International School of Management Studies

Pune – Maharashtra - India

STRATEGY CHANGE MANAGEMENT

LEARNING OUTCOME 1, 2.

Mr. ABHIMANYU BALKRISHNA KADAM

(MBA INTERNATIONAL)

Statement of Authenticity

I certify that the work submitted in regard to this assignment is my own and wherever the works of others have been
used to support my work, the credit has been duly acknowledged.

Student Email:abhimanyu.isms@gmail.com Date: 5/11/2019

 Extended Diploma in Strategic Management & Leadership
International School of Management Studies, Pune – Maharashtra - India

TABLE OF CONTENTS

Serial No Particulars Page no

1 Executive Summary 3

2 Task 1 4

3 Task 2 7

9 Conclusion 9

10 Bibliography 10

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 Extended Diploma in Strategic Management & Leadership
International School of Management Studies, Pune – Maharashtra - India

Executive summary

AEGON is one of the largest life insurance companies in UK. AEGON owns pensions, life insurance, and asset management
and adviser businesses in the UK. It is helping AEGON move towards its goal of becoming “the best long-term savings and
protection business within the UK. AEGON bought a large stake in Scottish Equitable. The objective of this case study is to
understand the need for change in AEGON and involve the stakeholders through change models. In this case study we will
evaluate the importance of the change models in the change process and why AEGON needs strategic change in the
market. We will also see the internal and external factors of AEGON and the resources that are not responding to change.
In this assignment we will study change models like Mc Kinsey framework, Kotter's 8 step change model, Kurt Lewin
change and evaluate the importance of this model for AEGON and this we will see factors driving for change and what
resources that would respond to change.

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 Extended Diploma in Strategic Management & Leadership
International School of Management Studies, Pune – Maharashtra - India

Task 1
a. Discuss the models of strategic change (AC 1.1)
The models which are going to be discuss are as follows –
McKinsey 7-S Framework-
This concept was developed in the 1970's by former McKinsey & Company consultants Tom Peter and Robert Waterman.
We shall discuss in depth the seven elements to bring about change within an organization. The layout is defined as "hard
elements" or "soft elements" in seven elements.
Hard Elements-Strategy, Structure and System.
Soft Elements-Shared Values, Competencies, Appearance and Personnel.
Such components are as follows -
Strategy: this is the company strategy to build and maintain the competitive advantage over its rivals.
Structure: this is how the organization will be managed (it means standardized department and team)
Systems: the everyday tasks and processes employed by workers for the job done.
Shared values: this is the organization's core values which demonstrate its corporate culture and general ethics.
Style: Adopted leadership style.
Staff: the employees and their capacities in general.
Skills: the actual skills and skills of the employees of the organization.

Second change model is Kotter’s 8 steps

John Kotter, a professor at Harvard Business School and world-renowned trade specialist, developed Kotter's 8 step
change model. In his book'' Leading Change', 1995, he presented his eight-step change method. These steps are shown as
below.
Step 1: Creating Urgency–This means that if the organization wants to change, they need to feel anxious about the need
for change. This may help the initial motivation to get things done.
Step 2: Build a Powerful Coalition-We are convincing people that change is necessary in this step. We need strong
leadership in this move and tangible support from people within the company.
Step 3: Build a Change Vision-First we need to think about the change. There could be a lot of great ideas and solutions
around us. Link the overall vision of those concepts that people can easily grasp and remember.
Step 4: Communicate the Vision-Vision depends on whatever success we achieve. The message would undoubtedly have
strong competition within the organization from other day to day contact. Therefore, we need to interact more often and
clearly.
Step 5: Remove Obstacles-In this step we will see resistance to change in organization as we hit this point in the process
of transition.Staff will get busy by inspiring and solving their issues and reap the benefits we encourage.
Step 6: Build Short Terms Wins-A lot of encouragement for success. It can become simple in the process of change when
giving taste for small victories. We will have some quick wins within the short time frame which staff can see.
Step7: Build on the ChangeThis quick win marks the beginning of the need to change over the long term. We need to
keep looking for changes to achieve this long-term goal.
Step 8: Anchor the Shift in Corporate Culture- The plan which is decided should become the part of the core of our
company in making every step. The corporate culture also dictates what is achieved so you need to display the ideals
behind your dream in day-to-day work. Making continued efforts to make sure the change is seen in every part of our
organization.

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 Extended Diploma in Strategic Management & Leadership
International School of Management Studies, Pune – Maharashtra - India

Kurt Lewin change model -

Kurt Lewin introduces change philosophy, change management model. In the 1940 Kurt Lewin developed one of the key
principles for understanding organizational transformation. His model is known as unfreeze-change-refreeze to the three
stages of the change process. He defined. He defined organizational change using the example of changing the shape of
an ice block.
Unfreeze-This is the first stage of transition involving preparing the company to acknowledge the need for a change that
involves breaking down the existing status before building a new mode of operation. We need to start at its heart in
order to prepare the company effectively-we need to question the principles, values, attitudes, and behaviors that
currently characterize it. This first part of the change is usually the most difficult and stressful.
Change-After the confusion generated in the unfreezing process, the stage of transition is where people can overcome
their uncertainty and search for new ways of doing things. The transition from unfreeze to adjustment does not occur
overnight. People are taking time to embrace the new path and be part of the change. Time and communication is the
two key to successfully happening the transition.
Refreeze- the Company is able to refreeze when the changes take shape and people embrace the new way of working.
The refreeze also helps institutionalize the change for people and the company. With a sense of stability, employees will
feel confident and comfortable in new ways of working. They can celebrate the change as part of the refreezing process
and can find closure and help them to believe that future change will be successful.

b. Evaluate the importance of models of strategic change to AEGON (AC1.2)

In this case study we see that AEGON in the UK is part of AEGON Group one of the world’s largest life insurance and
pension company. It owes pension, life insurance and asset management and adviser business in the UK. By using above
change model, we can evaluate its importance. In first stage I would implement the Kurt Lewin change model of
unfreezing in this stage company will acknowledge for need of change which involve changing the old working methods
into new ones. The AEGON will create the urgency (Kotter's 8 step) in this company will be anxious to need for change
this can help to motivate the employees for the change process and make the strategy (McKinsey) for building powerful
coalition and structure to manage the working for the change process. In that AEGON will create the vision for the change
this will help the organization to work as per the vision and shared values which demonstrate its corporate culture and
general ethics of the organization. Then the organization will implement change after the unfreezing stage as the
company will adopt the leadership style for working in change process and communicate with the employees to know
whether the process is smoothly working and if there is any obstacle like resistance to change in organization. Staff will
inspire and solve the problem of individual and encourage them to involve in change process. Organization will make
short term goals which will help the employees to show their actual skills and it will simple the change process when
employees are given the small taste of victories and it will encourage it for achieving organizational goals. And at the last
stage of refreezing it will make the change process complete.
Some importances of models of strategic change are as follows-
Accountability – this change model explain the process in a way that every can understand. It provides the change goal
that encourages people to understand their position in the process and keeps individuals accountable for their own
transformation. Not using a change model carries the possibility that improvement will not be accomplished or partially
accomplished.
Forecasting – change models predict the shift in process will take place and prepare people for that. Using transition
processes people can normalize their behavior by having a framework that gives everyone a sense of manageability.
Employee output is more likely to improve when workers feel empowered and recognize the process of transition.
Reduce resistance – change model helps to identify possible resistance areas and introduce techniques designed to
minimize or remove resistance before starting the change process. A related advantage is that a shift model assists in
developing an efficient communication strategy.
Role clarification – change management model includes various professional positions and offers transparency for their
involvement in improving process performance. Such positions include senior management and managers, human
resources, marketing professionals, supervisors and technical learning and development personnel. This change model
gives clarity about their position and when they are needed.

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 Extended Diploma in Strategic Management & Leadership
International School of Management Studies, Pune – Maharashtra - India

Return on investment – to use a defined change model it ensures that there is no lack of investment in the project and
budget control. Investment is not only financial but also individuals. A model of transition will help to ensure workers
and morale is maintained.
Measured results – without an expected result no change effort will begin and how this will be calculated. Change
models include setting targets establishing timetables and negotiating budgets. When a change model is in place this
offers reference targets to assess real experience against. This offers useful data to assess results and build strategies
against.
Shared approach – change models in large organizations have a common approach to the management of change. It
offers a forum for all the aspects of change management and helps to coordinate resources within the organization.
Increase in confidence – model of change give people the courage to speak about change with others. Shift models
helps people make sense of moments when they feel uncertain and out of control.

c. What is the value of using strategic intervention techniques in AEGON (AC 1.3)
An intervention is a variety of program elements or intervention aimed at bringing about improvements in behaviour
or boost health status among individuals or a whole community. Interventions can include awareness campaigns, new
policies, environmental change or a campaign to encourage health. Interventions involving multiple approaches are
usually the most successful in bringing about desired permanent change. These interventions are as follows –
Organizational conflict – this form of change brings the members of the organization together in order to identify the
issue, set course of action and begin to work on it.
Intergroup realizations aimed at improving the relationship between the group and department within the organization
Participation in large-scale community participation-involves a range of stakeholders in a large-scale meeting to discuss
important values for implementing change strategies and innovative ways of working to communicate the organization's
vision.
Design of the grid organization-these measures determines the specific way an organization can be operated. These
intervention techniques can be used in AEGON.
Large scale intervention – this is use to coordinate changes in the environment with the active participation of
stakeholders across the entire structure. Large scale intervention is a technique where participants operate in small as
well as large groups. The latter is defined as large group interventions(LGIs). The number of individuals involved can vary
from five and a thousand. A large scale intervention is an excellent solution to changes that impact the whole job system
or a whole group.

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 Extended Diploma in Strategic Management & Leadership
International School of Management Studies, Pune – Maharashtra - India

TASK 2
a. Why is there need for strategic change in AEGON (AC 2.1)
AEGON has enjoyed several years of success. But AEGON has a poor reputation in recent years due to internal and
external factors which make strategic change necessary. UK government had imposed price controls that reduced
profitability. Many companies have been accused of mis-selling because they don’t provide the best product to
customers and people don’t always feel ready to choose between the variety of financial products and services. The UK
government also decreases state reliance. For the surviving during competition AEGON needs the change. If the
organization cannot change then it may not survive in the global marketplace. In this process AEGON had to face
economic downturn that is going through difficult times for that country’s economy. As there is less competition in trade
and industry and people are unemployed, falling stock market price has reduced the return on investment on certain
goods, such as mortgage endowments. In this dynamic change in the global marketplace, AEGON has often had to adapt
in the global economy as it struggles in the UK due to the number of brand names that it has not always been easy to
recognize for customers. Consumer intuition plays an important role in getting to know the needs of consumers. In recent
years, as life expectancy in the UK has risen, people expected to retire for longer. In recent years, AEGON had a poor
reputation and they have been accused of mis-selling by not giving the best product to consumers. In areas other than
pensions AEGON was not well recognized. As there was concern that investment will not produce any returns.
Competitive edge means intense rivalry where the other company sells directly to the consumer and is cheaper in the UK,
AEGON is in competition. AEGON is selling its products and services through financial advertisers. It had developed goods
reputation in dealerships.

b. What are factors driving change in AEGON (AC 2.2)

Internal factors –
AEGON had to face challenges just as life expectancy in the UK has increased in the last few years. They had to persuade
people to understand financial services and products that they also didn't know where to look for support and advice. It
also affected downward prices on the Stock Exchange. AEGON had generated confusion in many ways. UK government
has reduced their reliance on the state they still enforce price control that has limited productivity. One of AEGON's main
challenges understood the world in which some company operates accused them of mis-selling the product to what
consumers in the UK market want. Many other companies have introduced new, simpler pension schemes. In intensive
competition, AEGON was competing with other organizations selling their product and services directly to the customer,
but AEGON is taking advantage of their distributor to sell their customer. Despite having developed good pension product
and services, they have concentrated on the pension market. Those are the factors that drive change.

External factors –
One of the big obstacles that AEGON face to understand the world in which they work. Then they identify key problem
they need to fix. Comprising these main problems facilitates decision-making and eliminates confusion. In recent years
few sectors have undergone as many shifts as financial services in their external climate. Thinking ahead and saving for
retirement is a concept that people sometimes find hard to understand as AEGON has to make product awareness to the
people. In the UK life expectancy has risen in recent years and people can expect to be retired for longer. In certain
instances individuals have not prepared adequately for retirement and there could be a deficit in the sum of money
available. Adding to this many companies have implemented new, less costly pension plans or have insisted on employee
pension payments where they have not traditionally been and this shows the competition other insurance companies.
These variables means that people need to make choices to better invest at an earlier stage of their working lives.
Investing in the future lets people ready themselves for old age in advance.

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 Extended Diploma in Strategic Management & Leadership
International School of Management Studies, Pune – Maharashtra - India

c. What are the resources of AEGON that are not responding to change (AC 2.3)

For any strategic change planning it needs huge resources. Any insecurity in the distribution of resources can affect
strategic change plan. The following are the important tools needed for an effective change to the model.

Financial resources – It is the important resource that will not start for any company without any success in funding.
Large amount of funds are required for AEGON to introduce the move. Financial capital therefore fails to respond for
change. AEGON will raise funds for process of change.

Human Resource-this is the main capital in AEGON where there are eligible stakeholders. Convincing stakeholders of a
world's biggest life insurance company is critical. Many agencies of human resources are lacking in transition. Many
stakeholders are resisting change so we should consider their problem and try to solve the issues. Going through
transition is hard work. So, there should be ability and skill for accepting change process. Human resources and
competencies are also an important part of adopting a new plan. The organizational need to make sure it has the
necessary human resources to achieve the organizational goals. Other capacity needs such management frameworks,
internal processes and systems are also necessary for implementation of the strategy.

Estimate lifespan of project, sustainability and exist plan – in AEGON a detailed study of the strategy’s period and its exit
route remains important. A practical analysis on when the plan needs changes and its viability to achieve organizational
objectives is also important. It is important to understand that if all of those elements are not established conclusively, a
strategic change management plan may not be considered complete. In the implementation process their meaning
becomes clearer.

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 Extended Diploma in Strategic Management & Leadership
International School of Management Studies, Pune – Maharashtra - India

Conclusion

In conclusion to this assignment. I have learned how change in the organization is needed and how it impacted in the
reputation of AEGON. I have also learned about the change models like McKinsey 7-S Framework, Kotter's 8 step change
model and Kurt Lewin’s change model which are implemented for change process. I have also evaluated the relevance of
model of strategic change for organization in current economy. I have also learned the intervention techniques in
organization and examine need for change in organization. And assessed the driving factors for change in the
organization. The tools that make AEGON valuable such as physical resources, human resources and financial resources
that AEGON can appreciate to grow in new market.

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 Extended Diploma in Strategic Management & Leadership
International School of Management Studies, Pune – Maharashtra - India

Bibliography

Mckinsey 7s, Kurt lewin’s, Kotter 8 steps.

Midgie et al., The McKinsey 7-S Framework: - Making Every Part of Your Organization Work in Harmony. Mind Tools.
Available at :< https://www.mindtools.com/pages/article/newSTR_91>.htm [Accessed October 31, 2019].
Importance of change models
Change Management Coach. (2019). A Change Management Model Is an Essential Planning Tool. [Online] Available at:
https://www.change-management-coach.com/change-management-model.html. [Accessed March 18, 2020].
Large scale intervention

www.largescaleinterventions.com. (n.d.). What is LSI. [Online] Available at:

http://www.largescaleinterventions.com/english%20version/intro%20What%20is%20LSI.htm [Accessed 18 Mar. 2020].

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