Understanding the Change Leadership Challenge
The reviewed leadership change is the recent transition from authoritarian governance to democratic leadership in Starbucks. The core decision taken by the company was to update the corporate policy and give employees additional authority over local decision-making and implement new opportunities for the digitalization of drink orders. It should be noted that the change was not implemented at every location, as it was presented in the form of recommendations (Lombardi et al., 2021). As a result, some sites did not implement the new model, while others followed the advice and reviewed their guidelines on employee involvement. Thus, while the proposed transition was completed on a major scale, it cannot be considered ubiquitous.
Context, Content, and Process of the Change
The leadership change’s context may be viewed in connection to the recent COVID-19 pandemic. Due to the limitations placed on visiting public places such as coffee shops and cafes, Starbucks decided to increase the digitalization of its purchasing experience and introduced new ways of ordering drinks. In particular, new “on-the-go” points where the customer could order a beverage using a mobile application were implemented in several locations (Lee, 2020).
The growing use of technology impacted managerial duties and created a new set of tasks for employees, whose workday now involved taking orders from several channels. In addition to offline responsibilities, it has become necessary to devote a lot of time to the online aspects of the brand’s work (Lee, 2020). The digitalization process requires managers to pay specific attention to employee time management, marketing opportunities, and workload distribution.
Furthermore, online instructions with recommendations were sent from the main office of Starbucks to the chief managers, where recommended steps or giving employees more freedom were outlined. For example, instructions were given on the correct conduct of voting on changes involving junior employees. Such areas as the development of the potential, the scope of competence, and the tasks to be solved by the junior staff of Starbucks are covered (Lombardi et al., 2021). It is expected that leaders would expand the zones of team influence and form a new work style. The most important strategic task is to search for leadership elements in need of transformation, including the leader, group, task, situation, and followers.
Current and Potential Impact on the Organisation’s Internal and External Environments
The current impact is the increased presence of Starbucks in the market of food delivery and online purchasing. It is expected that the external environment will focus on delivery and app-based options, allowing the company to expand its reach beyond physical locations. Potential long-term benefits for new employees are decreased staff turnover and increased job satisfaction (Lombardi et al., 2021).
Furthermore, it is possible that the organization’s internal environment will positively influence employee responsibility. By teaching junior employees to express their opinions, senior management will be able to shift responsibility for numerous minor tasks to them and thereby get more opportunities to devote time to large and important issues (Nurhasanah & Dewi, 2019). The potential impact on the organization’s external environment is to improve the reputation of the Starbucks brand as very loyal not only to customers but also to employees.
Evaluating the Change Leadership Approach
Effectiveness of the Organisation’s Approach
Starbucks’ response to the pandemic and the choice to integrate a new leadership approach shows the resilience of the brand and its ability to adapt to the changing market. While the challenge of the evolving environment continues to be an issue for businesses, Starbuck’s new locations and a focus on junior employees can be considered an effective strategy.
According to Lombardi et al. (2021), the company has a complex and well-developed management structure that supports business development and flexibility. As such, Starbucks can deliver new programs and changes to many locations where local managers are responsible for implementing the program (Lombardi et al., 2021). Although the company issues recommendations rather than mandatory changes, the present model allows the business to quickly disseminate information and create a sense of necessity.
In addition, an influential team of reformers was created, as shown by Starbucks’ quick solution to pandemic-related challenges. Successful transformation is characterized by the fact that the agents of change and their teams work as a whole (Wang, Hou and Li, 2022). The final goals were transparent – for the company to shift its focus to attract customers in the pandemic environment (Wang, Hou and Li, 2022).
One of the most important requirements for a successful transformation is a formulated, realistic vision of its tasks (Nurhasanah & Dewi, 2019). Furthermore, a clear implementation of a more participative style of leadership was apparent in the business’ actions, involving more employees and managers in the change. As argued by Wang, Hou, and Li (2022), democratic or participative leadership models are effective in engaging employees. Thus, Starbucks has shown outstanding flexibility and adaptivity to the changing market.
When implementing leadership changes, Starbucks considered the diversity of people and values. At the same time, the management avoided the value gap, which consists of the discrepancy between the declared values of the company and those manifested in the behavior of employees. Before the active phase of implementing changes, a qualitative and accurate assessment of the beliefs of candidates and employees was carried out, taking into account their diversity. After that, the company’s values were adapted to the different needs of employees (Avila et al., 2019). This selection of changes and the company’s development according to the diverse team’s values allowed Starbucks to gather cohesive and committed employees who are ready to move together towards the goal and benefit society.
Analysis of Leadership Approaches
The model of the leadership approach at Starbucks combined the elements of participative and transformational leadership. The concept of transformative or reformatory leadership has much in common with charismatic leadership but is interpreted differently. The reformer leader at Starbucks motivated junior employees by increasing their awareness of the importance of the goal (Nurhasanah & Dewi, 2019). At the same time, the representation of workers’ voices in decision-making clearly shows the democratic model’s use (Wang, Hou and Li, 2022). It is possible that the company’s choice to pursue a combination of two effective models was necessitated by the continuously evolving challenges related to the pandemic.
Outcomes and Current Needs
The outcomes of the implemented change are a new company focus and an updated view of employee engagement. Since junior employees are encouraged to solve problems on their own initiative, creating a more effective team. This higher productivity of each of the employees led to greater productivity of Starbucks as a whole. Now Starbucks needs to keep a balance to prevent the development of excessive dependence on the team (Avila et al., 2019). The danger of the new leadership style is that the leader may become overly dependent on the group, allowing the group to make decisions and losing authority over the outcome (Wang, Hou and Li, 2022). Therefore, it is important to ensure that future changes lead to Starbucks achieving its financial goals and strategic growth plans (Lombardi et al., 2021). The company must continue its transformation, as not all locations have adopted the new leadership model and online presentation.
Leadership Paradoxes Identified
Leadership paradoxes that can be identified are slow decision–making and a lack of ubiquitous integration. Initially, one of the goals of the leadership change was to accelerate employee decision-making without waiting for senior management approval. However, by involving junior employees in decision-making, Starbucks dramatically slowed down the decision-making process due to frequent employee disagreements (Lombardi et al., 2021).
Instead of gaining an advantage in situations where Starbucks needs an urgent change or when it is necessary to maintain the trailblazer advantage, decision-making has slowed down in some cases. A lesson from the Starbucks case is that a more democratic leadership style can only be used when junior employees are professionals.
Strategic Approach and Reflection
My Approach to the Challenge, Dilemmas & Paradoxes
As chief executive of the organization, I would approach this challenge by enrolling junior employees in decision-making training. It will provide Starbucks employees with a systematic understanding of the decision-making theory. Furthermore, they will develop and consolidate practical skills of conscious decision-making.
The central critical dilemma I may face is assessing the scale of decisions to understand whether it is worth addressing them to senior management (Lombardi et al., 2021). On the one hand, the manifestation of initiative can be considered an unauthorized decision and be punishable if it is not approved. On the other hand, a slowdown in decision-making may negatively affect the competitiveness of Starbucks since it is necessary to react immediately to market changes.
Paradoxes I may face are related to the fact that the more freedom employees are given, the worse it affects the quality of work. With complete freedom, the quality becomes much more challenging to control. However, with partial control consisting in providing a framework and defining boundaries, the choice of employees in decision-making becomes narrower. I would have engaged with these dilemmas by assessing the importance of a potentially made decision (Lee, 2020).
For instance, one can make a diagram of the possible consequences to review the outcomes. If a change proposed at the local level significantly affects the profits and work of Starbucks, it should be coordinated with higher management. At the same time, the manager can provide at least three options for a potential solution to reduce issue resolution time.
I would have engaged with these paradoxes by exercising partial control over junior employees when making decisions. At the beginning of each meeting, I would draw a coordinate plane, indicating acceptable extremes on a horizontal scale. This would allow employees to have a clearer idea of the plane of potentially possible solutions and, therefore, to reach an agreement faster. The reasoning behind my choice of action is that the recommended leadership style is not liberal but democratic (Lombardi et al., 2021).
Liberal leadership is distinguished by the fact that organization, discipline, and order in a society or group are allowed to take their course (Wang, Hou and Li, 2022). However, with democratic leadership, the manager does not withdraw from managing people, slightly limiting the freedom of action to meet the goals and values of the company (Wang, Hou and Li, 2022). Thus, as a chief executive, I would focus on maintaining a balance between authority and responsibility and on prioritizing the most urgent crises, such as the pandemic.
Critical Generic Factors
It is essential for Starbucks to know to what extent various factors affect the final performance indicators, including profit, profitability, labor productivity, and more. For this purpose, monitoring and analysis of indicators over time are carried out, and appropriate organizational conclusions are made. It is crucial to determine the most significant factor of the organization’s success in the market (Avila et al., 2019).
In the case of Starbucks, the company’s choice to implement changes is explained by the need to maintain growth and profitability while adapting to the customers’ and employees’ changing needs. During the pandemic, success factors were identified through surveys of specialists and managers, showing the need to innovate to stay competitive (Lombardi et al., 2021). With the help of such a survey, several of the most significant, vital factors for the success of the organization were identified in Starbucks.
Success Factors for the Organization
First of all, such factors were the design of the establishment and the effective organization of service, creating an atmosphere that is a critical component of the Starbucks brand. Moreover, some important generic factors that should be considered are the novelty of drinks, the quality of advertising, international sales, and service (Lombardi et al., 2021). All elements discussed above play a primary role in the competitiveness of Starbucks. In addition, it is vital to choose an effective trading system that allows one to manage the company more effectively on the ground.
The factors influencing the quality of the employees’ work are the components of the skill training, such as attracting the best speakers, identifying interesting topics, and the number of recipients for sending information materials (Lee, 2020). These generic factors are the basis for creating an effective team – attracting and retaining the best employees, supporting research and resellers, and identifying new market needs.
The factors that determine the work of leaders are also important: namely, the training of management personnel, efficiency, quality, and productivity of their work. The considered project, an initiative with minimal resources, is aimed at optimal use. For this reason, in the implementation, it is logical to pay attention to ensuring that critical success factors are considered separately when they are the most influential. It is done to reduce the intensity of using resources at other times when these materials can be utilized to ensure the solution of other tasks.
These are the strategic objectives, competitive opportunities, and business results that Starbucks must provide or strive for in order to be competitive and succeed in the market. These are also the factors that a company should pay special attention to since they determine the success or failure of a company in the market and its competitive opportunities that directly affect its profitability (Lee, 2020). Determining the critical success factors of an organization, taking into account the existing and projected trends in the development of the industry and competition in it, is the most important strategic task. Starbucks leaders know the industry well, which allows the business to determine what is more critical for success in the competition.
The Importance of Gaining Knowledge About Leadership
In current conditions, the market reality regularly puts executive managers in a situation where they must choose an effective way to develop the company. Professionals must introduce significant changes in value orientations and the foundations of cultural and transformative activities. One has to use the experience gained while working with support and guidance from scientific sources. Therefore, studying them increases one’s leadership qualities and the ability to translate theoretical knowledge into practice. Learning from leadership academic and theory content gave me an understanding of management models. This is a critically necessary knowledge for successful and high-quality delegation of tasks and strategic planning. At the same time, it was extremely difficult for me to learn confidence in the workflow or with the help of internal training without a theoretical basis.
Knowledge of a large number of models and leadership frameworks has given me the potential for flexibility and adaptability. This allows me to quickly rebuild and react in a critical situation for the company, and it is not easy to do. In addition, the study of theory has become a great contribution to my self-development. I believe that only a leader who is constantly learning and developing can broadcast the idea of training to other employees. Therefore, the contribution to my continuing education is a critically important outcome for me from learning from leadership academic and theory content.
Furthermore, learning more about leadership has impacted my practice as a change leader. As a manager, it is crucial for me to carefully study, analyze and accumulate everything created, invented, formulated, and nurtured in the theory and practice of forming leaders in the past. This allows me to constantly look for new approaches and methods of purposeful influence on the modern reality of the company. The combination of theoretical knowledge and practical expertise will help me become a part of the leadership that will bring companies more successes and contribute to a future generation of practice.
Reference List
Avila, M., Parkin, H. and Galoostian, S. (2019) ‘$16.7 million to save one reputation: how Starbucks responded amidst a racial sensitivity crisis’, Pepperdine Journal of Communication, 7(4), pp. 24–38. Web.
Lee, S. Y. (2020) ‘Study on digital transformation strategies: Starbucks case study’, Journal of Digital Contents Society, 21(10), pp. 1809–1816. Web.
Lombardi, C. V., Chidiac, N. T. and Record, B. C. (2021) ‘Starbucks coffee corporation’s marketing response to the COVID-19 pandemic’, Innovative Marketing, 17(2), pp. 177–188. Web.
Nurhasanah, S. and Dewi, C. (2019) ‘Defining the role of multinational corporations: Starbucks and coffee culture in Indonesia’, Jurnal Sentris KSMPMI, 2(1), pp. 1–15. Web.
Wang, Q., Hou, H. and Li, Z. (2022) ‘Participative leadership: a literature review and prospects for future research,’ Frontiers in Psychology, 13, p. 924357. Web.