Change Management at Lion Nathan: Analysis and Recommendations

This report examines the change management strategies employed by Lion Nathan, an Australian alcoholic beverage company, over a decade-long evolutionary change process. It identifies inefficiencies in areas such as product diversification and performance management, particularly in light of shifting consumer preferences towards healthier options and the evolving understanding of performance management's role beyond reward systems. The report attributes these issues to a lack of comprehensive research and insufficient stakeholder engagement during the change planning phase. To address these challenges, the report recommends implementing Kurt Lewin's 3-Stage Change Model, emphasizing the importance of unfreezing existing practices, implementing necessary changes, and refreezing new strategies to ensure long-term sustainability and competitiveness. The suggested actions include diversifying into non-alcoholic beverages and revamping the performance management system to foster a performance-driven environment.

Change Management at Lion Nathan
CHANGE MANAGEMENT – 940131
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Change Management at Lion Nathan
Executive summary
This report discusses the concept of change management by considering the case of Lion
Nathan, which is an alcoholic beverage company operating in Australia. The company has
undergone an evolutionary change that was over a decade long. The report is aimed at
analyzing the inefficiencies in the case of the company and recommend possible solutions to
it.
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Change Management at Lion Nathan
Table of Contents
Executive summary............................................................................................................2
Introduction.......................................................................................................................4
Change Management...................................................................................................................4
Case Background..........................................................................................................................4
Issues at Lion Nathan.........................................................................................................4
Recommendations for improvement..................................................................................6
Kurt Lewin’s 3 Stage Change Model.............................................................................................7
Conclusion.........................................................................................................................9
References.......................................................................................................................11
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Change Management at Lion Nathan
Introduction
Change Management
Change management is a planned intervention that is aimed at identifying and improving
inefficiencies in an organisation (Elsmore, 2017). The spread of globalization has made the
business world complex and has increased the internal and external factors to which business
organizations have become vulnerable. Factors, such as technology, political, economic,
legal, etc. can undergo a rapid change and can require business organizations to implement
workplace changes in order to remain competitive and operational (Waddell, et al., 2016). In
this report, we will discuss the case of Lion Nathan, which as an Australian alcoholic
beverage company. The report also identifies some issues that are related to change
management and human resource management in the case study and how Lion Nathan can
deal with the issues by implementing appropriate strategies
Case Background
Lion Nathan is an Australian based alcoholic beverage company that employs 1800
employees from Australia and 1400 from New Zealand. The company had been through a
decade long change process, which has increased its market share and has been helpful in
developing a new corporate culture. The changes have also allowed the company to register a
stable annual growth of around 6 percent and diversity its products by starting offering fine
wines and ‘ready to drink’ spirit products. Some of the areas where the company has
implemented changes are its leadership strategies, recruitment and selection strategies,
performance management, remuneration and reward practices, etc. The company has been
able to use change management to increase its focus on higher quality products and new
product development, which has helped the company in generating a greater revenue in the
market. Certainly, there are a few areas where the company still lacks efficiency, because of
the failure of the change to address certain areas that required a change, and can continue to
implement changes to become even more competitive in the market.
Issues at Lion Nathan
Lion Nathan has undergone a decade long change process, which makes it clear that the
change is evolutionary in nature. An evolutionary change is a change that takes place in an
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Change Management at Lion Nathan
organisation over a period of time (Borwick, 2013). It is targeted at the culture of an
organisation and if a change is successfully implemented, it can be deeply rooted into the
culture of an organisation (Stern, 2015). Such a change takes place by engaging the entire
pool of stakeholders and can sometimes extend beyond a couple of years to complete.
The two main areas where the change implemented at Lion Nathan failed to address the
industrial challenges are:
1) Product diversification  The global beverage industry is facing a shift in the market trends
because of the changing consumer preferences. The customers for beverages, throughout the
world, are becoming excessively health conscious and have started to consider the effects of
alcoholic beverages on human health before consuming alcohol (SBwirde, 2018). The effect
of the changing consumer preference is not just limited to the companies that are operating in
the alcoholic beverage industry but is also being experienced by non-alcoholic beverage
companies. Therefore, the failure of the company to diversify its product line up while an
evolutionary change was already taking place can create an urgency for more organisational
changes in the near future (Lioudis, 2019).
2) Performance Management & Reward Management  The growing need for achieving higher
organisational performance through human resource management is making performance
management even more essential (Van Dooren, et al., 2015). A recent trend that has emerged
in the field of performance management is to differentiate reward management from
performance management altogether. Business organizations, like Google, have started
differentiating between performance management and reward management and are carrying
them out irrespective of each other. According to the changing trends, performance
management should focus more on creating an environment that promotes performance
amongst the employees. The basic objective behind a performance management system
should be to encourage performance and not just act as a source for rewards and benefits for
the employees. By focusing on both the systems differently, the management can make the
employees believe that achieving performance objectives is not just important for the
organisation but will also be helpful to them in developing their career paths (Culture, 2019).
Therefore, this is another area where the company will have to implement changes in the near
future.
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Change Management at Lion Nathan
The issues related to change management program at Lion Nathan can be attributed to a
number of factors. These factors are discussed below:
Lack of research  Evolutionary changes can require a lot of resources, such as time and
money, which makes it important that they are targeted at the right inefficiencies. To make a
change more successful, it is important for business organizations to carry out extensive
research, which can help them in identifying the changing market trends and how they can
have an impact on the business in the near future. Had the company carried out proper
research, it would have known that non-alcoholic drinks have a huge potential in the market
and it would be a good proposition for the company to expand its business (BizzBee
Solutions, 2017). Not only would it allow the company to diversity its products, but would
like to establish a greater customer base by increasing its target audience.
Lack of employee engagement  for the success of a change management program, it is
important that the stakeholders are engaged in the planning, execution and implantation of a
change program. This has been suggested by most of the change management theories, such
as the Kurt Lewin 3 stage model, Kotter’s 8 step change model, ADKAR model, McKinsey
7-S model, etc. (Swarnalatha & Prasanna, 2013) In the present case, even though the change
took place successfully, its success can be attributed to the fact that it was an evolutionary
change that is aimed at developing an organisation over a period of time. Had the
stakeholders been engaged in the planning phase of the change program, they would have
been able to identify the changing market trends and report them to the company. Most
likely, not asking the stakeholders for their input made it difficult for the company to keep a
track on the changing market trends and design its change program appropriately (Mayfield,
2014).
Recommendations for improvement
The inability of the company to address the changing market trends in the global beverage
industry will create a need for change in the near future. The two changes that the company
will have to implement to strengthen its performance management system and to diversity
into a non-alcoholic beverage line up. The two changes that the company will implement will
have to evolutionary in nature i.e. they will have to be immediately implemented in order to
help the company in coping up with the market trends. The recommended course of action for
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Change Management at Lion Nathan
the company is to use a change management model that would help the management in
designing, implementing and controlling a change management program.
Kurt Lewin’s 3 Stage Change Model
One of the most widely used change management model is the 3-stage change model
proposed by Kurt Lewin. Kurt Lewin was one of the pioneers in the subject of change
management who proposed a theory that divided the entire change process into three different
stages. These stages are unfreezing, changing or moving and refreezing. The model prepared
by Kurt Lewin is a simple model and is efficient in dealing with most of the barriers to a
change program. Lion Nathan can use the 3-step change model to bring about an evolutionary
change in its organisation (Cummings, et al., 2016).
Unfreezing:
This is the first step in the change management model where the management of the company
will have to create an urgency in the workplace and make the employees aware about the
need to change. The management of the company will have to tell the employees about the
ways in which a change in the performance management system, reward system and
diversification of its products will be beneficial for the employees as well as for the
employers.
In this stage, the management will have to ensure that it communicates efficiently with the
employees and shares all relevant information with them. Through proper communication,
the management will be able to engage the employees in the change process and take their
input to design the change program. As it would be the first stage in the change program,
there is a great possibility that the employees might react to the change program with anger,
frustration and resistance, which can also be attributed to the recent evolutionary change that
the company had just undergone. Communicating relevant and timely information will not
just be helpful in keeping the employees engaged but will also help the company in ensuring
that the employees do not show a negative reaction to the change program. The employees
would also have to be informed about the way in which they would have to demonstrate a
change in their behavior, operations or processes (Hussain, et al., 2018). Another concept that
Kurt Lewin introduced in this stage was the Force Field Analysis. Lewin suggested that there
are two types of forces that comes into play when a change program is planned for an
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Change Management at Lion Nathan
organisation. The first type of force is the restraining force, which is the opposing force
offered by the stakeholders to a change program. One the other hand, there are the second
type of forces i.e. the driving forces that actually drive a change in an organisation. Kurt
Lewin suggested that for an organisation to successfully undergo a change, it is important
that the driving forces are strengthened or the restraining forces are weakened (Zand, 2015).
To successfully bring about a change in the company, the management of Lion Nathan will
have to take steps that will allow it to increase the critical driving forces while it would have
to decrease the critical restraining forces.
Moving or Changing:
This is the second stage in the change management model. It is in this stage that the actual
change takes place. Once the employees are prepared to undergo a change, the management
starts to make a transition from its previous state to a new state. In this stage, the management
will have to provide full support to its employees so that they are able to embrace a change
that their organisation wants.
The management will have to implement a new performance management system that would
consist of performance reviews and goal settings, while the system of rewards will be entirely
changes and carried out separately. Further, the management will also have to implement
changes in its strategies, structure and technology, which will allow it to acquire the desired
resources to diversity its products and enter into the non-alcoholic beverage industry. The
management will also have to arrange for the training and development of its employees so
that they acquire the necessary skills and competencies to adapt to the changes that the
organisation requires. In this stage, the employees can sometimes find it difficult to cope up
with the changes being implemented and might a demonstrate a tendency to oppose the
change. It is important for the management to continuously motivate the employees and
remind them about the reasons that have been creating an urgency for the organisation to
change (Connelly, 2016). To increase the chances of success of the change, the management
at Nathan Lion can also form a core team that would be dedicated to deal with barriers to
change. It will analyze resistance to change offered by the employees and will deal with it by
eliminating the root causes of resistance to change. The core team will also be held
responsible for keeping the employees motivated and to win them over. This stage will be the
most important stage in the change program as the main transition will have to be made in
this stage. Therefore, the management will have to pay a lot of attention to employee
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Change Management at Lion Nathan
reactions in this stage, so that a negative employee reaction does not become a reason for the
failure of the change (Morrison, 2014).
Refreeze:
This is the last stage in the change model that focuses on the need to reinforce the change in
behavior amongst the employees. Once the employees would have started to demonstrate a
change in their behavior, the management will then have to work to reinforce the changed
behavior amongst them as they might feel the need to resort back to their previous forms of
behavior.
There is no benefit of implementing a change program if the employees do not stick to it and
resort back to their previous state of being. As a result, the management will have to reward
its employees to reinforce the change in behavior demonstrated by them in their operations,
processes or routine. Rewards can be in the form of monetary or non-monetary benefits,
which are perceived to be valuable by the employees. Reinforcing the change will ensure that
the new ways of working become a standard in the organisation and that the employees are
not able to move back to their previous state. Reinforcement will provide the management
with a tool to keep the employees engaged and to make them feel valuable (Hussain, et al.,
2018). Through reinforcement, it would become easier for the management to make the
changes stick and to foster an organisational culture where the employees remain open to any
kind of changes that are required to be implemented in the near future.
Conclusion
Lion Nathan, without a doubt, is one of the companies that have the ability to lead an industry
through efficient human resource management. The company has demonstrated an
exceptional will to outperform its competitors in the past, which lead to the decade long
transformation journey of the company becoming successful. At times, such evolutionary
changes can take a very long time to become effective, which diverts the attention of the
companies from the changes that are taking place in the industry side by side.
The shift of the consumers preference to non-alcoholic energy drinks is one such change that
occurred concurrently, while Lion Nathan was undergoing an evolutionary change that took
almost a decade to become effective. The company failed to diversify its product line up and
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is still relying upon the sales of its alcoholic beverages for majority of its revenue. Further,
the company also did not make the necessary changes to its performance management and
reward management systems, which are most likely going to become inefficient in the near
future. Therefore, there is an urgent need for the company to bring about certain changes in
its performance management & reward management system and diversity its product line-up
by expanding into non-alcoholic beverage sector.
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Change Management at Lion Nathan
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