The project includes integrating two researched-based theories for change, developing a training program that uses job performance to measure the desired change, providing strategies to overcome resistance, creating a shared diagnosis plan, identifying challenges and benefits for teamwork, and offering an incentive plan for buy in and an enrichment program for commitment. Your Learning Team may review the case studies found in the readings in your course textbooks to gather ideas for the scenario.
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Organizational Change Process
1.
2.
3. Organization Overview
Scenario
Starbucks
Theories of Change
Rationale for Theories
How Will the Theories Promote Change
Measurement/Assessment of Change
Training Program
Objectives
Strategies to Overcome Resistance
Strategies to Create Commitment
Incentive Offers
Use of Teams During Change
Shared Diagnosis in the Change Process
Data Collected for Continuous Improvement Monitoring
References
4. Organization Overview:
› American coffee company and coffeehouse founded in Seattle,
Washington in 1971
› Started as a single store in 1971 now there are 22,591 retail stores in 68
countries
› Starbucks mission: to inspire and nurture the human spirit – one person,
one cup and one neighborhood at a time.
5. Scenario
› Effective April 12, 2016, Starbucks Rewards program (“Starbucks
Rewards")
› Members of Starbucks Rewards are able to earn and accumulate “Stars"
that can be redeemed for Starbucks Rewards benefits, also known as
“Rewards," at participating Starbucks®, Teavana® and Evolution Fresh™
stores in the U.S., Canada and Puerto Rico.
› Starbucks Rewards "stars" as a type of digital currency, reloadable card,
dubbed "Starbucks Rewards Prepaid Card from Chase” (Sharma, A.,
2016).
6. JOINING STARBUCKS REWARDS
› 1. Activate a physical Starbucks Card, or Starbucks Card eGift is Five
Dollars ($5.00).
› 2. Download the Starbucks mobile app to your Android™ or iPhone®
device.
› 3. Purchase a specially marked Starbucks® product from a participating
grocery retailer, create an account and select a Starbucks Card.
› 4. Join Starbucks Rewards!
7. Beckhard & Harris's Change Management
Organizational Analysis
› Evaluate the need for change by assessing existing organizational state.
Why Change?
› Determine the underlying need for change, whether change is a choice, and define a
change vision
Gap Analysis
› Assess the gaps between the existing state versus the desired end state.
Action Planning
› Develop a plan to accomplish the tasks necessary for the change.
Managing the Transition
› Execute the plan and manage resistance (Cawsey, Deszca & Ingols, 2012).
8. Lewin’s Change Management Theory
Unfreeze
Preparing the organization for upcoming changes.
› Breakdown of existing practices, attitudes, and behavior. Creating motivation for
implementing changes.
Change
Implementing of changes
› Development of new attitudes and behaviors.
› Time and communication are key to change success.
Refreeze
Consolidating changes and reinforcement of new changes.
› Ensure changes are being incorporated and used.
(Lewin's Change Management Model: Understanding the Three Stages of Change, n.d.)
9. Customer satisfaction
› Starbucks understood the need for change to help its customers learn
and use the rewards system
› They increased the reward to make it more appealing to customers
› Increased rewards attracts customers to make more purchases
10. After the uncertainty created in the unfreeze process, people begin to change
and look for new ways to do things.
Communicate often
Empower others
Involve people in the process
Address problems immediately
11. Set clear definitions
Collect data related to the objective
Establish a clear target –quantitative data
Consistently collect data
Highlight success, challenges, and issues
Ask questions
12. The Turnaround and Transformation Program
Day 1: The Turnaround
Day 2: The Transformation
13. Employees will understand the necessity behind the changes
to the reward program by:
Communicating directly with management concerning the new changes.
Directly addressing concerns with management.
Multifunctional teams will be created to provide unbiased
opinions and solutions to the new rewards program.
Roles and responsibilities of each employee will be changed
to accommodate their position within the pilot team for each
store.
14. Effectively create a plan to advertise and market the new rewards program
to customers.
This plan will also include an incentive plan for employees to encourage
participation.
Determine the success of the plan by analyzing the usage increased of the
Starbucks App for ordering and payment.
15. Use resistance from employees as a learning experience.
Encourage participation.
Be open, honest, clear about the upcoming changes.
Understand the reasons for resistance (Spector, 2013).
Use customer feedback on program to help employees develop answers to
possible objections.
16. Explain the ultimate goal of the organization.
Allow active involvement throughout the change process.
Stress importance of professional growth and development opportunities.
Create store goals to be reached
17. Create a rewards program for employees that get the most customers to
enroll in a week.
Create incentive program for managers of top selling stores
Trickle down incentives for employees.
Chase has confirmed that the rewards card will be free of some of the fees
often associated with prepaid debit cards, including loading, overdraft, and
monthly service fees (Sharma, A., 2016).
18. Mutual Engagement
Teamwork
› Accepting shared purpose and responsibility for interdependent tasks
› Enhances coordination
› Commitment
› Creativity
› Supports outstanding performance
› Learn from each other
19. Discover the problem (s) together as a whole.
Everyone is involved in the change process from beginning to end
Everyone in the organization arrives at the same result – “The Change”.
20. Surveys
Observations
Quarterly and Annual Sales Reviews
Monitor of Starbuck app usage from reward members.
21. Cawsey, T., Deszca, G. & Ingols, C. (2012). Organizational Change: An Action-Oriented Toolkit, (2nd ed.). Thousand Oaks, CA: Sage Publications
Lewin's Change Management Model: Understanding the Three Stages of Change. (n.d.). Retrieved June 10, 2016, from
https://www.mindtools.com/pages/article/newPPM_94.htm
Spector, B. (2013). Implementing organizational change: Theory into practice (3rd ed.). Retrieved from The University of Phoenix eBook .Collection database.
Sharma, A. (2016). Why Starbucks Wants You to Load Up Its Prepaid Visa Debit Card. Retrieved from
http://www.fool.com/investing/general/2016/03/28/why-starbucks-wants-you-to-load-up-its-prepaid-vis.aspx
www.starbucks.com. (2016). Starbucks Rewards Terms of Use. Retrieved from
http://www.starbucks.com/card/rewards/rewards-program-ts-and-cs
Editor's Notes
Organizational change process presentation by Jennifer Booker, Aisha Castro, Virginia Cruz, Jessica Mickey, Michael Reed, and Cristen Yancey.
The Starbucks rewards program is an incentive based reward program based on dollars spent per visit. Stars are earned which allow customers to earn rewards at set star levels. This program has evolved through the years to its current incarnation. This presentation will give you background into the program and how changes can be implemented to so that employees understand how the program works and how they can better help customers understand and get involved in the program.
Starbucks Coffee is an American coffee company and coffee house that was founded in 1971 in Seattle, Washington. Starbucks has grown from a single store in one state to thriving company that now has 22,591 stores in 68 countries. Starbucks mission is to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time. Starbucks name comes from the novel Moby Dick. In 1983 Chairman and CEO Howard Schulz travelled to Italy where he was inspired by the Italian coffeehouse experience and looked to bring it to Starbucks. His vision was for Starbucks to be a third place between home and work where people could have conversation and a sense of community. This is what set Starbucks apart from other companies. Schulz left Starbucks in 1985 for form his own coffeehouse Il Giornale which later acquired Starbucks in 1987.
In April of 2016, Starbucks revamped their rewards program. The first Starbucks card was initially introduced in November, 2001. In September 2002, Starbucks introduced the ability for the card to be reloaded automatically. In April 2008, the first rewards program was launched. This first generation of the rewards program did not contain any levels and enabled those enrolled to obtain free soy and breve milk, syrups, tall beverage with a pound of beans, and refills. In November 2008 the Gold card was introduced which required customers to pay a $25 annual fee. In return card members received 10% off purchases. Gold card holders did not receive any free items and it was phased out a year after its launch. In January of 2010, MyStarbucksRewards was introduced. This program consisted of three levels. The Welcome level, the Green level, and the Gold level. In April of 2012 Starbucks started testing digital rewards and launched the updated program in October of the same year. Since that time the program has remained relatively unchanged until the new program was introduced in April of 2016. Under the new program, members receive 2 stars for every dollar spent. These stars are accumulated and customers receive a reward after obtaining 125 stars. Under the old program, stars were obtained per visit and the first reward came after earning just 12 stars. This change in the program was based on requests by Starbucks customers. This new program has been met with opposition from customers who feel that they have to spend more now to obtain a reward.
There are four (4) ways to enroll in Starbucks Rewards and begin accumulating Stars:
If you have a physical Starbucks Card, or Starbucks Card eGift, visit www.starbucks.com/rewards. Follow the prompts to create an account and register at least one (1) physical Starbucks Card, or Starbucks Card eGift. The minimum balance required to activate a physical Starbucks Card, or Starbucks Card eGift is Five Dollars ($5.00).
Download the Starbucks mobile app to your Android™ or iPhone® device. Follow the prompts to create an account and register a digital Starbucks Card.
Purchase a specially marked Starbucks® product from a participating grocery retailer and enter the Star code located on, or if indicated, inside the packaging at www.starbucks.com/rewards. Follow the prompts to create an account and select a Starbucks Card.
Join Starbucks Rewards through a special promotion or membership program that may be offered by Starbucks and/or our business affiliates. There may be additional terms and conditions applicable to these offers, so please read them carefully.
Starbucks Cards may include: physical Starbucks, Teavana, and Evolution Fresh branded plastic cards that are available for sale from participating Starbucks, Teavana, and Evolution Fresh stores, and also sold from other retail locations (for example, gift card “malls" or kiosks); digital forms of the physical cards that are available through the Starbucks mobile app; and Starbucks Card eGifts that can be purchased at www.starbucks.com/shop/card/egift. For more information about Starbucks Cards, please visit www.starbucks.com/card.
The registration process may require that you provide the following information: username, password, email address (required in order to receive all eligible Rewards), physical address, telephone number, Starbucks Card number, and card security code (CSC), birthday, name, and marketing preferences. All of your Starbucks Cards can be activated and registered for use in Starbucks Rewards, but you may only have one (1) account that is personal to you.
Beckhard and Harris’s change theory helps with evaluating the program and determining the need for change and why it should take place. A Gap analysis will help to determine where gaps can occur in the process and how to best deal with them as they arose. All of these steps will help with developing a plan to this change process to the program and help to effectively manage the transition phase of the change (Cawsey, & Ingols, 2012Deszca).
Lewin’s Change model starts with the process of “unfreezing”. This means changing what is initially in place. This starts with Starbucks’ previous rewards program and breaking down the practices and the attitudes towards the changes towards the program. The next step is implementing the change in the program. With this, comes development of new attitudes and behaviors towards the new ideas that come with the changes in the program. Lastly, “refreezing”, is when the change process is complete. Once the changes are set, Starbucks’ needs to ensure that the changes are being enforced (Lewin's Change Management Model: Understanding the Three Stages of Change, n.d.)
Time and communication are the two keys to success for the changes to occur. People need time to understand the changes and they also need to feel highly connected to the organization throughout the transition period. When you are managing change, this can require a great deal of time and effort and hands-on management is usually the best approach ("Lewin’s Change Management Model: Understanding The Three Stages Of Change", 2016).
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Change is inevitable and will happen within any organization, our world is changing fast and organizations that can handle change will be successful ("Lewin’s Change Management Model: Understanding The Three Stages Of Change", 2016). These changes are beneficial to the growth of the organization. Creates more business and ultimately creates more jobs. There has to be employees on hand to manage the databases, and make sure that customers are receiving accurate number of stars and incentives for utilizing the application. Society wants to believe that with new technological advancements no one is required behind the scenes, but there is someone who must develop these programs to ensure that the app works efficiently. There may be a barista in a store that is working on a degree in IT, and the ability to work on a project of this magnitude helps with experience, as well as actively participating in the company’s change.
Assessments are important because the information gathered from them will direct of all the decisions you will make regarding what changes need to be made, how business is operating, customer satisfaction, employee satisfaction, and overall profit. Employees must grasp the goals and objectives of the company for they are the focus of what a company stands for. We will use different types of assessments for customers as well as employees.
With the participation of all employees from the administrator to the barista the team can redesign how all members of the unit would undertake their responsibilities. Change will not happen overnight however if implemented with consistency, change will occur (Spector, 2013) The training program should be shared with all staff and concerns of employees should be addressed when implementing the training program. There should be a meeting with management first to detail plans of program and get them up to speed on what and why change is being implemented. This will help when introducing the program to the rest of the team. The training program should be introduced one store at a time so if there are any problems with the roll out, they can be addressed prior to implementing the program at other locations. Roles and responsibilities should be clearly defined and the measurement system should be outlined so team members understand how and what is being measured.
Day 1 the training team will use Beckhand and Harris’s change management to break down the need for changes in the current rewards program. The team will also develop a plan to accomplish the proposed changes and manage the plans by reducing resistance and encouraging participation from employees.
Using Lewin’s Change Management Theory the training team will “unfreeze” the current rewards program and allow employees to voice opinions and provide suggestion for a new change. The training team will “change” the program by incorporating each store with individual promotional ideas, then “refreeze” our changes by collecting and analyzing data. The data collected from the Starbucks app of how often customers use the app for placing advanced orders, redeeming stars, and also making payments.
Finding ways to overcome employee resistance is the key to any change implementation. If there is any resistance from employees it should be addressed by the manager and questions about why change is occurring should be answered. The end vision needs to be clearly explained so employees know why the change is taking place and why it is best for business. Full participation is encouraged and expected by all team members. Reasons for resistance to change need to be understood by management so that they can address concerns and quell any negative feelings towards the program. A valuable tool is customer feedback to the program. By reviewing what customers think about the program will help employees develop ways to overcome objections to the program and help store managers to pass along customer concerns with upper management.
Mutual engagement at every stage of the implementation process helps assure learning and builds commitment (Spector, 2013). By explaining and providing employees with an understanding of what the goal of the change is, they will be more apt to buy-in to the change. Providing a clear vision will allow employees to see how and why change is needed. Allowing employees to be involved in the change process gives them a sense of ownership, and allows them to see that what they do has a part in the success of the change process. It is important to stress to the employees that there are development and growth opportunities that can arise based on their performance. Employees want to know that good performance and involvement is rewarded. Employees like to know that there is a chance to grow in the company and that they will not just be stuck on the ground floor. As an employer you need to create goals that are both challenging and obtainable. By creating store goals tied to an incentive, employees know that there is something to be obtained by getting involved which leads to better implementation of change.
Despite some possible rewards points complexity, Starbucks stands to reap a specific benefit from its card deal with Chase such as better cash flow. The company discovered something of a minor gold mine when it began offering its own non-debit prepaid loyalty cards a few years ago. The deal with Chase will draw new customers to its existing program (Sharma,2016). Creating a rewards program for employees will get the morale going in each store. These incentives and thoughts of bragging rights brings commitment to the change and dedication from everyone from upper management to store baristas.
In order to implement change, target group norms first and then focus on individual behaviors (Spector, 2013). When working in teams conflict may arise however it can be disruptive and dysfunctional. However, not all conflict needs to be avoided, as individuals articulate and analyze differences, they can improve organizational effectiveness (Spector, 2013)
When final decisions are made without researching the end result, with having only the big picture in mind, those decisions are detrimental to the success of using a shared diagnosis approach within the organization. According to Spector, (2013), for effective change implementation to occur, many employees at multiple hierarchical levels and in varied units need to change in the same direction. With one person making all of the decisions, regardless of how well thought out the plan may be will not lead to an effective change. It is only when the same diagnosis is shared by multiple individuals that change implementation can move forward effectively ( Spector, 2013). When there is not a shared diagnosis, the change will not go as planned and that causes confusion and resistance to the change from employees.
The organization needs to continuously monitor the change, and evaluate the change at every level. Doing this will ensure that the change is executed properly and that all of the objectives are met. Information from the customers, both new and old, will determine if the correct course of action was taken and how well the change was implemented across the board. Monitoring the usage of the app, by collecting data from the start of the change of how many customers use the app and actually place orders from the app will help with quarterly and annual reviews of sales.