4.1 CHAPTER 2 (p.72)
Short Change
4.2 CHAPTER 3 (p.102)
Experience Change: Rollercoaster Ride Leaflet
4.3 CHAPTER 4 (p.127)
Leadership in Process: N-Stages to N-Functions
Higgs and Rowland’s FRAMCAP Model and Kanter’s Change Wheel
As we saw in Chapter 3, there have been multiple attempts to define the management and leadership of change as conducting a sequence of activities or functions that have to be performed in a more or less rigid ‘N-step’ sequence (Appelbaum et al., 2012; Collins, 1998; Hughes, 2016; Kotter, 2007). The advantage of this approach is that it appears to provide an accessible and practical ‘checklist’ of activities. It, arguably, helps to provide orientation in the chaos, helping the practical manager to decide ‘What should I do? And when?’ The disadvantages of rather simple linear views are, however, equally well known. Events and required actions do not necessarily unfold in pre-set stages. They overlap, repeat and may occur and need addressing simultaneously. Urgency may require revisiting, visions be modified and communicated in different ways with different degrees of emphasis and at various times, coalitions built and rebuilt in the face of changing scope and conditions and so on….
Despite the admitted limitations of N-step theories, leading business schools such as HEC Paris/Oxford University and Macquarie Graduate School of Management have effectively used N-step internet simulations such as Experience Change to ‘kick start’ discussions amongst practicing managers about how to manage and lead change. Despite admitting, and being introduced to, the complexity of change, many of these managers end up returning to such models as a useful heuristic and guide. What do you think this says about such models, and their costs and benefits?
One way of addressing the limitations of N-step models has been to move away from more rigid theories of stages and onto a more flexible consideration of general leadership functions to be fulfilled and behaviours to be exercised. Instead of sequenced ‘N-steps’ of required activities, we are provided with required ‘N-Functions’ or behaviours to be performed and competencies to be developed. In many cases, the outlined ‘N-Functions’ look very similar to the ‘N-Step’ theories, although the functions to be fulfilled are freed up from being constrained by a rigid sequential timeline. These models help to provide guidance and advice on the tasks, skills and qualities required from those responsible for delivering change. Their usefulness derives from the order that they place on required functions and capabilities, and the use of this framework as a source of advice on ‘what has to be done’ and the necessary skills. The disadvantages of such an approach to leadership are, however, also relatively clear and well known. Different (change) situations may require different tasks and capabilities, successful change may be brought about by people in the absence of some or many of the task performances and skills that are seen as required (and vice versa - change may fail despite their presence), what appear as distinctive types of functions intertwine and overlap in complex ways and so on. Similar to ‘N-Step’ theories, substantial levels of uncertainty also surround any attempt to determine ‘how much is enough’ of any skill or task. A major continuing challenge is how to go beyond plausible yet vague, ambiguous and in many ways unhelpful outlines of functions without over-specifying what is required in ways that are unproven, inaccurate, misleading and even counter-productive.
Keeping these concerns in mind, let’s assess the contribution and value of two influential attempts to establish and define such ‘N-Functions’. The first is from an established change management academic Malcolm Higgs and his consultant colleague Deborah Rowland in a series of articles for change management research journals. The second is from the renowned academic consultant and change practice scholar Rosabeth Moss-Kanter in her published books and consultancy toolkit. We will focus in particular on Higgs and Rowland’s FRAMCAP approach, and Kanter’s Change Wheel.
The Higgs and Rowland Model
In a series of articles and monographs providing empirical insights and theoretical reviews of change leadership, Higgs and Rowland 2000, 2005, 2011; Rowland & Higgs, 2008) have developed a coherent academic framework for capturing the functions, capabilities and key activities required of change leaders. Following an extensive literature review of leading change capabilities, they identified 8 competency clusters (Higgs and Rowland, 2000) that then subsequently grouped into the skills required to fulfil 5 key functions:
• Creating a case for change
(e.g. stimulating engagement around recognition of a business need)
• Creating structural change
(e.g. communicating understanding of issues, providing supportive tools and processes)
• Engaging and building commitment
(e.g. facilitative leadership, encouraging interactive events, critical conversations and self-organizing)
• Implementing and sustaining
(e.g. planning and review)
• Facilitating and developing capability
(e.g. challenging people to find their own answers, and supporting them)
In a subsequent detailed analysis of 70 stories of change experiences, successes and failures, Higgs and Rowland (2005) confirmed the insights of sense-making/giving and relational views of leadership in identifying what they termed ‘Framing’ and ‘Capacity Creating’ behaviours as key influences on change success. These behaviours were elaborated in more detail in Rowland and Higgs (2008). They found success was less well correlated with traditional ‘leader-centric’ or ‘shaping’ behaviours associated with leadership actions and communications, thinking about change, focusing on individuals and their competency, and establishing accountability.
In a later qualitative study of interviews with 33 change leaders and further review of the change literature, Higgs and Rowland (2011) confirmed these results and expanded on what was involved in the framing and capacity creating behaviours that contribute to change success.
In 2005, Framing was initially identified with establishing a starting point for the change journey, defining what was involved and establishing principles. In the 2011 study, however, this was elaborated to include:
• Creating an Attractor
(energizing the organisation to pull towards its purpose; establishing an emotional connection to the change by connecting with other at an emotional level; tuning into everyday realities and connecting these to wider movement and change narrative; visibly working beyond personal ambition to serve higher purpose; and being consciously aware of leadership style and adapts this for the purpose),
• Providing Edge and Tension
(describing current reality with respect while also being critical without compromise; remaining constant in times of turbulence and does not withdraw from hard tasks and keeps people’s ‘hands in the fire’; creating discomfort by challenging existing paradigms and disrupting established habits; setting the bar high and creating stretch goals; not compromising on talent in getting and keeping ‘A’ players; ongoingly testing and challenging the organization, including amplifying disturbance; and helping the identification of repeated and unhelpful patterns of behaviour, while staying firm on the change course),
• Building Containers
(holding and challenging energy, providing calm; confident and affirming signals that create ownership, trust and confidence; self-assured and confident leadership that takes a stand and is not anxious about challenging conditions; and sets and contracts boundaries, clear expectations and hard rules on performance expectations and behaviours).
In their 2005 study, Capacity Creation was initially equated with fostering individual and organizational communication, and establishing connections. In the 2011 investigation, however, this was taken to include establishing:
• Containers (as above)
• Transforming Space
(demonstrating a commitment to thinking and acting differently; freeing people to explore by being vulnerable and open; understanding the present moment and breaking established patterns and structures in creating movement ‘here and now’; powerfully inquiring into systemic issues to enable deep change; and creating emotional, temporal and physical space for transforming encounters
Kanter’s Change Wheel
In a series of works, from The Change Masters (Kanter, 1983) to Think Outside the Building (Moss-Kanter, 2020), Rosabeth Moss-Kanter identifies the ‘power skills’ that enable change agents to navigate the three main waves of change (‘problem definition', ‘coalition building’ and ‘mobilization/completion’), and the ‘advanced leadership capabilities’ that enable them to overcome siloed institutional constraints on change and ‘dream big’, ‘tell the right story’, ‘activate allies’, ‘craft coalitions’, ‘master the miserable middles’ and ‘drive to scale’. While sequenced, these can be iterated and re-iterated (Kanter, 1983, p.217). At various times in her work, Kanter refers to such leaders as ‘change masters’(Kanter, 1983), ‘post-entrepreneurial heroes’ (Kanter et al., 1992), a ‘vanguard’.(Moss-Kanter, 2009), ‘advanced leaders’ and an ‘army for change’ (Kanter, 2020). In her work on The Change Wheel, however, Kanter (2011) formalises her general approach in defining 10 major elements that contribute to systemic change. In the ‘Change Wheel’, these elements are represented as functions that need to be fulfilled, and inform discussions of the goals, sensibilities and skills of change leaders (Kanter, 2020).
The ten elements or ‘spokes’ of the Change Wheel are:
• Common Theme, Shared Vision: a change message that is well and widely understood – articulate, broadcast and repeated
• Symbols and Signals: Symbolic actions by leaders and iconic stories reveal what the change means, and whether the change is real and consistent
• Governance and Accountability Structure: a governance structure that defines and controls the process, steering it in the required direction, even when everyone has to be involved. Overlaps often with formal established groups, but also requires another group with special attention and accountability
• Education, Training, Action Tools: education is necessary to meaningfully detail the what and why of change, training for people to become adept at the new behaviours and action tools provide models and templates for relating the change to their day-to-day work and behaviours
• Champions and Sponsors: Champions are needed as activists and cheerleaders, sponsors to secure backing of those with power to fight for the change
• Quick Wins and Local Innovations: Early quick wins show change is possible, provides proof that enhances confidence and demonstrates what it means in practice. Local involvement necessary to pick projects that are feasible for them, clear overall direction but empowerment to take ownership and rapidly prototype
• Communications, Best Practice Exchange: senior leaders need to know what is happening in the field, local initiators need to be provided with role models to learn from experience of others, see what is possible and be motivated. Context understanding is necessary for everyone to tailor actions, and new media and self-organising communities are crucial in disseminating
• Policy, Procedures, System Alignment: rules, routines, policies and structures either support or oppose the change, and need to be adapted. Includes reporting, HR practices, org charts etc.
• Measures, Milestones, and Feedback: Measures are important to assess whether the change is on track, particularly softer ones. Dividing into small increments and milestones is important for tracking, confidence, accountability, celebration and competitive comparison
• Rewards and Recognition: Financial and non-financial carrots and sticks, and behaviour to be recognised aligned to the change
Kanter emphasises that these are not just random elements or functions to be performed. While not a rigid set of steps, they have a logical sequence, with theme/vision, symbols, and governance important in the early, preparatory or unfreezing phases as they set the stage for education, creation of champions and quick wins. This is then followed by communication, detailed changes to policies and procedures and actualizing and measuring progress in the difficult transition phase, and then rewards and recognition helping to lock in or refreeze the new arrangements. As Kanter emphasises, however, these activities overlap, and the apparent leader-led sequence is far from universal as many changes involve and require initiation and enterprise from diverse and less elevated individuals and groups. It is important to recognise, however, that a combination of these elements is often required, as changes in one area can be prevented from having an impact by lack of achievement in others, and the different areas overlap – the ‘hard’ with the ‘soft’, visions requiring translation into practical quick wins, symbols requiring communication channels, governance requiring procedural change, education and training needing measurement and feedback, champions and sponsor support is linked to rewards and recognition and so on. As a rough overall lesson, Kanter emphasises, it is important to avoid too ‘lopsided’ a wheel and to keep the wheel ‘rolling’!
Reflective Questions
Higgs and Rowland:
• To what degree do the functions, behaviours, competencies and elements outlined by Higgs, Rowland and Kanter overlap with the required sequence of tasks outlined in ‘N-step’ views of the change journey or Route Map? If they do overlap, do you find this less rigidly sequenced statement of functions more accurate and valuable or less practically useful in the face of situational demands?
• To what extent do the difficulties faced in identifying ‘stages of change’ also apply to such a list of functions to be filled and behaviours to be performed? Does this mean they are still useful as a general heuristic or of little value? If useful, in what ways?
• Higgs and Rowland (2011) did not find any influence of context on the relative importance of FRAMCAP behaviours in bringing about successful change. Do you agree? To what extent do you think it is useful to identify generic functions and behaviours separate from the specific requirements of particular types of change and their context?
• Higgs and Rowland argue that change leadership is highly significant, particularly in the selection of appropriate strategies. To what degree do you think that the fate of change outcomes depends on leadership? What are the implications of your answer for our understanding of change leadership and the importance of its development?
• Higgs and Rowland argue that the more successful change strategies are less autocratically top-down and are more open to discussion and input from below and/or strongly encourage local initiative and enterprise. How accurate do you think this statement is? What are the costs and benefits of such an approach?
Kanter:
• Kanter argues that there is a ‘logical sequence’ of elements in the Change Wheel to be addressed by change leaders, yet also notes that in many projects, particularly those involving multiple institutions, ‘lower level’ initiatives may be important and precede official statements by change leaders. In what sense do you think that it is possible and valuable to hold to some idea of a ‘sequence’ and yet be more flexible than the more rigid ‘N-step’ theories?
• Kanter argues that different elements of the Change Wheel overlap, and many are ‘mutually reinforcing’, what does this say about the validity of, and the importance she lays on, keeping a non ‘lopsided’ Change Wheel rolling?
References
• Appelbaum, S. H., Habashy, S., Malo, J. L., & Shafiq, H. (2012). Back to the future: Revisiting Kotter’s 1996 change model. Journal of Management Development, 31(8), 764–782.
• Collins, D. (1998). Organizational change: sociological perspectives. Routledge.
• Higgs, M., & Rowland, D. (2000). Building change leadership capability: ‘The quest for change competence.’ Journal of Change Management, 1(2), 116–130.
• Higgs, M., & Rowland, D. (2005). All changes great and small: Exploring approaches to change and its leadership. Journal of Change Management, 5(2), 121–151.
• Higgs, M., & Rowland, D. (2011). What Does It Take to Implement Change Successfully? A Study of the Behaviors of Successful Change Leaders. Journal of Applied Behavioral Science, 47(3), 309–335.
• Hughes, M. (2016). Leading changes : Why transformation explanations fail.
• Kanter, R. M. (1983). The Change Masters. Simon and Schuster.
• Kanter, R. M. (2011). The Change Wheel : Elements of Systemic Change and How to Get Change Rolling. (No. 9-312–083; Issue November 23).
• Kanter, R. M., Stein, B. A., & Jick, T. D. (1992). The Challenge of organizational change : how companies experience it and leaders guide it. Free Press.
• Kotter, J. (2007). Leading Change: Why Transformation Efforts Fail. Harvard Business Review, January, 96–103.
• Moss-Kanter, R. (2009). Supercorp: How Vanguard Companies Create Innovation, Profits, Growth and Social Good. Profile Books.
• Moss-Kanter, R. (2020). Think Outside the Building: How Smart Leaders Can Change the World One Smart Innovation at a Time. Public Affairs.
• Rowland, D., & Higgs, M. (2008). Sustaining change: Leadership that Works. Jossy-Bass.
4.4 CHAPTER 6 (p.184-185, 187)
4.4.1 Kanter Seven Skills of Change Agents (2006) & Six Keys to Leading Positive Change
(2012/13)
• For Kanter’s Seven Skills of Change Agents, read the summary and carry out the exercise in: Buchanan, D. & Badham, R. (2008). The seven skills of change masters: A leadership self-assessment. In: Power, politics and organizational change. London: Sage. Chapter 6: 252.
• For Kanter’s Six Keys to Leading Positive Change (2012/13):
This exercise aims to help you further develop your leadership capabilities by critically analysing your strengths in minding and mobilising energy and resources to address the following knowing-doing gaps:
1. The leadership gap,
2. The practice gap, and
3. The power gap.
In this assessment, you will evaluate, apply, and get feedback on your knowledge of how to generate leadership strategies that are mindful of the complexity and challenges of change and mobilises energy for transformation.
Step 1: Watch: Moss Kanter, R. (2013, January 7). 6 keys to leading positive change. TEDx Beacon Street. (17:35).
Step 2: Complete the self-assessment questionnaire and reflection (see below).
Step 3: Submit your assessment for peer review.
Step 4: Complete peer review for two of your peers.
Self-assessment
Key 1: Showing up
Abilities / Current Strengths
(weak) 1 – 2 – 3 – 4 – 5 (strong)
My ability to lead positive change is reflected in:
1. My own leadership actions
2. My adaptive abilities to make judgments and act in uncertainty
3. My entrepreneurial skills to generate much-needed resources
1 – 2 – 3 – 4 – 5
I make time for:
1. Leadership activities, and deciding how to undertake them
2. Considering the limitations of my knowledge, and how to address it
3. Assessing resources and how to address gaps
1 – 2 – 3 – 4 – 5
I put myself in situations where:
1. I am required to lead
2. I have to act based on uncertain knowledge
3. I am not given resources but have to create them
1 – 2 – 3 – 4 – 5
Total
__ / 15
Give an illustration of one (1) situation in which you have succeeded in ‘showing up’ and one (1) situation where you have failed to do so.
• Success situation:
• Failure situation:
Key 2: Speaking up
Abilities / Current strengths
(weak) 1 – 2 – 3 – 4 – 5 (strong)
I speak up about:
1. Leadership issues when they are not being addressed
2. The need for acting and experimenting while acknowledging uncertainty
3. Consideration of more resources for strategies and proposals being under-resourced
1 – 2 – 3 – 4 – 5
I spend time working on shaping and reshaping agendas to get people to think differently about:
1. The need for greater leadership
2. Further consideration of behaviours and motivation even if data is ‘fuzzy’
3. Adapting activities or informally acquiring resources when formal allocation is insufficient
1 – 2 – 3 – 4 – 5
I provide creative ideas for:
1. Furthering leadership behaviours and activities
2. Collecting and acting on data about motivation and behaviour
3. Acquiring additional resources
1 – 2 – 3 – 4 – 5
Total
__ / 15
Give an illustration of one (1) situation in which you have succeeded in ‘speaking up’ and one (1) situation where you have failed to do so.
• Success situation:
• Failure situation:
Key 3: Looking up
Abilities / Current Strengths
(weak) 1 – 2 – 3 – 4 – 5 (strong)
I go beyond tasks and performance and address meaning and purpose for myself and others to:
1. Mobilise myself to ‘step-up’ as a leader
2. Have the confidence and ability to act in uncertain situations
3. Seek to gain additional time, commitment and resources
1 – 2 – 3 – 4 – 5
I spend time appealing to personal values and higher principles in making arguments for:
1. Greater leadership in situations that encourage management
2. Confident experimentation in uncertain and risky conditions
3. Additional time, commitment and resources
1 – 2 – 3 – 4 – 5
I have and promote a personal vision for:
1. Greater leadership
2. Confident action in uncertainty
3. Resourceful behaviour and action
1 – 2 – 3 – 4 – 5
Total
__ / 15
Give an illustration of one (1) situation in which you have succeeded in ‘looking up’ and one (1) situation where you have failed to do so.
• Success situation:
• Failure situation:
Key 4: Teaming up
Abilities / Current Strengths
(weak) 1 – 2 – 3 – 4 – 5 (strong)
I create committed, knowledgeable and powerful teams to:
1. Provide the space for integrating leadership activities into a project, and mentor and advise on how to carry this out
2. Handle the discomforts, insecurities and risks of uncertain experimentation
3. Help address deficiencies in time and resources
1 – 2 – 3 – 4 – 5
In carrying out initiatives, I spend time:
1. Identifying stakeholders and finding backers to support addressing leadership issues
2. Establishing creative and motivated groups that are comfortable with acting in uncertain and risky situations and ready to put extra-energy into handling unforeseen developments
3. Creating a ‘visible’ and ‘invisible’ team that I can draw on to provide additional help and information
1 – 2 – 3 – 4 – 5
In past or present initiatives, I and those I work with are:
1. Passionate in the belief in leadership principles
2. Excited and energised about improvising and experimenting with bringing about success
3. Creative and opportunistic in finding extra resources and making do
1 – 2 – 3 – 4 – 5
Total
__ / 15
Give an illustration of one (1) situation in which you have succeeded in ‘teaming up’ and one (1) situation where you have failed to do so.
• Success situation:
• Failure situation:
Key 5: Never giving up
Abilities / Current Strengths
(weak) 1 – 2 – 3 – 4 – 5 (strong)
I prepare myself and others for tough challenges in change and find significant personal and institutional reasons for not giving up to:
1. Overcome pressures to compromise on leadership activities and commitments
2. Deal with initial losses, unexpected complexity and uncertainty about outcomes
3. Cope with unexpectedly high levels of time and resource pressure in dealing with challenges
1 – 2 – 3 – 4 – 5
During initiatives, I spend time:
1. Reminding and motivating myself and others about persisting in leadership activities
2. Reassuring and reigniting excitement in improvisation and experimentation
3. Seeking out and mobilising people and sources to provide extra resources
1 – 2 – 3 – 4 – 5
In past or present initiatives, I and those I work with:
1. Continue to carry out desirable leadership activities
2. Test out ideas, learn from mistakes and then be more successful in my actions
3. Succeed in finding additional needed resources
1 – 2 – 3 – 4 – 5
Total
__ / 15
Give an illustration of one (1) situation in which you have succeeded in ‘never giving up’ and one (1) situation where you have failed to do so.
• Success situation:
• Failure situation:
Key 6: Lifting others up
Abilities / Current Strengths
(weak) 1 – 2 – 3 – 4 – 5 (strong)
I use initiatives as a chance to promote, reward and inspire others in:
1. Undertaking leadership activities
2. Learning and experimenting in uncertain and risky environments
3. Creatively finding or generating required extra-time, personnel or resources
1 – 2 – 3 – 4 – 5
I spend time promoting and rewarding:
1. Leadership activities by others
2. Adapting, learning and experimenting
3. Mobilising additional resources
1 – 2 – 3 – 4 – 5
In previous and present initiatives, I have been successful in:
1. Stimulating leadership behaviours in others
2. Establishing an ethos and practice of effective experimentation
3. Obtaining need resources that were not formally allocated
1 – 2 – 3 – 4 – 5
Total
__ / 15
Give an illustration of one (1) situation in which you have succeeded in ‘lifting others up’ and one (1) situation where you have failed to do so.
• Success situation:
• Failure situation:
Overall Reflection
i) Individual Scores:
• Showing Up __ /15
• Speaking Up __ /15
• Looking Up __ /15
• Teaming Up __ /15
• Never Giving Up __ /15
• Lifting Others Up __ /15
ii) Overall Score __ /90
What does this say about your current strengths and weaknesses as a mindful leader able to mobilise positive change? Were you noticeably stronger or weaker in any area? What might you now work on to improve?
……………………..……………………..……………………..……………………..……………………..……………………..……………………..……………………..……………………..……………………..……………………..……………………..……………………..……………………..……………………..……………………..……………………..……………………..……………………………………..……………………..……………………..……………………..……………………..……………………..……………………..……………………..…………………………..……………………..……………………..……………………..…………
4.4.2 Exercise (p.185):
The Springboks Jersey (Mandela and Invictus, 2009)’
The movie Invictus is a 2009 American-South African biographical sports drama film directed by Clint Eastwood and starring Morgan Freeman and Matt Damon. The story is based on the John Carlin book Playing the enemy: Nelson Mandela and the game that made a nation about the events in South Africa before and during the 1995 Rugby World Cup. The movie dramatises Nelson Mandela’s attempt to unite the South African nation by the symbolic donning of the No.6 Springboks Rugby shirt in the 1995 Rugby World Cup Final. The brief documentary (Grover, 2017) provides some details and background, and the video extracts from Invictus (Arsenal, 2013) highlight some of the critical issues.
1. Watch
Grover, S. (2017, February 22). Leadership through movies: Invictus. (3:06).
Arsenal, A. (2013, December 9). The real invictus: How Nelson Mandela united South Africa through sport. CBS News: The National. (11:11).
2. Reflect
What these videos illustrate are the challenges of bringing about behavioural change in uncertain and risky conditions. Consider the following:
(i) Mandela defines the issue as breaking a ‘cycle of fear’. How does this differ from the view of many of his supporters?
(ii) Why is the wearing of the Springbok cap and shirt so significant and so risky?
(iii) What does Mandela do and say to create behavioural change in his followers? What does he admit are the main challenges?
3. Re-Act
Drawing on Mandela's example, what are two or three things you might do to prepare yourself to better influence others by acting decisively and effectively when your actions challenge the prejudices of others and are uncertain in their outcomes?
Links referenced above if they don’t work are:
The real Invictus How Nelson Mandela united South Africa through sport (11 mins)
https://www.youtube.com/watch?v=2U7ZgCMLjHc
Leadership through movies – Invictus (3 mins)
4.4.3 Extended Case (p.187):
The Starbucks Story Continued: Revisiting the Turnaround
“…everyone has an opinion. Say “Starbucks,” and people start talking. The coffee is strong, they’ll tell you, unlike the weak swill of yesteryear. The coffee tastes burnt and bitter, aptly nicknamed “Charbucks.” The chairs are comfortable and the service reliable. The stores are cookie-cutter and the service pre-dictable. The company is good on environment. It’s bad on fair trade. It’s a haven of civilization. It’s a soulless corporate fake. Almost before I could ask the questions, friends and strangers alike would tell me what they thought, often with great relish. Their comments made one thing evident: Starbucks has insinuated itself into our shared culture as well as into our wallets and neighborhoods. It’s part of how many of us define our world and ourselves, not to mention our coffee.”
-Fellner, K., 2008, Wrestling with Starbucks p.4
The Starbucks story is well-known and we explored its basics in Chapter 6. The following provides a few more of the interesting background details, and explores the ‘turnaround’ change issues in more detail.
Four main features of the early Starbuck’s success story have become apocryphal. Firstly, the founding reputation of the company and its CEO and major shareholder Howard Schultz as having a passion for coffee and a rewarding experience around the beverage (Gulati et.al., 2002). Secondly, the rapid store-based customer-experience driven nature of the expansion as Starbucks created a whole new ‘latte class’ (Koehn et.al., 2014; McGrath, 2006). Thirdly, a supportive environment of a younger US generation desiring high-quality coffee and an economy in which the ‘experience’ rather than the product is more deliberately sold (Biehl-Missal 2012). Fourthly, the social responsibility of the corporation in its treatment of employees, suppliers and customers and contributions to society (Starbucks, 2021).
By the end of the first decade of the 21st century, however, the Starbucks’ image had become severely tarnished. Rather than a promoter of high-quality coffee it had become synonymous with mass-consumption downgrade of coffee as part of a sickly product. Its heralded health care benefits for employees and training and support for growers were compromised by the realities of employee experience, its anti-union practices and failure to meet Fair Trade standards. In the face of increased criticism, the phrase ‘Starbucked’ was coined to capture its purportedly predatory nature (Clark, 2007). The quality of its communal ‘third space’ experience was also being challenged, as part of a reconsideration of the ‘Starbucks moment’ (Simon, 2009, 2019). Within Starbucks, the first decade of the 21st century witnessed early warning signs of weaknesses in its expansion, followed by consternation over its subsequent collapse in share price, with Howard Schultz making a dramatic return as a CEO committed to resuscitating & reorienting the brand. Starbucks was being threatened by competitors, both ‘high end’ (over rapidly growing speciality coffee houses) and ‘low end’ (e.g. McDonalds McCafe, Dunkin Donuts). The economy was also heading for a dramatic downturn. As we saw in the Chapter 6 case study, and references, by the second decade of the 21st century, Starbucks appeared to have ‘bounced back’.
In the turnaround literature, Trahms et.al. (2013) and Moss-Kanter (2003) emphasise a number of different leadership actions. Let’s consider these in turn.
• Drawing on Trahms et.al. (2012), why and in what ways do you think Howard Schultz was aware of emerging problems, attributed these problems correctly and accurately perceived the severity of the problem? Why do you think that it took Schultz’s reinstatement as CEO to start addressing the problem?
• Established studies of turnarounds emphasise the tensions between operational cost-cutting and divestiture (‘retrenchment’) and strategic revitalisation (adjusting domains in which it competes, and how it does so), and the delicate balancing act required to pursue both strategies. In what ways did Schultz undertake and combine these two sets of actions? In what ways did he address the strategic leadership issues required to improve the capabilities, relationships and reward systems of top management, and work at effectively managing stakeholders including shareholders, customers, employees and suppliers?
• Drawing on Rosabeth Moss Kanter’s (2003) Leadership and the Psychology of Turnarounds, and, in particular, the HBR Case Study (2007) Starbucks Coffee Company: Transformation and Renewal, how did Schultz undertake the delicate balancing act of reconciling vision and numbers, stimulating criticism yet improving confidence, reconciling competing internal and external stakeholders, enhancing dialogue and collaboration while renewing and empowering his team?
Now let’s explore some of the deeper, more emotive and meaningful dimensions in considering the ‘success’ of Starbuck’s ‘turnaround’.
Starbuck’s proclaimed mission is “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time”, with a vision “to establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow”. In so doing, Starbucks is committed to ‘ethically sourcing high-quality coffee, contributing positively to the communities we do business in and being an employer of choice’ (2018 Annual Report). Taking this mission, vision and commitment into account, to what extent do you think Howard Schultz’s turnaround succeeded in reinstating the original proclaimed spirit and value of Starbucks? From your reading of supporters, critics and attempted balanced analysis, to what degree do you think Starbucks has:
• Succeeded in realizing its original promise?
• Betrayed its mission, vision and commitments in the course of its growth and turnaround?
• Made some valuable economic and social contributions, given commercial realities?
On the basis of your responses:
• In what ways would you praise or condemn Schultz as a change leader?
References
• Behar Howard, & Goldstein, J. (2007). Its Not About the Coffee: Leadership Principles from a Life at Starbucks. Penguin.
• Biehl-Missal, B., & Saren, M. (2012). Atmospheres of Seduction : A Critique of Aesthetic Marketing Practices. Journal of Macromarketing, 32(2), 168–180.
• Bussing-Burks, M. (2009). Starbucks. Greenwood.
• Fellner, K. (2008). Wrestling with Starbucks: Conscience, Capital, Cappuccino. Rutgers University Press.
• Gulati, B. R., Huffman, S., & Neilson, G. (2002). The Barista Principle — Starbucks and the Rise of Relational Capital. Strategy + Business, 28 (Third Quarter), 1–12. https://www.strategy-business.com/article/20534?gko=eb786
• Kanter, R. M. (2003). Leadership and the Psychology of Turnarounds. Harvard Business Review, 81(6), 58–69.
• Koehn, N. F., Mcnamara, K., Khan, N., & Legris, E. (2014). Starbucks Coffee Company: Transformation and Renewal (No. 9-314–068; Harvard Business School Case Study).
• Mahler, J. (2009). Organizational Learning at NASA: The Challenger and Columbia Accidents. Georgetown University Press.
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4.5 CHAPTER 7 (p.215)
Extract from the Appendix in:
Stacey, R. (2012) The Tools and Techniques of Leadership and Management: Meeting the challenge of complexity, London: Routledge. ISBN 978-0-415-53118-4.
The Stacey Diagram
"During 1995, I completed the second edition of my textbook and this was published in 1996. This second edition incorporated what I had already written about complexity and complex adaptive systems and it also included additional material on neurotic forms of leadership. The main change in this edition was not, therefore, the addition of new material but the reorganization of the structure of the book to reflect comments received on the first edition. The book set out a conceptual framework which was much the same as those in previous books: different models of decision-making and control are appropriate for different change situations defined in terms of conditions close to and far from certainty and agreement; and organizational dynamics was understood in terms of feedback systems. A distinction was drawn between extraordinary management, which made use of the notion of the shadow systems and did pay attention to politics, covert politics and unconscious processes, and ordinary management which was essentially the same as that found in conventional views on management. The different forms of ordinary and extraordinary management had to be applied at the same time and since they are opposites this generates tension.
This book introduced a diagram which I have since come to regret. The y axis of this diagram indicated movement from situations close to certainty to situations far from certainty while the x axis indicated movement from situations in which people were close to agreement with each other to situations in which they were far from agreement with each other. It was then argued that in conditions close to certainty and agreement, that is situations of regularity, stability and predictability, it was possible and useful to use the standard tools and techniques of management. In intermediate situations where the situation is close to certainty but there is a high degree of disagreement then political decision-making was required, while in conditions close to agreement but some way away from certainty, judgmental forms of decision-making were required. These possibilities were described as the ordered zone. It was also suggested that in conditions very far from certainty and agreement there would be old fashioned chaos and anarchy, the disordered zone. However, between the ordered and disordered zones there was a zone of complexity with the paradoxical dynamic of regularity and irregularity, predictability and unpredictability at the same time. It is in the dynamics of complexity, which are the only dynamics in which the new and the creative can emerge, that the standard tools and techniques of management cannot be used. Instead, we would find that decision-making was unprogrammed, having the form of muddling through and garbage-can decision-making. Here we would search for error and engage in the kind of agenda-building politics that the book had described. I used this diagram often in presentations I gave and people usually responded very positively to it. However, presenting things in this way suggests that managers can decide which kind of situation they are in and then choose the appropriate tools. This is typical of a number of contingency approaches to tools and techniques, approaches of which I am now highly critical. This contingency approach contradicts the whole point of the book which stresses unpredictability and tight limits to the ability of managers to identify what situation they are in and choose outcomes in instrumental, rational ways. Conditions close to certainty and agreement hardly ever occur in human interaction. The diagram proved to be very popular and a number of writers took it up and amended it in a number of ways – it came to be referred to as the Stacey Diagram, which is unfortunate because I came to see how problematic this kind of contingency approach is. My colleague kept telling me that people liked the diagram so much because it collapsed the paradox of certainty and uncertainty and doing so enables people to carry on thinking as before when I thought I was challenging them to think in a different way. I resisted this criticism for some time but then eventually saw the point and dropped the diagram altogether only to find that it had developed a life of its own whether I liked it or not, as others adapted and used it. I no longer use the diagram because it is simply interpreted in a way that sustains the dominant discourse while using the alternative jargon of complexity and so it does not feature in the 3rd, 4th, 5th and 6th editions of the book.
My publications since 2000 have taken a different course, one which moves away from thinking of organisations as systems to thinking about them as patterns of relationships, both good and bad, between people. These patterns emerge in complex responsive processes of interaction between people taking the form of conversation, power relations, ideologies, choices and intentions. Since everyone is choosing, intending, planning and strategising no one of them can determine what happens unless they are powerful enough to be able to employ terror. What happens is the result of the interplay between the intentions and strategies of all involved and no one can control this interplay, hence the fundamental uncertainty and unpredictability of human life."
References
Stacey, R., Griffin, D. & Shaw, P. (2000) Complexity and Management: fad or radical challenge to systems thinking, London: Routledge.
Stacey, R. (2001) Complex Responsive processes in organizations: learning and knowledge creation, London: Routledge.
Stacey, R. (2003) Complexity and Group Processes: A radically social understanding of individuals, London: Brunner-Routledge
Stacey, R. (2010) Complexity and Organizational Reality: Uncertainty and the need to rethink management after the collapse of investment capitalism, London Routledge.
Stacey. R. (2011) Strategic Management and Organisational Dynamics: the challenge of complexity to ways of thinking about organisations, London: Pearson Education (6th Edition).
Stacey, R. (2012) The Tools and Techniques of Leadership and Management: Meeting the challenge of complexity, London: Routledge.
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