Recently, Starbucks instituted organizational change related to a change in management. The long serving Chief Executive Officer (Howard Schultz) handed over his reins to Chief Operating Officer (Kevin Johnson). Howard had been the CEO of the company since 2008 (Trefis Team, 2016). The change in management was necessitated by a change in operational focus. Howard was shifting his effort to the premium segment of the company, including Starbucks Reserve Retail stores and Starbucks Reserve Roasteries. Howard has played a significant role in the success of the company, thereby his effort is important in the other segment, especially at a time when the company is trying to expand this businesses globally.
Kevin Johnson was selected as the best replacement for Howard because he is a veteran of the company. He has also been on the company's board for seven years. Moreover, Kevin has worked hand in hand with Howard in the various initiatives that have positively benefited the company, such as digital and technology platforms.
The premium segment is believed to be the next wave of growth. Therefore, the change in management is a form of positive development for the company. Implementing the change means that the core business will be handled by seasoned head while Howard will drive innovation in the premium segment of the company (Trefis Team, 2016). In the long-term, the premium segment can be a major driver in the company. Many people believed that the change in management was going to work well for the firm. This is because Kevin is well known for his experience in technology. The experience will play a significant role in driving the digital and mobile initiatives. In fact, these are going to be the major growth drivers for the core business. The expertise of Kevin is being put into use in the next growth segment of the firm.
Organizational Change Management Theories
The organizational change management theory that was used during the change in management was the Lewin's change management model. This model is among the most effective and popular models used by organizations. Most organizations prefer to use this method because it makes it easy to understand structured and organizational changes. This theory was created around 1950s by Kurt Lewin (Cummings, Bridgman, & Brown, 2016). Through this theory, organizational change is explained by the changing states of a block of ice.
Due to the use of Lewin's change management model, the change in management in the company was carried out in three stages. The first stage was the unfreeze. During this first stage, the company prepared for the entire change process. Workers had to be prepared through being notified why the change was necessary. The issue of the status quo could only have been broken through this stage. For instance, workers were notified that the change was required to allow Howard focus his attention on the premium segment of the business.
The second stage was the change stage. This is the stage where the actual change in management took place, that is, Kevin replacing Howards as the CEO. This stage takes some time since people have to embrace the changes. Communication is very crucial during this stage since it determines the success of the process (Cummings et al., 2016). The change stage was successfully carried out as a result of good reassurance and leadership. The significance of these aspects is that they helped to steer the entire process in the right direction.
The final stage is the refreeze stage. Once the change is accepted, embraced, and put into place by all employees and the firm becomes stable again. This is the reason why this stage is termed as refreeze. After effectively introducing the new CEO, things went back to normal.
The Process Used
The process used during the change in management was effective, and it had four steps. In the first step, there was the identification of what was to be improved by the change. The management of Starbucks noticed that assigning Howard to head premium segment will improve the operations of the segment as well as that of the entire organization in the long-term. Provision of resources and using data for evaluation was the second step. All infrastructure, software, and equipments required in the change process were provided during this step. Data regarding future performance of the company due to the change in management was analyzed. This was important for measuring milestones and success (Hayes, 2014). The third step was the provision of open and clear line of communication. This step ensures two-way communication structures and transparency. The final step was reviewing, revision, and continuously improving the change process. This step was guided by the notion that change is an ongoing process, therefore, things have to be adjusted throughout the process.
Appropriate Approach That Should Have Been Used
The approach used by the organization was appropriate because, at the end, the change in management was successful. However, the organization could have considered using the Kotter's change management theory. This theory is used and adopted by most organizations in different parts of the world because of its effectiveness. What makes it effective is the step-by-step model that can be easily incorporated and followed (Hornstein, 2015). The primary idea in this approach is to enable workers accept the change and work towards making it successful. It also enables those tasked with performing the change to understand the business through getting deeper insight into how things work. Additionally, the method has eight phases, and each phase focuses on main principle related to the response of workers to change. Adhering to all the phases properly does away with resistance and encourages workers to embrace the change.
The eight phases are increasing urgency, building the team, getting the vision correct, communicating, getting things moving, focusing on short-term goals, trying not to give up, and incorporating change. Increasing urgency helps to motivate workers to move towards the objectives related to change. Once this is done, it is important to have the right people on the change management team. This can be done through selecting a mix of knowledge and skills. Additionally, the correct vision has to be created and communicated clearly and effectively, such as through various channels (Hornstein, 2015). Getting things moving is possible through implementing constructive feedback, removing roadblocks, and getting all the required support. The goal of the organizational change can be divided into small and achievable parts to enable focusing on short-term goals. Success is normally guaranteed with persistence. Finally, apart from managing the change process properly, it has to be made part of the culture of the workplace. This will help in the future when another organizational change is required. All workers will have mastered the entire process and its phases properly, thereby make the process to flow smoothly.
Cummings, S., Bridgman, T., & Brown, K. G. (2016). Unfreezing change as three steps: Rethinking Kurt Lewin's legacy for change management. human relations, 69(1), 33-60.
Hayes, J. (2014). The theory and practice of change management. Palgrave Macmillan.
Hornstein, H. A. (2015). The integration of project management and organizational change management is now a necessity. International Journal of Project Management, 33(2), 291-298.
Trefis Team. (2016). Here' How Starbucks Will Be Impacted By A Change In Management. Retrieved from https://www.forbes.com/sites/greatspeculations/2016/12/05/here-how-starbucks-will-be-impacted-by-a-change-in-management/#739eee191f56
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