Diagnosing Change at FedEx

One of the first steps in the change management process is to carry out a diagnosis of the situation requiring change. This entails examining the causes, context, and rationale for the change (Russell & Russell, 2006). Proper change diagnosis ensures successful change planning and implementation. Though change may occur at different levels, including strategic, functional, and process, attention in this paper is paid to the human resource (HR) function. HR is one of the organisational functions commonly targeted for change. Increased competitive pressure, regulatory adjustments, changes in strategic orientation, as well as market and technological shifts often compel organisations to adjust their HR practices, policies, processes, and/or procedures. This paper describes, justifies, and evaluates a change in HR practice at FedEx, one of the largest courier delivery firms in the U.S. and internationally. The paper particularly identifies the HR area that requires change and the need for the change and assesses the organisation's readiness for change using relevant diagnostic tools.

FedEx was founded in 1971 by Frederick W. Smith. Over the years, the company has grown to be one of the largest providers of air and ground courier delivery services in the U.S. and worldwide. In addition to courier services, the organisation provides freight forwarding, inventory logistics, and customs support services. With its headquarters in Memphis, Tennessee, U.S., the organisation has operations in the Americas, Europe, Asia Pacific, as well as Africa and Middle East. As of 2015, the firm's revenues surpassed $47 billion, with net income and assets exceeding $2 billion and $37 billion, respectively. The firm is traded on the New York Stock Exchange, an S&P 500 component, and employs more than 300,000 employees (FedEx, n.d.).

FedEx has severally been named as one of the best organisations to work for in the U.S. thanks to its innovative HR practices, particularly in the areas of recruitment and selection, training and development, growth opportunities, employee communication, compensation, performance appraisal, and workforce diversity. The firm enjoys admirable employee satisfaction and turnover rates. Nonetheless, there is still room for improvement. It is particularly important for the organisation to adopt a people analytics approach as far as its HR practice is concerned. Indeed, the significance of people analytics in today's era of big data cannot be overemphasised. As showcased by Google, it is imperative for modern organisations to make their HR decisions based on data -- from recruitment and selection to task allocation, workforce planning, retention, diversity management, performance management, as well as learning and development. That is what the people analytics approach is all about. Whereas FedEx has in the last one and a half decades or so increased its attention to data-driven HR practice, it is important for the organisation to fully adopt the people analytics approach.

Change management theory stipulates several reasons for organisational change. Nonetheless, three major reasons relate to efficiency, effectiveness, and performance (Russell & Russell, 2006). Efficiency is all about accomplishing a task or a desired outcome using the least amount of time, effort, energy, and resources. Wastage in HR processes is not an uncommon phenomenon. Often, organisations waste time, effort, and resources in performance appraisals, employee development, and other HR processes without a significant impact on overall goals and objectives. With more data-driven HR practice, FedEx would eliminate HR processes that do not add value to the organisation. Effectiveness is about producing a certain desired outcome. In most cases, organisations invest in HR processes, but they cannot actually substantiate the impact of those processes on the organisation's bottom line. A people analytics approach can help FedEx quantify the effectiveness of its HR processes. Efficiency and effectiveness are without a doubt significantly tied to organisational performance. Effective and efficient HR processes can result in significant cost savings, thereby enhancing financial performance.

An important element of change planning relates to diagnosing the organisation's readiness for change. Assessing change readiness involves evaluating the scope of the intended change and the organisation's current resources and capabilities, weaknesses, degree of acceptance of change, ability to manage change, culture, communication processes, as well as flexibility and responsiveness (Biech, 2007). There are numerous tools that can be used to assess an organisation's readiness for change. Nonetheless, two useful tools include the Organisational Change Readiness Assessment (OCRA) tool and the change readiness predictor.

The OCRA tool provides a general assessment of the organisation's willingness or eagerness of the change based on information from a wide variety of people drawn from all levels of the organisation, from top management to middle management and front line staff. The tool focuses on four elements: organisational support (shared understanding of vision, decision making structures, past employee participation and support for change, communication, and so on); organisational culture (receptiveness to ideas, teamwork, trust, cohesion, individual responsibility, and so on); the change environment (awareness of change forces, existence of a history of change, impact of change of organisational dimensions such as strategy and structure, etc.); and employee attitudes and behaviours (a sense of urgency, job engagement, receptivity to change, etc.) (Russell & Russell, 2006). The change readiness predictor, on the other hand, provides a list of items through which the organisation's rates its readiness for change. The items fall in three major categories: comprehensive variables (size of change, current internal stress, external impact, change history, supportive culture, and internal processes); resources (access to workforce, workforce flexibility, constraints, time commitment, and financial resources); and employee considerations (workforce talent, top leadership, skilled change agents, and management support) (Biech, 2007).

The strength of the two tools emanate from their applicability in diverse organisations irrespective of size and industry of operation. Also, the tools include a wide variety of elements, resulting in a comprehensive change readiness assessment. Even so, the OCRA tool appears much simpler compared to change readiness predictor. FedEx's readiness for the change was, therefore, assessed based on the OCRA tool. As per the tool, each component is ranked on a scale of -1 to +3 (-1 = slightly disagree, -2 = disagree, -3 = strongly disagree, 0 = not sure or don't know, +1 = slightly agree, +2 = agree, and +3 = strongly agree). The average of the four components is then determined. The results of the diagnosis are summarised in the table below.