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Change management: Federated Co-operatives Limitedement
- 1. Federated Co-operatives Limited: Management Analysis Presented by An-ju Cheng. Jan. 2017
- 3. Obstacles #1: Command and Control Culture Problems: • Power centralization • Inefficient decision making process 3
- 4. Obstacles #2: Brand Inconsistency Problems: • FCL has various commodities and different retail co-operatives • Lack of consistency across brand identity and visual messaging 4
- 5. Obstacles #3: Lack of Unity Problems: Internal • Inflexible veterans • Excessive new hires External • Complex business model • Balance of competing interest 5
- 7. Communication transparency with employee involvement Strategy: • Direct and open two-way communication • Early employee involvement Evaluation : success • Encourage openness to change • Avoid psychological reactance • Motivate employees set goals, routines and problem solutions. 7 Source: Class handouts by Professor Michael Elwood Roloff for MSC core course “Change Management”
- 8. Develop a consistent framework across portfolios Strategy: Offer an operational balanced scorecard (five pillars) • Financial success、People、Market performance and growth、 Operational efficiency and effectiveness、Social responsibility • Evaluation: 8 Success Failure • Social adjustment function: encouraging people to change because everyone else does it. People need a sense of self- determination. It could be improved by the following actions. 1.Offering some choice about implementation. 2. Acknowledging feelings about the change. Source: Class handouts by Professor Michael Elwood Roloff for MSC core course “Change Management”
- 9. Strategy: • Regular check in with the employees. Giving permission for all the employee to learn and figure things out and make mistakes. • Evaluation : 9 Creating a sense of unity Success Failure Perceived organizational support: people are more likely to accept the change if they feel the company cares about them People have different attitudes toward the changes. For example, ambivalence toward change, seeking routine and short-term benefits. Source: Class handouts by Professor Michael Elwood Roloff for MSC core course “Change Management”
- 11. Messaging Advices Creating multilevel motivation systems • Reward system • Short-term benefits • Emphasize on fairness: performance based on contribution, equality, status and need. 11 Source: Class handouts by Professor Michael Elwood Roloff for MSC core course “Change Management”
- 12. Messaging Samples Loss Frame Message • Example: If we slow down the change, competitor is likely to catch up to us and eventually surpass us. If this were to occur, we are likely to be less competitive within the market. Rational Message • Use of data and facts: Example: 90% of the employee in this company is using Gmail to communicate with each other, and by doing so our production in last quarter was increased by 60%. 12 Source: Class handouts by Professor Michael Elwood Roloff for MSC core course “Change Management”
Editor's Notes
- First of all, I want to give you a brief about the current issues the company faces.
- Culture of fellowship: A few leaders held most of the decision-making authority and the rest of the organization followed: Decision-making processes is inefficient: Selection of board members at FCL was done through a democratic election process, the democratic governance structure made decision-making processes cumbersome.
- ▸ FCL has various commodities and different retail co-operatives. ▸ Lack of consistency across brand identity and visual messaging.
- ▸ Internal • Inflexible veterans: Senior employees are very comfortable with where they were. They are reluctant to change. • Excessive turnovers (or new hires): They are excited to participate in the change, but they may not understand the unique nature of the co-operative business model, and how this would impact the operation of the company ▸ External • Complex business model: FCL’s complexity increased with the geographic scope of its operations and the vast difference in the size of its retail members. It’s also hard to have a balance of competing interests among members.
- Strategy: Communication transparency with preemptive employee involvement. FCL is fundamentally changing a culture, trying to empower our people, to provide leaders with the ability to lead their organization, to really reframe our brand as that local alternative, and to celebrate the business model. Evaluation: Encourage openness to change: when the company empowers its employees, they would feel like they have more power to access the information about the change and more chances to participate in the change process. As a result, they would more open to change. Avoid psychological reactance: this strategy could make people more motivated. When employees have more freedom to control their decision making, they will be more interested in making contributions. Empowerment also enables workers to set their own goals, routines and problem solutions.
- • Social adjustment function: This strategy could put social pressure on different units. It can encourage people to change because everyone else does it. People who don’t want to change would think that the current behavior is out of step with others and that new behavior will allow them to fit in better.
- Creating a sense of unity Strategy: Regular check in with the employees. The CEO has sent the message loud and clear to give permission for all the employee to learn and figure things out and make mistakes. Evaluation: This strategy would help people perceive organizational support. That is to say, people are more likely to accept the change if they feel the company cares about them. Also, when the leader highly support and provide resources, it usually could lead to successful but modest change. people understand the reasons (cognitive) but feel bad about change. People tend to seek routines and short-term benefits.
- Creating multilevel motivation systems Reward system Short-term benefits Emphasize on fairness: performance based on contribution, equality, status and need.
- I would recommend using the following strategies to deliver the message about the change at the FCL’s home office Q&A session: 1. Loss Frame Message: Because changing behavior within this organization is consider risky, by applying loss frame during his speech, it will be more effective at convincing audiences. For example, I would say ” If we slow down the change, competitor is likely to catch up to us and eventually surpass us. If this were to occur, we are likely to be less competitive within the market.” 2. Use of data and facts: “Rationality” is one of Kipnis’s most frequent use strategies. I would emphasize on the date and facts. For example, I would say “ 90% of the employee in this company is using Gmail to communicate with each other, and by doing so our production in last quarter was increased by 60%.