or other competitors might step in, hence why they have to go a through change to protect their reputation and credibility.
The number of clients of RegencyHealth are increasing and clients are willing to travel from different cities to London to use their services. However, if the organisation can provide services in a nearer location to the clients, it would certainly increase the clients’ satisfaction and will attract more clients from that particular location.
2.2 Organisational Change Management Models
There are various models available to help organisations to go through change process. One or more of these models can be used for RegencyHealth’s expansion change project. The models I have considered before making the final decision are:
• Kotter’s – eight steps
• Kurt Lewin’s model
• Kubler-Ross curve
• Weisbord’s – six box
• Bolman and Deal’s – Four Frame
• McKinsey’s – 7 S’s
• Galbraith’s – Star Model
After careful consideration and analysis for RegencyHealth’s change process, I would like to recommend to use Kotter’s eight steps model to implement the change.
The Kotter’s eight steps model includes the following steps:
1. Increase the urgency: This suggests to examine the market and competitive realties, identify and discuss any major or minor challenges and opportunities. Martin Webster said: “Rather than shoving a project down the throats of operational managers change leaders need to generate a sense of urgency about the task in-hand and get the right team together to deliver transformational change. Change comes about because there is some underlying crisis: customers are unhappy, costs are rising, budgets are cut, competitors have the advantage and so on” (Webster, 2002).
2. Build the guiding team: Kotter suggests to make a group with enough power to lead the change effort, interest the key change leaders by showing motivation, enthusiasm and commitment. Webster said: “getting the right people in place is about getting the right team, commitment and trust to do the job. This is what step 2 is about.” (Webster, 2002).
3. Get the right vision: As Webster said: “Prepare this way: first prepare a vision that takes you to an end state, second a strategy to show you how to achieve the vision, next step-by-step plans to carry out your strategy, and finally budgets to make sure you can afford your plans” (Webster, 2002).
4. Communicate for buy-in: Establish alignment and engagement through successful stories, take advantage of every possible way to communicate the new vision and strategies and keep it as simple as possible and heartfelt. Then lead the coalition by example and teach them new behaviours.
5. Empower actions: This step entails taking care of the obstacles that appear during the project to gain the vision and amend the systems and or/structures that work against the vision.
6. Create short-term wins: Plan for and achieve tangible and visible improvements to attract all the stakeholders. Also recognise and provide incentive/reward for those who are involved in making the theoretical strategy to pragmatic improvements.
7. Don’t let up: This is essentially maintaining the performance – not letting up – and keeping the successful momentum.
8. Make it stick: Webster said about making it stick: “Making it stick is about:
a. Achieving tangible results quickly and ensuring change is embedded.
b. Tying results to new behaviours; showing people what the organisations really cares about.
c. Reinforcing the new culture through training and coaching; telling vivid stories about the organisation, what it does, and why it is successful.
d. Giving people who act according to new norms influential and visible positions.
e. Not giving up until you get the needed behaviour and results (Webster, 2002).”
These eight steps can be categorised into three phases:
1. Creating a climate for change includes increase urgency, build the guiding team and possessing the right vision.
2. Engaging and enabling the whole organisation includes communicate for buy-in, empower action and create short-term wins.
3. Implementing and sustaining change includes build on the change (don’t let up) and anchor the change in corporate culture (make it stick).
Figure 2 shows the visual image of Kotter’s eight step model.
Figure 2: Kotter’s eight steps model
2.3 Possible Approaches for RegencyHealth
According to Kotter’s model, RegencyHealth should undertake the following steps:
Step 1: The CEO should increase the urgency of the project by illustrating research findings and comparing the project objectives with realties. All the possible minor and major challenges the organisation might face and the opportunities that will present itself by completing this project should then be discussed, along with the gathering of information together and producing evidence that the change process is necessary. For example the change process could be to improve client satisfaction rate, grow the organisation to reach more clients and so on.
Step 2: The CEO should build a team of people who will have influence over the whole change process. According to the structure of the organisation (Figure 1), RegencyHealth currently provides five different services. There is also a Corporate Business Support (CBS) which is run by a director who ensures the smooth running of all five service areas. I would suggest to build a team which includes the CBS director and head of all five services. Most significantly, the CEO needs to ensure the whole group work as a team.
Step 3: The vision of the change process and strategies to implement the vision needs to be developed. RegencyHealth places high priority on their clients’ experience hence it would be ideal if the vision is related to the client service rather than focusing on increasing business revenue. The expansion project is required to fulfil clients’ demand, thus the strategies for the vision needs to reflect ‘what is in it’ for clients.
Step 4: The team should share the same values and participate in the change process. The CEO needs to spread the change message simply using all mediums available. The CEO needs to ensure that the team do not feel that the higher management knows what is right and what is needed to achieve the end goal.
Step 5: At this stage, the obstacles to achieve the vision need to be analysed to take steps to eliminate them. Risk assessment is also necessary.
Step 6: Stakeholders of RegencyHealth e.g. staff, members of the executive board, suppliers, specialist surgeons and clients will be interested in seeing visible improvements of the process. Therefore, it is imperative for the CEO to deliver short term success to gain their trust, cooperation and future development of the project.
Step 7: At this stage, ensure that the flow of success keeps rising and that the momentum continues until the project culminates. Communicate, discuss and spread the good practice and performance that led to the success.
Step 8: Finally, do not give up on changing the organisational behaviour until it reaches the point where the organisation needs to be. Also communicate the success story, show the staff that the organisation cares about them. Incentivise the staff who perform well and adopt new changes quickly and effectively.
3.0 Narrative on Expansion Strategy
3.1 Change model analysis
I suggested to use Kotter’s eight steps change model because it covers the necessary elements required for the change process which are:
• Involve higher management in the process.
• Engage all staff and consider their opinions.
• Include ‘client experience’ philosophy within the change process.
• Stakeholder’s engagement and communication process for the participation of the stakeholders were included.
• A smooth behaviour change process to make people feel comfortable about the change.
3.2 Narrative to CEO
This narrative is to explain to you (CEO of RegencyHealth) the analysis of your organisation’s recent proposal of expansion. My suggestion of using the Kotter’s eight steps change model will assist the vision of the change process to be implemented effectively and efficiently. The following elements of the project need to be considered within the expansion strategy:
• Benefits and risks of expanding the organisation
• Locations, Cost and duration for the project
• Resources required for the project – will there be need for new resources?
• Quality measurement of the project
• The level of innovation and creativity required to implement the vision
• Culture change of the organisation
• Clients’ expectation
Considering all these elements are crucial as they will provide the clarification for the expansion project and answers for many questions which will be raised by the stakeholders especially the executive board. Some of the questions will be related to the benefits or risks, duration, human resource of the project etc e.g. what are the benefits/risks of expanding the organisation in this way? Can the both phases be completed within 24 months? What new resources will be required for the project? Answers for these questions can be developed between steps two and three of the aforementioned possible approaches.
Some other questions might be asked by the director of CBS and head of the services such as what are the likely infrastructural factors which may impact the expansion plans? Are all service provisions equally transportable or are some services more transportable than others? It would be beneficial to consider transferring the services one by one to the new locations according to the demands from clients. In this way it would also be cost effective and you will be able to demonstrate a short-term win instantaneously by transferring one of the services and making it successful.
Client satisfaction is key to the expansion strategy, hence lend critical thinking to how you can gain an expansion plan that targets the right services to the right clients, how can you be certain that you are targeting the right clients, will the clients receive same quality service in all these new locations etc. These need be part of the strategy therefore the vison of the project needs to be surrounded by all these questions.
The strategy also needs to have proposal of innovation and creativity which will help the stakeholders to participate in the project as well as make the services of RegencyHealth unique in the UK health sector.
Communication strategy is one of the most significant parts of the project. All the stakeholders must be communicated about the change process. Staff will be worried about the change and might have questions such as how the change will impact them, whether they will have to transfer to a different location and so on. Make sure you clearly address the impact of expansion project on existing human resources of the organisation. You have to deal with staff fears as well as hopes and dreams by communicating the change process as simply as possible and with earnest. Kotter’s model’s step four will help you to achieve this. Stakeholder engagement will be a key matter for this project. Firstly identify the stakeholders and begin by communicating to them about the project. The director, head of the services, specialist surgeons, doctors, suppliers, and general staff, everyone needs to be communicated, briefed and kept in the loop about the change.
There are steps involved after the expansion plan is implemented. The local clients of a specific location need to be communicated that they can receive the service from the new location rather than travelling to London and ensure the clients that they will receive the same quality service. Collect feedback about the services from the clients to improve the provided services. Another significant task is to ensure the staff are familiar with the new change of the organisation. Provide rewards for staff who embrace the change quicker than others, it will motivate them to be more positive and effective. You may face challenges when conflicts between the management of each location or within the organisation arise, therefore you must prevent and deal with the conflicts immediately. Finally, stick with the change process and after the first phase is implemented, continue to the second phase of the project with the same enthusiasm and spirit and without holding back.
4.0 Executive Summary
In summary to the consultancy report for RegencyHealth, I would like to recommend the following steps:
• Initially demonstrate how important it is to expand the organisation e.g. show statistics of patients from each of the new locations and surrounding cities.
• Engage all the stakeholders and convince them to participate in the project.
• Instead of completing everything together, implement one thing at a time to reduce risks.
• Communicate the message for change project among the stakeholders, especially the executive board and the staff from the beginning of the process and keep everyone in the loop.
• I strongly recommend to bring innovation and creativity in the new locations to attract more clients e.g. new health services, specific treatments which are not currently available in UK, special schemes for long-term clients etc will make the organisation unique nationally as well as globally.
• Initially it would be ideal not to transfer all the services to a specific new location as it will increase the risk of high cost-low income for the organisation. Transferring one or two services of the most popular services at the first stage will be ideal e.g. cancer screening, vaccination and cell services etc.
• Achieving short term success is key to the project for future expansion and development and ultimately gaining the end goal of expanding into four new locations, thus plan short term goals for each phase of the project.
• Be mindful about the obstacles which can restrict the change process e.g. not getting permission from the authority to establish new services or centres, exceeding the budget, employee or stakeholder’s dissatisfaction and so on.
The possible benefits of expanding the organisation into four new locations are:
• Giving more accessibility to the clients.
• Attracting more customers nationally and internationally.
• High chance of purchasing healthcare services from NHS or private sector organisations.
• Increases the chance of obtaining funds from NHS for general medical practice.
• Improving the client satisfaction rate.
• Opportunity to bring innovation and creativity within the organisation.
• Chance of obtaining new services which ultimately will widen the range of patients.
• After successful delivery of the project, confidence level will be higher and will become a more trustworthy organisation to the stakeholders.
The possible risks are:
• RegencyHealth never went through an expansion project before hence it would difficult for the organisation to visualise the end goal and cope with the reality.
• Financial recovery of the investment will be a long term process so the risks of the investment is high.
• Providing the same quality service in all locations will be very difficult which will create client dissatisfaction.
• Some of the stakeholders may not ‘buy-in’ the project proposal which will create conflict within the organisation.
• Exceeding the approved budget will be one of the biggest risks during the project.
• Finding equal skill-sets/talent for all the locations or equal experts/specialist.
• Competitions from the local healthcare service providers for the same services.
• The structural change might have negative impact on the organisation’s current practices and culture.
• The initial fund of £50 million might not be sufficient for the whole project so some shares might need to be sold, which will split the management of the organisation.
Considering all the aforementioned benefits and risks and according to my recommendations mentioned in the summary section of this report, I would like to propose that RegencyHealth should go ahead with the expansion project into four new locations. The level of risks can be reduced by using Kotter’s change model, by undertaking a detailed risk assessment using one of the risk analysis methods, carefully considering the budget of the project and choosing the right services for the right locations to attract the right customers.
1. Palmer, I., Dunford, R., Akin, G. (2009). Managing Organisational Change: a multiple perspectives approach, New York.
2. Webster, M. (2002) Successful Change Management – Kotter’s 8-step change model. Available from: http://www.leadershipthoughts.com/kotters-8-step-change-model [Accessed on 21st December 2014]
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