Individual and Organizational Change Management in Starbucks - Case Study Example

Topic: Managing organisational and individual change Student’s Name: Course Code: Date of Submission: Introduction Change is unavoidable aspect of life. Anything that has life or whose very existence revolves around life is bound to undergo changes. Time change, situations change, weather changes, things change, individuals change and organisations as well change (Sharma 2007). There has been rapid globalisation, liberalisation, privatisation, mergers and acquisitions and the emergence of internet and web based technologies that have changed the way individuals and organisations carry out their objectives. This is a period of terrific change characterised by globalisation, advancements in technology and e-commerce that is eating away global boundaries and accelerating the pace of change (Sharma 2007). Leading individuals and the organisation through change is the most challenging and critical task of today’s manager. This essay will review individual and organisational change management using known management models and go forth in showing how personal change experiences can contribute to effective change management in organisations. Personal experiences of change as analysed using Lewin’s change management model Being brought up in a Christian background and went through schools that were exclusively Christian dominated except for university level where there were some bits of other religions, my promotion as a general manager was to an organisation that was based in a Muslim based region and the top management and most of the employees proclaimed the Muslim faith. A few of the junior staff were Christians. Because of the predominant religion of the region, the same was extended to the organisation. Dates relating to Islam were official within the organisation and were observed. And when it came to welfare issues such provision of lunch for instance, this was served according to Islamic traditions and beliefs, a case in point is where food was served in a single plate to be shared by a group of employees. This made the other non-Muslim employees uncomfortable and because of their small number and their unfavourable position in the food chain as far the management of the organisation was concerned, they couldn’t air these grievances. I realized, though silent, there existed a form antagonistic rivalry between the Muslims and the Christians. This actually stalled projects within the organisation right from the discussion of policy because of extended arguments simply because of this felt sense of mistreatment. Team work was also hampered due to this as well. There was potential in these employees that were not being exploited fully. Changing the status quo was necessary in order to balance the needs of both Muslims and Christians within the organisation. This is in accordance with the views of both Cameron and Green (2012) that leadership is a balancing act. The employment of Kurt Lewin’s model of change was necessary to effect the required change in the organisation in order the eliminate stand offs which usually came up during project implementation. The model consists of three stages. In introducing change there was need to do the unfreezing first which entailed preparing the organisation to accept that change was necessary to accommodate the believes of others within the organisation. Certain individuals were feeling uncomfortable about the imposing of others’ culture to them (Swansburg and Swansburg 2002). First explanations were made to the organisation that a section of the workforce was seeing being part of a culture native to a different faith was not going down well with them and then providing psychological safety in order for the others to welcome the proposed change (Burnes 2004a). The equilibrium that existed before had to be altered, in other words, there had to be destabilisation, what is referred to as to unfreeze (Burnes 2004b). This was done by explaining to the rest of the workforce that irrespective of the few number of Christians within the organisation, it was prudent and beneficial to the organisation as a whole to accommodate their views by including their Christian dates into the organisation’s calendar and allow them also to be exempted from work and go to worship. And also sparing them the culture of sharing a single plate during lunch breaks so that all the employees can co-exist harmoniously. This will ensure unquestioned cooperation among all the employees during project implementation. After making known the existing problem, a variety of solutions are put forward in what is referred to as change or moving stage (Morrison 2014; Burnes 2004a). In this stage, the workers at the organisation’s cafeteria and the cateress were informed of the proposed changes in serving each person individually and some roles were reorganised to make sure that whenever the workers are attending to their spiritual nourishments, the work still continues. Although a few of those who work in the kitchen saw this as added responsibilities, but with continued practising the routine, they came to appreciate the change. All the members were involved in this change and there was continued communication of the same, emphasising the bigger picture of the benefits of the proposed change. Reinforcement of the new behaviours is necessary (Burnes 2004a). In terms of welfare in the organisation, continued communication and day to day monitoring of the same ensured that the new behaviours became part and parcel of the culture. Although initially there was some resistance, but continuously practising the same brought a lot of harmony across all faiths proclaimed by the employees. In the aspect of allowing the Christians to also have a break and dedicate some of their time to their supernatural one, there were discussions with the board to allocate them a place they can call a church. This came to fruition although the initial resistance from the community. This was in line with ensuring that the new behaviours that were introduced into the workforce will not be soon swept under the carpet. This made sure that the new learned behaviours were safe from regression. And this is the third and the last stage of Lewin’s model of change management otherwise known as refreezing (Burnes 2004b). This has to do with making the new behaviours permanent within the organisation and safe from being forgotten. The new set of behaviours are integrated and stabilised as part of the whole system (Swansburg and Swansburg 2002). Negative forces trying to weigh down the changes are neutralised and the forces acting to support the new changes are reinforced. In that organisation at first, the local employees and the members of the community who were Muslims thought that the changes that were being proposed were actually trying to make Christianity have its way into the community. However, with time after seeing the advantages of the same, not mentioning the increased performance of the organisation, the co-existence and peace that existed between the Muslims and the Christians among others, the whole community came to accept the goodness inherent in diversity. In the new behaviours, everyone was supported and informed and success was celebrated as a group. The changes formed part of the culture of the organisation and the feedback systems that were in place ensured day to day reporting of the success of the new changes. Organisational change as analysed using Kotter’s eight-step model Starbucks, the world’s leading retailer, roaster and brand of speciality coffee, was undergoing problems in the year 2008. Faced with a struggling economy and increased competition from cheaper rivals, the net income of Starbucks fell by 28% in the first three months of 2008 compared to that of 2007 (Martyn 2010). The then CEO and president of Starbucks noted that the company had digressed from its culture of having the customer at the centre stage of their products, the company had lost touch with the requirements of customers hence the need to ignite the emotional attachment with the customers, that is emphasising on customer intimacy, making customized coffee for the various customers (Chae-Uan 2013; Robbins and Judge 2013). Starbucks was in for an organisational change to bring it back to its glory days. The corporation’s transition to a profit making organisation again can be analysed or explained using Kotter’s eight step change model which breaks down organisational change into eight steps (Sabri, Gupta and Beitler 2007). The first step of the model being establishing a sense of urgency, that is bringing to the attention of the top management why the change is important and urgent (Sabri, Gupta and Beitler 2007; Cameron and Green 2012). If the level of urgency is high the more likely that the proposed change will receive support from all quarters within the organisation. Within Starbucks the CEO, Howard Schultz did have to do much to convince the rest of the board members and the employees that changing was needed almost immediately since in the year 2008, losses were being experienced coupled with the cancellation of planned store openings and closure of stores (Robbins and Judge 2013). That urgency to institute change was staring in the face of everybody. Because the livelihoods of employees and partners relied on Starbucks making profit, it was easy for everybody to agree with the CEO and commit to change. In the second step, there is the creation of the guiding coalition (Sabri, Gupta and Beitler 2007). In this step, the CEO selects a team with which he will see the change through. There was a leadership conference for 8,000 Starbucks store managers and 2,000 partners where the transformational agenda was introduced as a tool of reclaiming Starbucks’s lost glory by delivering measurable results (Schultz 2011). Before the conference, every manager took part in five hours of community service to kick start their renewed commitment to change to customer service by doing service. This was the guiding coalition that the Starbucks CEO built to help effect the planned change. The third step of the change model requires one to develop a vision and strategy for the planned change (Sabri, Gupta and Beitler 2007). In the Starbucks, the strategy that was formulated aimed at achieving the formulated seven goals of making Starbucks the undisputed coffee maker, ignite emotional attachment with the customers, be a leader in ethical sourcing and environmental impact, institute growth platforms for Starbucks coffee and also to deliver a sustainable economic model. The strategy being retraining the 135,000 baristas by half a day as all the stores were closed half a day for the same, hosting leadership conference for the 8,000 store managers and 2,000 partners (Chae-Uan 2013). Quality control was emphasized as the main mission. In the fourth step there is communicating the vision and the strategy for the specific change (Sabri, Gupta and Beitler 2007). In Starbucks Corporation the new behaviours that were required instilled in employees to effect the planned change was communicated to the rest of the employees. First the change agenda was communicated to store managers and partners at a leadership conference. Baristas were required to pour from a spoon every glass of espresso like honey in order to preserve its flavour, the espresso machines that obstructed the customers’ view were replaced with lower profile machines that allowed baristas to look directly at the customers while making their coffee and the making of several drinks at once was discouraged and the making of each drink for each customer slowly was encouraged (Robbins and Judge 2013) that is, “one cup of coffee, one customer, one barista at a time” (Martyn 2010). This is in line with establishing customer confidence in the Starbucks coffee. The fifth step is empowering the employees for action where obstacles to implementation are eliminated and the workers allowed to experiment (Sabri, Gupta and Beitler 2007; Cameron and Green 2012). In Starbucks Corporation there was the retraining of the 135,000 workers in order to make them ready and prepared to effect the proposed change. The stores managers were also trained on new leadership skills through leadership conferences (Chae-Uan 2013). In the sixth step there is the generation of short term wins where the visible improvements as a result of the effected change are made known and reinforced (Sabri, Gupta and Beitler 2007; Cameron and Green 2012). After implementing the proposed changes, Starbucks Corporation recorded a growth in total sales by 4% and the company’s margins were up by 8.5% after just a year. The company’s earnings rose from $64.3 million earned in 2008 to $241.5 million in 2009. In the first year of the change there was also the introduction of VIA instant coffee which raked in $100 million sales in the first year alone enabling the corporation to open more points of distribution for the company (Martyn 2010). This information was shared to all players in the Starbucks Corporation and the efforts were applauded by the CEO in which all employees and stakeholders were commended. In the seventh step has to do with consolidating the gains and produce more change (Sabri, Gupta and Beitler 2007; Cameron and Green 2012). In the Starbucks Corporation after the instant hit in raking in $100 million in sales of the VIA instant coffee, the Corporation was willing to produce more change by opening up more than 30,000 new distribution points (Martyn 2010). This is in line with trying to produce more change. There was also the setting up of social network, www.mystarbucksidea.com, which enabled employees to interact with customers in collecting their views for continued improvement (Martyn 2010). In the last step of the model, there is the anchoring of the new changes in the system culture by making sure that the new behaviours are leading to corporate success (Sabri, Gupta and Beitler 2007; Cameron and Green 2012). Starbucks instilled in its employees the importance of customer satisfaction and through the social network there was continued interaction between employees and customers, hence this aspect of customer intimacy and loyalty became a culture (Robbins and Judge 2013). How these experiences can contribute to understanding of effective management of change in organisations From the above experiences, few guidelines emerged as to how to effectively manage change within an organisation. The first one being that any manager in any organisation has to anticipate change as this provides the formal and systemic methods of understanding the external environment. It provides extra information in order to institute change measures early in advance instead of waiting to take care of damage control (Talloo 2008). The second guideline that can be noted from the experiences is that in order to effectively institute change in an organisation, one has to create awareness as to why the change is needed so as to instill in the workforce some form of psychological safety (Talloo 2008). This is in order for the proposed change to be accepted and internalised within the organisation. The one proposing the change or in charge of the change process has to explain the ‘why’ of the change. The advantages that the change has to bring need to be exposed to all the stakeholders. The other important aspect relevant to managing change in an organisation is the creation of desire in the agents of change mostly being the employers. To inculcate in the employees the culture that change is part of life and necessary for any organisation to have a competitive advantage in the global arena. The other aspect of change worth noting from the experiences is that the change has to rely on the needs of the customer so as to ensure customer loyalty. Products or services that are unique and customized to be relevant to the current needs of the consumers need to be produced and hence the need to institute either individual or organisational change or both. The other important aspect is that there should be knowledge on how to implement the change as well as the knowledge to tell that change is necessary (Talloo 2008). The change to be effective in any organisation there should be reinforcement of the same in that the negative effects that tend to opposed the change are eliminated and those positive forces that tend to support the proposed changes are reinforced. The reinforcement is necessary so as to sustain the change, that is, to make sure that the change becomes part and parcel of the system as a whole (Talloo 2008). There is also need to formulate the strategy for the proposed change and accompanying the structure there has to be the actions that tend to bring about the proposed change. And at the same time the employees need to incorporated in the process so as to own the process of change and accept it as their own (Martyn 2010). Conclusion In conclusion, organisations are always in the midst different types of change. Change is inevitable. Organisations need to place and prepare themselves for change because it is an aspect of life that cannot be avoided. In order to achieve the desired change there is need to destabilise the existing structures that is to change systems, structures and policies that don’t align with the vision, hire, promote or develop employees within the organisation who can implement the required change and reinforce the process of change by the introduction of more change and making the changing to form part and parcel of the culture of the organisation. References Burnes, B 2004a, ‘Kurt Lewin and the planned approach to change: A Re-appraissal’, Journal of Management Studies, vol. 41, no. 6, pp.977-1002. Burnes, B 2004b, ‘Kurt Lewin and complexity theories: back to the future’, Journal of Change Management, vol. 4, no. 4, pp. 309-325. Cameron, E and Green, M (ed.) 2012, Making sense of change management: A complete guide to the models, tools and techniques of organisational change, Kogan page Limited, London. Chae-Uan, S 2013, Copy of organisational change at starbucks, viewed 30th April 2015, https://prezi.com/librwkpa1yn6/copy-of-organizational-change-at-starbucks/ Martyn, M 2010, How Starbucks managed rapid change and large scale, viewed 30th April 2015, http://www.qualitydigest.com/inside/twitter-ed/how-starbucks-managed-rapid-change- large-scale.html# Robbins, R S and Judge, T A 2013, Organisational behaviour, 15th edition, Pearson Education Inc. USA. Sabri, E H, Gupta, A P and Beitler, M A 2007, Purchase order management best practices: Process, technology and change management, J. Ross Publishing Inc., Fort Lauderdale. Sharma, R R 2007, Change management, Tata McGraw Hill, New Delhi. Schultz, H 2011, Onward: How Starbucks fought for its life without losing its soul, Rodale Press, New York. Swansburg, R C and Swansburg, R J 2002, Introduction to management and leadership for nurse managers, 3rd edition, Jones and Bartlett Publishers, Sudbury, MA. Talloo, T J 2008, Business organisation and management, Tata McGraw-Hill Publishing Company, New Delhi. Read More