BUS6010 Business Transformation (Impact of Transformational Change)
INTRODUCTION
In today’s fast-paced and competitive business world, digital technologies are playing crucial role in terms of operating business in changing circumstances. Most of the business organisations are highly investing in emerging technologies and transform their business according to market trends. Next plc, a UK-based retailer operates in all over the world has been selected for this report. The company sells a wide range of clothing products, footwear along with home goods. The report will explain about the history of the company which will be helpful to know the needs of digital transformation within the organisation. The report will discuss about the change process and leadership by using relevant change theory and leadership style. Further, the report will recommend strategies so that organisation can improve. Benefits from the change and possible obstacles in implementation procedure with solutions will be also covered in the report.
MAIN BODY
Need of digital transformation and change for the organisation
Next plc, is British global retail company that operate across United Kingdom and many other countries. The retail company offers a large range of clothing, footwear, beauty products, accessories and home goods to domestic and international consumers. The company was established in year 1864 in Leeds and it’s headquartered in Leicester, United Kingdom. Since its establishment, the company gradually opened lots of retail stores approximately 546 stores worldwide. In year 1999, the company has launched a website where customers can buy products online. In year, 2020, Next plc also set up a joint venture with popular company Victoria Secret (Next, 2025). In same year, first ‘Total Platform’ service launched by the organisation in order to become an online host for the other brands. After that, the company collaborated with Gap under the Total Platform (TP) and agreed operate e-commerce business of Gap across TP. Meanwhile, Next plc also devoted in many new and advance technologies such as; artificial intelligence, cloud computing, database management system along with the business intelligence. The integration of technologies within business helps the company to perform the business activities and manage operations effectively.
Though, the company has invested in technologies but NEXT plc is also facing problem like lack of online presence. Compare to its competitors, Next plc has poor digital transformation strategies and which make it difficult for the company to compete in the market. Next plc legs behind its opponents in terms of online sales and also has limited presence in e-commerce platform (Mike Nash Tech, 2023). It could impact the growth potential of company in future because customer are moving online. If the company does not focuses on it digital transformation strategies then it can be challenging for the business to survive in future. The company requires a digital transformation and change in order to offer products and services that match the customer’s needs and changing demands.
Next plc is already using the artificial intelligence (AI) technology but to enhance the operational efficiency within its online platforms. But the company can also invest in other technology like ‘Virtual Reality (VR)’ technology to make their e-commerce platform more effective. There are several retail fashion companies such as; H&M, Marks & Spencer, Primark, ASOS and many more uses the virtual reality technology in its online platform. The company use this technology to strengthen the customer’s shopping experience so that they always choose particular company when they plan shopping (Xi and Hamari, 2021). VR technology would be beneficial for organisation as well as their employees. The company should invest in this technology and take online business to next level according to their name.
The two major drivers behind the digital transformation which is going to apply by the Next plc is changing customer expectations and competitive edge over competitors.
Changing customer needs: The main driver behind investing in VR technology is meet the ever-changing needs of customers. Nowadays, almost all people are doing their shopping from online platforms because of high level of convenience. Though, the company has e-commerce platform, but it offers limited services. Customers choose other company over next plc because of their VR technology. The technology allows the customers to virtually touch and feel the products and inspect them from every angle (Kraus et al, 2021). VR shopping helps in improve the online shopping journey of the customers through providing immersive and tailored shopping experience. Though, it would be quite tough for the company to integrate VR technology as it needs high level of proficiency and investment. It will also take time for customers to sense more inclined to utilise VR.
Competitive pressure: It is basic driver digital transformation within business. By transforming business digitally, a company can achieve competitive advantage in the marketplace. Digital technology helps the organisation through increasing speed to market as well as offer robust information to customer. Next plc want to leverage VR as it would facilitates to acquire competitive advantage and enhance brand awareness in the retail fashion industry (Van Veldhoven and Vanthienen, 2022). Virtual tour and experiences provided by VR enhance the customer experience. Now, it has become possible for consumers to get realistic understanding of product without going anywhere. Conversely, a company who fails to embrace digital technologies can face problems like reduce market share, reduce sales and become less relevant in the market.
Evaluation of change procedure and change leadership
Digital transformation is not easy process and a company cannot apply change in one day. The change leader of the company need to make different strategies and apply them in proper way in order to get succeed in upcoming especially when it comes to digital transformation. Digital technology are quite complex in nature and it is not possible for the organisation and its employees to embrace change immediately. In this manner the company should use change management model to execute the change process and adopt relevant leadership style that help throughout the change.
Evaluation of change process
Lewin’s change management model
The change management model was developed by the Kurt Lewin and is popular model which is highly utilised by the organisations. Lewin divided the big changes into three more manageable pieces which are: unfreeze, change and refreeze.
Unfreeze: It is first stage in which a company decides to introduce a change in the workplace which may impact the everyday responsibilities of the employees. In this phase, company leaders notify workers to initiate change so that they prepare mentally for upcoming change.
Change: The second step is change which stars when most of workers accept change and show willingness to learn new process (Harrison et al, 2021). It is a phase in which workers attempt to adjust to new procedures and rules.
Refreeze: Refreeze is final phase that portrays the reinforcement about the change. In this phase, the work culture comes back to normal because workers have adjusted with new procedures.
Application of change model
Next plc is going to adopt and apply the virtual reality technology to boost the sales and provide seamless shopping experience to the customers. Lewin’s change model will help to reduce resistance of change and apply it effectively.
Step 1: The process of change will start by change leader by introducing upcoming digital transformational to the staff members. Current operations along with limitations will be considered before shaping the changes to make as well as what their advantages might be. The company will make a proposal which includes existing procedure and change can enhance business operations (Memon, 2021). The leader will also make presentation so that employees can learn about change in-depth manner. In line with first stage of change model which is unfreeze, leaders will highlight the advantages of proposed digital transformation and how it can benefit staff members. Moreover, leader will encourage the staff members to ask queries and doubts and look support in problems associated with the organisational change.
Step 2: In next step, the firm’s leader will set key performance indicators to evaluate responses of workers. Different communication channel will be established by the company to increase the accessibility of the workers to management for queries and support (Rosdiana and Aslami, 2022). The managers will organise the group discussion where workers can discuss about their fears and get the support they require during change. After that, the firm will evaluate the key performance indicators in order to recognise the changes, workers are adapting to. It will also help to find those changes which are challenging for workers.
Step 3: The leaders will take steps to make sure that digital transformation remain a valuable and regular part of the business operations. Training programmes will be organised in the workplace so that employees can know about virtual reality technology. By getting sufficient training, employees will improve their skills and knowledge (Whatfix, 2022). Further, the company will provide rewards and incentives to motivate staff members to adapt to quickly. Constructive feedback will provided by the managers to workers so that they can take more interest in new process and make change constant.
Leadership style
An appropriate leadership style while carrying out changes in the business is crucial. Without using suitable leadership style, change leader may face failure in their digital transformation project. Transformational leadership can be advantageous in change process.
Transformational leadership style: This leadership approach motivates workers to strive beyond needed expectations to perform activities toward a common vision. Transformational approach stresses on change and transformation. Transformational leaders always encourage their employees to accomplish more than they always thought. The leaders concentrates on future and always think what requires to be done to accomplish business objectives (Crucke et al, 2022). Leaders are comfortable with alteration and understand that it is required for company success. They work to make sure their team members are comfortable with change and can embrace it. In addition, leaders endeavour to develop individual strengths and skills of employees as it can help them to reach their full potential.
Application of leadership style
The change leader of the Next plc will adopt and apply the transformational leadership for upcoming project. The leader will explain employees what the company expect of them. The change leader will establish themselves as a role model through daily practising the skills of transformational leader. During the change, the leader will always encourage and uplift their employees. Leader will organise in-person meeting with each employee and take enough time to identify their individual needs and strengths. They will also take enough time to find the workers to who do hard work and show progress throughout change process (de Araujo et al, 2021). Meanwhile, the leaders will also motivate employees to take part in training sessions and improve their skills. A leader who adopts transformational leadership approach will easily push the employees to come out from their comfort zone and embrace new ways and processes of working.
Be open, clear and transparent with staff members while making changes and execute strategies is great quality of the transformational leader. In Next plc, the change leader will maintain a level of transparency with workers. Leaders will openly and clearly explain about the changes, vision as well as new directions which will allow the employees to share their creative ideas and thoughts. It will help to apply change in the everyday business operations effectively. During the process, the leader will make change related objectives and goals clear as it can help team to perform tasks and activities towards accomplish the goals.
Recommendations for improvement with benefits and barriers and solutions
Recommendations
In the business world, VR technology is predominantly used to streamline business procedures like training, remote association and customer engagement. Virtual reality will be incorporated by the Next plc as digital transformation project. There are some recommendations for the Next plc.
- It is recommended to the company to invest in research and development (R&D) to increase the technical innovation. These days, integration of advance technology is essential to survive. If Next plc will increase investment in R&D then it will help them to know about the VR in-depth manner. By knowing about the virtual reality, the company will be able to use the technology in better way. Investment in R&S is crucial to provide support to new project.
- Next plc should increase change the training strategies and apply robust strategies to offer training to their employees (Pakharuddin and Kamarudin, 2023). Training and development of employee is necessary within the organisation as it directly influence the performance and productivity of the workers. It make it easy for the staff members to perform their tasks by using new ways. Training facilitates employees through preparing them for progression. This recommendation will definitely support the digital transformation venture.
- Continuous monitoring and evaluation is recommended to the Next plc as it will assist during change process by making sure that everyone is on same page. If an evaluation is not considered as a priority then there will be lack of consent from workers within the evaluation procedure. So, regular evaluation is essential in change management procedure.
Benefits of change
The company is going to introduce virtual reality which is advance technology. The change will help organisation in many ways.
Remote inspections: In retail industry, where a company has many stores and it becomes difficult for the managers to access these stores frequently. By using virtual reality, the leaders of will be able inspect these sites virtually. It will help in continuous improvement and progress reviews. It will also make it easy for the Next plc to audit manufacturing factories that produced products for the company.
Improve customer service: Enhancing shopping experience of the customers is one of the major benefits of VR advance technology. From one survey, it has found that around one-third of online users have utilised VR to make buying decisions and do shopping (Har et al, 2022). This shows a paradigm shift within online retail market. By virtual try-on service, consumers can visualize clothes, footwear and accessories and can virtually try products.
Increase sales: Due to virtual try-on facility, customers can be able to make decisions. They will immediately buy the products, if the particular product will look good on them. This service also attracts lot of customers and convinces them to buy products which can generate higher sales and revenue.
Enhance training programmes: Through virtual reality training, training managers can develop completely synthetic and interactive 3D environments in which employees can interact with situations and learn particular business operations. 360° video training can be useful for the non –technical employees to quickly learn about any process (Qin, Peak and Prybutok, 2021). With the help of the VR training, the organisation will not only offer efficient training but also provide full safety.
Improve collaboration: With the capability to bring all staff members into a virtual environment, teams can feel intrinsically more cooperative and productive. By developing immersive atmosphere, virtual reality enables team member to communicate in shared space.
Barriers and solutions
Applying change is not easy process for the company and they can face many issues while change management process. There are list of major issues with solutions which can be experienced by Next plc.
Resistance to change: It is obvious that employees do not want to leave their comfort zone and old ways. They think that if they adopt new ways especially technology then they will face failure. Sometimes, employees will also think that if they will fail then they can lost their job. In this case, it is most crucial for the company to make motivation strategies to overcome the resistance to change (Caldarelli, Zardini and Rossignoli, 2021). The managers can organise team-building activities and encourage them to participate in activities. During activities, the managers can show value of change. They can also involve the employees to provide creative ideas. Through this method, employees will feel respected and valued and support change.
Lack of clarity: Employees who have lack of clarity about upcoming change cannot provide their support to leader to make changes. Workers who are unaware regarding advantages of virtual reality will be more awful instead of excited regarding technical change. But, the company can overcome this problem by conveying the advantages of change to all employee and department heads. The change leader must tell how the change will help the business, employees and customers. The company will need to tell the future benefits of VR.
Lack of communication: In change management process, communication throughout the procedure is crucial. An ineffective communication flow from the upper management to lower employees can create many difficulties. It can also create confusion between team members and managers and acts as barrier in application process. To reduce the problem of poor communication, the company should use different communication channels to connect with lower level subordinates (Errida and Lotfi, 2021). Email, instance messaging apps, video conferencing and MS team can be used as communication channels. By this approach, employees will be capable enough to know the current and future strategies and give their best to complete tasks. Different communication platform will allow employees to explain their doubts.
Lack of financial resources: Lack of capital resources can create obstacles within implementation process. Because virtual reality is quite expensive technology and Next plc will need to invest high amount. The company have to invest in training and infrastructure that also need additional money. The company can get money by selling assets which is no longer of use. By this the company will get enough money and use it in their upcoming digital transformation project. The firm can also attract investors through showcasing the unique value position of service and get money to finance project.
CONCLUSION
As per above report, it can be concluded that digital transformation of business is crucial as it allows corporations to adapt to changing industries and recurrently enhance how they operate in competitive business environment. The report has identified that Next plc which is a UK’s leading retail fashion company adopted the digital technologies like AI, database management, business intelligence etc. These technologies help the company to improve its operational efficiency. Further, the report has analysed the need of digital transformation within the business. By analysis, it has figured out that the company should invest in virtual reality which would be helpful for the employees to offer training programmes and boost customer’s shopping experience. The report has explained the steps undertaken to execute change by utilising Lewin’s change model. Transformational leadership style could be useful to carry out change.
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REFERENCES
Books and Journals
Caldarelli, G., Zardini, A. and Rossignoli, C., 2021. Blockchain adoption in the fashion sustainable supply chain: Pragmatically addressing barriers. Journal of Organizational Change Management, 34(2), pp.507-524.
Crucke, S., Servaes, M., Kluijtmans, T., Mertens, S. and Schollaert, E., 2022. Linking environmentally‐specific transformational leadership and employees' green advocacy: The influence of leadership integrity. Corporate Social Responsibility and Environmental Management, 29(2), pp.406-420.
de Araujo, L.M., Priadana, S., Paramarta, V. and Sunarsi, D., 2021. Digital leadership in business organizations. International Journal of Educational Administration, Management, and Leadership, pp.45-56.
Errida, A. and Lotfi, B., 2021. The determinants of organizational change management success: Literature review and case study. International Journal of Engineering Business Management, 13, p.18479790211016273.
Har, L.L., Rashid, U.K., Te Chuan, L., Sen, S.C. and Xia, L.Y., 2022. Revolution of retail industry: from perspective of retail 1.0 to 4.0. Procedia Computer Science, 200, pp.1615-1625.
Harrison, R., Fischer, S., Walpola, R.L., Chauhan, A., Babalola, T., Mears, S. and Le-Dao, H., 2021. Where do models for change management, improvement and implementation meet? A systematic review of the applications of change management models in healthcare. Journal of healthcare leadership, pp.85-108.
Kraus, S., Jones, P., Kailer, N., Weinmann, A., Chaparro-Banegas, N. and Roig-Tierno, N., 2021. Digital transformation: An overview of the current state of the art of research. Sage Open, 11(3), p.21582440211047576.
Memon, F.A., 2021. Improving employee’s engagement in change: Reassessing Kurt Lewin’s model. City University Research Journal, 11(1).
Pakharuddin, N.D. and Kamarudin, S., 2023, December. Retail sector emerging technologies: AI and augmented reality present and future perspective. In 2023 2nd International Engineering Conference on Electrical, Energy, and Artificial Intelligence (EICEEAI) (pp. 1-7). IEEE.
Qin, H., Peak, D.A. and Prybutok, V., 2021. A virtual market in your pocket: How does mobile augmented reality (MAR) influence consumer decision making?. Journal of Retailing and Consumer Services, 58, p.102337.
Rosdiana, N. and Aslami, N., 2022. The Main Models of Change Management in Kurt Lewin's Thinking. Jurnal Akuntansi, Manajemen dan Bisnis Digital, 1(2), pp.251-256.
Van Veldhoven, Z. and Vanthienen, J., 2022. Digital transformation as an interaction-driven perspective between business, society, and technology. Electronic markets, 32(2), pp.629-644.
Xi, N. and Hamari, J., 2021. Shopping in virtual reality: A literature review and future agenda. Journal of Business Research, 134, pp.37-58.
Online
Mike Nash Tech, 2023. NEXT retail investing in AI. [Online] Available through < https://mikenashtech.com/2023/03/next-ai/ >
Next, 2025, Our History. [Online] Available through < https://www.nextplc.co.uk/about-next/our-history >
Whatfix, 2022. Lewin’s 3-Stage Model of Change Theory: Overview. [Online] Available through < https://whatfix.com/blog/lewins-change-model/ >
