Change
As we will see in the case studies, leadership is a decisive factor in the process of diagnosing and in the implementation of changes in the operation of a corporate organisation. IT, HR and corporate work ethics may be excellent. However, without secure and decisive leadership, the best organisational makeovers can fail miserably.
In this part of the essay, this author will illustrate three models and techniques in the change management professional literature for diagnosing organisations. With regard to this, we will compare and contrast three different diagnostic models/techniques, including the main strengths and weaknesses of each. In this discussion, we will also examine the relationship between each diagnostic model/technique and the organisational development and political approaches to organisational change.
In the first we will consider, a great person and a great organisational management team leads change and the charge, focusing in on areas that needs to be changed. Starbucks corporation provides an interesting example of this and a unique one as well. In 2008, Howard Schultz announced to Starbucks that he was returning to duty as CEO after an eight-year period out of the leadership position. At the time he left, the company was in excellent shape. His return and leadership brought Starbucks stock back to $40 per share (Flamholtz, 2011, 3-4).
During his absence, the company began to have significant troubles. For example, intense competition emerged from Dunkin' Donuts and also other fast-food chains that were entering the market with new coffee products. Additionally, a leadership that had nothing to do with Schultz's exodus or reentry later was that Starbucks had grown very fast. Those very growing pains were now finally taking their toll. The infrastructure of the company represented in the management team/employees were not prepared and trained well enough to execute the Starbucks business plans.
Upon his return to CEO, how did Schultz fix his company's problems? Within two-years of his return to the CEO role, Schultz and his management team reviewed, broke down and repaired what was wrong with the company. Starbucks assessed the "key tangible assets" and after this assessment made the subsequent business changes in the hopes of raising the stock price again and in recapturing their market share. In the opinion of this author, one of the most critical qualities that had eroded was brand name loyalty. The capturing of (as well as the loss of this quality) is complex and comprises a number of not always tangible factors. Suffice it to say, business analysts try to capture this "holy grail" of marketing. They generally do not know how it works (human psychology is extremely complex). However, when it is in motion, one recognizes it working. When it is in play, the customers will follow, much like the children in the Pied Piper of Hamlin. They will follow the company almost anywhere because of this amazing trust in the product or service. It translates into market share which is built upon the purchasing power of customers (ibid, 3-6).
Certainly, this fight to regain customer loyalty was a fight to regain the company mystique and brand character. For example, a major problem was that the critical customer traffic had hit an all-time low in the stores. To combat this, Starbucks combined customer connectivity and innovation and efficiency to attract the customers to the stores and spends their money. They again reached out to their customers by getting them to grind their own coffee beans as they did to begin with. The company had stopped the grinding to save money and time. They realized that a bottomline financial metric messed up the brand loyalty. They developed new products, tried out new concepts and new technology (ibid.).
In the opinion of this author, the upside of the leadership model is unity of purpose and execution. However, when there is a lack of such "great men, " such unity of purpose and strength is lost. This can be seen in the Starbuck's case especially because the same man, Howard Schultz, who had founded and built the company had to return to the helm to lead it to glory.
During his absence, the company began to have significant troubles. For example, intense competition emerged from Dunkin' Donuts and also other fast-food chains that were entering the market with new coffee products. Additionally, a leadership that had nothing to do with Schultz's exodus or reentry later was that Starbucks had grown very fast. Those very growing pains were now finally taking their toll. The infrastructure of the company represented in the management team/employees were not prepared and trained well enough to execute the Starbucks business plans.
Upon his return to CEO, how did Schultz fix his company's problems? Within two-years of his return to the CEO role, Schultz and his management...
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