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Change Management And Organisational Development

Introduction - Change Management And Organisational Development

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According to Stouten, Rousseau, and De Cremer (2018), a systematic change strategy makes it simpler to implement new processes and practices. LPHY is losing their business as the epidemic worsens, making it more difficult for the charity to compete in a competitive market. LPHY is a local non-profit organisation dedicated to helping the local community’s Hospices provide the finest care possible. Specifically, this is accomplished by making an annual contribution of at least £1 million to an NHS Hospice, which allows for the creation of new programmes including Hospice at Home, Day Hospice, and a Listening Service for those who have just experienced a loss. The organisation is currently facing issues to adjust in their VUCA environment (Troise et al., 2022). Volatility, uncertainty, complexity, and ambiguity are all abbreviations for VUCA. When it comes to some sectors and business domains, continual, unexpected change has become the norm, especially after the pandemic.

Strategic Change Needed in LPHY

A scarcity of qualified applicants is making it difficult to fill several open positions in LPHY. Although the present salary (just over the “National Minimum Wage”) may not seem appealing, a handful of recent recruits have had less than stellar results. Besides, Teams that want to remain relevant and competitive will have to deal with managing recruiting change. Several retail staff account for 105 days of the 270 days of sickness in the first half of this financial year, and this sickness level is causing stress on the team already stretched. Besides, the manager in the online retail section seems unfocused to handle the administration, causing generating fewer sales than anticipated. The non-retail portion of the organisation has seen several voluntary layoffs and new hiring, while two of the three new employees have left the team due to the choice to invest in more trained (and more costly) people with expertise in specialised fundraising areas. Since the previous HR manager departed over a year before the outbreak of the COVID epidemic, the organisation was left with a huge library containing well-written but ignored rules and procedures, with nobody to convey them accurately to the employees. The annual appraisal and performance management system are also lagging from being efficient and issues have been observed in the feedback quality.

All these issues in the organisation are indicating to a change needed in the overall human resource management (HRM) of the organisation (Ulrich et al., 2012). As part of HR’s role, it is important to identify the qualities of “purpose-driven” employees and incorporate them into the hiring, development, and succession planning processes. For the most important positions, the greatest people must be placed in the organisation by taking a close look at where they create value and how they contribute to that value. As opined by Chyhryn et al. (2019), it is imperative to foster a culture of the rapid invention in the HR practices of LPHY. Performance management and annual appraisal systems are more likely to have a beneficial impact on employee performance when supervisors provide coaching, relate employee objectives to corporate aims, and reward employees differently (Buckingham and Goodall, 2015). To reap the advantages of the revolution in HRM, LPHY has to facilitate the goal-setting process, decouple compensation and development, invest in manager competencies and integrate technology as well as analytics into the performance-management design to ensure it is simpler.

Planned Change Approach to the Proposed Change

McKinsey’s 7S of Change Management

The complexity of McKinsey’s change management paradigm is higher than that of other models (Galli, 2018). As a result, it is suitable for executing large-scale organisational changes that affect personnel at all levels. The “organisational design” of a business may be analysed using the McKinsey 7S Model, according to the corporation. Structure, strategy and system as “hard S”, and skill, shared values, style and staff as “soft S” are the 7 factors displayed in the model to demonstrate how a firm can achieve success through the collaboration of such seven components. Rather than focusing on money, buildings, and equipment, McKinsey’s 7s model emphasises human resources as a catalyst for increased organisational efficiency. All seven areas must be linked together for the model to perform well, and only after that can changes be made across the organisation to make it more efficient (Bismark et. al., 2018). The most typical use of this model is to encourage organisational change, aid with the execution of the new strategy, describe how each sector may change, and enable the merger of companies. Change process implementation may be planned by using the McKinsey 7S model by first determining which factors to focus on for a particular change. From the discussion above on the change to be taken by LPHY, they need to focus on the strategy, style, skill and staff.

Fig 1: McKinsey 7S Model of Change Management

(Source: As created by author)

Types of Element

Elements

Guidance for LPHY

Hard S

Strategy

LPHY’s strategy would identify the short- and long-term objectives it seeks to attain, as well as the course of action to be taken and the resources to be allocated. While the organisation needs to focus on recruitment and selection as well as training and development in short-term goals, modification of the performance management system can be counted under long-term goals, and consideration of wages and salaries must be added to the medium-term goals.

Soft S

Style

The top management must embrace a transformational leadership style to encourage and engage the employees, as well as to create and manage HRM change.

Staff

Current staff must get retrained to meet the evolving needs of IT skills requirements, organisational procedures, new fundraising methods, and the competitive market environment. Based on the relevant criteria, new hires should be made.

Skills

However, even though the charity’s skilled workforce reduces employee turnover, LPHY should recognise and improve the skills needed amongst staff, such as a coping mechanism to stress and professionalism, IT skills, motivation and commitment, understanding of transforming areas and a sense of organisational objectives to carry through the change.

(Source: As created by author)

The Implication of the Change as per McKinsey’s 7S Model

This paradigm seems to have a challenging application because of the subjective nature of the idea of alignment concerning the seven main factors Razmi, Mehrvar and Hassani, 2020). On the other hand, a top-down approach is recommended, including everything from a broad goal and shared values to a company’s style and staff. LPHY needs to follow the process below to implement the changes based on the factors explained above:

Step 1: Identifying the ineffectively aligned areas

An ever-changing economy, shifting customer tastes, rapid technological advancements, and a very diverse workforce have all contributed to the rapid pace of change in the modern workplace (Singh, 2013). Managers in today’s firms are aware of the necessity of change management, yet they still encounter challenges in managing the process. It is not uncommon for non-profit executives to learn about their resilience as a result of leading teams through this crisis, or managing teams through programme modifications, personnel issues, or financial difficulty. No matter how COVID-19 has affected the retail and non-retail sectors of LPHY, no one has escaped the effects of this volatile and uncertain climate. This led the company to make certain restructuring in their process, however, their workforce is not aligned with the change adopted already. Hence, the required change has been identified in the area of HRM of the organisation.

Step 2: Determining the most favourable organizational design

When the status quo becomes unsustainable, it might open the door to new possibilities by instilling the feeling of urgency necessary to motivate change (Alam, 2017). An additional £2 million in funds will be raised to help the charity treble its retail outlets and continue its community engagement efforts. This and other important adjustments need an upgraded team and new ways of working. For this, “Professionalism, Agility, Community, Team” has been re-evaluated as a set of core principles for the organisation. Companies’ value agendas are based on these cultural values and practices. An overall change in the HRM is crucial for LPHY. Research and development (R&D) capabilities and creative employees are typically required to transform these goals into value.

Step 3: Deciding what changes must be made and where

For a transformation to be effective, it has to affect all aspects of a company, encompassing structure, people, strategy, processes and technology. Improved career paths for agile teams, revamped performance management, as well as skill development might assist human resources in adopting an iterative approach to people management. It should serve as a model by transitioning to agile “flow to work” pools in which staffing decisions are based on management-determined priorities (Galli, 2018). In the case of a new recruitment marketing solution, recruiters have to become acclimated to a new tool, but they also have to learn a new method of performing their work, which might result in a loss of performance or expertise in which they took pleasure before the transition. Thus, LPHY must determine the change in the areas of recruitment and selection, training and development, and performance and appraisal management at the initial stage.

Step 4: Making the required changes

To make the changes feasible, LPHY’s leadership must tightly manage employees by building an analytics capability to mine data to recruit, develop, and retain the finest individuals. (O’Nell and Hewitt, 2012) These HR teams must see themselves as internal service providers who guarantee high returns on human capital investments to transmit these staffing objectives to the senior management team. Leaders may, for instance, establish semi-automated data dashboards that track the most relevant indicators for critical occupations to involve them in regular personnel evaluations.

Potential for Organisational and Individual Resistance to the Proposed Change

Organizational change always results in resistance to change. Various types of resistance to change exist. It is easier to devise a plan for dealing with resistance when the organisation is familiar with the many sorts of it.

Organisational Resistance

The reluctance to change is a result of internal organisational issues. Resistance stems primarily from issues related to organisational structure, power relations, and culture (Rosenbaum, More and Steane, 2018). People in big organisations tend to think in silos and prefer the status quo, making it difficult to introduce new ideas. Organisational personnel in LPHY are more likely to reject organisational change when it undermines the organization’s values, conventions, and culture. They will reject the organisational change if they believe it is going to supplant their current working practices completely with a new set of procedures. Thus, organizational change is met with opposition when it threatens the position of one department over the others.

Individual Resistance

Employees, at the individual level, are afraid of the repercussions and hence resist the change (Curtis and White, 2002). Uncertainty surrounds the prospect of acquiring new talents in LPHY. It is not hard to understand why change might seem frightening. Likely, a lack of confidence in management or a sense of economic unpredictability might aggravate resistance to the move. Sometimes, a person’s personal qualities or capabilities might make them reluctant to change. LPHY’s retail employees are not efficient enough in technology-related areas. Change acceptance may be influenced by a person’s culture, personality, and life events (Amarantou et al., 2018). Unless LPHY employees are confident in their own ability to cope with the new situation, they will not be supportive of a change in policy or procedure. To avoid failure, individuals oppose change because they are concerned about their flaws (actual or fictitious).

Conclusion

In the present business period, organisations employ organisational change to enable and imply change. It has to adopt a strategy shift for organisational growth to maintain in this situation to attract new prospective customers and keep the current ones. This report has found that an overall change throughout the HR management practices is needed for the effective implementation of the business strategies adopted recently. An effective re-skilling and up-skilling process would need workers to embark on a change journey that incorporates modified ways of HR practices (e.g., recruitment, training, development, and performance management). Using McKinsey’s 7S model of change management, the report has found that LPHY must focus on implementing change in the areas of strategy, skills, staff and style.

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References

Alam, P.A., 2017. Measuring Organizational Effectiveness through Performance Management System and Mckinsey’s 7 S Model. Asian Journal of Management8(4), pp.1280-1286.

Amarantou, V., Kazakopoulou, S., Chatzoudes, D. and Chatzoglou, P., 2018. Resistance to change: an empirical investigation of its antecedents. Journal of Organizational Change Management.

Bismark, O., Kofi, O.A., Frank, A.G. and Eric, H., 2018. Utilizing Mckinsey 7s model, SWOT analysis, PESTLE and Balance Scorecard to foster efficient implementation of organizational strategy. Evidence from the community hospital group-Ghana Limited. International Journal of Research in Business, Economics and Management2(3), pp.94-113.

Buckingham, M. and Goodall, A., 2015. Reinventing performance management. Harvard Business Review93(4), pp.40-50.

Chyhryn, O.Y., Karintseva, O.I., Kozlova, D.D. and Kovaleva, A.V., 2019. HR management in the digital age: the main trends assessment and stakeholders.

Curtis, E. and White, P., 2002. Resistance to change: causes and solutions. Nursing Management (through 2013)8(10), p.15.

Galli, B.J., 2018. Change management models: A comparative analysis and concerns. IEEE Engineering Management Review46(3), pp.124-132.

O’Nell, S.N. and Hewitt, A.S., 2012. Staff Recruitment, Retention & Training Strategies. Villanova University. Lancaster Avenue, Villanova, pp.125-143.

Razmi, J., Mehrvar, M. and Hassani, A., 2020. An assessment model of McKinsey 7s model-based framework for knowledge management maturity in agility promotion. Journal of Information & Knowledge Management19(04), p.2050036.

Rosenbaum, D., More, E. and Steane, P., 2018. Planned organisational change management: Forward to the past? An exploratory literature review. Journal of Organizational Change Management.

Singh, A., 2013. A study of role of McKinsey’s 7S framework in achieving organizational excellence. Organization Development Journal31(3), p.39.

Stouten, J., Rousseau, D.M. and De Cremer, D., 2018. Successful organizational change: Integrating the management practice and scholarly literatures. Academy of Management Annals12(2), pp.752-788.

Troise, C., Corvello, V., Ghobadian, A. and O’Regan, N., 2022. How can SMEs successfully navigate VUCA environment: The role of agility in the digital transformation era. Technological Forecasting and Social Change174, p.121227.

Ulrich, D., Younger, J., Brockbank, W. and Ulrich, M., 2012. HR talent and the new HR competencies. Strategic HR Review.

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