Direct Line Group: Leading Change in Financial Services

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Understanding and leading change

Introduction
Direct Line Group is a UK based organization which serves in providing financial support to the needy
people. In this report, the leadership approaches and change models have been studied for the betterment
of the organization it can be seen that force field analysis is the best method to apply the changes by
analyzing the factors in advance. Also, those factors have been studied which are negatively impacting
the growth rate of the organization and appropriate methods are applied to minimize the impact of those
factors on the organization. In this report, the leadership approaches are used to enhance the capability of
the organization to implement the changes in the best possible way so that the outcome can be
maximized. The barriers have been studied which stops the implementation of the new changes within an
organization. The different example for analyzing the impact of the changes have been studied.

LO1
P1: Compare different organizational examples where there has been an impact of change on an
organization’s strategy and operations.
With a change within an organization, it is bound to have major impacts on the operations and strategies
that it was following. To keep up with the change and market organizations need to carefully plan their
new strategies so that they are effective for the organization (STANFORD, 2013).
Among the leadership, there can be two views on change. Either change is risky to their business which
they have increased from years or change is something that can be implemented and used for the
development of the company (Campbell and Craig, 2005).
Let’s consider an example of Direct Line Group, an insurance company based in the United Kingdom
which was founded in 2012. In 2008 financial crises The Royal Bank of Scotland was ordered to sell its
insurance business by European Union regulators for £45 billion. The insurance business owner Paul
Geddes was responsible for separating its business from RBS Group and perform its operations as a
standalone company.
It was the leadership of Geddes that they turned this opportunity into positive exercise and the insurance
business used this separation to create it's own standalone, viable and a rebranded insurance organization.
That insurance business is now known as the Direct Line Group which took 18 months to separate every
single strand of the business, from customer data to independent functions and governance. This was very
much a case of operating from a brand-new platform. This whole approach was directed by a controlled
urgency and as there was no plan B. In 2012 the board went for an IPO that turned out to be the biggest
and most successful London stock market listing that year. Its success heralded the start of a new, post-
crisis IPO era. The Direct Line Group’s share price has continued to climb since it floated with Paul
Geddes as its CEO.
Another example can of SHELL, the British-Dutch oil, and gas company.

In 2004 Shell was facing an oil reserves crisis that crashed its share price. The situation was worsened by
the abrupt departure of the oil group’s chairman, Sir Philip Watts. The new group chairman, Jeroen van
der Veer, believed that to survive, the corporation had to transform its structure and processes. A series of
global, standardized processes were identified and if these new changes affected more the 80 Shell
operating units. Even it was important some countries would still lose market shares and many units
balked.
Message from change team, led by van der Veer was to bring simpler and standard processes to all-region
and countries. In many change programs, there are many dangers of failing but in Shell's case, the change
leadership started and finished with Jeroen van der Veer, who never drew back from emphasizing how
important full implementation of Downstream-One would be. Since then it is in a significantly healthier
position.
When comparing these two companies, both of these companies needed to bring new strategies urgently
due to circumstances. One to tackle financial crises chooses to change its strategies and operations to be
simpler even for facing loses while other to overcome existential crisis changed its strategy by changing
to an IPO which changed its fortune for good.

M1: Assess the different drivers for change in each of the given examples and the types of organizational
change they have affected.
For identifying the drivers of change PEST/SWOT analysis are considered and they also tell about how
which type of changes has affected the organization (Campbell and Craig, 2005).
Let's conclude PEST analysis, it has four factors:
 Political factors: It's related to how the government or influential party intervenes in the business
economy.
 Economic factors: It is the dependency on the economy which includes growth, interest, revenue, and
other factors.
 Social factors: These are related to cultural aspects, health, population rate and other factors which
are related to the social life of the target audience.
 Technological factors: This covers the factors like cost, quality, innovation, et for the technology in
use.
The analysis can also include Legal and Environmental factors which makes it a PESTLE analysis.
As above considered companies the driver for change The Direct Line Group are Legal and political
factors while for Shell, they were Economic and social factors.

D1: Draw conclusions and recommendations with valid justifications for planning effectively for change
and applying change impact analysis
Planning for change is a very important factor for analysis of change impact, and certain things need to be
taken care for change implementation to work successfully which are:
 Turn the change vision into an overall plan and timeline: Only having a change plan
doesn't change anything, that plan is needed to be converted into a business plan and
thought thoroughly for implementation according to the need of time.
 Gather information about and determine ways to communicate the reasons for the
changes: One needs to collect all the data and information regarding the reason and ways
to change. This includes looking at other organizations examples and also communicating
with different employees about their view on this.
 Assess each potential impact to organization processes, systems, customers, and staff:
This is very crucial to know what will be the effect of these changes on all level of
organization (STANFORD, 2013).
 Plan the communication of the change: Nothing communicates expectations better than
improved measurements and rewards and recognition.
 Determine the WIIFM (what’s in it for me) of the change for each person in your
organization: This lets you know how all the people in the organization take this change
and what will be their benefits and loses from these changes.
 Some respondents to a survey a few years ago found that the development and sharing of
a theoretical underpinning for the changes were effective in helping individuals
understand the need for change.
 Be honest and worthy of trust: Treating people with the same respect you expect from
them.
 Assess the readiness of your organization to participate in the change.

LO2
P2 Evaluate how internal and external drivers of change affect leadership, team and individual behaviors
within an organization.
External and internal factor within the organization changes the leadership styles and management of the
organization because as the market demand changes organization existing strategies also need to be
changed to meet the market demand. The ways which drive the change are as follows:
Environment: as the changes occur, the first impact occurs on the environment of the Direct Line group
organization. The changes might change the working conditions and styles of the organization which is
outdated and less effective in connecting with the consumer (Stiles, Ryan & Golightly, 2018).
Structure: as the need for new tools and machinery occurs the structure of the organization also need to be
changed to manage the smooth working within the organization and to increase the reach in the market.
Management: the change also affects the leadership in managing systematic ways to develop the products
and service according to the market needs. The combination of the different department also changes as
the coordination get effected between those departments.
Skills and confidence: as the changes impact team as well as individual the main effect occurs on the
individual grooming because the skills set and confidence of the individual team member increases by
providing effective training to the members while applying the changes in the organization (Sweeney, et.
al., 2019).
Internal factors: the internal factors are responsible for the need for change within an organization's
leadership. Internal factors include the worker, structure, machinery and raw material which impacts the
leadership style of the organization. As these factors change according to time so it is important for the
organization to manage the movement of each factor.
External factor: The external factors are related to the technology, government policies and competition in
the market. These factors are also responsible for the change in the existing leadership. Available
resources and social conditions are also considered in the external factors which help in designing and
manufacturing of new products as well as services.
So, all the factors shown above are the different ways which help in implementing the required changes
within an organization for the betterment of the existing market strategy and policies of the organization
also to acquire the more place the market.

P3 Evaluate measures that can be taken to minimize negative impacts of change on organizational
behavior.
Changes are the necessary points which need to be implemented for the better product as well as for the
better service quality but negatively changes impact also which need to be eliminated or minimized to
maximize the profit of the organization. The ways which can be used to minimize the negative impact of
the changes are as follows:
Clearly defining the changes: The changes which need to be implemented for the betterment of the
organization must be clear to all the departments of the organization as well as workers. So that
misunderstanding between different departments can be eliminated and the focus of the complete
organization can be on the growth of the organization (Abildgaard, et. al., 2018).
Determining effects and impact: As the organization can identify the changes than the impacts and effects
of the changes can be calculated so that different options can be identified to minimize the negative
impacts.
Communication: Direct Line Group is an insurance organization which uses effective communication
systems which transfer facts and figures within the organization which eliminates the misunderstandings.
The communication system within the organization must be healthy so that everyone who works in the
organization can be aware of the changes and impacts.
Training: providing training before implementing the changes helps in minimizing the negative effects
and increases the profits and benefits of the changes in the organization. It also includes face to face
training.
Support structure: The organization also need to use a support structure so that if the changes fail to
perform than the impact on the organization growth can be minimized.
According to Rawhouser, et. al., (2019) measure change process: measuring the process helps in the
reinforcement of new opportunity and continuity in the improvement process. Also, management of the
change plan to effective measurement of the process.

M2 Apply appropriate theories and models to critically evaluate organizational response to change.
Lewin’s change management: this model gives three stages to understand and implement the changes.
Unfreeze: in this stage, the changes need to be identified and the structure of the organization is converted
into an open system to implement the change. In this stage, all the processes and methods are analyzed
with the help of this model.
Make a change: after analyzing the changes than the changes are implemented within the organization so
that improvement in the structure can be obtained. The changes might be negative which need to be
minimized and improved so that the overall benefits of the changes can be consumed by the organization
(Mertens & Wilson, 2018).
Freeze: after implementing the changes in the appropriate way the whole system is freeze for the
continuous work with the improved process. Improvement in the methods is carried out and analyzed for
the further improvements in the system.
This method is effective when the business needs support to successes in the market but not effective in
implementing the changes in less time because this model is time-consuming.
Figure 1 Lewin's model for change
Unfreeze Implement
change Refreeze

Mickey’s 7-S model
 Strategy: the organization needs to use an appropriate strategy to implement the changes in the
organization. The Direct Line Group first surveys the influence of the existing strategy in the
market and then purpose new strategy for the betterment of the organization.
 Structure: this model helps in predicting the future needs of the organizational service and
products in the market and helps in designing the structure of the organization according to the
demand.
 Systems: the systems are also a measure factors which tells the requirements of the changes
which for meeting the future needs.
 Shared value: the value of the organization shared in the market for investment purposes also a
big reason to apply the changes.
 Style: the working style and leadership style also helps in implementing the appropriate changes
in the organizational internal and external factors so that output can be maximized (Getz, et. al.,
2018).
 Staff: selection and retention of the staff are also occurring in the change theory because the
human factor is the largest factor for the growth of the organization.
 Skills: Skills of the workers need to be changed to produce high-quality products which are only
possible with the help effective training.

Figure 2Mickey-s 7-S model
The different models can be used for evaluation of the changes in the organization based on the
environment and factors which need to be changed. These models have benefits as well as drawbacks so
the model needs to be analyzed whether the model is appropriate for the organization or not?
Structure
Systems
Shared
value
StyleStaff
Skill
Strategy

LO3
Introduction
In this report, the Direct Line Group organization is considered which is a UK based financial support
organization which provides service in different locations (Scholl, et. al., 2018). In this report the barriers
which impact the implementation of changes and the factors which can help in applying the changes in
the Direct Line Group organization had been studied.
P4 Explain different barriers to change and determine how they influence leadership decision-making in a
given organizational context.
Each organization faces some barriers while applying changes for the betterment of the organization and
systems. The barriers stop the organization to apply the changes and these barriers might occur due to
misunderstandings.
Fear for unknown: The first barrier which occurs due to the fear in the management heads because they
fear for the unknown changes and negative impacts which might occur after applying the changes. The
new processor methods are unfamiliar for the organization and need appropriate training to introduce the
changes.
Lack of leadership: The leadership of the organization is the first factor which helps in the growth of the
organization to get success. Ineffective leadership is also a big reason to avoid new changes.
Communication gap: if the organization fails to deliver the proper information to the worker which is
beneficial for them than it would become the hardest part to apply those changes without the permission
of the workers. To avoid this barrier Great Line Group uses healthy communication system to transfer the
information from the top shell to the bottom shell (Dawson, et. al., 2018).
Complexity: the complexity present in the organizational structure or process also creates hurdles in the
way to implement the changes. These complexities might be removed by analyzing and simplifying the
existing system.
All the factors mentioned above are the main barriers which occur in an organization to avoid the
changes.