Assignment: Managing Change in Organisations, MBA. Student name and number - 1 - University of Wales MBA Through Resource Development International (RDI) Managing Change in Organisations Assignment Report on Change at Little Chef, Popham, Hampshire Submitted by: ……………… RDI Student No: …………. University of Wales Student No: ……………. 85% Comments from examiner stated that the Forcefield Analysis was too long – 1 page would have been sufficient.
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Assignment: Managing Change in Organisations, MBA. Student name and number- 1 -
University of Wales
MBA
Through Resource Development International (RDI)
Managing Change in Organisations
Assignment
Report on Change at Little Chef,
Popham, Hampshire
Submitted by:
………………
RDI Student No: ………….
University of Wales Student No: …………….
26 January 2010
Words, excluding Bibliography and Annexures, but
including an element of referencing = 4318 words
85% Comments from examiner stated that the Forcefield Analysis was too long – 1 page would have been sufficient.
Assignment: Managing Change in Organisations, MBA. Student name and number- 2 -
Report on Organisational Change
at Little Chef, Popham, Hampshire
Index
Page
1 Introduction and Terms of Reference 3
2 Research 3
3 Abbreviations 3
4 Little Chef, the case study 5
4.1 Background 5
4.2 The main objectives of the organisational change 6
5 Forcefield Analysis 7
6 Evaluate of change management effectiveness 16
6.1 Create a sense of urgency 17
6.2 Pull together the guiding team 18
6.3 Develop the change vision and strategy 19
6.4 Communicate for understanding and buy-in 20
6.5 Empower others to act 21
6.6 Produce short term wins 22
6.7 Don’t let up 22
6.8 Create a new Culture 23
7 Assessing change objectives 23
7.1 Balanced Score Card 25
7.1.1 Finance 25
7.1.2 Customers 26
7.1.3. Business 27
7.1.4 Learning and growth 27
7.15 Recommendations 29
Bibliography 30
Annexures 36
Channel 4 Summaries of TV series 41
Assignment: Managing Change in Organisations, MBA. Student name and number- 3 -
Managing Change in Organisations
Report on the Business Process Transformation
Of Little Chef, Popham, UK
January 2010
1 Introduction and Terms of Reference
The purpose of this report is to elucidate on the organisational change that
has taken place at Little Chef (LC) Popham, UK as a blueprint for revitalising
the Little Chef chain of roadside restaurants in the UK during 2008 and 2009.
The chain, a private limited company, was acquired by specialist private
investment business, RCapital, a Limited Liability Partnership, in 2007.
The objective of the report is to:
describe the organisational changes that have taken place in Little
Chef since it has been under new management, and the purpose of
the changes
analyse the nature of the change
illustrate how change management models could have been used to
identify the drivers of change,
evaluate the success of the complex change processes and make
recommendations regarding further changes required to reach the
objectives that were set out by the management of Little Chef.
2 Research
The following research methods were used to inform this report.
2.1 Channel 4 Television ran a series on the LC transformation process in
their TV programmes “Big Chef takes on Little Chef” and “Did Heston
Change Little Chef?” in 2008 and 2009. This assignment is based on
the TV programme. This Two Four Productions Limited series of 4
episodes, is available on podcast from ITunes on the Internet. (Itunes,
2009) and is summarised as Annexure 7.
2.2 Secondary research on the internet and trade media.
Assignment: Managing Change in Organisations, MBA. Student name and number- 6 -
Rescued
The Little Chef chain was rescued from administration in January 2007 when
RCapital LLP, a private equity business owned by Messrs. Jamie Constable and
Peter Ward, bought 176 Little Chef outlets for less than £10 million. (Caterer, 2009:1)
The scale of change needed to restore Little Chef to its former success and
profitability was what Ackerman (1997) would term transformational change, affecting
Little Chef’s structure, processes, culture and strategy. (Ackerman, 1997:2)
The change team set about changing LC, albeit amidst great turmoil.
4.2 The main objectives of the organisational change at corporate level in the
short term:
To turn the LC Popham restaurants around to profitability within a period of 6 months.
The long term corporate objective:
To create a culture of excellence that will continue to deliver quality and value to its
customers, retain valued employees and generate wealth for its investors.
At a functional level: (Tutor2U, n.d.:3)
To renew the Little Chef brand including the Fat Charlie logo
To create a new menu to cater to their customers’ changed tastes,
To improve the food quality, through a business process transformation
To improve customer service
To refurbish the Popham restaurant as the blue print for the LC chain, with a
budget of £350 000 within a period of 6 months. This report will deal with the
short term goals.
All the above goals were to be achieved within six months on a budget of
£350 000. (Wachman 2009:14)
Assignment: Managing Change in Organisations, MBA. Student name and number- 7 -
It was agreed that once the model dubbed the “Heston Model” proved to be
successful, a further two restaurants would be launched. Thereafter the chain would
be incrementally changed throughout the UK. (RCapital, 2007:4)
The change team engineered the first major change, involving all processes and
systems, in the 50year-history of the Little Chef chain.
5 Forcefield Analysis for Little Chef’s Planned Transformational Change
(Sachs International, n.d:16)
According to Mullins (2005) in order to promote change it is essential to understand
the origin of the need to change and
the nature of any proposed change.
A way to do this would be through a cause and effect approach (Ishikawa’s Fishbone
diagram) (12Manage 2009:5) but the author believes that the forcefield analysis
models is more closely associated with the Little Chef’s circumstances.
The internal and external forces that were brought to bear on the trading environment
of Little Chef can be analysed by Kurt Lewin’s (1982) Forcefield analysis. (12Manage
2009:6) He maintained that conditions are kept in equilibrium by two opposite sets of
forces; those that drive for the change, and those that try to maintain the status quo
by restraining change. For change to take place the forces that drive change should
exceed those that restrain. (Lewin K, 1982)
Assignment: Managing Change in Organisations, MBA. Student name and number- 8 -
Forcefield Analysis –The Little Chef
1 Current State: 2 Desired State:
3. Driving Forces
(Help achieve
change)
5. Ways to strengthen
(Potential Action
Plan)
6 Ways to weaken
(Potential Action
Plan)
4.Restraining
Forces
(working against
change)
Internal
Skills,
Resources
Strengths
Limitations
1a.176 outlets
throughout the
UK. Basic
infrastructure in
place with 11
million
customers
(2007) walking
through the
doors, albeit
shabby.
Transformational
Change as described
by Ackerman 1997
whereby all
processes were was
required.
(Northumbria U
2009:2)
Abated through
staff consultation
and interaction,
training and
recognition.
(Kotter&Rathgeber
2006)
1 Staff moral was
low, staff turnover
high and
resignations were
endemic
1b New owners
of LC -equity
investors have
Referent Power
Plan for
Transformational
Change if Force Field
Analysis proves
Arrest further
decline through
planned change
Declining profits.
Stakeholders
dissatisfied
1 Loss making operation2 Brand name tarnished 3 Menu outdated4 Poor quality food –all precooked and outsourced 5 Poor service6 Trading premises shabby
1 Profit making operation2 Branding retained and Logo renewed 3 Modern, healthy cost-effective menu4 High quality food, cooked on the premises 5 Excellent service6 Refurbished and modernised premises
Assignment: Managing Change in Organisations, MBA. Student name and number- 9 -
3. Driving Forces
(Help achieve
change)
5. Ways to strengthen
(Potential Action
Plan)
6 Ways to weaken
(Potential Action
Plan)
4.Restraining
Forces
(working against
change)
(French and
Raven 1960)
and look for a
profit
(12Manage.com
2009:17)
feasible
Jarrett 2010
1c LC CE has
Reward Power -
(French and
Raven 1960) to
motivate staff.
12Manage
2009:17) CE
eager to market
to the “lost
generation” who
did not know LC
previously.(The
Guardian
2009:7)
Plan for this market
sector through
revised marketing
strategy when
developing the
change vision and
strategy (Kotter J,
2007:11).
Assignment: Managing Change in Organisations, MBA. Student name and number- 10 -
3. Driving Forces
(Help achieve
change)
5. Ways to strengthen
(Potential Action
Plan)
6 Ways to weaken
(Potential Action
Plan)
4.Restraining
Forces
(working against
change)
1d Change
agent eager to
lead the change
process to
successful
conclusion,
possibly for
reward.(Tutor2U
2009: 15)
The interests of key
stakeholders must be
recognised,
especially those who
may be positively or
negatively affected. A
Stakeholder Analysis
would highlight such
interests.
(RDI Notes,
Stakeholder Analysis
P 4of 14)
Enhanced
communication
Misunderstanding
and apparent lack
of shared vision
among the change
team created
undercurrents of
distrust. Pettigrew
argues that internal
politics can restrain
change.(Pettigrew A
2001) (Lecturer’s
Handouts 2009)
1e Consultant
seeks success
and to boost
celebrity media
ratings. (Expert
Power) (French
and Raven
1960:17)
Ref:
Stakeholder Analysis
Force rating for
change = 9
Force rating
against change=5
2a LC’s brand
loyalty is strong
in the UK.
Wachman R
Guardian
2007:8)
Renewing the logo to
illustrate and
symbolise a change
and new
management. The TV
series created
enormous publicity.
Plan for change 2 Poor service and
poor quality
products causing
damage to brand
reputation, if not
addressed urgently.
(Holbeche 2005)
Assignment: Managing Change in Organisations, MBA. Student name and number- 11 -
3. Driving Forces
(Help achieve
change)
5. Ways to strengthen
(Potential Action
Plan)
6 Ways to weaken
(Potential Action
Plan)
4.Restraining
Forces
(working against
change)
(Rodgers J
Broadcastnow,
2009:13)
2b Owners
expressed desire
to keep and
revive the brand.
(Wachman R
Guardian
2007:8)
As above 2a Proposed buy-
out/ acquisition by
competitors (Italy’s
Benetton family)
threatened to scrap
the brand and keep
infrastructure.
(Wachman R
Guardian 2007:8)
Force rating for
change 8
Force rating
against change=3
3a Loyal cost-
conscious clients
demand renewal
of all services.
(Coercive
Power) (French
and Raven
1960)
(12Manage
2009:17)
Consult stakeholders
to ensure their needs
are addressed.
Collect data and
analyse it.
Communicate with all
stakeholders to show
their input is valued.
(Kotter J, Rathgeber
H 2006, P132)
Implement
healthy, cost-
effective menu
targeted towards
consumers needs
and freshly cooked
on location giving
choice of service
(e.g. sit down or
fast food
3 Entrenched
culture of putting
profit before quality
food was
outsourced and
came pre-cooked.
(Strebel, P 1996)
Assignment: Managing Change in Organisations, MBA. Student name and number- 12 -
3. Driving Forces
(Help achieve
change)
5. Ways to strengthen
(Potential Action
Plan)
6 Ways to weaken
(Potential Action
Plan)
4.Restraining
Forces
(working against
change)
Force rating for
change = 10
Force rating
against change=5
4 Poor quality
food
“Business process
transformation is the
fundamental
rethinking and radical
redesign of business
processes” to change
the total product on
offer; complete with
sensory effects.
(RDI Study Notes,
Managing Change,
Unit 3, P5 of 20)
Empowerment of
Staff through
interactive training.
Staff were reluctant
to learn new
catering skills at first
as they faced a
culinary clash of
cultures
Force rating for
change = 9
Force rating
against change=5
Interactive and
hands-on training
with a receptive
group of
employees that
can influence
fellow workers
(Carnall C 1999,
P254)
New service format
moved staff out of
their comfort zones
and caused
resignations
Assignment: Managing Change in Organisations, MBA. Student name and number- 13 -
3. Driving Forces
(Help achieve
change)
5. Ways to strengthen
(Potential Action
Plan)
6 Ways to weaken
(Potential Action
Plan)
4.Restraining
Forces
(working against
change)
5 Customers
demanded
service choice;
fast food and sit
down
(Guardian
2008:14)
Entrenched culture
and work ethic had
seen little change in
last 50 years.
Force rating for
change = 9
Force rating
against change=3
6a Owners
eager to
implement
refurbishment
programme
to act as catalyst
to turn business
to profitability
Implement Pilot
programme as a
model for successful
throughout the chain
and invest
incrementally into the
revitalising the whole
chain.
Renovate and
modernise
L C Popham as a
pilot scheme,
complete with multi-
sensory effects to
encourage sales.e.g.
musical toilets, coffee
aroma
Communication
strategy to target
all stakeholders
Market forces in
operation e.g.
a small but hard-
core of old-faithful
Little Chef
customers did not
welcome change
Assignment: Managing Change in Organisations, MBA. Student name and number- 14 -
3. Driving Forces
(Help achieve
change)
5. Ways to strengthen
(Potential Action
Plan)
6 Ways to weaken
(Potential Action
Plan)
4.Restraining
Forces
(working against
change)
6b Investment
funds available
and owners in
favour of change
Prove change is valid
through data and
capital budgeting
analysis.
Force rating for
change = 10
Force rating
against change=1
External
3. Driving
Forces
(Help achieve
change)
5. Ways to
strengthen
6 Ways to
weaken
(Situation if no
change is made)
4.Restraining
Forces
(working against
change)
People, places,
environment
People, Things,
conditions
1 Owners eager
to see a
profitable
operation
Plan for change 1 Economy in
recession
2 New
competitive
brands had
established
themselves in
the market
Careful planning of
business process
transformation
2 Porters Five
Forces (Porter M
1979) describe this
market force as new
entrants – e.g.
Moto, Roadchef,
Welcome Break
Substitute products,
e.g. Costa Coffee
competing for the
Assignment: Managing Change in Organisations, MBA. Student name and number- 15 -
3. Driving Forces
(Help achieve
change)
5. Ways to strengthen
(Potential Action
Plan)
6 Ways to weaken
(Potential Action
Plan)
4.Restraining
Forces
(working against
change)
same customers
and resources.
(QuickMBA2009:18)
3 Menu outdated
and overpriced.
Research new trends
3 Globalisation
have changed
consumer eating
habits e.g.
MacDonald’s,
Burger King, a
fast food culture
Research new trends 3 Persistent
consumer demands
had to be
accommodated on
new menu (e.g.
foregoing smoked
salmon and serving
baked beans with
breakfast)
4 Food
excellence
The Capital
Budgeting process
with realistic cash
flow forecasts
illustrating
favourable Net
Present Value and
IRR, tax rebates
and government
incentives, could
provide the
necessary
decision-making
information for
risk- averse
4 Unexpected
capital investment
was required, in
turbulent economic
conditions, to equip
kitchens to cook on
the premises.
Assignment: Managing Change in Organisations, MBA. Student name and number- 16 -
3. Driving Forces
(Help achieve
change)
5. Ways to strengthen
(Potential Action
Plan)
6 Ways to weaken
(Potential Action
Plan)
4.Restraining
Forces
(working against
change)
investors.
(Jarrett, 2010)
5 Research
highlighted
customer
preferences on
service choices
5 Customer
complaints
6 Customer
complaints and
decline in profit
Address the change
process as described
above.
Revitalise the LC
Popham branch to
prove feasibility,
test technological
changes e.g. Wi-Fi
links. Cloud
computing
installed
(Little Chef,
2009:10)
Competitors
Strengthening their
own market share
as LC posed no
competition.
Integrating the forces:
In weighing up the forces for and against change, the team should ask whether
issues are valid, significant and could the forces be changed. Once it is clearly
identified that change is desirable and that most stakeholders are ready for it, the
planned transformational change would be feasible. (Carnall C 1999) Please see
annexure 1 and 2.
6 To evaluate how effectively the process of change was managed, two
frameworks stand out, being the 7-S Model and Kotter's 8 step process of change.
The McKinsey’s (1980) 7-S models is centred around shared values and consider
Assignment: Managing Change in Organisations, MBA. Student name and number- 17 -
business performance around strategy, systems, skills, structure, staff and style.
(12Manage 2009:9)
Kotter’s model is however specifically tailored to manage change in
organisations and therefore this model will be used as a guide, as explained
in their book “Our Iceberg is Melting”. (Kotter J and Rathgeber H, 2006).
Strebel’s Resistance to Change guidelines (Strebel P, 1996) is attached as
Assignment: Managing Change in Organisations, MBA. Student name and number- 18 -
6.1 Create a sense of urgency
Kotter and Rathgeber advocate the importance of dealing with change urgently. They
propose that information should be presented logically so that thinking can begin to
change, which, in turn, can change behaviour. (Kotter and Rathgeber 2006 P131)
In accordance with this advice the CE addressed 250 LC managers on the LC’s
financial and operating status which, after the take-over, was in serious financial
trouble.
He gave them assurances that though they may be criticised for the state of the
present LC operation, that he valued and respected them and “forgave them for
mistakes”. His charisma, enthusiasm and drive won them over and the high staff
turnover was arrested. (Bowler S, 2009:7)
Strebel asserts that resistance to change manifests itself when staff consider that
management have reneged on the psychological contract which is the implied mutual
obligations employers and employees have towards each other. Once contravened
staff consider the arrangement to be broken and they have no obligation to cooperate
until they have reviewed their contract. (CIPD 2009:22)
6.2 Pull together the guiding team
Assignment: Managing Change in Organisations, MBA. Student name and number- 19 -
Kotter and Rathgeber (2006) stress that the team need authority, analytical and
leadership skills with excellent communication abilities.
The change agent, an experienced manager in the roadside restaurant field, together
with expert food and service consultant, Blumenthal formed a powerful and credible
team with both individuals well respected in their own right. (Guardian 2009:8)
There was however conflict between the Change Agent and the Consultant from the
beginning. Scenes depicted tension between the Change Agent and the Consultant
because the Change Agent had unique situational knowledge, being the inner
workings of the business, its workflows and issues and was not willing to share this
with the consultant. (Annexure 7 Episode 1, scene 2A and 5)
Change agents and consultants need to be highly sensitive to their environment. A
breakdown of these skills are attached as Annexure 4.
Furthermore, these experienced leaders should have recognised that the scale of
change pervaded the following spheres, and are likely to cause turmoil.
Supplier contracts had to be negotiated with local suppliers. New procurement systems had to be put in place.
Kitchens had to be equipped and financed, Chef’s training, restaurant and fast food services training, amidst unsettling circumstances.
Systems
Processes
People and Culture
Organisation
Markets and Customers
Regulatory
Strategy
New Health and Safety regulations e.g. food recycling,
Staff needed re-assurance during unfamiliar training and trading conditions
LC customers had become more health and cost-conscious, living a fast- lane, cost-conscious lifestyle. Market research was done to ensure the new menus would satisfy customers’ preferred consumer tastes. . The “lost generation” had to be reached through new marketing campaigns.
The spheres of influence on LC during Change ManagementRDI Notes Organisational Development and change P9 of 15
Assignment: Managing Change in Organisations, MBA. Student name and number- 20 -
The consultant overcame staff scepticism through his sheer passion for pursuing
excellence. He was also willing to compromise on his own high standards.
6.3 Develop the change vision and strategy
Kotter and Rathgeber (2006) stress that it is essential that the change team showed
staff what the food-service product future will look like. Senior and middle
management were consulted and through trial and error, the ideal menus, brand
revival, refurbishment programmes were gelled into the central vision.
Despite this, some disagreement still surfaced (Annexure 7 Episode 2, Scene 6)
possibly a play on power (Strebel 1996) which was overcome through negotiation.
Upon evaluation it is clear that the vision should leave no doubt as to what success
will look like. The Consultant insisted on quality and the Change Agent insisted on
profit. It was therefore essential to secure top management support. Middle
management ensures standards are maintained but it is not sustainable if top
management is not on board. (RDI Notes: Unit 3 Strategies and Models for Change,
Business Process Transformation and Total Quality management P14 of 20)