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Respond to at least two of your peers’ initial posts, making a substantial comment to each by Sunday.

NOTE 2: Respond to at least two of your peers with any questions you have about their analysis of communication failures they have witnessed in organizational change efforts and compare their answers to your own understanding of communication problems in organizational change efforts.

Peer One:

The leader that I chose to highlight in this week’s discussion is John Antioco, the former CEO of Blockbuster, who turned down a partnership with Netflix and failed to see and understand the digital storm that was coming to the movie-rental industry. Although Antioco made multiple executive decisions for change in an effort to save Blockbuster once he realized that he had made a mistake and the company was in trouble, it was too little too late (Sattel, 2014). The company would eventually succumb to its losses and collapse. 

1. What were the drivers or reasons for the leader to initiate a change effort?

The drivers that pushed Antioco to initiate a change effort were Netflix’s creation of a subscription program that effectively removed the need for late fees. Unfortunately, late fees were one of Blockbuster’s main sources of profit. As people began to move to Netflix to save money and enjoy the convenience of movies being delivered to their door, Antioco felt the urgency to make changes to Blockbuster’s methods. (Satell, 2014). 

2. What were the hindrances or obstacles that emerged during the change effort?

Because Antioco did not create a coalition to develop a solid vision and strategy and instead made quick executive decisions, there was a lot of pushback that would eventually result in his firing (Satell, 2014). One of his decisions involved the immediate removal of all late fees for late-returned movies and this caused a significant financial loss for the company. At the same time, he decided to increase the product line in the stores which put a huge financial strain on a dwindling budget. His reactionary leadership style and the resulting losses prevented him from convincing his leadership that his plan would have long-term benefits. Ultimately, buy-in was poor.

3. What did you find as the key role the leader had to take in the beginning of the change effort?

The key role that Antioco took was the role of an autocratic leader. Although he had not operated in this approach before, he felt that he was justified given the urgency of the situation as Blockbuster saw a huge loss of customers (Satell, 2014).

4. What was the communication channel the leader used to initiate the change effort?

Antioco failed to communicate to the company as a whole his new vision of mail-order movie rentals, a vision for movie streaming, and the removal of the late fees, all of which would have taken Blockbuster into the future. Instead, he simply implemented changes and communicated them after. Unfortunately, his poorly planned out decisions initially cost the company millions, and no one was able to see past the loss to the potential of growth in the long-term (Satell, 2014).

5. How did the organizational culture play a role in the success or failure of the change effort?

During Antioco’s time as CEO of Blockbuster, he doubled Blockbuster’s revenues which had earned him significant credibility with the board and stakeholders (Satell, 2014). In fact, Blockbuster was the dominant player in the movie-rental industry and this was something that the company took great pride in and celebrated. This culture of success and pride likely contributed to Antioco believing that Netflix was no threat to them, which resulted in a change effort that was poorly thought out and poorly carried out. 

6. What did you learn about the leader you researched that surprised you the most?

What surprised me the most was how reactionary Antioco was when confronted with the reality of Netflix’s success. Given his long history of success and experience with Blockbuster and other companies, I would have expected him to create a coalition of his top executives and store managers, collaborate to create a new long-term vision, establish a solid plan of change, and communicate with the stakeholders through the entire process in a much more effective way. 

References 

Sattel, Greg. (2013). A Look Back at Why Blockbuster Really Failed and Why. Forbes.

Peer Two:

For this week’s discussion, I researched the organizational change that occurred in the Lego company when it was struggling to compete in the toy industry. My chosen leader is Jørgen Vig Knudstorp, the CEO of the company.

What were the drivers or reasons for the leader to initiate a change effort?

The change effort for Lego was driven by falling sales, an $800 million dollar debt, and the very real possibility that the company may fail (Davis, 2017). Previous efforts to expand the Lego brand had been unsuccessful in establishing Lego in different industries (clothing, video games, theme parks, etc.) (Davis, 2017). The company responsible for a classic toy needed to update its product lines and find ways to reduce costs to ensure a future for the organization.

What did you find as the key role the leader had to take in the beginning of the change effort?

Knudstorp had to act as the decision maker in the change effort. He had to make key decisions regarding which product lines and business ventures to discontinue (Davis, 2017). Knudstorp was also a leader in creating a cultural shift in the organization, promoting more customer interaction to build brand loyalty (Davis, 2017).

What was the communication channel the leader used to initiate the change effort?

Knudstorp used face-to-face communication throughout the change process (O’Connell, 2009). He made sure to walk through each department and speak with employees reasoning that this approach would create trust that is necessary for a successful change initiative (O’Connell, 2009). Knudstorp also initially participated in the regular meetings where his presence would help him get feedback and keep the change effort in the forefront of managers’ decision making (O’Connell, 2009).

How did the organizational culture play a role in the success or failure of the change effort?

The success of the change effort was supported by Lego’s belief in making their products the best they can be and sticking to the organization’s strengths (Davis, 2017). With the focus of the organization shifting to a smaller product line, it became possible for Lego engineers to refine and improve the quality of the products (Davis, 2017). This organizational culture worked well with Knudstorp’s downsizing to help Lego recover and begin to thrive once again.

 References:

Davis, J. (2017, June 4). How Lego Clicked: The Super Brand that Reinvented Itself. Guardian News & Media Limited. https://www.theguardian.com/lifeandstyle/2017/jun/04/how-lego-clicked-the-super-brand-that-reinvented-itself

O’Connell, A. (2009) Lego CEO Jørgen Vig Knudstorp on leading through survival and growth. Harvard Business Review. https://hbr.org/2009/01/lego-ceo-jorgen-vig-knudstorp-on-leading-through-survival-and-growth