Introduction

AEGON UK is one of the globe’s largest life assurance, pensions and asset management companies. It is located in United Kingdom and has provided these services for a long time. AEGON group has a total of 27,000 employees and serves over 25 million customers internationally mainly in U.S and Netherlands (Krogerus & Ppeler, 2012). The success of this organization has been as a result of its ability to embrace change for strategic reasons. In this report, we will have a great analysis of how the organization’s objectives have been achieved as a result of pursuing strategic change. Embracing and pursuing change within the organization has enabled the organization in becoming the best long –term savings and protection business within UK.

TASK 1

1.1.    Models of change management

A strategic planning model is an essential concept in the success of any organization. It refers to the different approach employed by an organization for better results. It requires continuous monitoring and evaluation process to ensure that the objective and goals of the organization are realized. There are different models of change as discussed below;

(a)    Kotter’s eight step change model

This is a critical mode of change that has been in use for a long time. The model outlines eight steps necessary for successful change.

• Step 1: Increase urgency for change
• Step 2: build a team for the change
• Step 3: construct the vision
• Step 4: Communicate
• Step 5: Empower
• Step 6: create short term goals
• Step 7: be persistent
• Step 8: make the change permanent

From the change model, it is important to create the urgency for change. This implies that all the employees of the organization must be convinced the urgency and the need for change. It is also imperative to ensure that the employees are made to understand that the proposed change is achievable and free of detrimental effects on their jobs (Armstrong & Armstrong, 2012). AEGON UK has been at the forefront in adopting this strategic change model. Building a team for the change is very important and should be composed of some of the most respected employees of the organization.

The third step of the model requires that an organization must construct the vision that describes the intended change and its effect on the company’s future. After defining the vision, it is essential that the management of the organization communicate it to the different stakeholders. By so doing, the vision will be well understood by all the employees thus making it easy for the change group to implement the change effectively. It is important for the management to empower its employees in executing the change. It is the obligation of the organization’s top management to provide leadership in executing change. Use f reward becomes essential at this stage to enhance motivation among the employees. Persistence is very important even for achieving short-term goals to ensure the organization change is perpetual.  The final step is to make the change permanent by moving fitting it into the company’s culture and practices, such as promotion.

(b) McKinsey 7-S MODEL:

This another important model developed by Tom Peters and Robert Waterman in 1978 as the worked in McKinsey & Company. The model explains how an organization can effectively organize its operations based on seven key elements (Armstrong & Armstrong, 2012).    These elements are classified as either the hard or the soft elements that refer to tangible and intangible elements respectively. The elements are as follows;

Shared values: these are the critical element f the model since they refer to what the organization stands for. It defines the organization’s culture, mission, and vision.

Structure: this defines the structure within which the organization operates. For instance, it explains delegation of duties, coordination of the operations and supervision of such operations.

Strategy:  this refers to the organizations plans of how to respond to changes in its external environment.

Systems: every organization has major systems that support the daily operations. For instance, the firm may have IT systems, accounting systems, financial reporting and accounting systems that are critical to the organizations daily program.

Style: this refers to how the organization affairs are managed. It is mostly conceded with the leadership and management style of the organization (Krogerus & Ppeler, 2012).

Staff: it is concerned with the number of employees in the organization.

Skills: it is concerned with the capabilities and competencies of the organizations employees.

(b)    LEWINN’S CHANGE MANAGEMENT MODEL

This is another important change management model developed by a psychologist Kurt Lewin. In his work, he discovered that there are three important stages of change.

Unfreeze: this concept is based on the fact that most people are hesitant to change and tend to stay in their “”safe zones”. Such people feel comfortable when they stay in such unchanging environment and feel uncomfortable if introduced to change. Lewin refers to this as the frozen state that should be overcome to initiate change. The frozen state can be eliminated through motivation programs where employees are taught why change is essential.

Transition: this is the second and equally important stage of change. It refers to the period during which change is being implemented. The transition period is important since most people do not like change. This may make the transition period being longer than expected.

Refreeze: this refers to the situation whereby the organization becomes stable after the changing process.

1.2.     Factors that drive organization to change, choice of appropriate model of change AEGON UK

Change is essential to any organization that aspires to be successful and achieve the desired organizational goals and objectives. In the case of AEGON UK, there are several driving forces for organizational change. For instance, there has been major financial restructuring in United Kingdom (Armstrong & Armstrong, 2012).  It is important to understand that saving for retirement is a concept that is difficult for most people to understand. The increase in life expectancy increased the retirement age, and the government’s efforts to reduce state dependency by the elderly serves a great driving force for change in the financial service companies like AEGON.

The population growth registered in the UK and the changes in demographic attributes are also key driving forces for change. Other forces include; cultural diversification in UK, changes in social dimensions, the evolution of political orientation and policies, increase in domestic power, deficient management practices and inefficiency in management processes. The industry within which AEGON operates is characterized by intense competition. This stiff competition also serves as a good driving force why change for management model is essential.

Among the three models described above, Kotter’s Eight Step Change Model is the most recommendable model in the case if AEGON UK. The simplicity of the model makes it the best bet for the organizational change required in this organization. It is important to note that the model ensures that all the employees are aware of the vision thus making it easy for change implementation process (Armstrong & Armstrong, 2012).  It is important to understand that the transition period will be short, and the model has few disadvantages as compared with others.

1.3 values of strategic intervention techniques and technique for introducing change in AEGON UK.

It is imperative for managers in an organization to understand that strategic planning is critical for organization’s performance now and in future. This makes it essential to have effective change models that will yield the expected organizational performance. Nevertheless, it is important to understand that this process has numerous challenges that hinder implementation of such plans in an organization. However, large group interventions are an important set of methods that have been used in addressing these challenges.

For instance, AEGON UK strategic planning is usually planning for a long term.  The organization usually has long-term plans for three to five years. Long range planning is associated with numerous challenges that the organization must strive to deal with. For instance, it is always difficult to create a breakthrough plan where all the stakeholders are committed to the organizational course. The long term planning also present the organization with the challenge of monitoring critical activities during the planning process.  The modern dynamic global economy demands immediate solutions to such challenges to ensure perpetuity and business development.

Large group interventions techniques

These are the recommendable techniques to adopt in the AEGON UK business set up.  They have been touted as the best choice due to their quick effect on large-scale change. The techniques have been instrumental in dealing with challenges associated with strategic planning. Large scale interventions include; Design, workouts, open space technology and Simu-Real.  Pundits have asserted that the technique allows an organization to involve even to thousands of individuals working as a team for a common goal.  The team objective can be achieved in a given period in unison thus realizing organizational alignment.

The success of large-scale interventions is best used when;

• Time is of the essence
• There is committed and involved leadership.
• The purpose of intervention is clear.
• Benefits can be reaped from stakeholders’ involvement and ownership.
• Real work occurs during the event (Krogerus & Ppeler, 2012).

TASK 2

2.1 Reasons for change at AEGON UK

AEGON had been a successful business over the years. However, different internal and external factors have made it necessary for the organization to consider change.  For instance, the change in government policies has made change unavoidable (Krogerus & Ppeler, 2012).  The UK government had imposed price controls which resulted in a decline in the organizational profitability. Moreover, UK government had also proposed a decline in the state dependency by the elderly. This necessitated social awareness to the public about the benefits of having financial products offered by AEGON. It was necessary for the UK population to secure their future by investing in the pension plans offered by the organization.

In addition, the organization was the least known by consumers compared to its competitors. AEGON UK had developed good products and services and also had a good reputation with the distributors.  However, most of its products apart from the pensions were not recognized by consumers that had a significant impact on the overall profitability of the organization (Armstrong & Armstrong, 2012).  The breadth and depth of the organization made it necessary to incorporate change model to increase product and brand awareness to the general public. The competitive nature of the industry was another driving force in the AEGON corporate structure and strategy change.

2.2 Implications of AEGON resources not responding to change

A strategic planning process requires massive resources. Any inadequacy in the resource allocation will hinder a successful strategic plan.  The following are essential resources necessary for an effective model change

Financial requirements:  the strategic planning process is an expensive one where a huge financial base is required. It is important to understand the amount of funds required in implementing a particular management strategy (Albertini, 2009).   A proper analysis of the current and potential sources of these funds remains a critical consideration.

Human and capital requirements: human capacity and skills are also an integral part in the implementation of a new strategy. The organization must ensure that it has the required human capital for the realization of the organizational goals. There are also other capacity needs such as management structures, internal systems and networks that are essential in strategy implementation.

Risk assessment and mitigation strategy: risks are common in any organization. It is, therefore, the obligation of the organization to identify the possible risks and how they can be reduced to manageable levels.

Estimate of project lifespan, sustainability, and exit strategy:  a proper analysis on the duration of the strategy and its exit route remains fundamental. It is also essential to have a feasibility study on when the strategy requires modifications and its sustainability towards achieving organizational goals (Fulton, 2007).

The above-discussed elements are critical for a successful strategic plan. It is imperative to understand that a strategic change management plan may not be considered complete if any of these components is not conclusively defined. Their definitions become clear and more vivid during the implementation period.

TASK 3

3.1 Key stakeholders and systems in the AEGON strategic plan

Stakeholders are the individuals affected by decisions made in an organization. In most cases, they include; employees, customers, management, suppliers, government, financiers, debtors shareholders and the media. All these stakeholders have varied expectations from the organization. For instance, the shareholders of any organization always hope that the decisions made by the organization will lead to increase in their wealth. Nevertheless, there are various ways through which stakeholders of an organization will be affected by the change (Krogerus & Ppeler, 2013). For example, stakeholders may be involved in problem-solving, being updated on corporate objectives or mobilize the correct resources at the right moment to recognize the implementation plan.

In the case of AEGON UK, the company’s CEO has involved stakeholders in various capacities in the quest for changing process.  The CEO decided to involve several key stakeholders in the process of simplifying the organizations financial services. This process was customer focused approach that ensured that all the customers could easily understand the financial services offered by the organization. The organization ensured that there are no complex calculations on return on investment on the various schemes offered by AEGON. The change has been received positively by customers since they no longer need financial interpreters to understand the pros and cons of the AEGON products.

The employees of AEGON UK have also been actively involved in the workforce development. AEGON UK is aware of the significant role played by the employees since they are responsible for implementing change in an organization. The organization’s CEO decided to brief the employees about the current AEGON stand and what is its future stand before implementing the change (Armstrong & Armstrong, 2011).  He also took a time to explain to the employees the reasoning behind this change. Development of the required skills was also a vital step where the CEO introduced job rotations. All the employees were made to rotate from one job to another thus enabling them to have a coherent career path. AEGON CEO also arranged management development program where training of the workforce remained the center of focus.

The change process in AEGON had major implications for the customers. The organization’s attempt to create distinct market place ensured that consumers as stakeholders were significantly affected by this step. The extensive promotional campaign was critical to refresh the brand identity of AEGON to the public domain. The CEO found it important to highlight the relationship between the locally famous Scottish Equitable and AEGON. For further stakeholders’ involvement, the CEO spoke to the media explaining the reasons for change and the importance of this change to the stakeholders

3.2 Advantages and disadvantages of these systems

The systems explained earlier were meant to involve the different stakeholders in the change implementation process. AEGON intended to respond to the internal and external forces that affected its normal performance. These internal and external forces had resulted in the performance of AEGON not to reach the expected levels.  In order to realize the expected performance levels, the CEO had to introduce some critical changes in the line of operation and way of operations by AEGON.

The change process introduced by AEGON CEO was fully customer focused. The changing process was critical of certain behaviors that include; think customer, embrace change, encourage excellence, act with integrity, work together, communicate, learn and grow and decisive action (Krogerus & Ppeler, 2012). All the employees were trained about these core behaviors essential to implementing change in an organization.

Another advantage related to this system is the fact that most of the customers were not aware of the AEGON products and services.  For a long time, the customers were always confused about the investment policy offered by AEGON. The customers were unable to determine the possible outcome of their investment in the various policies offered by the firm. In response to this challenge, the company’s CEO decided to simplify the description of the products making it easy for more people to understand and calculate the financial flows of these products without engaging financial analysts.  This system had real positive results as acknowledged by a good number of consumers.

The system of training the organization’s workforce was also advantageous to the organization. During the process, the CEO decided to brief the employees on the need for change and the proposed changes before they were implemented (Albertini, 2009). This ensured that the employees were aware of what was expected of them and had capabilities to function in the new environment. The CEO also introduced job rotation and the management development program where the employees were trained in a leading management college. This ensured that the employees appreciated the need for change.

Another reason the system is advantageous is the fact that the CEO had to respond to the challenge of AEGON trading under different trade names in the same geographical location. In response to this challenge, the organization had to settle for a distinct marketplace and adopt a multinational status. It is for this reason that he CEO made an address to the media and this together with other measures ensured a strong brand position for AEGON products (Thompson & Martin, 2010). For instance, Scottish Equitable was changed to AEGON Scottish-Equitable representing the repute of the local company and the brand of AEGON similarly external promotional campaign was incorporated into the system.

3.3 How to develop a change management strategy with the key stakeholders

Stakeholders have a great impact on the change implementation process of the organization. The more people are being affected by the change, the more likelihood of increased influence in the outcome of the projects by key stakeholders (Fulton, 2007). The management in an organization must ensure that it wins as many people as possible to ensure the success of their projects.

It is of paramount importance to carry out a stakeholder analysis and identify the key people who have to be won over. This is a very important step in ensuring that the management works with people who have a positive influence in the project implementation. It is important to understand that stakeholders approach has numerous benefits (Roueche, 2005). For instance, opinions of the most powerful stakeholders are very important in shaping the change implementation in its early stages.  This enhances the chances of change implementation success through support and resourceful thinking. Frequent communication with the shareholders is essential in ensuring that they fully understand what you are doing and the benefits associated with your projects. It is also important to incorporate stakeholders’ reaction in the change planning process.

3.4 Strategy for Managing resistance to change

From the previous analysis, it is clear that people are hesitant to change despite its positive influence on the firm’s performance. .the management of the organization must come up with strategies for managing the resistance to the much-needed change. In the case of AEGON, the following can deal with change resistance;

• There will be a workflow process in order to achieve results for mutual benefits for employees and organization.
• There will be an Authority Process in order to direct behavior in the interests of the organization and its participants.
• There would be a Reward and Penalty Process to induce people to behave in a way required by the interests of the organization and its participants and to behave in a way making associated activity possible (Krogerus, & Ppeler, 2011).
• There will be a Perpetuation Process to maintain, replenish, and make adequate the quantity and quality of social and natural resources utilized by the organization and its participants.

TASK 4

4.1. Appropriate models for implementing change AEGON

Model change is very critical for improved organizational performance. It refers to the overall strategy to incorporate change in an organizational environment. A model of change requires the following steps;

    Access the necessity of change

    Forming a powerful alliance

    Create an idea of change

    Communicate the vision

    Remove barriers

    Effect change in the organization  (Taborda, 2011).

The same model was adopted by the AEGON CEO in incorporating change in the firm. He understood that the organization was not performing as expected compared to its competitors thus making it paramount to initiate change. The introduction of price control and lack of brand awareness was another reason when the change was unavoidable (Heckscher, 2007). Failure of customers to understand the products offered by AEGON was another factor that needed urgent addresses and thus changes in the organization. In order to fulfill the first step, a SWOT analysis of the firm is important. This will help identify the gaps that ought to be filed through structural or system change in the organization.

After identifying the gap, the CEO decided to develop a behavioral framework of the staff referred to as the Eight behavior framework and also organized for a workforce training in management. The stakeholders were also briefed on the need for change and the likely benefits of the anticipated change. It is, therefore, rational to conclude that the model used by the CEO had positive results in the performance of the organization.

4.2 model implementation, improvements and measure of achievement

The change implementation process is a step by step process. For instance, in the AEGON case, it starts with identifying the current position of the firm, where it wants to be in future and the necessary actions to achieve the desired objective of being the best long-term saving and protection business in UK (Lukasiewicz, 2012).  The initial stage revealed the need for change, weaknesses and strengths of the firm through SWOT analysis. After gap identification stage, then different stakeholders are involved in the process of change. The CEO involved various stakeholders in the different effective manner as earlier discussed. The organizational behavioral framework was revised, and the CEO also organized for management training to the workforce.

The results of the work done by AEGON CEO are evident. For instance, before induction of change, there was little public awareness of the AEGON products and services. After the heavy promotional campaign, the AEGON brand became popular with the general public. The customers also had a better understanding of the various investment schemes offered by the institution as a result of financial simplification. The employees’ character and behavior have also changed significantly and have embraced a customer focused approach.

Products like the 5 for Life annuity has facilitated to change the way in which consumers can look at their retirement income (Fulton, 2007). AEGON providing the levels of return promised and were responsible for any risks associated with doing so it provides more certainty about levels of income for the consumer. In short as the result of the change implement by the CEO of AEGON the company rebuilt its brand reputation, became more customer focused, started to provide more innovative products and became more popular among the consumers and ultimately the business has grown to a gigantic extent (Albertini, 2009).

AEGON decided to carry out an audit to determine the effectiveness of the strategic plan. The audit aimed at determining the actual position of the firm both internally and externally. After the audit, it was clear that AEGON was in its rightful market position. The organization’s workforce had also registered recommendable progress in terms of expertise, innovation and clarity in communication (Ridley, 2008). The external audit also proved that the firm remained competitive in the industry.

 

References

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