BEMM388 Individual Case Assignment
Read the case and then address the task.
Leading and Managing Change at Pegasus: difficult decisions and emotional challenges.
John accepted a new role as change programme manager at Pegasus Engineering with a remit to
improve performance. His new employer provided specialist engineering services to large
organisations. Most of their business contracts were with government departments. However, each
time a contract with the government came up for renewal, significant cost reductions were required,
making it increasingly difficult to continue to deliver the quality required at a profit and on time.
Pegasus had previously also had contracts with private sector customers, which offered much better
margins. However, these customers had slowly gone elsewhere complaining of an expensive and
inflexible service, and only a few smaller contracts remained. Broadly John’s targets were to
facilitate a change process that would lead to: reduced process costs, reduced time to complete
contracts, and improved responsiveness to customer needs.
On his first morning, John had a briefing from his new boss, Peter, the Operations Manager, who
had been with the organisation for 40 years. Peter complained that everything would be fine if only
his staff stayed more focused on the key objectives. “John, I’ve been in this organisation my entire
career and I have seen it all. My team don’t have the same commitment to learning the ropes. Most
don’t stay long enough to understand the industry; they just don’t understand the nature of client
relationships with big contracts, or the bureaucracy involved”.
While collecting his new company laptop and phone, John chatted to Nandita the IT Manager who
told him that the biggest problem was underinvestment in IT. She had identified a new system that
would be much more effective in integrating some of their core information systems that would
remove the need for much of the manual work involved in linking up the data sources and ensuring
processes happened. “This would save us so much time and help us keep to schedule, as well as
manage our stock better”, she said. “but Peter just sees the cost of it and not the benefit. I think he’s
worried that his team will shrink – and it would, as we’d need far fewer people with this package”.
After some time extoling the benefits of the package, Nandita insisted that they book a time for her to
meet with the Software company rep to see what the package could do for the company. When they
parted, she handed him a well-presented and costed proposal.
The next day John met Alan the HR Manager who said how pleased he was that John had joined
the company as they were finding it difficult to retain staff, despite what he thought were generous
salaries and benefits: “It’s not just the fact we’re losing people” he told John, “it’s the fact we’re losing
the best to competitors. And the more of them who go, the more it accelerates the departure of
others”.
When John finally sat at his desk in the office, he started chatting to the people sitting near him:
Jennie, Adam and Will. They told him how they were exhausted, putting in extra unpaid time to
deliver to customers and all they ever got was complaints from the customers and grief from Peter
who just wanted them to deliver more quickly while keeping on top of the paperwork. “Peter thinks
he knows everything, but he’s too removed from the customers to understand them these days” said
Adam. They then went on to tell John that he wouldn’t be around long anyway as they had a change
programme every year, which never actually changed anything. They were sure he’d soon be bored,
frustrated (or both) and leave the organisation like all the previous programme managers.
Feeling rather depressed, John went to his first meeting with the MD, Nicola. Nicola was friendly and
positive and said she’d only been in the job a month herself – she could see there were problems but
was sure they could be sorted out and that she could see a great future for the Pegasus with the
great team they had, and was really pleased John had taken the role as she was confident he could
help them get things back on track. She spent a bit of time discussing the staff involved:
“Peter – well he’s been here forever. This is his home as well as his job. He’s loyal and hardworking,
but perhaps not the most open to new ideas. He’s led the team for a long time. I’d say he’s
committed to the company, but I am not sure whether he’s ready for change. He might be difficult to
get on board but he leads the main team that will be impacted, so he’s crucial too.
Peter’s team comprises 16 people. They’ve all been recruited in the last five years, and most of them
within the last 2 or 3 years. They work hard although I am not sure if they work effectively. The
systems and processes seem long-winded and bureaucratic. I am sure this is due to the significant
number of government contracts we have but I wonder if we need to apply the same rules to our
private sector clients and whether we might not be able to streamline everything. Adam is the most
vocal of the team and I think might influence others with his opinions as he’s always the one to
speak for the operations team. The team didn’t say much when I spoke to them, but I think they’re
ready for change.
I know Nandita has some ideas too. She’s keen to see changes, but she tends to see things from a
IT process based perspective. Sometimes she loses sight of her colleagues along the way. I gather
her reputation is of being a bit of a loner and I think people find her a poor communicator – she’s
been described as being ‘all tech(nology) and no team’, which I assume means she isn’t seen as a
people person. I don’t think she’s central to the operations team, but her ideas could be important to
how we shape things.”
She asked John for a report outlining his initial thoughts about the challenges they faced and what
he planned to do next. John got up to leave the room but before he got to the door Nicola said:
“When I say ‘get things back on track’, John, we need to be prepared to make some difficult
decisions”.
John returned to his office wondering what was being implied in her last comment. He made some
notes on a pad.
“Initial thoughts..
-Everyone seems to be unhappy with the status quo
-Everyone has a different way of seeing things
-There are limited funds available to support any change process.”
Well, thought John, there has to be change – the question is how we do this. He continued to make
notes:
– Who should I involve in the change management process
– What skills do we need to lead the project
– How are we going to decide what change to make
– …
John’s thoughts were interrupted when Nandita popped in to tell him about the great conversation
she’d had with the software rep. She handed John a revised proposal: “I’ll leave you to read it, but
the summary is this – we should go for it!”. John picked up the report – it supported the original
proposal but also presented some more specific details, and a suggested impact on staffing in the
operations team – a reduction of about 25% staffing. If the figures were to be believed this would
cover the cost of the new package and yield additional financial benefits. John thought back to his
meeting with Jennie, Adam and Will. A reduction like that would result in at least four members of
staff leaving – would any of them be included And how would those who were left feel about
working with the software that had – effectively – put their colleagues out of a job If morale is low in
that team now, he thought, this would hardly help. John went back to his list and added:
“…potential redundancies How to manage the emotional climate”
John started to write his report for Nicola. His made it clear that his role as a change manager was
not just about processes of change but fundamentally one but about people: ‘Change Management
is People Management’, he wrote. It wasn’t his role to make the final decision on what the change
would be, but it was to set out how they should go about it, and he felt that how they approach the
people side was as important – if not more important – than the structural, financial or procedural
changes.
John continued to work on his ideas over the next few days, but before he had finished the report he
became distracted by an email. The subject title was: ‘The Future of Pegasus: strategic review’ and
it was sent to all staff. Upon reading it, he experienced a growing sense of anxiety as it became
increasingly clear that, amongst references to ‘future strategy’, being ‘fit for purpose’, ‘agile’ and
‘resilient’ with ‘staffing relevant to our needs’ and ‘reduced costs’ there was a clear indication that
current job roles and staffing levels were to be reviewed. Although ‘redundancy’ was not explicitly
mentioned it was hard to avoid that as an inevitable outcome. ‘So much for putting people first’, he
thought.
John managed to speak to Nicola the next day. As soon as he walked into her office, she put her
hands up in an admission of the need for an apology. “I’m sorry, John, it must have come as a
shock. I wish I could have given you more notice. Don’t worry – it’s not your job at risk here. I had
hoped we could undertake the change process and identify changes there, but the need to cut costs
became too urgent, so we’re going to launch a redundancy programme. But it doesn’t impact the
change programme. We still want you to meet your programme aims. But in the meantime, we also
need to reduce our staff costs by offering generous redundancy packages”.
John came away from that meeting somewhat unsure of the situation. He felt that the change
process should have led to a new way of working that would identify other changes – including
staffing – that might be required. Instead, there was to be a redundancy process with the objective of
reducing costs rather than removing staffing where it wasn’t needed. This was most likely to
accelerate the problem that Alan had identified – losing more of the best staff and being left with the
staff who might not be as valuable to the organisation.
On the following day an all-staff meeting was held. Nicola spoke to the group about the new and
exciting vision for Pegasus, to secure its future. John glanced around the room, and particularly at
the operations team. There was almost no change in expression on their faces.
Nicola approached John after the meeting. “How do you think that went ”, she asked. “Difficult to
say”, John replied, honestly. Nicola reflected a moment, then said “we need to make sure staff see
that we’re taking into account their views on any proposed change – we’re in listening mode and
they can influence the future. We want them to feel empowered”. “Yes”, said John tentatively “but
the meeting today might impact their perception of any involvement – they might assume decisions
have already been made”.
John went back to his office and asked himself: “what sort of decisions should they be involved in
and how would we want to involve them ” He returned to his core tasks: reduced process costs,
reduced time to complete contracts, and improved responsiveness to customer needs. He decided
that he needed to take some control of the situation and plan the change programme in a way that
involved the team. “It’s the team”, he thought, “that is the closest to the processes and customers.
It’s crucial that they are involved in the decision-making. Despite the cost pressures leading to
immediate actions, it’s those closest to the process who need to be involved in finding the solutions”.
He wrote down a few questions:
– What types of decisions need to be made
– What information is needed to make these decisions (and who has this information)
– Who should be involved in the decision making
– What timescale is needed for an effective project enabling us to make implementable
decisions that would tackle the long existing challenges in new ways
John reflected on how to proceed. There was obviously going to be immediate pressures that were
going to impact staff wellbeing, happiness and engagement. Nonetheless he needed to set out a
plan for the change programme which navigated the current pressures.
(Case written by Emma Jeanes)
Your Task
John decides to write two reports. You only need to write ONE of them.
Choose ONE option and complete that task. Do not combine the reports in your submission.
Report Option One
Leadership and Decision-making
This report requires you to focus on theories of leadership and decision-making. You may engage
with other theories, but those on leadership and decision-making should be central to your report. If
you draw on other theories, then make sure they support the leadership and decision-making
analysis.
This report should contain an analysis that:
– Explains the type(s) of leadership approaches that would be most effective for Pegasus in
the current circumstances (recognising their strengths and weaknesses). These should be
justified with reference to theories and set in the context of the case scenario. In your
answer, consider the nature of the staff/team(s) to be led through this process, the timescale
and appropriate qualities of leadership for this scenario.
– Makes an argument for a suitable approach to managing the decision making in this change
process at Pegasus. In your answer, consider the appropriate levels of participation from the
different stakeholders, what approaches to decision-making would most likely be appropriate
in this case.
The report should
– Have an introduction that sets out the importance of leadership and decision-making
approaches to effective management (no more than 10%)
– Answers the two main questions given above in the main body of the analysis.
– Conclude with your personal recommendations, justified based on your analysis, of how
decision-making and leadership should be managed (no more than 10%).
– Include a list of references of the academic ideas cited in the main body of the report; these
should be high quality references and web site resources should only be used if of high
academic quality (references are not included in the word count).
**OR**
Report Option Two
Change and its Impact on People
This report requires you to focus on theories of change management and managing emotions. You
may engage with other theories, but the analysis of change and emotions (and the underpinning
theories) should be central to your report. If you draw on other theories, then make sure they support
the change and emotion-based analysis.
This report should contain an analysis that:
– Explains what approaches to managing the change process would be appropriate at
Pegasus, taking into account the key stakeholders, scale and urgency of the change, and the
drivers for and against change (with reference to appropriate theories to support your
argument).
– Assesses the impact on the emotional climate in Pegasus at this time and in light of the
proposed changes and the ways in which this might be managed (drawing on theories to
explain this).
The report should
– Have an introduction that sets out the importance of the effective management of change
and its emotional impact (no more than 10%).
– Answers the two main questions given above in the main body of the analysis.
– Conclude with your personal recommendations, justified based on your analysis, of how the
change and its emotional impacts should be managed (no more than 10%).
– Include a list of references of the academic ideas cited in the main body of the report; these
should be high quality references and web site resources should only be used if of high
academic quality (references are not included in the word count).
Only write ONE of these reports.
