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)
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)
Forcefield Analysis –The Little Chef
1 Current State: 2 Desired State:
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 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 annexure 3 and guides resistance to change.
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
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.
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)
Please see annex 6 for further evaluation.
6.4 Communicate for understanding and buy-in
Kotter and Rathgeber state that as many stakeholders possible should be aware of the changes and promote their buy-in.
To this end, a selection of talented LC grillers were selected to become involved in the new vision for LC and they became the change heroes.
The Consultant demonstrated the essence of good quality food. Staff tasted, was trained and tested to recognise excellence and poorly cooked food.
The authors state that the message of change should be spread widely to get acceptance. It is important to remind the staff how they fit into the organisation. (Kotter and Rathgeber 2006, P130)
In evaluating the success of getting the message out, the change team cannot be faulted. The message of change at LC was most effectively dealt with through the TV series and was viewed by millions. This national interest has led to unprecedented growth for the group.
Unfamiliar procedures, insecurities and fear of failure, can take their toll on sensitive staff members as it did at Popham when staff members walked out.
This self-explanatory change iceberg illustrates that there is a wealth of hidden factors below the surface, in the sea of change. The relatively small area of management issues which break through is literally the tip of the iceberg. (Kruger W, 2008)
(12Manage 2009:24)
6.5 Empower others to act
The Consultant removed the barriers that stand in the way of staff who want to embrace the vision. (Kotter J 2006)
A model team was trained to become trainers for other LC outlets. Once mastered, the LC staff team trained other staff in the other two LC outlets in Kettering and York.
The consultant embraced and recognised the staff as the bedrock of the organisation. And enabled their professional growth through learning.
6.6 Produce short term wins
In line with Kotter’s advice, staff training and empowerment sessions were quick wins to gain staff confidence.
A substantial landmark was the official relaunch of the first “Heston Model” which generated much publicity and renewed interest in the brand.
The next motivating factor was the announcement that two further restaurants will be launched, based on the Heston Model.
6.7 Don’t let up
The Consultant agreed to supervise progress for three months and then management would decide whether to roll out further outlets.
The author’s visits have proved that standards remained consistently high.
Look to the future and anticipate change. (Jarrett 2010)
6.8 Create a new culture
Care in this crucial part of the change process begins to form the basis of the new culture in the organisation. The consultant’s input illustrated his genuine interest in the staff members, their growth and skills development, quickly resolving conflict as it arose.
Conclusions:
The Popham pilot programme was considered a success and the owners plan to launch a further twelve restaurants based on the Popham Model. (Catersearch 2009: 20)
Change Management is a highly skilled job. It is now recognised that more than industry expertise is required to transform complex business problems.
Consultants are expected to have business insights first before being able to generate strategic change.
New Look Olympic Breakfast
7 In assessing the extent to which the change at LC was successful in meeting its objectives it is necessary to recall the change objectives as listed in 4.2.
The tangible objectives of the transformational change was highly visible.
- The renewal of the LC Brand and Logo and
The Old but cherished British Logo
(Manchester Evening News 2006)
New Look
- the refurbished premises
- the new menu.
7.1 An appropriate model to assess the change at LC in its strategic entirety would be the Balanced Score Card (Kaplan and Norton, 1992). (12Manage 2009:12) This model places the organisation’s vision and strategy at the heart, which drive the performance of the organisation. The four perspectives are:
- Financial
- Customer
- Business
- Learning and growth
The Little Chef vision is:
Good food on the go
to be the motorist's friend, serving up quality
food and offering great value for money.
The author telephoned the LC Head Office for information on structures, a balance sheet, and staff retention but this request was turned down. In its absence the author will report on secondary research findings.
7.1.1 Finance
Their profit forecasts were widely publicized in the media. As the case study was televised, the public interest was strong. At take-over in 2007 LC was reported to have lost £3 million p.a. However an increase in sales of 250% was announced during the TV series.
The LC website reports that since the Blumenthal intervention their sales are up 500% with a 150% year on year increase. (Little Chef 2009:10)
Further reports announced that the group had “bounced back, stronger than ever” and had forecasted a profit of £3million for the year till December 2009. (Catersearch 2009:29)
The financial aspects of the Balanced Scorecard suggest that organisations also have intangible values that are not reported on in Financial Results. The Scorecard makes provision for branding and other intangible assets to be monitored.
The owners of Little Chef have stated that their long term objective is to build up the brand and then sell it. R Capital bought LC for £10million, but it was previously sold for £52m when it changed hands. Their strategy to build up the brand is to increase its value and therefore the transformational change was a crucial step in its recovery of profits. Jarrett 2010. (Shares Magazine 2009:19)
7.1.2 Customers
Media reports stated that LC, despite its decline, still had 11 million customers(2007). In assessing the success of achieving an improved service objective, it is reported that LC has more than 20 million customers walking through its doors since the changes were brought about at the Pilot Restaurant. This figure will undoubtedly be increasing as sales increase.
Personal visits to the Little Chef have proved to be an enjoyable, value for money experience, true to its vision statement.
7.1.3. Business
LC underwent a transformational business process transformation as can be seen from the preceding parts of this report. The organisation is now fully geared to base their business model on quality food and service, (Annexure 7, 4/5) Because of the scale of the business the Consultant negotiated supplies from local suppliers. This will be generating a great deal of goodwill in the local areas around the 176 outlets. Change has stimulated the business profitability and growth objectives.
7.1.4 Learning and growth
The growth of the business is evident in further media reports that the Consultant will be opening a further 12 LC outlets in 2010 (Catersearch, 09:30)
Camaraderie in learning
Undoubtedly structures were altered to cope with the business process transformation. This was unfortunately not obtainable. A change in structure is known to change the culture of the organisation as well, as management often become more accessible in flatter structures that are more responsive to their customers. As the organisation changes the culture changes to keep abreast of its environment and staff do not get stagnant. (RDI notes Unit 1 Lesson-Drivers for change P 13 of 15 Drivers for change)
M.Jarrett 2010. personal experience.
A further development is apparent in evaluating the change process. Ackerman (1997) states that a transitional change takes place within the scope and context of the transformational change. From this change LC has emerged as a learning organisation.
The Consultant‘s transfer of knowledge and skills has changed the staff’s perception and approach to their end product. The skills they had gained through exposure to improved processes, represents a source of power and pride in the staff. (HRPlatform 2009:23)
Organizational level change does not follow a linear pattern that can be duplicated and applied restaurant after restaurant. Each one will have their own unique character and a crucial emergent element. It is therefore necessary to capture the leaning experience gained to be applied and refined where needed. Such actions will lead to the LC becoming a learning organisation and one of excellence as the change team becomes more skilled. (RDI Notes Module Managing Change in Organisations Drivers for Change P13)
In conclusion, it can be stated that LC had achieved the objectivises they set themselves to change.
Business Process Transformation is not a panacea for an ailing business and needs ongoing refinement making the company agile in meeting the constant changes occurring in the business environment.
(RDI Notes Business Process Transformation and Total Quality Management Top Tips P9 of 20)
Throughout the analysis of the LC case study the author observed that no direct input was given to staff except to interact and train them for the new job descriptions. Little Chef, could be well advised to deal with staff issues more sensitively by implementing Human Resource policies that support staff through the enormous changes that lie ahead for the LC staff.
The change earned them much sought-after recognition in British Good Food Guide. The change has not just affected the processes and systems but the staff had changed in the process of adapting to change. The stakeholders of Little Chef face an optimistic future.
7.1.5 It is therefore RECOMMENDED that:
- Human Resources Policies be developed to deal with the human process when Little Chef
- Those e-learning opportunities be created for staff who are eager to embrace the vision and open themselves up for professional growth, personal development and career opportunities within the group.
Jarrett 2010.
Bibliography
Books and e-Books
Beitler M, 2009 Strategic Organizational Change (Second Edition) The strategy driven approach Chapter 1 E-book [Online] available from
Carnall C 1999, Managing Change in Organisations Forcefield Analysis, Europe, Prentice Hall,
Holbeche L, 2005 Understanding Change, Theory, Implementation and Success
Imprint: Butterworth Heinemann Paperback, 432 pages, publication date: OCT-2005 , ISBN-13: 978-0-7506-6341-0 ISBN-10: 0-7506-6341-3
Kotter, J & Rathgeber, H (2006) Our Iceberg is Melting, London UK, MacMillan
Mullins, L (2005) Management and Organisational Behaviour 7th edition Pearson Education Limited
Journal
Strebel, P. (1996, May/Jun). Why do employees resist change? Harvard Business Review 86-92. Strebel, P. (1998) Why Do Employees Resist Change? In Harvard Business Review on Change. Boston: Harvard Business School Publishing, pp. 139-157. (originally published in May/June, 1996 issue of Harvard Business Review)
Podcasts:
TV Programmes, Big Chef takes on Little Chef and Did Heston change Little Chef: available from: , Two Four productions Limited, 4 episodes,
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Available from
Accessed 10 January 2010
Annexure 1
Charles Carnall 1999 contends that Increasing the strengths of driving forces runs the danger of ignoring those stakeholders who are apprehensive about what the changes will lead to. The changes undergone by Little Chef have been drastic and therefore the turmoil this will cause during the human process interventions such as conflict management, team building, management development, organisational learning and communication will require perceptive and insightful management. The technical processes such as operational issues, food production, marketing, finance, logistics and technology processes will require skilled attention as this enormous scale of change will affect all these aspects.(Beitler M, 2009)
Annexure 2
An alternate way to analyse L C’s drivers for change could be the application of
Hamel and Prahalad’s Core Competence model applied to establish competitive
advantage. These could be used to build on LC’s internal strengths as opposed
to being based on internal and external forces that drive change. Hamel and
Prahalad’s Core Competence model theorises that competiveness emerges from
the strengths of the core competences of a business. Building on these strengths is a cost-effective way of building the business’s capacity.
Little Chef have core competencies which meet the criteria of the theory. They are:
- Having access to a wide variety of markets
- Contribute significantly to the end product benefits
- Be difficult for competitors to imitate
Prahalad and Hamel 1990, Core Competence Model QuickMBA http://www.quickmba.com/strategy/core-competencies/ 2 Jan 09
Little Chef infrastructure and intangible assets include:
- 176 trading premises throughout the UK where planning permission for similar projects would no longer be granted by local Councils. Competitors would not be able to imitate this.
-
L C are co-located with several Travelodge Hotels and Burger King franchise holders, thereby contributing to end-product benefits.The British iconic Little Chef brand with its The Fat Charlie logo, which provides competitively priced food into the heart of the the UK road network reaches a wide variety of markets.
Corporate author, 2009 Bouncing Back, article in the Shares Magazine, April 23,
2009 edition, [internet] available from http://www.sharesmagazine.co.uk/node/5186
accessed on 2 November 2009.
Though Hamel and Prahalad applied their theory to using core competence which would feed into various end-products it could be argued that Little Chef’s core competencies meet their theoretical criteria.
Their Core Competences being a network of 175 Established co-located trading
Outlets could therefore be a Driver for change
Prahalad and Hamel 1990, Core Competence Model QuickMBA http://www.quickmba.com/strategy/core-competencies/ 2 Jan 09
Annexure 3
Strebel’s Resistance to change model
In assessing resistance to change
Look for:
- Closed attitudes
- Entrenched cultures
- Inflexible arrangements and methods and procedures (like e.g.cutting quality of food)
- Clashing attitudes towards change efforts or goals
- Look at re resistance to change for forces that may be correlated with each other
- Describing the resistance threshold in terms of power and resources needed to deal with the resistance (Strebel P, 1996)
Lecturer’s Handout , Mr Ian Norman, Blakehall College, obtained from www.ln.edu.hk/mgt/staff /change EMBA Lecturer’s Handouts 2009 Mr Ian Norman, BHC, Leading Change, from slides of Barbara Senior Organisational Change Lecturers Guide 2002, available from
accessed September 2009.
Annexure 4
Change consultants should possess the following competencies:
- Excellent rapport among all stakeholders, and should have especially good collaboration within the change team,
- have the ability to manage change,
- data collection,
- problems solving and
- reporting to clients.
RDI Notes, 2009 Unit 2, Identifying, Understanding and Involving others in Change, P2 and P8 of 19 Understanding Change through Consulting.
Once the nature of the change has been identified the change team should possess and be suitably equipped to:
- Recognise the emotional response to change, even in management ranks, to ensure the commitment to and acceptance the change.
- Demonstrate top management ‘s visible and active support for the changes
- Listen and communicate consistently with those involved to build commitment
- Provide the required support for the processes in terms of new skills and resources that may be required.
RDI Notes Unit 1 Change Management :The Business Context, Organisational Development and Change P12 of 15
Furthermore, the change team should possess project management skills, a thorough understanding and agreeing on the change objectives, then the skills to orchestrate people, processes and systems. In studying the case study it became apparent that the communication among the change agent and consultant was sorely lacking.
RDI Notes Managing the Change Programme P 1 of 16
Kotter J and Rathgeber (H 2006) P 130
Annexure 5
Furthermore, if the Pennington’s Proposed change matrix below had been applied to LC, it would have been clear that the proposed changes would cause high disturbance and was high risk. The changes were radical, especially at the core of the business. Staff who had been preparing food out of packets for years were called on the cook and serve food of a high standard from quality raw ingredients, in a very short period of time and expected to perform under duress.
Own Illustration on Proposed Change.
Pennington theorizes that if the character of the planned change could be plotted on the graph, the change agent would sense how the change may affect the organisation. This radical changes brought about in LC were substantial. (Northumbria University 2009 :23)
Annexure 6
The Consultant insisted on the best quality of food to hang his strategy onto and the change agent kept looking at using cheaper ingredients to satisfy the profit motive. This could be ascribed to the principal/agent problem whereby the change agent and consult do not share a common goal and their goals are not known to the owners. (Tutor2U,n.d:)
In evaluating the team’s effectiveness their persistence, which to the casual TV viewer may appear to be petulant behaviour, became clear. The Consultant was adamant that for business process transformation to be established the quality of the food was crucial to the success of the new model.