Critical Evaluation of a Role as a Leader - Howard Schultz - Case Study Example

Critical evaluation of a role as a Leader Contents Contents 2 Introduction 3 Contextual discussion of the leader 4 Contribution of leadership example 8 High performance 8 High achievement culture 11 Recommendations 12 Conclusion 14 References 16 Introduction The study highlights the concept of leadership and its presence in real world organization. Leadership comprises of two essential aspects such as follower and performance. This is a process to influence individuals in order to achieve common goals or objectives. There are activities undertaken by a leader so as to align team members with organizational goals and objectives. The key components of leadership are it is an effective process; it greatly influences people, enhances group work and encompasses goal attainment. Leadership is conceptualized on basis of skills, behaviour, transformational characteristics and personality. Leaders mainly represent importance and power but they even need to possess ethical responsibility towards their followers. Ethics enable leaders to distinguish right from wrong. This in turn is beneficial for an organization in terms of increased productivity and efficiency. In this study, focus shall be on a specific leader, their respective skills or traits. To be more precise this study would analyze importance of a leader in context of increasing organizational efficiency. Leadership theories will be outlined in order to justify characteristics of chosen leader. The study would also encompass contribution of the leader towards developing high achieving and high performance workplace culture. Howard Schultz has been chosen for this specific study. He is an American businessman and was born in 1953. This leader has set forth his image as CEO and Chairman of Starbucks. Howard Schultz had joined Starbucks as Director of Marketing, and in later time period on basis of his achievements gained the position of Chief Executive Officer. As a leader he has contributed significantly towards growth of Starbucks. The company in current scenario is a renowned organization supplying coffee to target customers. There were many critical circumstances in the company which was efficiently handled by Howard Schultz. Leadership and management are two distinguishable concepts. Management is about ordering people to perform tasks appropriately so as to accomplish corporate objectives. On the contrary, leadership denotes influencing people to perform tasks and building strong relationships. This study would portray skills or abilities of chosen leader and its importance on organizational productivity or performance level. Contextual discussion of the leader Leadership is closely knitted with skill development and enhancing knowledge base. There are certain skills which should be possessed by a leader. Skills approach is common for all leaders. These skills are necessary in order to facilitate personal development and influence team members to perform well. Howard Schultz, Chairman and CEO of Starbucks, over the years have tried to encourage team work within the organizational system. The company has been able to gain competitive advantage with the support of team leaders and followers. Howard Schultz as a leader has always undertaken tasks in collaboration with employees. Skills approach of leadership states that competencies or knowledge should be utilized properly so as to address common objectives or goals (DuBrin, 2013). Abilities or skills might be learned by a leader in due course of time. Three - skill approach is a basic theoretical framework of leadership. There are three different skills encompassed within this approach such as technical skills, human skills and conceptual skills. Technical skills are associated with knowledge or competencies required for a specific job position. Leaders have to possess these skills to lead a team and accomplish set objectives. Howard Schultz had previously worked with Xerox Corporation as a sales executive. He was well aware about strategies used in sales and marketing operations. Howard Schultz was also appointed as the general manager for Hammarplast, which was a coffee maker manufacturer in Sweden. Starbucks coffee company was an important client of Hammarplast and Howard Schultz was greatly influenced by their knowledge of coffee. He joined this company as Director of Marketing possessing sufficient technical knowledge essential for smooth execution of business operations. Human or interpersonal skills can be categorized into three parts like exhibiting emotional intelligence, being socially perceptive and managing efficiently interpersonal conflict (Northouse, 2013). Howard Schultz was socially perceptive since he believed in participative leadership approach to motivate employee base. When Starbucks had encountered crisis situation, in terms of declining sales margins due to reduced consumption of coffee, Howard Schultz continuously motivated employees to perform well. There is training and development program organized by the leader, so as to resolve any issues witnessed by team members. Howard Schultz had an emotional understanding with all employees. He was more inclined towards open discussion forum where team members can put across their grievances. Interpersonal conflict was managed by the leader through encouraging cross-cultural or cross-departmental practices. On the other hand, Howard Schultz also formulated a weekly meeting where team members can come together and resolve any interpersonal conflict. Conceptual skills of the framework comprises of three main aspects – problem solving capability, creating a vision and strategic planning expertise (Armstrong and Stephens, 2005). Howard Schultz definitely possessed strategic planning expertise because he designed a supply chain network, whereby least time or costs shall be involved in the entire process. The best coffee beans are purchased by the company in order to maintain superior quality of products and services. Strategic leaders should possess ability to learn, managerial wisdom and adaptability capacity towards any particular scenario. National leadership award was given to Howard Schultz in 1999 and he was even awarded as Businessperson of the Year in 2011. These recognition and awards clearly state that Howard Schultz was actively indulged in productive learning process. This supported him to enhance his skill set and acquire necessary knowledge for increased performance level. Leaders are solely responsible for providing training to followers so as to ensure overall productivity of team. There are two types of learning cycle – Kolb learning cycle, and Honey & Mumford learning cycle. Kolb learning cycle can be associated with operational procedure adapted by Howard Schultz. This cycle encompasses four important stages like gaining concrete experience, reflective observation, abstract conceptualization and active experimentation. The cycle has been further elaborated in figure 1. Figure 1: Kolb Learning Cycle (Source: Rayner and Adam-Smith, 2005) Experience gained by Howard Schultz is transmitted to team members. He even utilizes this experience while designing training sessions. Reflective observation mainly refers to evaluating employee performance. In conceptualization phase, team members are perceived as having sufficient knowledge about organization. The last stage of experimentation deals with analyzing employee effectiveness in context of implementing new business strategies. Howard Schultz is focused on performance enhancement through incorporating essential skills in day-to-day activities. This leader has always been aligned with organizational objectives. There are three main factors which should be present within any leader. They are known as IQ, EQ and LQ. IQ represents cognitive ability. This ability is linked with generating ideas, solving problems and understanding critical information (Rickards and Clark, 2006). On the other hand, EQ stands for both ability and awareness. It is about effectively managing own emotions along with that of other team members. EQ level was significantly strong in Howard Schultz. He was able to understand emotions of team members and undertake appropriate actions. LQ determines learning ability of a leader. A leader needs to continuously learn from external environment in order to develop a productive workforce. This form of learning also takes place from experience and is later applied in current scenario. Transformational experience in Starbucks had supported Howard Schultz to appropriately analyze external business conditions and implement proactive strategies for long-term growth. Strength is not the only aspect in a leadership role but major area of concern is learning ability of a leader. Team members are influenced by a leader in terms of encouraging experiential learning process. Howard Schultz can be stated as an effective leader because he has always supported the concept of experiential learning where team members are given flexibility to learn from their experiences. Starbucks has proved itself to be a learning organization in which new advancements in environment are easily included (Yuki, 2010). The company’s growth over the years portray success story of Howard Schultz. Talent, skills and knowledge were the three aspects which constituted leadership characteristics of Howard Schultz. As a sales person he was well aware about sales techniques needed to convince customers. He did possess technical expertise but along with that as a leader he had good communication skills. Good communication skills enabled Howard Schultz to align team members with common business objectives. He was capable enough to analyze external business conditions and frame innovative strategies accordingly. Starbucks in current scenario ranks higher in comparison to Costa Coffee. This competitive advantage is acquired with wide base of knowledge and experience of Howard Schultz. Collaborative workplace practice is beneficial for the company since it facilitates contribution of innovative ideas or opinions (Adair, 2005). It is an example of leadership because transformational characteristic prevalent in a leader was noticeable in Howard Schultz. He fulfilled all objectives of a leader by retrieving Starbucks from crisis situation to a position where the company secures $14.89 billion as revenue margin. Contribution of leadership example Howard Schultz, the CEO of Starbucks is mainly following participative leadership style for overall growth and development of Starbucks. His leadership style and technique contribute a lot in enhancing the performance and culture of the organization. High performance Howard Schultz has implemented many rules and regulations for motivating the employees of Starbucks. The transformational leadership approach of Howard Schultz plays a vital role in increasing employees’ contributions. This CEO has implemented various organizational systems which help to know individual employee in more detailed way. Based on this knowledge the company is able to concentrate and fulfil different needs and requirements of its employees. This influences the employees to increase their dedication and commitments toward the organization. As a result of this there performance level increases. As a leader Howard Schultz motivates and challenges its organizational members to create and develop new business ideas. To prove themselves the employees are putting more effort to improve their work process for achieving their goals and targets. This stimulation helps the employees to enhance their work performance. For innovating or developing new business ideas the organizational members need to concentrate more on their works. It facilitates them to understand their work in detailed way for which they are able to rectify their errors and produce high quality work. To a large extent Howard Schultz has become successful in motivating and inspiring its followers. He has designed target based jobs for its employees. When an employee is able to fulfil its target then he gets both monetary and non monetary rewards. This influences the employee to improve his performance for achieving the reward and stand separate from the crowd. Howard Schultz has tried to establish himself as a role model for its organizational members. To some extent he has become successful but in the long run it he has not been able to establish himself as a role model. The CEO of Starbuck has done different types of commitments to its employees. He is putting huge efforts to fulfil those commitments for motivating its employees to put more dedication in their work. Howard Schultz has established decentralized organizational structure which helps its organizational members to take decisions for improving their works. Howard Schultz has given high responsibility to its organizational members for increasing their contribution in growth and success of its business. This influences the employees to produce high quality of services for proving themselves as responsible organizational member. Howard Schultz has implemented High Performance Work Organization (HPWO) model to increase the performance level of its organizational members. With the help of this model the Schultz focuses on five important factors which contribute a lot in employee’s performance level. As a leader Howard Schultz has set an expectation level from all of its employees. As per the expectation level they perform their works which help them to achieve success. This factor provides the advantage of attracting the employees. The internal environment of Starbucks is set up in such a way which helps the employees to learn many new things from the organization. This benefits them to improve their performance level. The learning climate of the organization facilitates the company to select best employees among all the organizational members. The CEO of Starbucks has established strong communication system with the help of advanced technologies (Burke and Cooper, 2006). This facilitated the company to develop its employees by providing them the facility to learn new technologies and enhance the communication level. With the help of these facilities employees become capable of improving their work quality and performance level. Howard Schultz has also implemented various training programs for enhancing the skills and capabilities of its organizational members. With the help of these training and development programs, employees of Starbucks clear their doubts and learn more about business process which contribute a lot in delivering high quality performance. Individuals having high performance are always demanded by different companies. So to retain its employees the CEO of Starbucks has implemented many policies (Bennett and Wise, 2002). As per his instructions the company provides various attracting benefits and facilities to its top performing employees, which influences them to stay in Starbucks and to deliver good performance. High achievement culture Howard Schultz has set up its organizational culture of Starbuck in such a way which influences its employees to achieve high performance level. Achievements are always positive. When an employee of Starbucks achieves its target or goals then other employees feels motivate and encouraged by this and they put more effort to do their works. Howard Schultz, as a leader supports this and puts huge effort in maintaining high achievement culture within the company. He had implemented Belbin’s team role model for establishing high achievement culture (DuBrin, 2011). As a leader of this company, Schultz supports team worker aspect of this model to increase the performance level and to set up high achievement culture. For following this model the he influenced and motivated its organizational members to become more co-operative, diplomatic, caring, sensitive and good listeners. All of these things helped the employees to improve its performance level. The leader helped the employees to enhance their awareness about the business process. He implemented team work which enhanced the level of trust among the employees (Adair, 2005). This benefited them to deliver high quality of works. Howard Schultz has established different criteria which help Starbucks to improve the performance level of its employees. The company only recruits highly qualified people in the company who can understand the business process easily. In case of recruiting experienced people the organization only focuses on the individuals who have relevant experience in this field. Before recruiting any person Starbucks do a detailed analysis of that person’s aptitude level, versatility, communication skills etc. Based on these analyses the company recruits its employees. The leader sets different goals and targets for the employees as per their skills and capabilities (Adair, 2003). Howard Schultz believe that employees having good work experience and strong academic background can understand the goals and objectives of the organization in a better way which makes them capable to achieve their work easily. Recommendations Organizational performance is strong associated with leadership approach. An organization can perform well only when organizational leader is capable enough to analyze business scenarios and undertake required actions. Leadership style and attributes usually changes from one organization to another. Transformational and transactional leadership approaches are adapted by many organizations. Howard Schultz implemented transformational leadership approach in the organizational system. He was more concerned towards motivating team members and increasing their level of job performance. However his leadership approach could have been improved in order to enhance organizational performance. Howard Schultz followed transformational leadership approach to ensure that highly motivated employees are available. This approach comprises of four main aspects such as individualized consideration, intellectual simulation, inspirational motivation and idealized influence. Howard Schultz was not able to foster idealized influence. Employees could not be influenced to a great extent in terms of completely following orders of leader. Team members adopted their own techniques at times in order to accomplish set goals. Howard Schultz was not able to portray himself as the role model of the company. During his job tenure the company was surrounded with a lot of managerial issues and this affected business operations of Starbucks. Team members were reluctant to undertake responsibilities of different departments. Cross-cultural management system was not productive in this organization. Firm’s performance could have been improved if the leader took steps to initiate job rotation. This mechanism enables individual belonging to a specific department gain expertise of any other department. Job rotation or job enlargement techniques are beneficial in crisis situations. Team members shall possess wide base of knowledge and skills to improve job performance. Howard Schultz can portray himself as a role model only when he highlights his contribution in complex business situation. He needs to communicate his achievements to all employees. This in turn will influence team members to perform better and set high performance standards. It can be stated that followers consider leader to be a role model only when one is able to efficiently handle a critical situation. Communication skills of a leader need to be strong so as to create long term impact on employees. Organizational performance could have been improved further if the leader emphasized more on experiential learning procedure. A leader has to continuously evaluate potential of team members and then allocate tasks accordingly. This perspective was ignored by Howard Schultz. He was more concerned about collaborative work but gave less importance to learning mechanisms. This resulted into development of a team where certain members possessed high potential and some were not performing well. The chosen leadership example is recommended to encompass continuous learning framework within the system. This mechanism is not only beneficial for leaders but even for employees. It provides a platform whereby knowledge base can be improved and further skills can be developed. Starbucks operate in an intensely competitive business environment. In such environment, transformational leadership approach does not prove to be productive always. It has been observed that greater potential is developed by team members when they are given flexibility to perform individually. Innovative strategies emerge only when employees are given scope to exhibit tasks according to themselves. Laissez faire approach is a productive phenomenon recommended for this leadership example. Howard Schultz had adopted the parental figure of the company. This strategy needs to be eradicated completely in order to increase overall organizational performance. Laissez faire approach denotes that employees will be given flexibility to perform separately and implement their own strategies. The degree of interference of leaders will be comparatively less in this approach. Leaders would not intervene in strategic decision making process. Team members will be solely responsible for success or failure of any particular business strategy. This recommended strategy shall enable Howard Schultz to motivate team members to perform well and achieve set targets. Other recommended strategy is to build necessary skills required for company fit position. The alignment between organizational culture and competencies of a leader is essential. This alignment is indicated as company fit. The chosen leadership example should focus more on current organizational culture rather than applying past experiences. Leader is recommended to analyze well key business factors. These factors shall predict suitability of any business strategy. Conclusion This study outlines wide array of leadership approaches. Leadership is a broad term as it encompasses critical skills or attributes. Leadership approach can be classified into two types like transactional and transformational leadership. Skills or traits of a leader are essential components in context of organizational productivity. These traits usually differ from one individual to another. Leadership traits initiate employee motivation and in turn improve organizational performance. Howard Schultz had been chosen as a leadership example for this particular study. He has set forth high performance standard and has been awarded as the businessperson of the year. Howard Schultz possesses technical expertise to exhibit business operations. These expertises are related to understanding coffee manufacturing process, quality control measures, marketing approach, etc. Over the years, he has transmitted this expertise within team members. Starbucks was not in a stable position few years back but in current scenario the company acquires high percentage of market share. Howard Schultz has contributed magnificently towards such company growth and success. In overall context, he has been able to align business strategies with changing external environmental conditions. Leadership theories clearly portray Howard Schultz to follow transformational leadership approach. He has always followed collaborative workplace practice where team members are encouraged to work together in order to accomplish common goal. Participative leadership style is an effective approach since it enables employees to contribute their innovative ideas. To be more precise, team members are considered as a part of strategic decision making process. On the other hand, actions undertaken by Howard Schultz have also transformed the company into a high performance workplace. In such workplace, team members are highly motivated to perform well and set high performance standards. Distinct team roles and focus on goal achievement has supported organizational transformation. It is recommended that Howard Schultz should incorporate certain changes in its leadership approach. Laissez faire approach would be suitable for the company since it shall provide opportunity to team members for contributing their innovative ideas. As a leader, he needs to continuously evaluate employee performance and deliver required training sessions as and when required. References Adair, J., 2003. Effective Strategic Leadership. Oxford: Pan. 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