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Corporate Leadership & Change Management
Posted Date: 28 Jul 2008 Resource Type: Articles/Knowledge Sharing Category: Education
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Posted By: Marissa Fernandez Member Level: Silver
Rating:  Points: 4
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Introduction:
Globalization, developments in the field of information and technology, new management strategies and the competitiveness in the business environment have all been factors that have necessitated changes in the culture of organizations and the manner in which they function. Yet, change is seldom easily accomplished, as there is bound to be resistance to change from both the employees and the management, who have been used to a particular culture set in the organization over a considerable period of time. This resistance needs to be resolved, and it is here that leadership plays a significant role. The philosopher Peter Koestenbaum reveals the qualities of leadership that provide the means to overcome resistance to change in an organization. In his opinion good leader’s exhibit operational capabilities in the four dimensions of vision, reality, ethics and courage, and it is these dimensions that impact on the manner in which people behave. To make sure that the relevant change in an effective and successful manner it calls for leadership that displays all these four essential characteristics of leadership. (Ind, N. 2001).
Management Theories
Lewin, 1951, Force Field Analysis, "An issues is held in balance by the interaction of two opposing sets of forces – those seeking to promote change (driving forces) and those attempting to maintain the status quo (restraining forces)".
Firstly one should describe the current and desired situation. One should discuss all forces thus enabling one to discover whether the forces are valid or changed. And determine whether change is doable thus leading to progress.
Kotter, 1996, to cope with change; leaders have to fundamentally alter the way their organizations do business. Kotter’s ‘Leading Change’ describes the role of leaders in accepting and managing change by creating a sense of exigency thus forming a powerful league. In his book ‘Corporate Culture and Performance’ Kotter & Heskett, 1992, companies should posses’ three things-a) a corporate should promote values aligned with the environment. b) They should have consideration for employees, shareholders and customers. And most importantly c) a corporate should position value on leadership rather than bureaucracy.
Goleman, 2002, “Primal Leadership” states to understand the six leadership styles; first the human communication and the interaction concept of resonance, should be tacit. Goleman’s view is good leaders create resonance. Resonance comes from the Latin word resonare, to resound. Goleman, 1997, ‘Emotional Intelligence’ demonstrates the critical importance of a specific type of intelligence that is not recognized in traditional IQ i.e. emotional intelligence.
Covey, 2003, to achieve the goal the principle of leadership should be understood. Speed will be a crucial determinant for success as the pace of business keeps accelerating. Covey famous “first things first” mantra, advises that all should be disciplined in their daily work.
Mc Kinsey’s, 1982, 7-S framework model was developed by Tom Peters and Robert Waterman, is a Value Based Management (VBM) model that describes as to how one can holistically and effectively organize a company. The 7-S framework consists of: Shared Value, Strategy, Structure, System, Staff, Style and Skill. (McKinsey, 7-S framework model).
Brown’s, 2000, “The Six Dimensions of Leadership” opens with a quote from the noted writer on leadership, Warren Bennis, stating: "It is the paradox of our times that precisely when the trust and credibility of leaders are at their lowest…we most need people who can lead". (Bennis, The Unconscious Conspiracy. 1976).
Brown, 2000, describes the role of leaders as “dimensions”. The six dimensions are hero, actor, immortalist, power-Broker, ambassador and victim.(Brown, Six Dimensions of Leadership.2000).
Schein, 2004, "Organizational learning, development, states planned change cannot be understood without considering culture as the primary source of resistance to change."
Schein, 2004, “Organizational Culture and Leadership" defines the culture of a group as: "A pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems". (Schein, Organizational Culture and Leadership. 2004).
Leadership and Change Management
To begin with what is leadership? Leadership is- leading the organization into a profitable future. Superior corporate leadership is essential to outstanding corporate. The principles of leadership are, to know oneself and seek self-improvement, to be technically proficient, to seek responsibility and take responsibility for ones actions, make sound and timely decisions, set an example, keep one’s workers informed, develop a sense of responsibility in ones workers, ensure that tasks are understood, supervised, and accomplished and to use the full capabilities of ones organization. A leader’s management tool is effective communication. Leaders should explain both explicitly (by defining their visions, intentions, and directions) and implicitly (through their behaviour). A significant aspect of leadership is self awareness. The act of management is followed by the act of leadership. Having set the course of action, then the next step is management thereby identifying the objective that was established by leadership. Leadership is about being able to perform multitasking, being polite, having a vision and being able to run the operations by the financials.
As Dr.Alex Krauer said “Whether we like it or not, change is with us. We either actively participate in it or passively ignore it. In the latter case, the future will punish us.” Change -No one knows what tomorrow’s trend will be. What is the solution? Companies have to continuously examine their industry, business, social, technological that might affect them. The game of “what if?’ should be played regularly. According to Mark A Morgan, managing director and head of Gulf onshore, Citigroup Private Bank, said: "Leadership is about being adaptable to change and uncertainty. Being robust enough to withstand change or to adapt to change is a competitive advantage that corporations should focus on. We live in a world that is more susceptible to change and uncertainty than ever before, due to the forces of globalisation and technology." (IIR, 2004).
Ethical Approach to Leadership
An ethical approach to business should be good business. What is ethical behaviour? It is candid behaviour towards customers, employees, investors and stakeholders. An ethical corporate is sustained by ethical individuals. Outstanding leaders maintain a positive 'can do' sense of confidence.
Customer service- a competitive edge for corporate. Many companies go beyond customer satisfaction and try to meet customer expectations as well as surprise the customer. For instance companies such as Hilton and Starwood are experimenting with service technologies such as self check-in kiosks, providing hotel and local area information, additional room keys and folio information. Radisson Hotels & Resorts announced that guests will be allowed to check-in via the internet 24-hours prior to arrival.
Wise organisations always learn from their competitors. One needs to anticipate one opponent’s move, as the old saying goes “know your enemy”. The question: Where is the market? Who is currently catering to it? Where do we stand with respect to the competitors? What changes are they adopting? How will competition respond to our plans and strategies? The objective of market intelligence is to gather relevant information without crossing the line of unethical behaviour. Information is the first vital step to wealth. When the received information is used to make it commercially utilisable, this becomes knowledge.
Information and Intuition
Managers should combine information and intuition into informed intuition as management is a blend of science and art. Business decision requires explicit knowledge. Jack Welch one of the world’s best managers of General Electric Co (GE), who had about 270,000 employees in 100 countries, knew exactly which business problem to address personally. When asked, how does he know when get involved, he replied “I smell it”?
Leadership is not a position but an action. A leader needs credibility and this comes from own performance’s. Authority is achieved from abilities, experience and commitment. Qualities of leadership are required to enhance change. But what is management change and when does one implement change? The concept of management change include change in mission, restructuring operations, new technologies, major collaborations, new programs such as Total Quality Management etc. Organizational transformation and radical reorientation is the way an organization operates.
What provokes CHANGE management, a major driving force and the changing globalization? To sustain a change, the structure of an organisation should be bespoke, including the strategic plans, policies and procedures. Thus the qualities of leadership play an important role to enable one to face challenges and changes. Innovation is a department and company proficiency. The common cause for a project failure is the absence of a definition of what actually would constitute success. According to UK Government procurement guidelines, it is generally regarded to spend a minimum of 15% of the overall project budget on defining and validating requirements before a single line of code is written. Strategic plans once set the team as active agents of change should be appointed. For instance, a CEO realized that he needed to realign internal resources because a close competitor was gaining advantage. He called for a meeting and said “Team," we're in a war for market share. Presently I don't think we're properly configured to win the particular battle, so I'm changing the structure of resources. After showing the new organization chart, the CEO later explained: "We had a competitor who was showing us a better way to win the business.” Using fire fighting as an example he explained “My team had five guys armed with buckets and two with hoses. His team had three guys with buckets and four with hoses. We just weren't organized to compete and win. I was just trying to optimize our resources. I wasn't willing to let this change be viewed as a political event. I wanted it to be seen as a business necessity to remain competitive."
"Results" a powerful concept if left unmanaged, poses a risk to a company. For a CEO result is a useful diagnostic and learning tool. Problematic plan should lead to the management team analyzing all factors that contributed to the shortfall, and this should be communicated to ensure organizational learning.
This leads to the question, what is corporate culture? Corporate culture comprises the attitudes, values, experiences and beliefs. It is the residue of success within an organization. Culture is not created by declaration; it derives from expectations focused on winning. CEOs who fail to define success and communicate their vision of it, and fail to make their expectations clear to employees, produce meaningless cultures. In companies with healthy cultures, employees are supported in the belief that they are part of an exciting future. Leaders should be confident that they understand all of the issues. The five factors– project duration, the project team's performance integrity, management commitment, employee commitment, and employee effort required to cope with the change, are all essential.
The impetus for change may come from within the organisation or from external conditions which are outside the direct management control. An effective change model should answer the following questions, what are the factors determining this change? Who is initiating this change? What is to be changed? How is the organisation to be changed? What are the results of the change?
If a business is going to manage change effectively there needs to be a clear decision-making framework to ensure the organisation has a means of achieving its goals.
Hospitality and Tourism
International hotel chains were invented after World War II and grew in the 1960s, which later expanded. The pressures to inflate beyond national precincts have largely arisen from the needs of growing hotel companies. Leadership forms the essential part in forming the organisation as a global company.
Hospitality companies always need to consider the implications of the global context in which they operate. What tangible trends driven by an inter-linked global marketplace will shape the hospitality industry of the future? What does globalization mean for the internationally oriented hospitality company, as well as hotel operations that compete locally and regionally with these organizations?
Awareness and knowledge have increased worldwide among restaurant guests and definitely guests have become more demanding and cannot be fooled. And one way of pleasing a guest is to give them choices. Growth of population and migration are one of the key issues for the industry in the future. The world’s population is expected to grow from 6.2 billion today to 8.9 billion by 2050. The World Travel and Tourism Council (WTTC) estimated in 2004, that the travel and tourism economy represented 10.4% of the global economy. (Hospitality, Dec/Jan 2004/05).
GCC Countries and Hotel Industry
Al Zamil (chief operating officer of Saudi Arabia's Zamil Industrial Investment Company) stated that the six Gulf Cooperation Council (GCC) member countries - the UAE, Bahrain, Oman, Kuwait, Qatar and Saudi Arabia - are particularly well placed to attract the global conventions market with its growing image as a multi-market tourism and business destination. (IIR , May 2004.)
According to the latest industry survey, 18,947 Airbus A-380 aircraft trips per year would be needed to carry guests for the 7.8 million room nights of supply that are confirmed to become available in the GCC 4 and 5-star hotel sector by 2008. The region-wide survey of future upmarket hotel developments was undertaken by the Dubai office of TRI Hospitality Consulting, which identified 80 upcoming hotels and 21,283 future rooms in the Arabian Peninsula - the equivalent of 7,768,295 room nights of supply per annum.
Although the largest single market remains the UAE, with 11,922 rooms due to become available between now and 2008 (9,628 of which are in Dubai alone), the GCC markets expected to make the largest gains are Qatar, with a projected 145 per cent increase in room supply, and Kuwait, with an anticipated 75 per cent increase in room supply.
The key word in our survey is 'confirmed',' says Peter Goddard, Managing Director of the Dubai office of TRI, the world's leading management consultancy in the fields of hotels, tourism, leisure and real estate. 'In Dubai, in particular, there is an element of confusion surrounding which hotel developments have been confirmed and which are still in the pre-feasibility stage. On The Palm, Jumeirah, for example, there's a great deal of buzz surrounding all of the proposed hotel projects. According to our research, nine are confirmed so far. While I have every confidence that there will be in the region of 30 to 40 hotel projects when The Palm is complete, TRI's research has culminated in the most accurate snapshot of the current status of hotel developments in the region.' (AME Info, 2005).
'The large scale, landmark hotel and resort developments currently underway in Dubai speak volumes of the tremendous growth of the emirate as an exciting tourist destination,' says Goddard. (AME Info, 2005). Elsewhere in the UAE, Abu Dhabi's future supply of five confirmed hotels includes the landmark, Kempinski-operated Bani Yas Palace Hotel and Conference Centre, while Fujeirah's four confirmed hotel developments include the five-star Kempinski Fujeirah Resort and the Robinson Club. In Qatar, where the hotel sector has been given new impetus by the staging of the Asian Games in 2006, there are 13 confirmed hotel projects with a future supply of 3,118 rooms by 2007. The Pearl Island project alone is reported to have three hotels with 900 rooms opening in 2006. Notable among the other hotels listed on TRI's website are a five-star, 350-room Grand Hyatt, due top open in 2006, and a five-star, 225-room Four Seasons, due to open in 2005.
'Landmark projects for Dubai have acted as a catalyst for the whole region,' says Gavin Samson, TRI's Managing Consultant in Dubai. 'The other Gulf states are trying to emulate Dubai's success as they build infrastructure and improve tourist arrivals, or stem the outflow from their own countries. Although the overall tourism objectives are different, there are significant similarities in tourism development strategy, namely the proliferation of mixed-use development and waterfront projects, incorporating marinas and golfing facilities. Man-made islands of fantastic designs have also been a strong element.' (AME Info, 2005).
Commenting on the growth in mixed-use hotel developments, in particular, Samson says, 'The rapid expansion of the tourism and real estate markets in the GCC in recent years has been fuelled by an ever-growing number of ambitious mixed-use development projects that incorporate significant hotel components. These developments are now integral at both a country and regional level as governments seek to diversify their economies through the key growth areas of tourism and real estate.' (AME Info, 2005).
The rapid growth in the number of up-market hotels in the GCC countries is exciting for the tourism industry. However, as Sven P. Gade, Director Travel and Tourism Development with MESA points out: 'securing a good operator or finding the right brand for a hotel property will become increasingly difficult for owners of hotel properties in the GCC going forward'. (AME Info, 2005).
There are three main factors that have influenced the relationship between the hotel operators and owners, Market supply and demand, Ownership as well as the investment structure of a property and Level of branding in the micro market.
Food & Beverage Department
The F&B department is generally the second-largest operating department in an hotel. Those that provide a clear unique selling point (USP) and recognise consumer benefit always provide a three times higher return on investment (ROI). Food-and-beverage services require an intimate understanding of what attracts patrons to dine or drink, and those lures are not the same as what brings people into a hotel's.
Implementing Change
An example? Menus constantly change from a la carte to a tapas style tasting menu and so on. As I always said “Any time you give the customer choice and control to create their experience it’s a move towards the future, no matter what type of restaurant it is”.
Consider a change in the menu, wherein a Latin-influenced line of appetizers are to be presented in forms of Asian foods. Pork styles are found in spring rolls, roasted pork and tender ham with a mild white cheese and brown mustard, combined with shredded beef, roasted corn and mild white cheese with poblano and jalapeno together with ‘crones’- a small, unique woody tuber with earthy flavours and crunchy textures.
Awareness of the change should be made and every staff in every department to be informed about the new menu. All staff in the F & B department needs to watch the preparation of the dishes (if possible), thereby enabling them to introduce as well as enlighten the guests to the new dishes. The team should explore and develop the menu for the new brand wherein flexibility and balance would be critical components. Food needs to fit the guest’s lifestyle and offering comfort food as well as healthy foods. Consumers are looking for familiar foods with a 'twist.' Operators want to offer in-demand menu items that keep them ahead of their competition. The varieties are to be balanced in a strategic manner, to provide a wide range of choices--three proteins, two forms and distinct flavour profiles, including savoury, spicy-sweet and spicy.
In developing Latin Latitude, a team should be created that overlooks from marketing, R&D, sourcing, finance and sales, as well as support from the company's executive chef--to ensure that the project is managed for success.
Further the sales department need to use this introduction of cuisine as their marketing technique and should thus be effective in luring people to come and taste. According to Kurt Lewin, the current situation should be described i.e. what the items on the current menu are. Identify where the current situation will lead to if no action is taken i.e. if the introduction of the new menu is delayed there is a chance wherein another hotel can use the same cuisine. As covey stated in order to achieve this goal i.e. with the introduction of this cuisine, there could be a rise in revenue. At the same time principle of leadership forms the core in establishing as well as implementing as well as keeping a watch on the Latin-influenced line of appetizers, all the time.
Goleman’s view, good leaders create resonance (Latin word resonare meaning to resound). Resonance comes naturally to people with a high emotional intelligence and intellectual aspects, plays an imperative part in managers for exultant implementation of change.
At the same time, what happens when there is opposition to this change in the menu? Certain staff would find this change as a problem, for this means the need to learn more about the cuisines and upgrading oneself. Mc Kinsey’s 7-S framework, a Value Based Management (VBM) stated that when problems arise, examination of the issue and the freedom of speech of staff should be a priority, for in doing so the reasons for non-acceptance of change at times can lead to new ideas which can further strengthen the path to success.
When interacting with the customer one always has to keep a smiling face. Four factors - warm welcome, anticipatory service, defect-free product and fond farewell if followed, will increase customer loyalty. Further most travelled guests can be used in the right manner, to communicate about the product and thus because of curiosity, the flow of customers can increase. Producing change is about 80 percent leadership, establishing direction, aligning, motivating, and inspiring people and about 20 percent is management, planning, budgeting, organizing, and problem solving. (Winning at Change, 1998).
The interiors and ambience of the restaurant plays a vital facet and is the life and spirit. The ambience is what the guest feels even before he can see the menu and eating in the restaurant should be a pleasurable and a memorable experience. Maybe waiters can dress Latino style; employees with knowledge of Latin can be shifted to F & B department to further enhance the atmosphere thereby enabling customers to return for Latino heat.
Improving F & B Department
Modern day Managers have to skill themselves with inter and intra person development, if they wish to progress. One such successful method is the SWOT Analysis, wherein the Strength, Weakness, Opportunity and Threat are studied. While so, it is pertinent to study and overcome the issues pertaining to Weakness and Threat first.
F & B can also be identified as the primary and individual point of sale in the hospitality industry. In other words, its business is not dependant on the occupancy of the hotel. Banquets, walk-in’s and across the counter sales (take-away and home delivery) form part of the revenue earnings of this department.
This attributes the main reason for constant improvement of the menu, introduction of authentic foods and promotion of health foods. While Managers oversee the general functioning of the respective outlets, it is imperative that they train their subordinates to keep a finger on the pulse of their guests, in terms of the guests ability to increase business like banquets etc., Necessary follow-up, contact through mail, phone, promo offers, festive wishes and more importantly enquiring of the guests absence for the last fortnight go a long way in giving the guest a feeling. A feeling similar to – “ATHITHI DEVO BHAVO” (Thy guest is thy God).
Conclusion
The hotel industry position has been a positive one towards the effort in revolutionizing trends. This in itself does mean that changes are an inevitable scenario in any business enterprise in the hotel industry segment and as such will witness resistance to the changes required as a part of the strategic decisions of the business enterprise. Successfully managing change thus becomes a significant factor in the success of a business enterprise in the hotel industry segment and so would be the requirement for leadership in the business enterprise to ensure the success of the planned changes. At such times the words of Max Depree need to echo through the business enterprise that “management is essential a push operation while leadership is a pull operation”, and leadership is what would pull the enterprise through the labours of change. ( DePree, 1989).
References
Kotter. 1996, Leading Change. Harvard Business School Press.
Kotter. 1998 ‘Winning at Change’. Leader to Leader. No10. pp27-33.
Kotter, & Heskett, 1992, ‘Corporate Culture and Performance’. The Free Press, New York.
Goleman. 1997, ‘Emotional Intelligence’, Batman Books.
Goleman. 2002. Primal Leadership: realizing the power of emotional intelligence. Harvard Business School Press, Boston.
Waterman, Thomas, Waterman (Jr), 1982. In Search of Execellance. Warner Books Printing.
Ethan, Rasiel & Paul. 2001, the McKinsey Mind: Understanding and Implementing the Problem-Solving Tools and Management Techniques, McGraw Hill.
Covey. 2003. Principle Centred Leadership, Free Press, New York
Brown. 2000, ‘The six Dimensions of Leadership’. Random House.
Schein. 2004. Organizational Culture and Leadership, 3rd edn, Wiley Publishers, New York.
Kanter. 1983. ‘The Change Masters’. New York: Simon & Schuster, Inc.
Bennis.1976. The Unconscious Conspiracy: Why Leaders Can’t Lead. Amacom.
Bennis & Nanus. 1985, Leaders: The Strategies for Taking Charge, New York, Harper and Row.
Lewin. 1951. Field Theory in Social Science. Dorwin Cartwright (ed.). New York: Harper.
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