Analysis of Poor Change Management Processes at Xerox

Founded in 1906, Xerox is one of the biggest names in the digital print technology. The firm has competencies in imaging and printing, analytics and development of solutions to help customers improve productivity (Fortune 2018, n.pg). The primary offerings of Xerox can be categorized into three main areas namely managed document services, graphic communications, and workplace solutions.  The managed document services help customers to optimize printing while the communications and graphic solutions services provide customers with printing and communication infrastructure. Early this year, the company unveiled its acquisition plan by Japan’s Fujifilm in a $6.1 Billion deal (Fortune 2018, n.pg). This acquisition points to Xerox’s diminishing corporate power and coupled with a decline in demand for printers and photocopiers, the company’s future and profitability is uncertain. Xerox’s woes can be traced to two main issues namely poor employee morale and mishaps in the change management processes that have cost the firm its future. In this light, this paper analyzes poor employee morale and poor change management at Xerox and uses two-factor theory and Lewin’s change model as the theoretical framework. Also, the paper offers suggestions that business leaders at the company can implement to revive the company and chart a future of profitability and competitiveness.

Analysis

Employee Motivation at Xerox

Failure to Act on Employee Complaints of inefficient processes at Xerox

            It is noteworthy that employee contributes significantly to the competitiveness and profitability of the company since they are the first brand ambassadors of the company. Also, employees add to the organization’s synergy thus improving customer interaction at every touchpoint (Doppelt 2017, p.88). Employee engagement and productivity largely depends on the staff morale, and when the employees are highly motivated, they steer the firm towards the future of its goals while poorly motivated staff achieve the opposite. Unfortunately, Xerox is not anywhere near the list of companies that motivate employees given the frequent concerns that employee complaints regarding inefficiencies of the current processes fall on deaf ears (Sauter 2016, n.pg). According to Hertzberg’s two-factor theory, although hygiene factors do not result in job satisfaction, their absence causes a job dissatisfaction (Cascio 2018, p.88). Therefore, since inefficient processes are a part of the employees working conditions, they cause a negative experience for the staff thus leading to poor morale. Furthermore, it is also to be remembered that according to Kelly’s followership theory, effective followership is based on mutual trust between the employees and the leader and as such, instances where employee’s complaints are not acted upon severe the relationship between the employees and the organization (Hurwitz & Hurwitz 2015, p.118).

No Loyalty to Employees

            The stakeholder theory requires the organization to recognize that it has a responsibility to all the stakeholders, employees included. This means that a firm should strive to improve the welfare of the employees and to guarantee their job security as much as possible (Cascio 2018, p.88). However, this is not the case for Xerox employees where the executive team manages the staff with threat making them feel less valued (Sauter 2016, n.pg). Also, the recent announcement that the company will be cutting more than 10,000 jobs in the acquisition deal reveals that employees cannot stake their career future at the company (Fortune 2018, n.pg). Job security is a major hygiene factor, and its absence causes a dissatisfaction since nothing is more disturbing than to know that you might be laid off the following day (Gollenia 2016, p.202). When employees witness their colleagues and friends being laid off, their morale is adversely affected since they do not know when their termination letter will land on the desk. Therefore, the employees’ sense of importance in the organization diminishes when they witness job cuts in the organization thus leading to poor morale (Hurwitz & Hurwitz 2015, p.122).

Unreasonable Sales Targets and Poor Management

            Sales targets are essential since they help to keep the employees on track. The problem comes up when the executive team sets up unreasonable sales targets that create tension and ill will in the organization. Unreasonable sales target at Xerox is another reason for low employee morale (Fortune 2018, n.pg). While challenging employees to offer their best can increase performance, overdoing it is likely to achieve the opposite since it communicates that the firm puts profits before people thus going against the corporate social responsibility triple bottom line. Poor management is also a major complaint amongst Xerox employees (Sauter 2016, n.pg). For instance, many employees at the company hold that they are not involved in decision making and that their efforts are not recognized. Motivators in a workplace inspire followership and employee loyalty which are positively correlated with employee motivation (Cascio 2018, p.88). Therefore, the absence of employee recognition and exclusion in decision making creates a work environment that demotivates and demoralizes the employees. Even if one gives a promotion in a hostile environment, it will do little to boost the workers’ psyche.

Change Management

            Change management is vital to every organization as it ensures the organization remains receptive to internal and external factors in the organization thus sustaining competitiveness. Failure to manage change effectively increases the cost of production, reduces the market share and profitability of the firm as it loses to new entrants. Before delving into Xerox’s poor change management strategy, it is imperative to understand Kurt Lewin’s three-step change model which the theoretical framework for this section is.

Kurt Lewin’s Three-Step Change Model

According to Lewin, Change can be categorized into three major steps namely:

i. Unfreezing Stage- This is the first stage in the change process, and it involves showing inefficiencies in the current processes or ways of doing things so that the stakeholders can identify the need for change (Gollenia 2016, p.223). For instance, if the company is experiencing declining sales, the manager might use the refreezing stage to demonstrate the need for product or process innovation. This stage prepares the organization for change so that when the proposed change is finally implemented, there will be minimal opposition from the stakeholders.

ii. Change Step. This is the second step of the change process, and it involves introducing the proposed change into the organization so that the employees will use the new system, process or technology in the value chain (Doppelt 2017, p.67). For example, if the change involves the use of new technology, the change step will include sourcing for vendors of the new equipment and educate the employees on how to use the new machine.

iii. Refreezing- This phase involves embedding the change into the organization so that it is ingrained in the daily production and operation activities at the company (Gollenia 2016, p.225). Also, the phase requires the leader to put in place performance metrics to assess the impact of the change on the productivity and profitability of the organization.

Xerox’s History of Poor Change Management Strategy

            Xerox’s history of poor change management strategy dates back to 1970’s when the company established Palo Alto Research Centre (PARC) aimed at designing the personal computer. At the time, the company stood the chance of becoming a successful global brand like Apple since if PARC had succeeded, Xerox would be enjoying the same corporate power as Apple (Mui 2012, p.38). Although PARC was successful at developing the PC, the corporate conditions at the company had shifted greatly by the time PARC attained this milestone. Firstly, the corporate leadership at the time was not so keen on innovation, and as well, the investors were more concerned with the current profitability of the company than the long-term sustainability. Therefore, Xerox missed the grand opportunity to commercialize PARC’S innovations and hence stuck with the production of printers. According to Lewin, the change process has two major factors that affect it namely the forces driving the change and the forces restraining it (Hurwitz & Hurwitz 2015, p.136). The forces driving the change for diversified products at Xerox in the 1970’s included the emerging PC market, financial resources and visionary leadership which knew that one day, printers and copier market would diminish and Xerox would require a new source of revenue. However, the leadership that was at the helm of Xerox when PARC delivered the PC and the crop of investors at that time were the restraining factors to the change and dealt a big blow to the company; A blow that Xerox has not recovered since then (Mui 2012, p.33). Fast forward to the 21st century, Xerox delayed in manufacturing 3D printers since despite the availability of 3D printers as early as 2014, Xerox started manufacturing 3D printers in 2016 showing a lag in adapting to changes in market trends. This is another mistake the company did, and it is no wonder the company is struggling with falling demand for copiers and printers. For instance, 2017 was not a good year for the company given it reported a net loss of $196 Million from the continuing operations; an indicator that Xerox’s future and competitiveness are in Jeopardy (Fortune 2018, n.pg).

            Xerox missed all the steps of the change management process leading to its current woes. Also, when the company implemented change, it was either late or inappropriately executed thus reducing the effectiveness of the implementation.  For instance, while the decision to diversify products through the addition of PC products to the Xerox brand was a viable strategic move, the mishaps in the implementation of this strategy yielded little to the organization’s competitiveness.

Findings

            The above analysis has established that poor employee morale and mishaps in change management are some of the major challenges facing Xerox. Factors such as unreasonable sales targets and the failure of management to listen to employee’s complaints create an unconducive work environment at the company. Also, the analysis has indicated that Xerox has no loyalty to the employees and therefore it is unrealistic to expect the employees will be enthusiastic and loyal to the company. Secondly, the analysis section has illustrated Xerox’s poor change management strategy that has cost the company huge market opportunities. To illustrate, the failure to commercialize the PC saw Xerox lose the opportunity to be the pioneer of the PC industry. Therefore, there is a dire need for Xerox to address these issues to regain its lost glory and chart a future of operational efficiency and competitiveness.

Recommendations and Conclusion

            There are four major recommendations that Xerox should consider implementing to gain and maintain an edge. Firstly, the company’s leadership need to adopt a transformative leadership style to bring everyone on board (Cascio 2018, p.97). A transformative leadership style inculcates the inputs of all the staff members hence building trust by demonstrating to the employees that their input matter. Through transformative leadership, Xerox will succeed in addressing the problem of poor morale among employees since the staff will know that they are valued by the employer.  Secondly, Xerox should develop a culture of listening and acting upon employee complaints and requests. Such a culture would ensure that leaders do not ignore employee complaints but engage with the staff members to establish common ground. Leaders must always remember that the true measure of effectiveness is not the absence of dissenting opinions but the ability of the leader to synchronize the diverse views of the staff to the organization’s vision. Thirdly, Xerox should rely on data analytics to identify market insights, so the company does not lose in the next big market opportunity (Gollenia 2016, p.213). Data analytics shows the changes in market trends and customer tastes and the company can use this insight to develop new products. Finally, Xerox should revamp its research and development department so the company can deliver innovative products that meet and exceed customer expectations. Because demand for printers and photocopiers will continue diminishing in the coming years as offices become paperless, Xerox’s R&D must explore the possibility of adding new products to the company’s portfolio.

            In a nutshell, poor employee morale and lapses in change management are so of the issues facing Xerox. If the above recommendations are implemented well, the company will open a new chapter of efficiency and competitiveness. Otherwise, the collapse of the company will be inevitable in the long run.

References

Cascio, W., 2018. Managing human resources. McGraw-Hill Education.

Doppelt, B., 2017. Leading change toward sustainability: A change-management guide for business, government and civil society. Routledge.

Fortune, 2018. Struggling Xerox Is Reportedly in Deal Talks With Japan’s Fujifilm. Retrieved from: http://fortune.com/2018/01/11/xerox-deal-talk-fujifilm-japan/

Gollenia, L. A., 2016. Business transformation management methodology. Routledge.

Hurwitz, M., & Hurwitz, S., 2015. Leadership is half the story: A fresh look at followership, leadership, and collaboration. University of Toronto Press.

Mui, C., 2012. The Lesson That Market Leaders Are Failing To Learn From Xerox PARC. Forbes.Retrived from: https://www.forbes.com/sites/chunkamui/2012/08/01/the-lesson-that-market-leaders-are-failing-to-learn-from-xerox-parc/#6a2cd8076829

Sauter, M., 2016. The 19 worst companies to work for . CNN Money. Retrieved from: https://www.msn.com/en-us/money/careersandeducation/the-19-worst-companies-to-work-for/ar-BBC0mpH