Under the brand names of Ranpa was introduced by the Samson Manufacturers (Pvt) Ltd who is a part of DSI Group. The company has been producing quality footwear for gents, ladies, children and infants for more than 30 years starting from 1981. The foot wears are available in more than 175 DSI retail outlets and over 2000 multi-brand shops.
The company is currently in the business with the vision of “To be the leading contributor to the socio-economic development of Sri Lanka” and with a mission of “To invest in manufacturing and services, meeting highest international standards to our global customers in conventional and niche markets”.
In the report we have critically analyzed strategic change models in order to evaluate relevance of strategic change models. By analyzing different types of models and discussing the costs and benefits associated with them we have identified that Lewin’s change management model is the most appropriate model that the company can use. Also we assessed driving factors for change and resource implications of the organization not responding to strategic change. And also developed systems to involve stakeholders in the planning of change and evaluated the systems used to involve stakeholders in the planning of change.
The DSI Samson Group, monumental industry was built by one man with a vision the late Mr. D. S. Rajapaksa JP, the great founder of the brand DSI, who was driven at a young age to make a sounder livelihood for him and his family.
The company is currently on the business for about 52 years and other than the footwear they have expand their market by introducing DSI tyres to the Sri Lankan market. But this report is only concerned with the foot wear- “Ranpa” that company is producing. The foot wear product range of DSI group includes:
Figure: DSI Shoes
Ranpa/Ranreka brand Gents Sandals & Slippers, Ranpa/Ranreka Ladies Sandals & Slippers, Ranpa/Ranreka Infant Sandals & Slippers, Ranpa/Ranreka Children Sandals & Slippers, STRANGER brand High Quality Sports Sandals, Oriyent brand high quality gents slippers, Y CLUB brand gents flip flops, Sweet Girl brand ladies flip flops, Velocity brand gents shoes, P.V.C rubber slippers straps, E.V.A sheet, P.V.C slippers sole, E.V.A related product.
The company is importing the required materials such as PVC Cloth, PVC, PU Soles, Adhesives, PVC, EVA Compound, Eva Painting Ink, Shoe Components & Accessories and Rubber Chemical.
Strategic change is the restructuring of an organization’s business or marketing plan that is used in order to achieve an organization objective. For example a strategic change might include shifts in a corporation policies, target market, mission or organization structure. And this strategic change should cover and involve all relevant people, elements and levels of the administration. This specific approach has also been called a holistic approach. A holistic approach means formulating a comprehensive picture of how the change process will proceed in the whole organization and its various parts.
Here strategic change we are going to implement that DSICompany is going to export their Ranpa foot wear to another new foreign market of China& Japan. The company is currently export their products to Papua New Guinea, Dubai and Maldives, other than these 3 markets the objective of this report is to introduce a new market segment to the company.
We can use following models for strategic change.
- Lewin’s change management model.
- Kotter’s 8 step model.
- McKinsey 7-S Model
- The Kübler-Ross model
- Lewin’s change management model
Lewin described successful change as a three-stage process. If you have a large cube of ice, but realize that what you want is a cone of ice, what do you do? First you must melt the ice to make it amenable to change (unfreeze). Then you must mold the iced water into the shape you want (change). Finally, you must solidify the new shape (refreeze).
Stage 1 – Unfreeze
This is the process of finding a way to get people to end their resistance to change, in both individuals and groups. This is achieved by finding ways to strengthen the driving forces for change or to weaken the restraining forces that resist change (or a combination of the two).
Stage 2- Change/Movement
This stage involves making the change. It includes not just making the changes to operations and activities, but making changes to the thoughts, feelings and behavior of the people affected. There may be a period of confusion during the move from the old ways of doing things to the new. The task of the ‘change manager’ is to try to limit this confusion and promote the change.
Stage 3 – Refreeze
After a change has occurred, there may be a tendency for people to revert to ‘old ways’ after a while, and for the changes to become lost and forgotten. Re-freezing involves establishing the change as a new mind set, so that it now becomes the accepted and’Normal’/standard operating procedure. Without refreezing, employees will go back to the old ways of doing things – and the old ways of thinking.
Advantages of Lewin’s Change Management Model are,
- The change model of Lewin is a simple and easily understood model for change.
- The Lewin model has a fewer steps that have to be followed.
- The Lewin model is done through steps and thus can be considered as an efficient model that is used within the field of change management.
- During the Refreezing phase, many employees are worried that another change is coming, so they are in a change shock. This change shock causes employees not to be as efficient or effective regarding their jobs.
- There is some criticism regarding the Refreeze phase. Organizational change is continuous and change may occur within several weeks. There is thus no time to settle down into comfortable routines.
2. Kotter’s 8 step model
John Kotter, a US author on change management, has developed an eight-stage model for understanding and managing major change. Its 8 steps are,
Create a Sense of Urgency-Craft and use a significant opportunity as a means for exciting people to sign up to change their organization
- Build a guiding Coalition – Assemble a group with the power and energy to lead and support a collaborative change effort.
- Form a Strategic Vision and Initiatives – The team needs to establish a vision and strategy for the change. What will the change help us to achieve? What are we trying to do?
- Enlist a Volunteer Army – Communicate the vision and strategy to as many people as possible, and get them to accept (‘buy into’) the need for the change.
- Enable Action by Removing Barriers – Remove obstacles to change. Encourage employees to give constructive feedback to the proposals for change. Recognize and reward progress towards change and achievements that are made.
- Generate Short-Term Wins – Set short-term aims along the road to the final objective. Make these short-term aims easy to achieve. Finish each stage before moving on to the next one.
- Institute Change – Keep up the impetus for change. Encourage reporting on progress. Highlight achievements that have been made along the way and the next stage or stages in the path towards change.
- Make the change stick – Once the changes are achieved, try to make them part of the organization culture. If necessary, recruit and promote individuals who have bought into the change.
Advantages of Kotter’s 8 step model are,
- The process is an easy step-by-step model.
- Here focus is on preparing and accepting change, not the actual change.
- Transition is easier with this model.
- Since this is a step-by-step model, the steps cannot be skipped
- This strategic change process consumes great deal of time.
3. McKinsey 7-S Model
McKinsey’s 7S model was designed to show how the various aspects of a business relate to one another. The model represents the organization as a set of interconnected and interdependent sub-systems, some of which are seen as ‘hard’ (quantifiable or easily defined) and some of which are ‘soft’ (more subjective and less easily defined).
This McKinsey 7-S Model can be divided in to 2 parts.
- Strategy: the plan devised to maintain and build competitive advantage over the competition.
- Structure: the way the organization is structured and who reports to whom.
- Systems: the daily activities and procedures that staff members engage in to get the job done.
- Shared Values: called “super ordinate goals” when the model was first developed, these are the core values of the company that are evidenced in the corporate culture and the general work ethic.
- Style: the style of leadership adopted.
- Staff: the employees and their general capabilities.
- Skills: the actual skills and competencies of the employees working for the company.
Strategic change to be successful,
- Soft elements need to be huddled first and carefully than hard elements.
- All the soft elements should support the implementation of the strategic changes.
- All the hard elements should support the implementation of the strategic changes.
- All the 7 S’s should interactively work together to support the implementation of the strategic changes.
Advantages of McKinsey 7-S Model are,
- It offers an effective method to understand an organization.
- It provides guidance for organizational change.
- It combines both rational and emotional components.
- All parts are integral and must be addressed in a combined manner.
Types of interventions selected for a project although depend on variety; they are highly concentrated in a project. Strategic interventions are useful in situations like
- Rapid changes in the external environment
- Rapid or stagnant sales
- Increased competition
- Rapid expansion of markets
- Mergers and acquisitions
Disadvantages of McKinsey 7-S Model are,
- Since all the factors are interrelated changes cannot be done to individual parts.
- The model is complex.
- There is a higher degree of failure.
4. Kübler-Ross model
All change involves loss at some level and the “Five stages” model has been used to understand people’s reactions to change for many decades.
The five stages of grief Kubler-Ross wrote about are:
“I can’t believe it”, “This can’t be happening”, “Not to me!”, “Not again!”
Denial is usually a temporary defense that gives us time to absorb news of change before moving on to other stages. It is the initial stage of numbness and shock. We don’t want to believe that the change is happening.
If we can pretend that the change is not happening, if we keep it at a distance, then maybe it will all go away. This is a bit like an ostrich burying its head in the sand.
“Why we? It’s not fair!” “NO! We can’t accept this!”
When we realize that the change is real and will affect us our denial usually turns to anger. Now we get angry and look to blame someone or something else for making this happen to us.
What’s interesting is that our anger can be directed in many different directions.
I’ve seen people angry with the boss, themselves, or even God. In these tough economic times it’s often the economy that is blamed. It’s the government, or top management’s fault for not planning properly.
You might find you are more irritable towards colleagues or family. You’ll notice others finding fault with the smallest things.
“Just let me live to see my children graduate.”; “I’ll do anything if you give me more time A few more years?”
This is a natural reaction of those who are dying. It’s an attempt to postpone what is inevitable. We often see the same sort of behaviour happening when people are facing change.
We start bargaining in order to put off the change or find a way out of the situation.
Most of these bargains are secret deals with God, others, or life, where we say “If I promise to do this, then you make the change not happen to me”.
In a work situation someone might work harder and put in lots of overtime to prove themselves invaluable in order to avoid retrenchment.
“I’m so sad, why bother with anything?”; “What’s the point of trying?”
When we realize that bargaining is not going to work the reality of the change sets in. At this point we become aware of the losses associated with the change and what we have to leave behind.
This has the potential to move people towards a sad state, feeling down and depressed with low energy.
The depression stage is often noticeable in other ways in the workplace.
People dealing with change at work may reach a point of feeling demotivated and uncertain about their future.
I recently experienced a group of bank employees asking why they should continue to give of their best at work when they were unsure that their jobs were safe; and the bank was obviously not committed to them.
My experience is that there is an increase in absenteeism at this time as people use sick leave and take ‘mental health’ days.
“It’s going to be OK.”; “I can’t fight it, I may as well prepare for it.”
As people realize that fighting the change is not going to make it go away they move into a stage of acceptance.
It is not a happy space, but rather a resigned attitude towards the change, and a sense that they must get on with it.
For the first time people start considering their options. I think it’s a bit like a train heading into a tunnel. “I don’t know what’s in there, I have to keep going on this track, I’m scared but have no option, I hope there’s light at the end…”
This can be a creative space as it forces people to explore and look for new possibilities. People tell me that they learn lots about themselves, and it’s always good to acknowledge the bravery that acceptance takes.
- Lewin’s change management model.
- Kotter’s 8 step model.
- McKinsey 7-S Model
- The Kübler-Ross model.
Discussed in previous section this is strategic change to organizations in the current economy using above four models.
1.3 Assessing the strategic intervention techniques in organizations to realign the current business with the external business environment.
For a change to be successful driving forces need to be stronger than restraining forces.
The most important asset of any organization is human resource and strategic intervention helps them to adjust with the changing strategies of the organization and understand it. Strategic interventions can be categorized mainly under 3 headings.
1. Human process interventions
These are helpful in particular during change project in organizations where there are some combinations of many new employees, different cultures, working together, many conflicts, etc.
2. Techno structural interventions
These interventions are helpful in particular for rapid growth but few internal systems to sustain growth, many complaints from customers, etc.
3. Human resource management interventions.
These interventions are helpful in situations like establishment of new organizational goals, implementation of technology for a short time, low productivity, etc.
Since strategic interventions are mainly relates with Human resources, they are very much important to the organizations.
Strategic changes can be required by both external environment & internal factors (Parties). External environment may include political environment, legal environment social and cultural environment etc. Internal parties may mainly include owners, managers & employees. In current business world, strategic change is a must. So it is expected for DSI to manage strategic change, in order gain completive advantage (advantages which other organizations could not achieve) and to survive in the competitive business context (to compete in business context)
There are different models of strategic change which available for DSI. Out of these models, model which is used by the organization mainly depends on uniqueness of the DSI, the prevailing situation or the organizational objective per time. DSI needs to consider about following facts when managing strategic changes.
- Major changes are more difficult to introduce than small changes: major changes are those that will have a big impact on the way that many employees do their work.
- There will often be resistance to change, which must be overcome if the changes to be happen successfully.
- DSI leaders have an important role to play in persuading employees to accept the change.
- Major changes should be planned and managed carefully.
According to Lewin’s change management model there are forces that push organization in the direction of change or support the need for change (Strategic change). In this case strategic change our organization is trying to capture foreign market of china & Japan to earn high income by increasing the current market share and to make demand from the export markets. In this scenario our organizations driving factors can be included as this.
- The Shifting Economy – The economy is so very changing and dynamic. Due to the unpredictability of it, the organization is in constant need of change in the strategy and economic plan. Since we are in a global village it is need improve our products in a way which can be exported at lower cost to China & Japan. The 1st step of introducing a product and make a demand for it, is a difficult task and when compared with local market the introduction of a new product for a foreign market is too risky and costly. Therefore to make a demand for the product company should give more attention for the cost of production.
- Environmental factors – There are certain environmental changes that have an effect on the production and sales. These changes are to be monitored and the demand of change arises. We should adapt to those changes by changing our product mix, market segment. In here we can develop our product in a way which can cater to new market segment of China & Japan. The preference of the customers in these markets are very important because the demand for the product mainly depend on them.
- Financial pressure – There are financial pressures on the organizations, in order to meet deadlines and targets. In order to handle finances, there has to be a change in finance plans. This is where the need for change management occurs.
- Technological advances – There has been drastic change in production, marketing, outsourcing and other fields due to technology. The organization needs upgrading and has to keep in pace with the technological advances to succeed in its mission and make way for growth. Keeping in mind the factors discussed above, there is a need for change. With the use of new technology company can make quality products. The company should always be aware about the new technologies related to the foot wear production and try comply with them will help them to hold the future markets.
- Competition – Competition is a healthy asset for any business. To keep up to the standards and do better than others is very important, hence it is vital to keep a watch at what others are doing and bring change in the company accordingly. To face with competition we want to improve our product quality & try to give the product at the lowest cost as much as possible. Then we can get competitive advantage.
When implementing a change we should have to consider restraining forces too. These are the forces that hold back change and resist change. In this case we can identify following restraining factors.
Restructuring of HR – When implementing changes organizations need to restructure their HR.
If the company does not respond to the changes as discussed above, it may have to face severe consequences and lose in the process. There have to be leaders chosen to implement the change.
Interview and hire new employees – To implement changes organizations need to hire new employees, which is a time consuming and costly process. Because when company enter into a new market it is obvious that the level of production need to be increased, therefore the required amount of labours should also increase.
Redundancies – The organization will have redundancies if proper steps for the change are not taken in time. This will affect the working and time management of the strategy of work.
Training – Training is needed for new employees who are hired, this training is a highly time consuming and costly process.
According to the above figure, Business’s stakeholders with high power and high level of interest such as employees and shareholders need be closely managed in relation to change initiatives. High level of power and low level of interest stakeholders, such as customers, on the other hand, need to be kept satisfied by the company management.
Another stakeholder category that has low power but high level of interest, such as suppliers need to be kept informed about the progress of change initiatives through various communication channels. The type of stakeholders that have low level of power and low interest in changes within Boots, such as general public need to be monitored with minimum efforts and resources.
Be able to lead stakeholders in developing a strategy for change
Stakeholders are those who have rights or interests in a system. If you are concerned with the future of a system – the stakeholders are those you should worry about. For an organization, for example, stakeholders are any group or individual who can affect, or is affected by the achievement of the organization’s purpose. This definition is too broad for some as it includes interested parties as well as affected parties. Some prefer to restrict the term to those who have a ‘stake’, claim or vested interest – those who provide something of importance to the organization, and expect something in return.
Stakeholders can be individuals, communities, social groups, or organizations. For example, stakeholders in a forest policy might include people who live in or near the relevant forests, people who live further away who use these forests, settlers from elsewhere in the country, or abroad, workers, small scale entrepreneurs, forest officials, timber company managers, environmentalists, politicians, public servants, national citizens, consumers, forest authorities, central government agencies, local government agencies, national NGOs, academics and researchers, donors, consultants, international NGOs, community based organizations and general. All these people, if their interests in forests are indeed legitimate – and one role of stakeholder power analysis might be to examine the legitimacy of their claims – should in some way be involved in the making and implementing of policy which affects forests.
Develop systems to involve stakeholders in the planning of change
Investigate stakeholder’s interests, characteristics and circumstances:
Once stakeholders have been identified, their interests, characteristics and circumstances need to be better understood. At this stage it is particularly important that stakeholders express their own concerns. A checklist of questions for each stakeholder group might include:
- What are the stakeholder’s experiences or expectations of the policy/ institution?
- What benefits and costs have there been, or are there likely to be, for the stakeholder?
- What stakeholder interests conflict with the goals of the policy/ institution?
- What resources have the stakeholder mobilized, or are willing to mobilize?
Organizational stakeholders of business need to be involved in planning strategic changes. The extent of involvement of each type of stakeholder in the planning of the change depends on a range of factors such as their influence, their importance, and the degree to which changes are going to affect them.
Required capacity for direction setting and learning
Degree of active involvement
- Press Conferences
- Leaflets & broachers.
- Work shops
- Stakeholder analysis
- Focus groups
- Experimenting in communities of practice
On the basis of graph above, employees and managers as the main internal stakeholders at Company need to be involved in change planning process to the extent of ‘co-creating’.
The degree of involvement of company’s main external stakeholders – customers, on the other hand has to be limited to ‘testing’, whereas the company’s suppliers and shareholders need to be involved in the planning of change to the extent of ‘selling’
Additionally, “decision – makers may commission market surveys or mandate market research institutes so as to early perceive emergent stakeholder groups and their claims” in order to reflect their viewpoints regarding the change initiatives.
It is important to note that the system to involve stakeholders in the planning for change presented above is only a general framework and the extent of involvement of stakeholders may differ in each individual circumstance depending on the nature of the proposed change.
Business’s change management strategy with stakeholders primarily depends on the level of power of each stakeholder category, as well as, the level of their interest on the change proposal.
For this useful methodologies are there which must be followed for bringing a strategic change.
- Brainstorming to generate ideas and issues within a stakeholder group. This takes the form of a session in which ‘anything goes’ – with all points recorded. Later these points can be sorted and prioritized. Focus groups can then be convened with particular stakeholders to discuss particular topics.
- Semi-structured interviews in which an informal checklist of issues is used to guide an interview with a stakeholder group, whilst allowing other issues to arise and be pursued. This approach is particularly useful for cross-checking, identification of common ground, identification of tradeoffs and identification of decision-making frameworks of stakeholders.
- Digging up existing data – a variety of recorded materials may shed light on stakeholder’s interests, characteristics and circumstances. It is always worth probing and rummaging for reports and recorded information, there is almost always more of it than at first appears, sometimes found in the most unlikely places.
- Time lines can be prepared with stakeholders of the history of links and impacts of particular policies, institutions and processes, with discussion of cause and effect of various changes.
- Diagrams help many people to get a quick idea of what is planned or talked about. They can work well to stimulate discussion by both non-literate and literate people. In general diagrams and visualizations work because they provide a focus for attention while discussing an issue, represent complex issues simply, stimulate ideas and therefore assist in decision-making. Of course, some people do not think or work well in terms of diagrams and prefer verbal discussion with descriptions of real examples and stories.
Identification and confirmation of the level of effort to be assigned to each stakeholder group and the preferred form of engagement and associated frequency need to be established by the program manager. Early engagement with stakeholders helps set the stage for a constructive process throughout the entire program execution process.
Stakeholder engagement can begin in the earliest stages of issue identification at the program level and then be built upon as the program is developed and ultimately implemented through a series of projects. Proactive engagement allows surprises, issues and problems to be addressed within a framework in which a high level of trust exists. Contrast this with the reactive situation where first engagement takes place around a problem or crisis. Programs should scale their stakeholder engagement strategies relative to the risks and impacts the program and its various projects are likely to create. There is no one-size-fits-all approach when it comes to engagement. Like any program function, stakeholder engagement needs to be managed and driven by a well-defined strategy. Clear objectives must exist together with a timetable, budget, and allocation of responsibilities.
Good stakeholder engagement programs are characterized by:
- Timely and Comprehensive Information Disclosure
- factual information
- earliest possible disclosure
- understand timing related risks
- readily accessible
- respect for sensitive information
- structured to facilitate engagement
- Early and Ongoing Stakeholder Consultation
- founded on well developed and communicated plan
- consultation well defined
- any pre-conditions for consultation
- affected stakeholders
- issues prioritized
- carefully selected engagement methodologies
- clearly identified responsible individuals both within the program and
- document consultation process, feedback and actions and feedback to stakeholders
Following strategies can be used to manage the resistance to change.
- Education &Communication: This is the best strategy which can be used to manage resistance for change, that means give an understanding of change before it actually happen. Continuous communication helps employees to see the logic of change effort. The importance of the change and the benefits of the change should be communicated within the organization because that way the employees will try to adopt the change.
- Participation & Involvement: this is strategy of getting employee involvement for the decision making process make the employee to accept the change as they also a part of the decision of the strategic change. They know the requirement of the change therefore they are more likely to accept the change rather than resist it.
- Facilitation &Support: Managers can head-off potential resistance by being supportive of employees during difficult times. Managerial support helps employees deal with fear and anxiety during a transition period. This approach is concerned with provision of special training, counseling, time off work. This way employee can face for the new production targets and deadlines, new styles of footwear that has to the produced for the new market.
- Negotiation and Agreement: Managers can combat resistance by offering incentives to employees not to resist change. One of the old school methods is giving incentives for the employee to get the required job done.
In this scenario we need to select Lewin’s change management model to implement our change, which is that going to a new market segment to increase the market share. In order to implement that selected strategic change we can use Lewin’s change management model, since it has more advantages with compared to other models. As discussed above that model consist of 3 stages. Those stages are shown in the diagram below.
This is the first step of change management where the change occurs or identify that change is needed for the organization. Here we can input some new machinery to increase the production of DSI and speed up the delivery of products to its customers. Through this new change DSI will able to maximize their production to achieve their objectives.
Change / Movement
This stage will describe how we need to implement the new change into business, so operations of the business need to be changed whilst changing its process sing method. Fully automated new machinery will help to give required production and hence it will support to give prompt service to customers. Further, we can offer customized service o customers after placing an order.
Here we need to concern and pay close attention continuously on day to day operations after implementing the new change to the organization. And also all technology and changes need to be interconnected in order to check whether this implemented change has been tracked in a right direction or not. For that we can use practice some sessions with relative parties of the operations, training sessions, discussions etc in order to measure the efficiency and effectiveness of the operations after new changes.
To implement new change in an organization, we need to plan it properly in order to get maximum use of the change. Through workshops, demonstration and training on use of machinery, people can get clear idea of the purpose of this and how they can use it in a productive way. Moreover, employee should have clear awareness of this change and why are we going to do this in an organization. Then they will give their full capacity of work for the business operations.
Then we can implement the new machinery after completing above mentioned pre-requisites for the implementation. In this, our main purpose is to maximize production while giving speedy service to customers.
After this implementation is done, the first measurement to check we have done correct change is financial records in sales figures. If it has been increased than previous records, then we have done the correct change. Further, through customer satisfaction level we can measure the productivity and the speediness of the service that DSI offers for their customers. If customer complaints have been decreased, customers are visiting more to the outlets and they search for new items more and more reveal that the change has worked properly.
To implement Lewin’s change management model to our company we can use learning organization concept. Learning organization is a company that facilitates the learning of its members.
A recurrent assessment of progress is essential to ensure that plan objectives are achieved in a timely manner. Course corrections may be required as new information becomes available or new opportunities or threats develop.
The process of determining local performance measures and performance outcomes should be transparent and readily available to the public. The performance results for each participating program should also be open for review, as businesses, workers, and jobseekers all need to know what services work. Further, taxpayers should be informed of the extent to which the expenditure of public funds yields outcomes beneficial to the community.
Providers and other partners that do not meet performance standards or advance the system’s goals and objectives should receive technical assistance to improve their service delivery. If these organizations or individuals do not achieve better results, they should be sanctioned and ultimately dropped from the public workforce system. Funds should be tied to performance measurements which account for the particular challenges of working in different communities. Indeed, WIA permits job candidates to use training vouchers to select industry-recognized training or education programs that have been designated eligible training providers by local WIBs and the state because they have proven results.
After evaluating models of strategic change, we selected Lewin’s change management model, because it has more advantages when comparing with other models of strategic change. We identified that if strategic change to be successful, the driving Forces needs to be stronger than restraining forces.
- DSI should try to get maximum involvement all the staff in the organization in order for successful implementation of strategic change.
- DSI should try to manage strategic change as much as possible for successful implementation of strategic change.
- DSI should focus more on the driving factors and should have a proper financial position before making such a huge strategic change.
If organization does not possess resources which need for change, they can use the help of change agent for strategic change.
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