Team Presentation: Team Presentation: Change ResistanceChange Resistance

MAL535 Professor GunholdMAL535 Professor Gunhold

Change Equals SuccessChange Equals Success

Inspiration is not born in a vacuum; Inspiration is not born in a vacuum; excellent ideas are seeded by excellent ideas are seeded by

other excellent ideas and fertilized other excellent ideas and fertilized by still more excellent ideas by still more excellent ideas

(Fokma, 2007). (Fokma, 2007).

IntroductionIntroduction

► Outline FedEx as a global company.Outline FedEx as a global company.► Explain technological changes necessary to retain Explain technological changes necessary to retain

competitive advantage in market. competitive advantage in market. ► Explore 3 change models (Technology Driven, Explore 3 change models (Technology Driven,

Stakeholder Driven, Satir).Stakeholder Driven, Satir).► Apply the steps of the Satir change model to Apply the steps of the Satir change model to

technology changes within FedEx.technology changes within FedEx.► Describe elements needed to drive a successful Describe elements needed to drive a successful

change. change. ► Examine potential resistance and opportunities to Examine potential resistance and opportunities to

limit or mitigate that resistance. limit or mitigate that resistance. ► Conclusion and ReferencesConclusion and References

Background of FedExBackground of FedEx► Started by Fred Smith in 1971 with 1 jet.Started by Fred Smith in 1971 with 1 jet.

► FedEx now employees 215,838 staff around the world.FedEx now employees 215,838 staff around the world.

► FedEx provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. We offer integrated business applications through operating companies competing collectively and managed collaboratively, under the respected FedEx brand. Consistently ranked among the world's most admired and trusted employers, FedEx inspires its more than 290,000 employees and contractors to remain absolutely, positively focused on safety, the highest ethical and professional standards and the needs of their customers and communities (FedEx.com, n.d.).

► Growth of this magnitude has required tremendous change.Growth of this magnitude has required tremendous change.

Mission, Strategy, ValuesMission, Strategy, Values► MissionMission► FedEx will produce superior financial returns for shareowners by providing high value-FedEx will produce superior financial returns for shareowners by providing high value-

added supply chain, transportation, business and related information services through added supply chain, transportation, business and related information services through focused operating companies. Customer requirements will be met in the highest quality focused operating companies. Customer requirements will be met in the highest quality manner appropriate to each market segment served. FedEx  will strive to develop mutually manner appropriate to each market segment served. FedEx  will strive to develop mutually rewarding relationships with its employees, partners and suppliers. Safety will be the first rewarding relationships with its employees, partners and suppliers. Safety will be the first consideration in all operations. Corporate activities will be conducted to the highest ethical consideration in all operations. Corporate activities will be conducted to the highest ethical and professional standards.and professional standards.

► StrategyStrategy► The unique FedEx operating strategy works seamlessly - and simultaneously - on three The unique FedEx operating strategy works seamlessly - and simultaneously - on three

levels.levels.► Compete collectivelyCompete collectively by standing as one brand worldwide and speaking with one voice. by standing as one brand worldwide and speaking with one voice.► Operate independentlyOperate independently by focusing on our independent networks to meet distinct  by focusing on our independent networks to meet distinct

customer needs.customer needs.► Manage collaborativelyManage collaboratively by working together to sustain loyal relationships with our  by working together to sustain loyal relationships with our

workforce, customers and investors.workforce, customers and investors.► ValuesValues► People: People: We value our people and promote diversity in our workplace and in our thinking.We value our people and promote diversity in our workplace and in our thinking.► Service:Service: Our absolutely, positively spirit puts our customers at the heart of everything we Our absolutely, positively spirit puts our customers at the heart of everything we

do.do.► Innovation:Innovation: We invent and inspire the services and technologies that improve the way we We invent and inspire the services and technologies that improve the way we

work and live.work and live.► Integrity: Integrity: We manage our operations, finances and services with honesty, efficiency and We manage our operations, finances and services with honesty, efficiency and

reliability.reliability.► Responsibility: Responsibility: We champion safe and healthy environments for the communities in We champion safe and healthy environments for the communities in

which we live and work.which we live and work.► Loyalty: Loyalty: We earn the respect and confidence of our FedEx people, customers and We earn the respect and confidence of our FedEx people, customers and

investors every day, in everything we do.investors every day, in everything we do.

Managing with Technology at Managing with Technology at FedExFedEx

► CEO Fred Smith believes that, "Information about the package CEO Fred Smith believes that, "Information about the package is as important as the package itself” and has always viewed is as important as the package itself” and has always viewed IT as the core element of his company’s business formula IT as the core element of his company’s business formula (Gordon, 2001). (Gordon, 2001).

► In 1981, the company inaugurated the use of bar code In 1981, the company inaugurated the use of bar code labeling in ground transportation labeling in ground transportation

► In 1984, FedEx rolled out a PC-based automated shipping In 1984, FedEx rolled out a PC-based automated shipping system system

► In 1994, the FedEx website, www.fedex.com, became the first In 1994, the FedEx website, www.fedex.com, became the first to let customers track their packages on the Internet. to let customers track their packages on the Internet.

► In 1996, that capability was extended, allowing customers to In 1996, that capability was extended, allowing customers to create shipping labels and order courier pickups. create shipping labels and order courier pickups.

► This emphasis on IT innovation has gained FedEx a 30 percent This emphasis on IT innovation has gained FedEx a 30 percent share in the highly competitive business to consumer express share in the highly competitive business to consumer express delivery market, according to Chris Newton, a senior analyst delivery market, according to Chris Newton, a senior analyst of supply chain strategies for AMR Research in Boston of supply chain strategies for AMR Research in Boston (Gordon, 2001). (Gordon, 2001).

3 Possible Change Models with 3 Possible Change Models with IT Innovation FedEx Could have IT Innovation FedEx Could have

ChosenChosen►Technology Driven Technology Driven

ChangeChange

►Stakeholder Driven Stakeholder Driven Decision MakingDecision Making

►Satir Change ModelSatir Change Model

Technology Driven ChangeTechnology Driven Change

Technology Driven Change-Technology Driven Change-Technology-driven change Technology-driven change management frequently involves management frequently involves initiatives that are dependent on initiatives that are dependent on interwoven technical processes. The interwoven technical processes. The interconnections are rarely fully interconnections are rarely fully understood from the outset and the understood from the outset and the man-machine interfaces often prove man-machine interfaces often prove difficult (Holti, 1996)difficult (Holti, 1996)

Stakeholder Driven Decision Stakeholder Driven Decision MakingMaking

The stakeholder model requires that all The stakeholder model requires that all of the parties affected by management of the parties affected by management decisions, in addition to the shareholders decisions, in addition to the shareholders themselves, management, employees, themselves, management, employees, customers, suppliers, communities in customers, suppliers, communities in which the company operates and the which the company operates and the environment from local to global, all environment from local to global, all must be considered as fairly and justly must be considered as fairly and justly as possible (Kay, n.d.) .  as possible (Kay, n.d.) . 

Satir Change Model Satir Change Model ExaminedExamined

► The Satir Change Model focuses not just on systems or The Satir Change Model focuses not just on systems or technology but on individual people.technology but on individual people.

► The Satir Change Model describes the major stages of a The Satir Change Model describes the major stages of a change; transition between stages; effects of each stage on change; transition between stages; effects of each stage on feelings, thinking, performance and physiology; and helpful feelings, thinking, performance and physiology; and helpful and harmful interventions during each stage, making it a and harmful interventions during each stage, making it a robust model which explains the success of FedEx; a service robust model which explains the success of FedEx; a service industry that uses technology to cater to customer needs industry that uses technology to cater to customer needs (Gordon, 2001).(Gordon, 2001).

Fig. 1 Satir Change Model

Satir Change Model as Applied Satir Change Model as Applied to FedExto FedEx

► The Satir model fits highly technical organizations well.The Satir model fits highly technical organizations well.► Late Status QuoLate Status Quo

Staff are familiar with the FedEx Staff are familiar with the FedEx organizational team and understand that company success is organizational team and understand that company success is dependent on IT for survival and success dependent on IT for survival and success

They know what is expected of themThey know what is expected of them If something fails, they know they might have to pick up the pace.If something fails, they know they might have to pick up the pace.

► ResistanceResistance Group confronts a foreign idea (new hand held device and technology changes)Group confronts a foreign idea (new hand held device and technology changes) Threatens familiar power structures. Threatens familiar power structures. When change is to be implemented, resistance is natural, When change is to be implemented, resistance is natural,

however, overcoming resistance requires that “people…open up, become aware, and overcome however, overcoming resistance requires that “people…open up, become aware, and overcome the reaction, to deny, avoid or blame” (Smith, 2009). the reaction, to deny, avoid or blame” (Smith, 2009).

Members resist and question validity of new device. After being educated on device realize that it Members resist and question validity of new device. After being educated on device realize that it is a good productis a good product

► ChaosChaos After accepting new device there is a lot of unknownAfter accepting new device there is a lot of unknown This stage is required as a means of processing, problem solving, re-framing, and acceptance and This stage is required as a means of processing, problem solving, re-framing, and acceptance and

buy-on for change initiatives buy-on for change initiatives Old behaviors may not be possibleOld behaviors may not be possible

► IntegrationIntegration Transforming element that can show how the device can benefit them (speed up their day)Transforming element that can show how the device can benefit them (speed up their day) Increases value in the marketplace. Increases value in the marketplace. FedEx communicates the value of change to their employees FedEx communicates the value of change to their employees

through their “bottom line;” as the bottom line is affected by consumer behavior, the company through their “bottom line;” as the bottom line is affected by consumer behavior, the company communicates hat the “initiator of change is [their] customer” (Gordon, 2001, p. 3). communicates hat the “initiator of change is [their] customer” (Gordon, 2001, p. 3).

► New Status QuoNew Status Quo Fed Ex in a better place Fed Ex in a better place Performance stabilizes at a higher levelPerformance stabilizes at a higher level More reliable informationMore reliable information

Change Resistance: Why?Change Resistance: Why?

► The risk of change is seen as greater than the risk of The risk of change is seen as greater than the risk of standing still.standing still.

► People feel connected to other people who are People feel connected to other people who are identified with the old.identified with the old.

► People fear the lack the competence to change. People fear the lack the competence to change. ► People feel overloaded and overwhelmed. People feel overloaded and overwhelmed. ► People have a healthy skepticism and want to be People have a healthy skepticism and want to be

sure new ideas are sound. sure new ideas are sound. ► People fear hidden agendas among would-be People fear hidden agendas among would-be

reformers. reformers. ► People feel the proposed change threaten their People feel the proposed change threaten their

notions of themselves.notions of themselves.► People anticipate a loss of status or quality of life. People anticipate a loss of status or quality of life. ► People genuinely believe that the proposed change People genuinely believe that the proposed change

is a bad idea (Schuler, 2003)is a bad idea (Schuler, 2003)

Critical Components in Change Critical Components in Change TheoryTheory

►Define the changeDefine the change► Seek stakeholder inputSeek stakeholder input► Formulate a planFormulate a plan► Communicate the planCommunicate the plan► Seek additional stakeholder inputSeek additional stakeholder input► Implement the planImplement the plan► Continuously document process and Continuously document process and

communicate with stakeholderscommunicate with stakeholders►Make changes as necessary during the Make changes as necessary during the

process (Hayes, A., 2009).process (Hayes, A., 2009).

Reducing Change Resistance: Reducing Change Resistance: EmployeesEmployees

“ “The most significant recent change at The most significant recent change at FedEx was a massive reorganization FedEx was a massive reorganization announced Jan. 19, 2000. The company announced Jan. 19, 2000. The company consolidated four of its five operating consolidated four of its five operating subsidiaries under the FedEx brand subsidiaries under the FedEx brand name and moved most of its IT, sales name and moved most of its IT, sales and marketing staff into a new and marketing staff into a new company, FedEx Corporate. At the company, FedEx Corporate. At the same time, FedEx realigned the same time, FedEx realigned the relationships of these companies to relationships of these companies to one another, aiming to provide one another, aiming to provide customers with a single point of access customers with a single point of access to sales, customer service, billing and to sales, customer service, billing and automation systems” (CIO.com, 2001). automation systems” (CIO.com, 2001).

Increased Internal Increased Internal CommunicationCommunication FedEx has managed resistance to change by FedEx has managed resistance to change by

communicating with their staff. One way of communicating with their staff. One way of increasing communication as well as increasing communication as well as exploiting the internal expertise of FedEx exploiting the internal expertise of FedEx employees worldwide, was the employees worldwide, was the implementation and use of “FXTV” which implementation and use of “FXTV” which connected the company members as a whole connected the company members as a whole system through live broadcasts to employees system through live broadcasts to employees around the world (Gordon, 2001, pp. 1-2). around the world (Gordon, 2001, pp. 1-2).

FedEx also uses IP multicast technology to FedEx also uses IP multicast technology to pipe programming through their intranet into pipe programming through their intranet into IP-TV viewers that staff have at their IP-TV viewers that staff have at their desktops" (CIO.com, 2001). desktops" (CIO.com, 2001).

Reducing Change Resistance: Reducing Change Resistance: CustomersCustomers

James Ketner, manager of the General Motors Service Parts James Ketner, manager of the General Motors Service Parts Operation plant in Lansing, Mich., sums up the customer’s Operation plant in Lansing, Mich., sums up the customer’s perspective succinctly: "The more responsive a vendor is, the perspective succinctly: "The more responsive a vendor is, the more chance we have to do business with them. FedEx has been more chance we have to do business with them. FedEx has been very responsive." Ketner has been working with FedEx to improve very responsive." Ketner has been working with FedEx to improve the shipment of small automotive parts from his facility to dealers the shipment of small automotive parts from his facility to dealers worldwide. "We had needs," he says, "and we approached FedEx worldwide. "We had needs," he says, "and we approached FedEx for opportunities to solve them. They have been very willing to for opportunities to solve them. They have been very willing to work closely to blend their systems expertise with ours." FedEx’s work closely to blend their systems expertise with ours." FedEx’s IT improvements have cascaded down the supply chain. "In IT improvements have cascaded down the supply chain. "In today’s environment, there is ongoing pressure to be responsive today’s environment, there is ongoing pressure to be responsive to customer needs while maintaining cost-effectiveness," Ketner to customer needs while maintaining cost-effectiveness," Ketner says. "Partners like FedEx who can translate their expertise into IT says. "Partners like FedEx who can translate their expertise into IT solutions create that opportunity. It has allowed us to serve the solutions create that opportunity. It has allowed us to serve the customer and eliminate waste from our system" CIO.com, 2001).customer and eliminate waste from our system" CIO.com, 2001).

ConclusionConclusion

FedEx has continually managed change FedEx has continually managed change to its advantage by maintaining its core to its advantage by maintaining its core and “essential” mission, while at the and “essential” mission, while at the same time, remaining innovative; same time, remaining innovative; exploiting their competitive edge to exploiting their competitive edge to achieve “value-added services,” and also achieve “value-added services,” and also seeing the package movement as a seeing the package movement as a continual way to build value and utility continual way to build value and utility through its customer (Gordon, 2001, pp. through its customer (Gordon, 2001, pp. 1-4).1-4).

Final ThoughtsFinal Thoughts

Establishing communication Establishing communication practices that enable people to be practices that enable people to be informed, provide feedback, ask informed, provide feedback, ask questions and develop a re-questions and develop a re-framing of the change situation so framing of the change situation so that they understand the overall that they understand the overall benefit to the system in a benefit to the system in a company and individual sense as company and individual sense as well as how they will develop the well as how they will develop the competency and expertise in using competency and expertise in using these systems will continue to these systems will continue to allow FedEx staff to move through allow FedEx staff to move through the frequent changes required to the frequent changes required to provide value-added products and provide value-added products and services to customers.services to customers.

ReferencesReferences► Academy of Achievement (2008). Frederick W. Smith Biography. Retrieved 2/25/09 from Academy of Achievement (2008). Frederick W. Smith Biography. Retrieved 2/25/09 from

http://www.achievement.org/autodoc/page/smi0bio-1http://www.achievement.org/autodoc/page/smi0bio-1► FedEx.com (2009).  Company Information.  Retrieved February 25, 2009 from website:  FedEx.com (2009).  Company Information.  Retrieved February 25, 2009 from website: 

http://about.fedex.designcdt.com/our_company/company_informationhttp://about.fedex.designcdt.com/our_company/company_information

► Fokma, Nynke (2007). Satir: Change Model. Retrieved 2/25/09 from Fokma, Nynke (2007). Satir: Change Model. Retrieved 2/25/09 from http://www.satirworkshops.com/en/satir-change-modelhttp://www.satirworkshops.com/en/satir-change-model

► Gordon, Mark (2001). Change Management at FedEx. Retrieved 2/25/09 from Gordon, Mark (2001). Change Management at FedEx. Retrieved 2/25/09 from http://www.cio.com/article/30233/Change_Management_at_FedEx http://www.cio.com/article/30233/Change_Management_at_FedEx

► Hayes, A. (2009). Hayes, A. (2009). Theories of Change. Theories of Change. City University of Seattle, Seattle, WA.City University of Seattle, Seattle, WA.► IO.com (2001). IO.com (2001). Change Management at FedExChange Management at FedEx. Retrieved February 25, 2009 from . Retrieved February 25, 2009 from

website: website: http://www.cio.com/article/30233/Change_Management_at_FedEx?page=1http://www.cio.com/article/30233/Change_Management_at_FedEx?page=1► Kay, Alan (n.d.) Stakeholder Model. Retrieved 2/25/09 from Kay, Alan (n.d.) Stakeholder Model. Retrieved 2/25/09 from

http://www.alanfkay.com/successes/stakeholder_model.shtmlhttp://www.alanfkay.com/successes/stakeholder_model.shtml► Smith, Steven (2008). The Satir Change Model. Retrieved 2/16/09 from http://www.stevenmsmith.comSmith, Steven (2008). The Satir Change Model. Retrieved 2/16/09 from http://www.stevenmsmith.com► Shuler, Dr. A.J. (2003). Resistance to Change. Retrieved 2/25/09 from Shuler, Dr. A.J. (2003). Resistance to Change. Retrieved 2/25/09 from

http://www.schulersolutions.com/resistance_to_change.htmlhttp://www.schulersolutions.com/resistance_to_change.html