Diagnostics in a company called CSY
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The change leadership challenge is the merger of two separate divisions: Female Reproductive Health and Genomics to form Diagnostics in a company called CSY. The merger of the two divisions had to happen because of the changing clinical business world, increased competition and NHS struggling financially. The two divisions have separate budgets, departments and different approaches to selling and training customers on the products. It was not obvious to the employees in the different departments why this merger was happening? The CEO of CSY made this announcement to the respective division leaders and this message was filtered down to the employees. Although the information came from the division leaders, none of the employees were interviewed, or asked about their opinions regarding the merger of the two departments.
From Figure 1, as a direct lack of communication this subsequently led to many employees speculating and making assumptions. The biggest concern was job security, and changes to the existing jobs, and the CEO made no attempt to explain or alleviate any concerns. As the two divisions were merging, additional products and customers will be gained. Not all the employees were happy about this. This incorporates many different employees, backgrounds and cultures. The leadership approach at PE is very much “top-down” in the organisation. Many employees felt that there was no choice or alternatives, and were told to accept this and continue with their duties. CSY has a mission to enhance human health, provide solutions for this and look after their employees. However, this was clearly not demonstrated when this departmental merger took place (Swanson and Creed, 2014).
A PESTELE analysis was performed and different cultures and countries may be affected with this merger. Also, different employees may have different working practices along with country specific political and economical stabilities.
The merger of these two divisions was proposed by the CEO of the company to increase resources, revenues, reduce employees and save money. The CEO communicated this merger through the regional divisional managers. No attempt was made to communicate with the employees directly and this approach failed within the organisation. Employees in the two divisions didn’t understand why this was suddenly happening.
This merger was being implemented across the whole business in the major operating countries, USA, Europe and Asia. The people, cultures and the diversity of the employees had not been taken into consideration. The leadership style of the CEO is autocratic, controlling and directing. As the CEO had already taken this decision, the message was passed down to the directors and various management employees. It was their tasks to explain to the employees what was happening. The CEO made no attempt to have a company meeting or conference to explain anything. Employees were left feeling very uncertain about their future and job roles. The employees felt very threatened, and it was down to the management team to inform certain employees of loss of their jobs, or re-apply again, or being transferred to a different department. As a subsequent result of this, a lot of employees left the business, down to feeling very under-valued and fear.
The CEO really did not communicate effectively, and this can be compared to the Conduit model shown in Figure 2. This message of the merger was filtered by the respective directors and management employees on receiving the information themselves (Harrison et al. 2008). In turn, a subjective interpretation would have occurred when the message was transferred. Conversations occurred between employees, much of which involved assumptions and speculation.
Culture is very important in any company and organisation, particularly CSY. The company relies on employing people who are not only diverse in culture but in turn practice and promote the culture of the company. The two departments, although they are sync with the company mission and vision, have very different methods of operation. As can be seen in Figure 3, the visible characteristics are employee traits that will be displayed well. However, to really understand the culture, prior to the merger a deeper understanding must occur. Employees may fear additional people joining the team. Not all employees will embrace this, and are incredibly competitive and can result in a toxic culture.
As a result of this merger, the organisation needs time to implement the merger and monitor the success of this. The organisation also needs to invest in recruitment, and merging of the IT and HR processes. Also, as employees are expected to sell additional products, training is required to maintain the integrity of the business. The company needs to explain to customers that there may be a delay in response whilst they are in the merger phase. Existing employees will also need to receive an explanation about their job roles and a new job description (Broedling and Goodwalt, 2012;Castaneda and Toulson, 2013).
The leadership paradoxes that have been identified for this merger is, the CEO needs to build a close relationship to the people that report to him directly. However, a distance must also be maintained to operate as the CEO. Building the relationship so trust is maintained is also important to understand what is happening in the business, if the feedback is truthful and honest. Planning the merger was always going to be difficult, due to the unknown timeframe of completion, and understand employee’s emotions and feelings. Having faith in the decision of merging the two departments, and knowing that not everyone is going to be pleased with the decision. There is no crystal ball, there is always the feeling – what if this does not work? Will this make the stakeholders happy? The external market forces and customers is uncertain and unknown factors that no CEO can anticipate (Evers and Katyal, 2007).
The conclusions drawn from this merger, is the CEO should’ve engaged with the employees directly at all the levels of the business. The CEO should’ve have also spoken to each department in the different divisions and explained the reasons for this merger. Implementing champions for this merger in each department may have helped with the communication and fear within the employees. The CEO had taken the decision of merging the two divisions without really expressing any communication about this. Employees felt very unappreciated and despondent about this. The time and disruption for this merger to take place, was vastly underestimated. As no vision or mission was communicated from the CEO, employees failed to understand the value in this merger. Numerous valuable and long-term employees left the business due to the merger. Recruitment is costly to any business, but this complacent attitude of the CEO, really enforced how valuable employees are to any business. The culture was also not taken into consideration of the two departments merging. Also, cultures in the different countries and practices.
Effective leadership as shown in Figure 4: teams must engage with the team and their employees and enforce this message (Everard, 1990). The CEO failed to demonstrate the commitment to the employees at all levels in the organisation. Whereas, it is appreciated this was a tough decision, and profits had to increase, it appeared to many employees that the CEO just didn’t care and appeared ruthless. As a healthcare company, their mission is to improve customer health, however, many employees became unwell from this through stress and worrying. A clear explanation and ensuring that these employees understand why this change had taken place should’ve been the priority of the CEO (Van der Voet, 2016).
AS CEO of CSY, I decided to merge two divisions to create economical strategic resources that in the long-term will be beneficial to the business and the customers.
My 8-step plan is listed below: (Pollack and Pollack, 2015 and Appelbaum et al. 2012).
Process one, creating a sense of urgency by engaging with my senior management team and employees to share this vision them, and ask them to join me on this journey together. This is not something I can do on my own, and I need every employee to accept this change. Employees are aware of the threats to the business, but this is not going to justify the merger. As the CEO, I will understand that many employees will feel that their job security is threatened and not everyone will be ready to embrace this change. I either need to suggest alternative positions for these employees, or think about a severance package.
Process two, forming a powerful task force is necessary, not only to implement this merger, but to also lead by example. The task force comprised of key figures in the company, will help to champion these ideas within the company. The task force must consist of key respected employees from all departments, and various positions. The key to this is also emotional intelligence and understanding where the gaps and fears are coming from within the organisation.
Processes three and four, creating and promoting this vision of the two divisions working together can help to empower employees to understand why this is happening. Also, it helps employees to visualise the two technologies working together. Also, the bigger picture, is healthcare and how we can all support our customers to enhance life. As the CEO, it is imperative that I communicate this vision every chance I have. I really need to promote this to all the employees and help them to understand and join this journey with me As CEO, I need to address all aspects of this merger with the vision, job security, job descriptions, training, customer service and career advancement. As the CEO, this is going to be implemented, and everything that now happens in CSY, must go back to this vision.
Process five, removing the objections, as the CEO I understand that a lot of employees don’t like and don’t understand change. As the CEO, I need this merger to be successful. Always looking for these barriers, will help to reengage with these employees and convince them to join the journey. However, a strategy must be implemented if these employees do not want to change. This negative communication will have an impact on other employees.
Process six, being thankful when short term gains have occurred during this change. As CEO, I understand how powerful it can be to win something, whether it’s a conversion of a competitive account, or winning a big deal. This merger will take a considerable amount of time, employees may be enthusiastic, and then can also lose their motivation and forget why they are doing this to begin with. I must always communicate the vision and constantly engage with my employees. I must also create short term wins, like training and expanding the CRM. Rewarding employees when these tasks have been completed is all part of sharing my vision.
Process seven, change doesn’t happen overnight. As the CEO, even though short term wins are good. I need to analyse and reflect on what went right and wrong. Still working with my task force and all the employees, I need to continue to keep the momentum going. After this change has occurred, take the ‘Kaizen approach’ of always looking to improve the situation and what can be done better must take place. This is a change for the better, and in order to survive in this competitive environment, I must encourage my employees to keep innovation and ideas coming.
Process eight, incorporate the change into the mission, vision and the culture of the company. As the CEO, just because this has taken place, I must not become complacent I must continue to work with my task force and review and monitor the situation every three months. I must continue to keep my task force strong and motivated, as if I lose my champions, then I am facing resistance again.
Using the 7S framework described in Figure 5, as the CEO I can review the different viewpoints and capabilities of the two divisions as part of implementing my strategy for the merger. The shared vision between the two divisions is to create one diagnostics department to enhance healthcare. This is the mission of the company and also coincides with the merger (Singh, 2013 and Mateja, 2016). The strategy will involve looking at the products in the two divisions, analysing the competitors and understanding manufacturing costings. Looking at the best ways to implement the budgets and get the best return on investment. The structure of the two divisions will have different practices, and understanding these employees and cultures is very important. As the CEO, I must communicate the vision with the help of my task force to empower the employees. Looking at the systems of the two divisions, and promoting this merger through communication and marketing campaigns. Merging the customers in the CRM and starting to create the one diagnostics division.
Also, explaining to customers about what is happening, and explain how account management, service and customer support is going to work moving forwards. As the staff will be from different backgrounds, education, competency, I need to review these things at all levels. I need to design new job descriptions, provide training, recruitment and talk about career development. This merger is for the long-term survival of the company, and the style of which I communicate this message has to be clear and always goes back to the mission and vision of healthcare. Employees are very valuable, and it is very expensive when employees leave the business. Specialists with particular skills or product knowledge should be valued and managed during the merger.
As the CEO, the main critical paradox I would’ve faced, is whether this merger will succeed and enhance the revenues. I can however, plan and formulate a strategy. I can work with my senior management team and employees to understand what is happening in the market and decide whether this is the correct thing to do. I also know, as the CEO, the external environment is out of anyone’s control. I can however, have contingency plans, in the event unexpected situations occur. As the CEO, I also don’t know what people are really thinking and feeling. Out of a sense of duty and obligation, employees often tell you what you want to hear. As the CEO, it is my responsibility to champion this message and provide and harvest this culture. I want employees to tell the truth no matter how difficult this is. Implementing this merger across the whole organisation, in different countries and sites, is unknown with regards to the timeframe. This will very much depend on people, cultures and their attitudes.
As the CEO, I have to visit all these sites, and understand the cultures and practices in each of these countries. Also, I am relying on the employees working together from the two different divisions. Although, there will be employees who leave the business, the majority will stay. As the two different departments have different cultures and ways of working, groups small numbers of people from each of the divisions and see how they work. This can be a way of testing the two divisions merging as one (McKenna, 2017 and Davies, 2017).
The critical generic factors to any senior leadership team when considering change is any situation of organisation can be daunting. The culture is incredibly important and engaging with all employees on every level and communicating these ideas is key. Without the stakeholders and employees seeing the value in these ideas, the change will fail. Working on these changes like it needs to happen tomorrow, and creating a sense of urgency with the task forces are very important. Employees need to hear these visions many times, and if not communicated often, employees can lose faith and momentum very quickly.
The type of leader should be transformational, as these kinds of decisions are always taken for the long-term future and survival of the company. Displaying emotional intelligence and realising that employees are valuable. However, a good CEO always knows that you can’t please everybody and it is acceptable to make wrong decision. The key factors that will help the CEO to become successful is to know that they have made the wrong decision and to reflect on wrong choices made and learn from it. The company exists for a reason, and the CEO needs to iterate why these changes are taking place. Employees then feel more valued and there is a purpose to their jobs (Mangundjaya et al. 2015).