Transcript

Managing Change and Innovation – Innovation Report – Final Assignment Logan Stodart – W156423291

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Blood Brother+ - Company Structure

Innovation Plan

University of Westminster

MA Fashion Business Management

Managing Change and Innovation 2015-2016

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TABLE OF CONTENTS

EXECUTIVE SUMMARY - 3 - COMPANY STRUCTURE - 5 - CURRENT STRUCTURE - 5 - 24 EMPLOYEE STRUCTURE - 6 - 36 EMPLOYEE STRUCTURE - 9 - RISK MANAGEMENT - 12 - 24 EMPLOYEES RISKS - 12 - 36 EMPLOYEES RISKS - 13 - HOW CHANGES DRIVE BLOOD BROTHER FORWARD - 15 - CONCLUSIONS - 17 - REFERENCES - 18 -

Words – 3,519

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Executive Summary As new brands enter the ever growing fashion industry and succeed in their chosen market, their need to grow as an operation becomes more and more pressing to succeed and fulfil their customers needs (Randle, 2012). However, this growth comes at a cost to the company as the operating costs involved put strain on the company as well as the current employees may not feel the need as much as the directors do (Randle, 2012; Marlow et al., 1997). This means that the company now has the need to grow as well as mitigate and manage the current risks involved with this growth. Blood Brother, an urban contemporary men’s street wear brand, based in London has now grown to the point where they feel to add additional employees to their current employment structure. The following paper discusses the potential to add additional employees up to 24 and then up to 36 and the risks that will come with this change and how to mitigate them. These employees will range from director’s assistants to technical e-commerce developers and product developers when 24 employees are currently working, as well as a new international sales and marketing team when 36 employees are working at Blood Brother. Many risks will also come with the addition of these new employee’s at both the level of 24 new employees and at 36 employees. This risks include (but are not limited too) low understanding, growing to fast, benefit and risk, and exhaustion/saturation (Rick, 2011). These risks can then be mitigated and avoided by Blood Brother with some change management by informing the current staff of the changes that are going to take place before they happen as well as controlling the growth at a level and monitoring it so the the company does not risk growing at a rate that it can not maintain (Churchill and Mullins, 2001). By mitigating and managing these risks before they take place while growing Blood Brother can avoid many risks that come with growth of a new company and help assure their success as they continue to expand into new markets and grow in the current domestic market. They also will be able to

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optimize their profit to allow them to maintain their current growth rate (Churchill and Mullins, 2001).

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Company Structure The development and introduction of company structure is something that all new businesses have to become concerned with as they begin to grow after their initial startup stages (Randle, 2012). This phase of growth can be difficult to handle as not everyone can understand and handle these ‘growing pains’ and the addition of new staff can become difficult for new start up companies to handle, both in operational means, and in a financial sense (Randle, 2012). However, with the success of new companies comes the need for new management structures and the addition of these employees to handle the growth needed to satisfy your new customers so that your company can continue down a successful path (Marlow et al., 1997).

Current Structure Blood Brother is an urban contemporary men street wear brand that was founded by two gentlemen who now run the brand as their creative and brand directors (blood-brother.co.uk, 2016). This brand currently is sold through its own brand run e-commerce store as well through many high end retail store through out the world including locations in the UK, USA, UAE, and Germany (Bergstroem, 2016). Despite Blood Brothers widespread reach, the brand currently has only 12 employees’ who are all located in the UK and whom are very interconnected in their job roles (Bergstroem, 2016). One employee, despite have a job title of sales manager, may one day be required to also work with the finance department as well as in the retail store when needed (Bergstroem, 2016). This has made it so that the distinct job roles have stopped being very black and white (Bergstroem, 2016). The need for company growth is quite urgent. Below is a diagram of the current structure and titles of the current employees within the Blood Brother organization.

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24 Employee Structure

With the need to grow their employee base becoming more necessary for Blood Brother as their business expands into new markets the current structure of their employee layout might also need to change. The employee layout as seen above can grow significantly at a pace that will allow the company to maintain their profitability, at an accessible level (Randle, 2012). Below is the current employee layout with the addition of 12 employees (in no specified order) that would be useful to Blood Brother in their future growth as a business.

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13. Creative Directors Assistant (£1,933.75 per month (glassdoor.co.uk, 2016)) – Helps to deal with the needs of the creative directors, such as research, design, and scheduling, for the director 14. Brand Directors Assistant (£1,933.75 per month (glassdoor.co.uk, 2016)) – Helps to deal with the needs of the brand director, such as research, marketing, and supply chain for the director 15. Sales Manager Assistant (£7 per hour (glassdoor.co.uk, 2016)) – Develops sales contacts and networks with individuals in the fashion industry to help connect and extend the brand reach as well as help with the tasks that the sales manager assigns 16. Technical Specialist and Development (£1,750 per month (glassdoor.co.uk, 2016)) – Helps with the POS system and the development of the product organization for the sales management team and flagship store 17. Brand Ambassador (£7.20 per hour (National minimum wage and national living wage rates, 2016)) – Target customer who represents the brand in their

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daily life by wearing the brand clothing and representing the brand identity and in turn receiving brand perks 18. Social Media Manager (£250 per month - £1200 per month (Social Media Management, 2016)) – Develop the social media of the brand and help manage brand identity and reach on all of the current and future social media outlets (including but not limited to Instagram, Facebook, Twitter, Snapchat, Tumblr, and Vine) 19. Marketing Assistant (£1,916.67 per month (Glassdoor.co.uk, 2016))– Develops and aids the marketing personnel in their tasks by completing daily tasks such as identifying new markets and completing research on new current target customers and advertisement campaign data 20. Store Associate (£7.20 per hour (National minimum wage and national living wage rates, 2016)) – A trained, dedicated, and informed associate that can help customers in there in their current flagship store 21. Product Developer (£2,618.41 per month (glassdoor.co.uk, 2016)) – To assist in the development of products and the management of the current supply chain distribution channels and the development of new and more effective supply chain and manufacturing processes 22. Textile Designer (£1,291.67 per month (glassdoor.co.uk, 2016)) – To assist in the development of textile and designs 23. Accounting Associate (£3,577.08 per month (glassdoor.co.uk,2016)) – Complete daily tasks and assist accountant in the finance sector of the business to aid in the growth of the business 24. Logistics Specialist (£2,333.34 per month (glassdoor.co.uk, 2016)) – Helps with the distribution and logistics development and assist to expand the current international reach The addition of these employees would not take place all at once and would not be immediate as the cost to the organization would be immense. Considerations such as temporary employment or contract work can also be considered for jobs like that of a social media manager, textile designer, product developer, and technical specialist. Doing contract and temporary employment with employees of this nature would help Blood Brother keep their costs for

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these individuals down and also allow them to receive the benefits of the employment of these parties during their growth stage when cost management is considered during growth.

36 Employee Structure The next addition of 12 more employees would see Blood Brother to the expansion into new market expansion. Blood Brother currently has many offerings outside of the domestic market but these are all currently managed by the domestic management team. With the growth to 36 employees Blood Brother can now grow to manage these markets in a way that is targeted to those specific markets as to truly target them in a way that will benefit the brand instead of simply being pulled out of the home market (Randle, 2012; Alexander et al., 2008). The addition growth to 36 employees is shown below with the description of the employee titles, in no specific order.

25. Sales Assistant (£7.20 per hour (National minimum wage and national living wage rates, 2016)) – A trained, dedicated, and informed associate that can help customers in there in their current flagship store

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26. Online and Retail Management (£2537.50 per month (glassdoor.co.uk, 2016)) – Help with the development of online site and retail systems and the management of products organization systems 27. Brand Ambassador (Compensated through brand attire)– Target customer who represents the brand in their daily life by wearing the brand clothing and representing the brand identity and in turn receiving brand perks 28. Assistant Brand Manager (£2,676.33 per month (glassdoor.co.uk, 2016)) – Manage brand identity in marketing, advertising, and retail environments and assist marketing department in other researching tasks 29. Graphic Design Assistant (£1,541.67 per month (glassdoor.co.uk, 2016)) – Assist the graphic designer to further the designs to add dimension to brand lines by adding new designs 30. Distribution Associate (£2,333.34 per month (glassdoor.co.uk, 2016)) – Assist in logistic and distribution decision 31. International Brand Manager (£3,449.42 per month (glassdoor.co.uk)) – Brand Manager will work to identify and push the reach of the brand into its international retailers and extend its current reach 32. Full Time Brand Specialist (£7.20 per hour (National minimum wage and national living wage rates, 2016)) – Employee specialist helping customers at department store locations (full time) 33. International Marketing Manager (£3,750 per month (glassdoor.co.uk, 2016)) – Will work to extend and launch international advertising campaigns through international social media and specific international specific ads 34. Part time Brand Specialist (£7.20 per hour (National minimum wage and national living wage rates, 2016)) – Employee specialist helping customers at department store locations (part time) 35. Accounting Assistant (£3,577.08 per month (glassdoor.co.uk,2016)) – Complete daily tasks and assist accountant in the finance sector of the business to aid in the growth of the business 36. International Sales Manager (£3,910.34 per month (glassdoor.co.uk, 2016)) – Helps with distribution in international sales and the continuation of growth in international markets

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With this growth cycle, Blood Brother has the option to add an international management team which will allow them to manage their international brand reach in a targeted and specific way. This team will include a brand, sales, and marketing manager. These individuals will be in charge of management of the brands extensive international reach while the domestic team can focus on expanding the brands current, but small home market. This will allow for a more targeted approach to be taken in these markets so that the brand will be more relatable in those areas (Alexander et al., 2008). In addition to the international team, this growth cycle will also include the addition of a graphic design assistant who will aid in the development and growth of the pattern and prints in the current collection which is very limited. This is currently a future trend, as seen on WGSN and LSN (WGSN, 2016; LSN, 2016) so the addition of prints will add to the appeal of the line for men. With these additions Blood Brother will be able to hand their international growth more effectively and also control their domestic growth in a way that is optimized (Alexander et al., 2008). By doing this their growth can be successful and will become more risk adverse (Randle, 2012).

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Risk Management When a company begins the process of growth or change, there is the potential for risk to take place (Rick, 2011). This risk can take many different forms and can from outside the company (external risks) or can from within the company (internal risks) (Rick, 2011). That is why organizations need to consider change management and mitigation when undertaking large changes to their current strategies (Rogers, 1995). When these risks, and management plans are considered and thought about in advance many of the risks can be avoided before they take place and contingency plans can be set up so that the organization can be safe from failure if the circumstances were to occur (Rogers, 1995).

24 Employees Risks As Blood Brother grows by adding employees to their current staff then the risks to the current organization will also grow. There are many risks that could take place but the following are some of the more likely risks that are to take place due to the strategy suggested and the nature of the change suggested (Rick, 2011).

• Changes to Routines: The changes to the current routine could cause people to be resistance to due the changes in the ‘comfort zones’

• Lack of Understanding: When the workforce does not understand the changes that are taking place they will not support the changes

• Benefits and Rewards: People could believe that the benefit of the change does not out weight the risk and trouble that is involved in adapting to growth

• Low Trust: When people are scared that the company can not manage the change then they will be resistance to the change

• Fear of the Unknown: People will only actively support changes that they believe that the changes are better than the risks of “standing still”

All of the risks will impact the company internally. This means that the company will need to handle the changes internally before the change takes place to effectively mitigate these risks (Randle, 2012). Blood Brother can do this by explaining to their current employees what their new strategy will be

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before they go forward with the new changes to make sure that there is understanding from all employees and that they have time to prepare for the new routines that will be taking place. This will mitigate the risks that will come from changes to routine, low understanding, and benefits and rewards (Rick, 2011). Blood Brother can also maintain a level and steady growth rate instead of changing everything at once. This will allow time for employees to adjust to the new environment and will mitigate the risks that come from low trust in the change and fear of the unknown (Rick, 2011). By mitigating these risks Blood Brother can slowly grow their staff to 24 employees successfully without risking backlash from their current staff and struggling with their growth rate or expansion (Randle, 2012; Marlow et al., 1997).

36 Employees Risks At this point, Blood Brother would have currently grown and have been successful in doing so, however the need to expand into new markets for this company has already taken place. Blood Brother was pulled out of their domestic market by the demand of their product in other foreign markets. Because of the this there are many new risks that come with growing a business too quickly for the internal operations to handle. The following are some possible risks that could take place if Blood Brother attempts to expand their current operation to 36 employees from the proposed 24.

• Growing to Fast: When companies are ‘pushed’ out of their domestic market they have the risk of growing to quickly and collapsing under the customer demand

• Exhaustion/Saturation: When companies are ‘pushed’ out of their domestic market they have the risk of growing to quickly and collapsing under the customer demand

• Change in the Status Quo: When people think that other individuals or departments are going to benefit more than themselves they are more likely to be opposed to the changes

While the previous risks were all internal, these risks are a mixture between internal and external risks (Rick, 2011). If a company begins growing too

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quickly and can not handle the capacity and demand for their product they are just as likely to fail as a company that has no customers due to a cash flow deficit (Atrill and McLaney, 2011). Blood Brother can mitigate the risks that come with the increased employment and growth the adapting their strategy in many ways. Some of those could be to have management focus on employee successes and achievements to help mitigate the exhaustion and satisfaction problem that can occur (Callis, 2010; Rogers, 1995). It will also help mitigate the differences that can occur in the status quo changes, by letting old employees know that their achievements are still recognized and are going to appreciated and needed by the company (Callis, 2010). As well acknowledgment of employees, the current management can help mitigate risk by managing domestic growth at a steady rate and assisting in the development of the international management team to assisting the steady and health growth of the company as to not let the growth of the current organization become to much for the brand to handle (Churchill and Mullins, 2001).

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How Changes Drive Blood Brother Forward If Blood Brother can successfully mitigate the previously stated risks after instating a successful growth strategy, then the changes will allow the company and brand to be driven forward into the menswear industry as a more successful brand. These changes can affect Blood Brother directly in three ways, those being:

• Internationalization and Expansion of the Business (Churchill and Mullins, 2001): Instead of being forced out of the home market (UK) they will start to be able to control their expansion and market their lines

• Department Creation (Randle, 2012): Segmentation of responsibility will allow for job creation and training specific employees to better serve customers leading to a higher level of customer satisfaction

• Increased Profit (Atrill and McLaney, 2011): By increasing the reach of the brand, the sales will also increase allowing the business to grow

These changes will have allowed Blood Brother to expand their reach to many new consumers making their business more profitable, expanding the brand reach and market share. As well as create new departments and trained employees to better serve their customers (Cohn et al. 2005). These departments can continue to be structured in a flat hierarchy method or Blood Brother could move to a vertical hierarchy method in the future by forming departments and managers (Callis and Walmsley, 2010; Marlow et al. 1997). With these changes the current flat hierarchy and structure could create difficult communication channels, so the organization needs to consider how they wish to manage the strategic organization of management (Marlow et al. 1997; Callis and Walmsley, 2010). However, as expansion of a business occurs the operating costs of a business increase as well. These changes in strategy also incur a large investment into the development of the operations, which will only occur once the sales and profit have reach a level which can satisfy the cost needed to hire up to 24 employees (temporary, contracted, full-time, or part-time) (Atrill and McLaney, 2011). This increased operation cost is a large undertaking for such a small company and can take years for companies to complete and should not be

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undergone in a short amount of time (Randle, 2012). If handled incorrectly then it could take a small company from being profitable to unprofitable quickly (Atrill and McLaney, 2011).

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Conclusions Blood Brother’s current employee structure has room for growth, compensating for the companies for growth within the current menswear industry. If the company has the ability to add up to 24 employees, then to 36 employees’ it can allow the company room to expand its current market reach as well as the ability to grow its current market share. However, this growth also comes with the added operation costs associated with addition of 24 new employees (Churchill and Mullins, 2001). This growth can take many years for a company of Blood Brothers size, and should not be rushed as to avoid the potential of growing to quickly and becoming unsustainable (Churchill and Mullins, 2001). These changes in strategies can also come with potential risk that will also need to be mitigated and managed by the organization by informing all of their employees of the new strategies before they occur so the level of understand is within the business is increased (Rick, 2011). They can also acknowledge achievements of their employees to continue to maintain the satisfaction levels of their current employees (Rick, 2011). By mitigating these risks and adapting to the new change strategy Blood Brother can increase their profit and sales as well as growing their brand identity and international brand extension. These changes will drive Blood Brother forward in many ways but in three specific ways including the development of department and trained employees, the expansion of the brand into new markets successfully through the addition of a international management team, and the increased profit that will be achieved from the expansion of the business through the increased sales from expansion. They specifically will be able to focus on their domestic market while still being able to expand into new marketplaces through the addition of an international management team. This will change their expansion strategy from pull to push (Alexander et al., 2008). Blood Brother can be more successful through the mitigation and adaptation to these changes as well as implementation of a new organizational growth strategy.

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