Leadership and Change in Organizations

Assessing my perception of leaders and leadership, I can state that such notion is one of those who most people think they know, but fail to clearly describe. The latter is specifically evident in organizational context. I think the problem might be in that leadership is mostly perceived as intuitive actions, rather than definite theoretical framework. Thus, the availability of theoretical foundations characterising leadership in organisational context was surprising. The main difficulty is in learning the way such framework can be applied in practice.

General Concepts

In terms of leadership definition, it can be stated that a wide array of definitions clearly indicate that asking 10 people to define leadership will result in 10 different definitions. Many definitions include adjectives which lead to a sense of subjectivity in each definitions observed. Thus, I came to the conclusion that the most efficient way to understand leadership is through outlining common themes and elements that describe such notion. Additionally, I can state that I faced one of the assumptions about leadership indicated in the lectures, which is the stereotype that leadership is about the influence of a single person over many people. Such assumption might be based on that in any single setting the term leader will be more common, rather than its plural form – leaders. Although proven that leadership might be represented through a group of people, I still believe that leadership in a single context is about one leader and many followers.

The trait approach states that “people born as leaders rather than made” (Beerel, 2009, p.67). Prior to taking the course, my main perception about leaders’ development was based on the trait approach to leadership. At the present time, and as it will be evident from the following section I perceive the closest theory on leadership being the situational approach, which states that different situations require different types of leadership.

Leadership Development

An important notion learned in class, on whether leaders are born or made, was partially related to the situational approach to leadership. Reading about the triggers for leaders’ development, I believe that most triggers are situations. These situations require response and thus, the need for response triggers the occurrence of leadership traits and styles that correspond to such situation. The most prominent example confirming such approach to leadership is the historical analysis of military leaders in England, where their numbers was proportional to the conflicts in which the country participated (Bass and Bass, 2008). Thus, a conflict can be perceived as a situation that triggers the development of leadership skills.

From the perspective of the theoretic and critical approaches, it should be stated that conflict may be regarded as an aspect of personal development, however, the best development will be originated if all the conflicts will be eliminated and avoided. The conflict should be productive but not in a form of rivalry. Moreover, aggression will be the degenerating aspect of a conflict, while any conflict experience should be used for development. (Kotter, 1996)

Transformational Leadership

Differentiating the types of leadership between transformational and transactional, I believe that transactional leaders can be associated with managers. Although such belief proved wrong, as transactional leadership is an important part of leadership theory, I think that being concerned with action and consequences, while stripped of the motivation aspect is more related to management, i.e. organisation, control, planning, and producing short-term results (Kotter, 1996, p.26).

Transformational leadership, on the other hand, focuses on motivating people. Elements of charismatic-transformational leadership are valued leader qualities in different cultures (Bass & Riggio, 2006, p. 16). Such statement can be specifically agreed with, where the history shows that most prominent leaders focused on motivation and inspiration as a driving force, rather than planning their way of life, e.g. Martin Luther King, John Kennedy, Winston Churchill, etc. Transformational leadership can transform people into the kind of followers an organization must have. There are other kinds of leaders which may lead to disastrous circumstances for the organization, some of which maybe the egocentric leader. Egos and selfish principles on the part of the leader can lead to failure of leadership. On the other hand, if these selfish principles are closely associated with the needs and requirements of an organization, leader’s ego may be regarded as a ruling force of company’s development (Kellerl and Dansereaul, 1995). However, in order this was the truth, the aims of a company and the aims of a leader should be the same. They need to develop the extensive understanding of the company’s needs, and improve motivational strategies and principles within an organization. As it was stated by Gilley and Mcmillan (2009, p. 171):

Leaders who know when and how to follow build deep common understanding, not superficial consensus, around the purpose, goals, and approach at hand. They submit themselves and others to the discipline of ensuring that all sides to any disagreement are fully understood by everyone, recognizing that mutual understanding is far more powerful than any particular decision to choose path A over path B. All people will follow strong, commonly understood purposes and goals more easily than the “put-up jobs” associated with consensus.

In the light of this statement, it should be emphasized that the actual importance of such leadership transformation is intended for the forced provoking of changes and productive conflicts. Thus, Bass and Riggio (2006, p. 3) state that, “transformational leaders help followers grow and develop into leaders by responding to individual followers’ needs by empowering them and by aligning the objectives and goals of the individual followers, the leader, the group, and the larger organization”. It can be seen that inspiration is an important aspect of transformational leaders. Inspiration and motivation are two terms that are connected together. Transformational leadership focuses on the advancement of each and every employee or worker. The employees become motivated, inspired and given rewards in various forms. Transformational leaders stimulate their followers’ imagination to be creative and to provide more ideas and innovations for the betterment of the organization (Firth, 2002, p. 16). Improvement is an objective in transformational leadership. It is for the welfare of the members, and the organization as a whole. Although my personal notion of leadership correlates with transformational leadership, I can state that for certain cases such style is not suitable, namely cases that require quick reaction and response, the success of which depends not on the way people will be motivated and inspired, but rather on the way they will be organized, being given clear instructions for actions. The latter is specifically evident in cases when the number of followers is large, where transactional leaders will take the most pragmatic course of actions (Beerel, 2009).

Another kind of leadership is socialized charismatic leadership that is based on egalitarian behaviour, serves collective interests, and develops and empowers others (Bass & Riggio, 2006, p. 16). One example of a socialized leader is Bill Gates, the man who led Microsoft Corporation to success and made himself a millionaire as well as his followers. Gates is a charismatic leader who also uses his talent and intelligence to lead the company. He is a full-contact intellect who seeks out partners to scheme and explore with, and bash against. He handpicks the most elite ones he can find and occasionally, thrice in his life, he will find a super-partner who recasts his notion on what’s possible and what he can accomplish (Leibovich, 2002, p. 156).

Personal Reflection

I have always asked what kind of a leader I am, or am I a good follower. However, in my relationship with my co-workers, I have always wanted to be a leader, similar to Bill Gates, who is charismatic, who inspires and motivates while being respected and loved, rather than feared. I agree with the situational theory of leadership, because my chances of becoming a leader are depend on the situation in which I will be put, rather than traits I was born with.

Change

An important aspect learned is related to change. Change can be seen as one of those situations in which leaderships can develop and certain leader styles can occur. Accordingly, such is the perception on change in organisations, which views change as a response to new realities. If such realities did not occur, the company would have completed doing what they used to do. (Joyce, 2000)

Personal Reflection

Personally, though, I do not like changes. For me changes are associated with getting rid of something I am familiar with and starting with something that I have not tried before. In that regard, I take more of conservative approach, believing if it is not broke, you do not fix it. Nevertheless, I do also believe that necessities dictate changes. For example, taking my experience in UK, where in UK lunch break means a sandwich and a coke. In my country, on the contrary, lunch is quite an important meal of the day, after which we have a two-hour lunch break, with a nap after lunch. Though I don’t like it, I still have to accept it because it is something that I can’t control and since I am here in UK, I have to get used to UK habit. It applies to leadership as well. Change is not something that you can control or choose to have or not. It is something that constantly happens and something that leaders cannot avoid. Therefore, leaders should adapt themselves and their strategy accordingly. The quicker leaders can adjust, the more successful they will become. (Kolb, 2005)

Change is an internal dynamic in a person; meaning the attitude – our attitudes, our outlook in life, our motivations and objectives for the organization – should change in order to become good leaders. But first we have to transform into good followers who want change. The ‘want’ is emphasized here because if we do not have the longing for change, it will not be effective. It has to be a desire and a goal (Gilley, 2009, p. 38).

Leadership and Change

Leading a change in an organisation is one of the responsibilities of leaders. Similarly, my personal perception of such task was widely regarded as an aspect largely intuitive. There were no assumptions on the way leading change can be structured into a framework. In that regard, the understanding of such aspect came with the acknowledgement of the role of leaders in organisations. Such role can be seen as mediators, an intermediary link between the internal and the external environment, adapting the strategy of the company for changes in the external environment, and preparing and motivating followers for the new strategy.

The conceptualisation of the role of leaders in change came with learning the power that leaders have in organisations. Accordingly, such powers suggest the types of actions that can be undertaken by leaders to initiate and sustain change. The analysis of the different models that explain leadership powers emphasises the importance of personal traits held by leaders, the skills learned, and the importance of the situation. It should be noted that the models of powers emphasise the notion that leadership can be learned, where the indication of the way powers are lost omits personal traits, i.e. personal traits of the leaders will remain, but nevertheless, the powers will be lost with the loss of learned skills and organisational dynamics. (Nahavandi and Malekzadeh, 2004)

Managing Change in Starbucks

For an organization that wants to survive in the conditions of dynamic business environment, a change is an inevitable aspect. The role of leaders in managing organizational change cannot be overestimated, where “the prime task of leadership is to orient the group or organization to new realities” (Beerel, 2009, p.77). It can be stated that one of the aspects of change in which leadership plays a critical role is innovations.

Starbucks is an international company specialized in coffee retailing. Founded in 1971, the company is currently operating in more than 16,000 locations in over 50 countries (Starbucks Coffee Company, 2010). Being in the business for a little less than forty years, Starbucks has gone through a lot of transformations and organizational changes. In the light of the aforementioned, the present paper provides a reflection on the leadership approach taken in managing change in Starbucks Company, drawing upon a review of literature on leadership and change management.

The critical approaches towards the leadership in Starbucks are closely associated with the necessity to maintain the existing retail network and implement the innovations, needed for the network development and company improvement. Analyzing the business approaches of the company, it should be emphasized that the leadership theory which may be applied reminds contingency theory, when leaders are defined in accordance with the environmental changes.

However, this approach is not fully suitable for the organization like Starbucks, as the environment may not change for a long time on the market of coffee retailers, while the changes in strategic approaches are constantly required. These changes are vital for the strategic evolution of a company; hence, the approaches that will be required are participative. (Nirenberg, 2003)

Major Changes

Organisational change is usually accompanied with the arrival of new realities, which requires companies to remain relevant in new conditions of leading business (Beerel, 2009, p.3). For Starbucks, new realities were always occurring, despite the sense that the company was always successful. The most prominent consequences of such new realities can be seen in a drop of traffic in US stores for the first time in the history of the company. The assessment of the changes should be regarded from the perspective of the leadership traits, as these traits are generally defined by the business environment. In fact, this may be the only connection to the contingency approach, as the traits which are required correspond with the changes of the business environment. These traits are as follows:

• Adaptable
• Sensitive to social and business environment
• Cooperative
• Decisive
• Dependable
• Dominant
• Energetic
• Self-confident
• Tolerant of stress
• Willing to assume responsibility (Fichman, Keil and Tiwana, 2005)

In the light of this statement, it should be emphasized that the trait leadership approach can not be implemented in full measure as the business environment requires that business leaders were flexible towards the changes of an environment. In accordance with Bass and Riggio (2006, p. 312), the following statement should be emphasized:

Leaders exhibit task behaviour and relationship behavior. Each employee must be assigned a specific job or task to perform. Job descriptions may provide a general framework through which the supervisor can examine duties in the department to see which to assign to each employee. Routine duties usually can be assigned to almost any employee, but there are other functions that the supervisor can assign only to employees who are qualified to perform them.

Hence, the actual importance of leadership is not realized in full measure in Starbucks, as the company is not able to suit the correct approach. While some may argue that the company has achieved an immense success (Bass and Bass, 2008), the others claim that this has happened due to lack of serious competition on the market of coffee retail (Kiviat, 2008). In fact, it is hard not to agree with the latter researchers, as in accordance with the managerial grid by Blake and Mouton, the company does not show the high concern for workers, which makes the company position a place between organization man management and the authority obedience.

Other “symptoms” of improper style selection can be observed in negative store sales and 40% drop of the company’s stock and the mounting complaints from the customers of the company (Kiviat, 2008). As argued in Beerel (2009), all changes are driven by environment change (p.8). Such position can be confirmed through the case of Starbucks, which new reality can be seen in the argument that they started losing their unique individuality. Such reality can be traced to changes in the environment, namely the occurrence such external factors as the occurrence and/or the enforcement of the positions of competitors, e.g. “McDonald’s, Dunkin’ Donuts and several convenience-store chains” (Kiviat, 2008). Such factors, in that regard, conform to the warning signals of a new reality, which in this case can be seen through the following facts:

• The altering of market positioning of competitors, which as of 2007 might include chains that were making a run at Starbucks’ customers (Beerel, 2009, p.10, Kiviat, 2008).
• Customers’ complaints, which refer to such signal as changes of customers level of satisfaction.
• “Existing business model no longer effective” (Beerel, 2009).

Providing a general characterisation of change in Starbucks, it can be stated that the change was in returning to the roots that made Starbucks successful, or as stated by Howard Schultz, “We have to get back to what we do” (Kiviat, 2008). With the change consisting of several activities that the company should be managed, the role of the leadership in such change can be assessed through the role Schultz played in those initiatives. Such role can be seen through the following points:

• Differentiate products.
• Emphasizing focus on customers.
• “Infuse” the company with spirit and innovation.
• Restoration of organisational culture.

All of these points do not imply abandoning changes that were implemented up to the stage described in this paper. Nevertheless, the roles of a leader should be changed for improving the leadership style within the entire organization. In accordance with Kotter (1996), the tasks of a leader and leadership strategy should be based on:

• Directing
• Coaching
• Supporting
• Delegation

In fact, these are the key functions of leadership, hence, the actual importance of the proper leadership suit may be explained by the necessity to improve the “Concern For People” line of the matrix. (Zaleznik, 2001)

Literature Review

Change

In a general context, change can be defined as an initiative or initiatives that provide an effective response to the events that triggers such change (Paton and McCalman, 2008, p.13). Categorizing the types of change, it can be stated that change can be seen as either radical or incremental, where in Beerel (2009) it was argued that both types of changes occur simultaneously. Relating such characterisation of change to changes occurring in Starbucks, it can be stated that in the present case, i.e. related to the downturn occurring in 2007, the change was radical. The radical nature of such change is driven by the actions of management, which in this case were initiated and implemented as a response to a crisis, with change driven “through urgency and haste” (Beerel, 2009, p.8).

From the perspective of the psychology of business changes, it should be emphasized that the company has managed to perform an effective change strategy, as the changes were not sold as a way of improving the customers’ satisfaction only. The changes were aimed at improving the general attitude of the visitors towards a brand. On the one hand, this helped the company to expand the network and arrange the deep analysis of the audience’s tastes, on the other hand, the company should have considered all the aspects of change, while Continuous Improvement and Culture aspects of the change management process were left without any attention (Fichman et al., 2005, 2004).

Hence, the company will have to rearrange the changes, and originate the further modification of the business performance strategy with particular and accurate consideration of cultural aspects (by confirming the vision, values and behaviours, as well as assessing individual values and the capacity of the changes).

Leadership

The leadership approaches that were implemented in the Starbucks company are closely associated with the matters of the changes described above. On the one hand the leadership approaches could be regarded as the important aspect of the effective changes, on the other hand, the company should have implemented the trait and environment leadership principles. As it was stated by Schultz (2008), the company was mainly oriented at tasks, while the effective leadership, and change management presuppose implementation of three elements: Task, Team and Individual. The company was mainly focused on Task, while the Individual aspect was not regarded as the worthy element of the changes. Hence, it caused the dissatisfaction of the employees, and the increased turnover rates. The company needed to improve the compensation system by implementing the extended fine/reward system, as well as to give the employees realize that they are valued and appreciated.

In general, the actual importance of the leadership in Starbucks should be assessed from the position of specific activities assigned to leaders. While these activities were directed at improving the organizational performance of the organization, the company needed to improve the communication process in order leaders had a better opportunity of communication with employees, and visitors. (Paton and McCalman, 2008)

Reflection

Analyzing the Starbucks case, the first thing to acknowledge was in the personal approach taken in the company’s leadership. The notion of leadership and leaders was initially perceived to be of the authoritarian type, i.e. followers led by a single leader, dictating all the aspects and the processes that should be implemented in the company. Accordingly, setting the direction and the vision of the company as a response for events triggering change is about the nature of the direction as about the way the followers are motivate and are willing to listen and follow such directions. Accordingly, looking at the way leadership influences change and the nature of the change, it is important to note that the actions taken by the leaders themselves are neither of a large scale, nor they are necessarily concerned with specifics, i.e. pre-paid cards, providing custom CDs, etc. These are about setting an environment that will facilitate achieving the mission and the goals of the company, which are either initially set, or modified in response to change trigger events. In the present case, the change can be seen in shifting from the goal to sell a lot, regardless of whether it is teddy bears, egg-based breakfast, etc., to going back to the coffee culture, creating “long-term value for the customer” (Kiviat, 2008).

The role of leadership in such change is in creating and supporting an environment that facilitates innovation within the established new goals, so that the followers not only understand what they are supposed to do, they are also motivated to do so. The inspiration of the leaders and the passion and the admiration of the followers are among the main leadership efforts apparent in the Starbucks case.

Practical Suggestions

It can be suggested that the company continues its initiative in shifting toward the dispersed leadership, in which leadership is exercised at all levels. Organizational learning in the organization should be emphasized as much as unlearning (Beerel, 2009, p.20). Abandoning practices and accustomed ways of dealing with problems which do not work should be an aspect practiced in leadership at all levels. In that regard, the company might consider taking more flexible approach to assess the drivers for change.

For a company with such as successful history, the reaction to the company’s competition might have been more responsive, considering that the media were able to make a huge deal of such aspect, before the company could react. The emphasis on constant and continuous change should be adopted by the company, for which systemic leadership can be seen as a suitable approach. Systemic leadership is a transformation leadership, in which the emphasis is put on strengthening the organisation’s capacity for learning.

References

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