Essay on Leading Current Times of Change is Challenge to Business Manager Assessment Answer
The present crucial situation has led many challenges in the business operations leading managers to adopt strategies to overcome these challenges. While the whole world is facing the challenges of COVID 19, United Kingdom has been facing this global crisis along with 2016 political and economic crisis of Brexit (Jessop, 2017).
The first crisis that UK faced in the year 2016 was the Brexit i.e. exit of Britain from the European Union. As the result of this crisis after 30 years for the first time the value of British Pound fell lower than dollar (Northouse, 2016). The assessment of the effects that Brexit was causing was yet to be completed that the whole world was hit by the crisis of COVID- 19. COVID- 19 is a virus which is affecting individuals like the common cold but is far deadlier and has till now caused total deaths of 572k (Al-Ali et al., 2017). Thus in order to prevent the spread of this virus and reduce the total human death toll, WHO announced lockdown of all activities and operation asking people to stay at home. This lockdown process was followed by most of the countries along with UK. The business environment of the whole world was in shock due to Brexit which was enhanced by the lockdown situation of COVID- 19.
Currently the business has started its operations and making strategies so as to overcome the crisis situation and lead their employees into better and productive living. To overcome these crisis situations it is essential for an organization to have a leader whose strategies are accurate and effective (Holmes, 2017). Novel coronavirus has caused business organization to lose revenue of billions of dollars but actually the effect was way worse than financial damages. The major challenges that the leaders are facing are the low supply of materials, fearful and demotivated employees, and falling apart of years and years of strategic plans (Karareba, Clarke, and O’Donoghue, 2018). Thus this essay will discuss an effective leadership model along with the concept of change and finally provide leading ways for present challenges and change for the business leaders.
Effect of Brexit on Business Environment
Brexit has affected the business environment of the organizations operating in UK by stagnating various investments. Thus the first uncertainly effecting the British business was the Brexit which resulted in 6% investments reduction in the first two years along with 1.5% decrease in the rate of employment. 36% of CEOs considered Brexit as the top three cause of uncertainty while 9% believed Brexit to be the key factor of uncertainty (Attah, et al., 2017). The sales of the British business were reduced by 3% and exports of goods reduced to negative figures. On the other hand the cost of labour, per unit cost of production, and financial costs increased.
Effect of COVID- 19 on Business Environment
The biggest hit due to COVID 19 was faced by the aviation industry with 90% of the global flights were grounded. It was also observed the commodity prices all over the world have been reduced by 20.4% in the 2020th March month. Aging in the second 2020’s quarter the prediction on global trade reduction on comparison of last year’s second quarter will be 27% while the prediction on the fall of tourism sector will be 58% to 78% this year (Tang, 2019). In the case of education the disruption due to COVID- 19 is around 1.6 billion learners which are every 9 students out of 10 students. Again it was also predicted that due to this pandemic 40 to 60 million of people will be below poverty level in the year 2020 (Heathfield, 2019). All these are the result of the world wide lockdown in order to contaminate the spread of this novel virus. Apart from the crisis in the financial level of COVID- 19 had a huge impact on the human lives with 13.1 m people positively affected with COVID- 19 and a death toll of around 572K all over the world. In the United Kingdom total affected people are 2.90 m with a death toll of 44K and the numbers are still rising up.
Concept and Model of Leadership
The COVID- 19 has not only changed the world but has also impacted the environment of the workplace greatly. This is essential for the leaders of the business world to also change their strategies and concepts in order become an effective leader of the modern era. Leadership will be playing an important role in organizational future development as organizations were forced into hibernation which broke the economy of all the countries of the world. Many leadership styles and traits have been observed during such a disastrous situation which helped in making decision resulting in the rise or the fall of business organizations (Hussain et al., 2018). Leadership is not defined by the process of ruling employees forcefully and making them work, rather it about helping employees to understand their full potential and build their future along with the development of the organization. A manager is not always a leader, but a leader is a manager one who brings the entire team together and builds forward to new levels. The present crisis of novel coronavirus has affected employees of organization by inducing fear and emotional dissatisfactions. Thus with the help of good leadership model like the leadership style of servant leadership a leader can encourage its employees and motivate them for the growth of the organization (Cameron, and Green, 2019). Currently the most challenging job of a leader is to balance in between the usual business operations and delivering the competed tasks.
There are various leadership models that have shown effective results of motivating employees and understanding their needs (Deschamps et al., 2016). These models are Servant Leadership style, Leadership with Autocratic Model, Leadership with Transactional Model, Leadership which is Task- Oriented, Charismatic Leadership, Leadership which is based on People, Transformational Leadership Model, Laissez-Faire Model, Democratic Model, Bureaucratic Model and others (Abbasi, 2017). On the basis of the current crisis of novel coronavirus and the Brexit the Servant Leadership style is acceptable to withstand the present situations.
Servant Leadership Style
This style of leadership has six attributes which help in withstanding critical situations during uncertainty. Servant leadership style is not about acting as a servant rather putting the needs of the team member before leader’s own. This style helps leaders to support his/her followers and help them in achieving their goals in the correct process.
The first attribute from the six attributes of Servant Leadership style is the putting the people or the team or the employees first (Rightmire, and Gershon, 2020). Good leaders have an understanding of the fact that human resource is much more than a resource which will harm the business organizations when exploited. It is important to show that the employees of a company are treated humanely and respectfully. Thus by giving importance to the need and requirements of an individual employee will support them to reduce their fear of uncertainty like in the recent case of COVID-19 and Brexit. Respect is shown by giving time to understand their fear in accordance to their lives or their jobs and providing employees with respective support so that they can work without any fear and reach their potentials.
The second attribute is the Laser- Focus on Purpose which means a good leader should be focused in centre and front. A good leader should have the understanding of its business existence and changes it make on the world (Van Rossum et al., 2016). The focus of leaders should be on the reason of using resources on certain activities or else important resources will be consumed on unessential activities. In the present COVID-19 situation the most effected and focus required resource is the human resource i.e. employees. It is important for leaders to change their working condition in order to save and utilize the full potential of their human resources.
Next is the narrowing of the gap between leaders and employees. A study on the UK executives and medium earing employees showed a huge gap which is greater than in US. This type of leadership style currently followed by UK should be changed so that the gap can be narrowed (Rich, 2016). Narrowing the gap between employee and employer will increase the confidence of the employees to share their views, concerns and fear with the employer. Thus the employer takes necessary steps to resolve those issues for example implementation of work for home which allows the employees to stay in the security of their home while working for the company during the pandemic situation.
The fourth is leading by example i.e. leaders act as an example for their followers with proper communications and explanation of issues and choices with transparency at each level. Employees pay a close attention to their leader’s words along with their behaviours and acting. Servant Leaders are empathetic towards their employees with words and actions. This strategy is better explained by steps taken by John Holland- Kaye (will be discussed below) which motivated others mangers to do so and thus Heathrow airport will not have to lay off their lower level employees due to the costing crisis developed during the pandemic situation.
Thus the fifth attribute is empathetic with the help of which good leaders care for their employees even being under huge pressure. The present crisis has caused excessive pressure from shareholders, finances and suppliers on the leaders still a good leader take time and actions to help their employees and customers.
The sixth attribute is being calm and decisive which creates stability within the organization and its functions (Quinn, and Quinn, 2016). A good leader is like an eagle that is confident in his decisions and calm rather than being like a pigeon that flaps its wings in every small critical situation. Confident and calm decisions help in gaining confidence of employees on their leaders and thus increasing their productivity.
Servant leadership model have been proven to show organizational benefits and impact the employees of the organization positively in the toughest of situations like the present crisis of COVID- 19 and Brexit. Paladin (2020) in an article of Forbes suggested that organizations should provide their employees with autonomy and supportive environment to help them perform effectively in the present pandemic situation. Servant leadership style helps in smooth transition of business operations and employee’s transition in a turbulent environment. Following the strategy of servant leadership the CEO of Heathrow airport John Holland- Kaye decided on forgoing his salary for three months so as to support their employees and prevent the lay- off (Brownlee, 2020). Similarly Ian Grabiner the Chief executive officer of Arcadia has decided on no salary or benefits till further notice. All these actions are the attributes of a servant leadership style where leaders give priority to their employees than themselves and put their needs at first (Conti, and Conti, 2020). Uber Eats a fast food company has implemented a strategy to be empathetic and care about their customers and employees safety by asking to leave ordered food at the door so as to avoid ant contact (Deloitte, 2020a). Similar strategies are implemented by airline companies where customers are asked for their ways of decontaminations. Restaurants have implemented the application of hand sanitizing of their staffs in front of the customers so as to give assurance of safe and sanitized food.
Concept and Models of Change
Change can be explained as the organizational movement from one affair state to another. Change is associated with the environmental change of the organizational operations. It is also associated with the technological, methods and strategies of an organization. Thus a change in the organizational function mainly affects full large- scale transformation of the whole organization. Mainly organizations uses change management to cause disruption in their operation in order to initiate strategical changes to increase their profitability and fulfil the requirements of the changing customers (Betancourt et al., 2017). However present uncertainty situations have led to the worldwide organizational change which is causing worldwide disruptions and loss of organizational resources. In order to successfully operate the change management models leaders of organizations play an important part. Various models of change managements are Lewin’s Change management model, Kübler- Ross five stage change management model, the McKinsey 7- S model, Bridges’ transition model and others (Binci, Cerruti, and Braganza, 2016). This essay will discuss Kübler- Ross five stage change management model and McKinsey 7- S model as they are related to employee management and resource management.
Kübler- Ross Five Stage Change Management
This model of change management is 100% employee oriented and deals with the development of employees and their productivity. The present crisis of COVID- 19 mainly affected the human resource of the organization by inflecting fear and dissatisfaction in employees. This five stage model was developed by Elisabeth Kübler-Ross a psychiatrist who understood the importance of employee emotion in the productivity of an organization. This five stage strategy helps leaders to understand the reactions and emotions of their employees during any uncertainty change and can show empathy towards them. The five stages are Denial, Anger, Bargaining, Depression and Acceptance (Guerrero, Teng-Calleja, and Hechanova, 2018). The order to these stages does not play an importance as employees can behave in random order or can repeat certain stages too. Various changes strategies taken by the organizations in order to reduce their losses due to the COVID- 19 lockdown may cause the employees of the organization to go through these five stages. Thus it is essential for the leaders or the mangers of the organization to prepare them with the help of Kübler-Ross explanation of change management.
The first stage deals with the denial of employees towards changes in the business environment and it the most important for any good leader or managers to guide their employees through the full process of denial. This stage is a short-lived stage in which information about the various changes of strategical planning to deal with the uncertainty is given to the employees gradually in order to prevent any kind of rebel. It is important to monitor and figure out if the employees are at denial with the changes so that the communication with them will be open with slow transition of the change. The warning of COVID-19 virus by WHO was not taken seriously as the decision of lockdown was not followed by most of the companies or countries at the initial stages. Thus due to this denial the virus spread like a wild fire and created a pandemic situation. Thus it is essential for leaders to take strict decisions and implement specific rules so that employees come out of the denial stage and understand that the change is inevitable.
Next it is observed that the stage of denial is often followed by the stage of fear in employees which lead towards the anger. Good and efficient leaders or managers need to prepare for such cases of anger as this stage will come up soon or later. Thus the leaders should understand that anger of employees is an act which is natural for any human being and planning about this stage should be done beforehand. Change causes employees to shift from safe zone to a defensive position causing them to lash out understandable anger. The increased rate of deaths due to novel corona virus induced a sense of fear in the global population along with the fear of losing jobs and food scarcity which led the population to burst out in anger. For example the Amazon employees working in New York warehouse went into strike due to layoff of these workers and safety measures taken by the company (BBC, 2020). This stage can be dealt with good communication and support given to the employees in best way to eliminate anger in employees while taking good care of them.
The next stage is the bargaining stage where employees bargain against the change so that most of the change is averted (Sagnak, 2016). Thus it is important for any manager or leader to be firm at their decision as it is important for the development of the organization but still listen to their employees and convince them otherwise. The stage of bargaining is done by employees through feedbacks and conversations with the spread of believe in other teams that the change is unnecessary. It is important for the managers to fully follow the change as it can lead into inaccuracy and fail of the organization in long period.
The next stage is the depression stage in employees which can lead to the loss of productivity for organization. Depression caused due to change can affect the productivity of the organization and fail of the strategical plan for change predictions. Thus managers or leaders should implement the strategy of rewards or interesting activities so as to ease the depression stage of their employees. However it is observed that a change cannot cause a full-blown depression but a minor dip in the mood of employees can affect the production of an organization adversely. Thus it is important for organizational leaders and managers to keep their employees spirit up by providing every support i.e. financial or emotional so that they can come over of their depression.
The final stage is the acceptance stage where employees accept the change and show their full support and increased productivity in organizational functions. Thus the managers and leaders of an organization should full celebrate the acceptance of the change with their employees by rewards programs or team promotions. It is also observed that this stage comes with the generations of new goals and productivity level in employees.
In the present uncertainty environment due to the acceptance of Brexit and the lockdown for the prevention of novel coronavirus contaminations employees of organizations have been the most are affected by specific changes. Some organizations had to lay off an amount or employees while other had to cut down their salaries. Dissatisfaction and anger in employees are common in this situation. Thus it is important for managers and leaders to follow this change management model in order to increase the production of their most important resource i.e. human resource (van Dierendonck, and Sousa, 2016). This model mainly focuses on employees fear, needs and their feeling which most of the organizational employees go through during a change. Thus having an understanding about the mental state of their employees organizations and their leaders can eliminate barriers caused by Brexit and COVID- 19 in their business functioning.
McKinsey 7- S Change Management Model
This model of change management is the most accepted and long lasting change management model which is accepted by most of the organizations. This model helps organizations to form a proper management system for the specific changes that need to be applied in the business operations in order to overcome uncertainty. With the help of 7- S model of McKinsey companies create a change approach which work as a united change for business operations. The 7- S’s of McKinsey are Strategy, Structure, System, Shared values, Style, Staff and Skills (Galli, Kaviani, and Margulis, 2017). It is important for managers or leaders to form a strategy that will support the organization in change and gain competitive advantages. An understanding about the present situation, the objectives, the competitive advantages and strategies to gain those is important for a leader or manager to have. Structure of the organization is also important to understand as it is tangible in comparison to the strategies (Giovanita, and Mangundjaya, 2017). The third S helps in understanding the operational system of the organization along with the official and unofficial process, rules and the process of tracking them. The next is the recording and analysing of the shared official and organizational values. It is often observed that culture is irrelevant to the changes in the managerial level however act as a powerful tool in keeping the work force together and help them to adapt the changes more easily. The next S helps in understanding the leadership style of a leader in order to implement the organizational change successfully (Sinaga et al., 2018). The last two S’s of McKinsey 7- S model helps in understanding the employees and their skills. Staff helps in giving the exact reflection of employees working under a leader and the presence of any gap in the required positions. While Skills helps in understanding the various skills of their employees perceived by the organization and its customers.
It is important for a leader implementing the 7- S model to keep in mind that all the elements of 7 –S support each other in order to develop an effective strategical change. This method helps the leader to have a complete focus on the important areas that are influenced while a changing organizational environment along with spotting out the organizational weakness.
The founder of Day One Ventures and one of its partners Masha Drokova, believes that in the present crisis situations companies should apply change management at a fast rate as slow change will be more damaging than fast changes (Deloitte, 2020b). Additional Drokova also believes in flexible changes and effective communication with stakeholders, teams and community. Chris Hufnagel of footwear brand Merrell adopted the approach based on people and team. Hufnegel believes in its workforce and provides full support and resources to their employees (Zaczkiewicz, and Zaczkiewicz, 2020). Similarly Topshop a part of Arcadia Group have decide in reducing the salaries of their higher managers and leaders by 50 % so as to prevent the layoff of working due the havoc caused by the novel coronavirus (Conti, and Conti, 2020). The company believes in safeguarding the job of lower officers more crucial in these crisis situations.
The present crisis on the global world due to COVID-19 and Brexit led to development of change management by most of the working business organizations. In order to apply these changes it is essential for leaders to study the market on a continuous basis so that as to have an understanding of the changing crisis month by month. Additional it is also essential that leaders should have complete focus on their employees and human resource is the most effect resource in the crisis situation. The focus should also be on the competitors, which will help leaders to study the strategies they are adopting and their planning features. This will help leaders to protect the organization’s share in the market.
Lockdown implemented on the world due to novel coronavirus and Brexit has forced the organizations to go into force hibernation which resulted in damaged economy of the world along with most of the organizations. Thus business organizations operating in this critical and uncertain environment need effective leaders with their leadership qualities. These leaders will help in the formation of change management models in such a way that the organization will reduce its losses without the expense of their employee’s needs and satisfaction. Servant Leadership is one of the best leadership styles that managers can implement for the application of change management models. These models will help in understanding of the changes and leadership attributes required for building the new era after the crisis situation is averted.