John F. Kennedy was quoted as saying “Change is the law of life, and those who look only to the past or present are certain to miss the future.” The world is in a constant state of motion. No one should expect things to always stay the same. Organizations require technologies and human resources in order to operate. A business needs to operate by learning from the past and planning for the future. Since, the economic collapse of 2008, the idea that any company is ‘too big to fail’ has been thrown out the proverbial ‘business window’. Business is now practiced in a global market and technologies have made the world a smaller place. “Managers and their organizations must anticipate the future and become proactive players.” (Brown, D.R., 2011, part 1.) Consider companies like Blockbuster Video.
The demise of Blockbuster proves that leadership did not look to the future. This company considered itself to be the standard. Where is Blockbuster now? Instead of being an industry leader, it is trying to regain its footing in a marketplace it once dominated. Why? Blockbuster failed to take its competitors seriously. It did not consider technology surpassing the company’s own perception of practicing business. “In 2002 (Blockbuster) had 8,000 stores and a market value of $3 billion. Today, movie-by-mail Netflix is worth nearly three times that much. And Blockbuster is broke.” (Gandell, S., 2010, paragraph 19.) Successful companies are looking to the future as they learn from the past and present.
Organizations that are successful will operate without ego, effectively communicate throughout the organization, and constantly reinvent themselves. Organizations need to be in constant development in order to move forward with any success. In this paper, I intend to define the importance of organizational development as it relates to my own company’s recent sale to a new group of owners. I intend to define organizational development as it relates to organizational trust, a strong practitioner-client relationship, the imperative nature of the diagnostic phase, effective communication between ownership and employees, and the importance of strategy as it relates to a successful transfer of ownership and culture to an organization.
Organizations need to know when organizational development is necessary. I am a Managing Partner in the restaurant business. I currently have about 50 employees that I am responsible for. Recently, the restaurant I am running was sold to a South African group of owners. The owners actually bought two restaurants from the local restaurant group I was working for. After studying the Charlotte market and other markets throughout this great country of ours, the South African owners decided that Charlotte, NC would give them the best opportunity to grow a restaurant chain. The owners currently have over 150 restaurants in South Africa and this is their first venture into the United States.
Once the sale became final, the owners began to evaluate all the current systems and business practices of the restaurants. The new owners began to re-develop the organization by defining its existing and future organizational identity. The owners sat down with staff and management to get an understanding of what the restaurants meant to each staff member. “The identity will provide an advantage if it is well aligned with the organizational strategy and well suited to the market niche, because identities tend to be socially complex and path dependent, and therefore difficult to imitate.” (Salgado, S.R., 2003, page 65.) The owners became the practitioners of change by purchasing the restaurants.
After the sale became final, it was time to develop a sense of trust from the existing staff and management. One way of gaining that trust is to value the opinions of the current members of the organization. The new owners showed that they valued staff opinion of organizational identity. This process helped to develop the fundamental need to build a positive practitioner-client relationship. The new owners need an employee landscape that is friendly, not hostile. There is no way the new organization can move forward with a negative culture. Once trust was established, the new owners were able to begin to identify issues, problems, and opportunities each restaurant was having. The five fundamental stages of organizational development are: “anticipate the need for change, develop the practitioner-client relationship, the diagnostic phase, action plans, strategies, and techniques, and self-renewal, monitor, and stabilize.” (Brown, D.R., 2011, page 18).
Ownership has followed the principles of organizational change and development in a very smart way. The new owners worked on building a strong practitioner-client relationship while gathering information about the businesses. They remained very approachable and worked hard to assist with the agreed upon change lists. Ownership made everyone feel as though they were not there to change what was not broken. Employees were made to feel proud about the restaurants they worked in. By developing such a good and trusting relationship, change has come easier.
Once trust was established, new ownership quickly moved to the third fundamental of organizational development, the diagnostic phase. “Organizational diagnostic models and surveys have often been demonstrated by practitioners to be very effective in supporting organizational development programs.” (Goldstein, L. and Burke, W. (1991), Vol. 19, page 5.) Diagnostic models are designed to help organizational development practitioners to “categorize data about the organization, enhance understanding about organizational problems, interpret data systematically, (and) provide appropriate change strategies.” (Lok, P., Crawford, J., 2000, page 108.)
The practitioners have been reviewing every facet of the restaurant’s business practices. Ownership is constantly evaluating the effectiveness of each system. Technologies, equipment, and managerial functions are all reviewed and measured to the new standards and goals set forth by the owners. The ownership designed a “team approach to setting and reviewing targets, real participation by subordinates in setting goals, with an emphasis on mutually agreed upon goals, mutual trust between subordinate and manager, and a real concern for personal career goals as well as for organizational goals.” (Brown, D.R., 2011, page 327.) Ownership felt that the technologies were not tied in together very well. Ownership felt that the current gathering of data was cumbersome and inaccurate.
The practitioners felt that the clients needed to stream-line the ways in which data was collected. By reviewing every program and system of accounting, the new owners were able to determine that updating would be necessary in order to move the two concepts forward. Looking to future growth was not going to happen for the organization until both concepts were able to produce accurate information about the actual business. Ownership also determined that it wanted its managers out in the restaurant more.
There was simply too much to do in the office while running the restaurants. The practitioners asked current upper management to clearly define the responsibilities of each manager and chef position. At this point, the culture of the new organization had begun to take shape. Clearly defined roles and a change in managerial philosophies have started to grow. I have witnessed what I believe is a very successful transformation of culture. Responsibilities are clearly communicated. Accountability has improved. By creating clearly defined roles, the effectiveness of each manager is much easier to measure.
At times, however, communication has been inconsistent. The massive restructuring of all current systems has taken a toll on some people in the organization. Missed deadlines and unforeseen problems have occurred. The way in which the new ownership has responded to the unforeseen issues has been impressive. I feel that new ownership has shown an unwavering amount of dedication to the new organizational vision it has set in place. Considering the amount of change, the owners have been very clear and approachable throughout the transformation. I respect and support their efforts in remaining approachable and supportive. They exude an understanding of what each existing member or employee is going through. Ownership has been very aware of the ego state of the organization. “Every interaction between people involves a transaction between their ego states. When one person converses with a second person, the first person is in a distinct ego state and can direct the message to any of the three ego states in the second individual.” (Brown, D.R., 2011, page 230.)
Ownership has made every effort to have open and complementary transactions with groups and individuals throughout the organization. At the same time, they have also shown that the organization will move forward with or without its current members. Holding people accountable has been extremely important. “In today’s changing environment, organizations that encourage individual ability and hold employees accountable for achieving goals are more likely to succeed.” (Brown, D.R., 2011, page 381.) The practitioners have been able to accentuate individual strengths and weaknesses within its existing employee body.
This approach has brought on a spirit of contribution to the cause of the new vision presented to the ‘old guards’ of the organization. This is a very clever approach to affecting change. Also, the new leaders of the organization have discovered some hidden talents within its current team-members. Finding an existing and in-place pool of needed skills has helped the new leaders keep an aggressive time-line for the development of change. New owners did not have to look completely outside the organization for skills that will enable change. Instead, new owners were able to motivate change by looking for solutions internally. Looking for hidden talents helped to reaffirm the positive culture of opportunity and renewed perceptions of the employee skillset.
An internal approach to solving or rectifying identified issues has also kept the cost of change down. Existing members already have a sense of where the shared vision of the company is going. Existing staff has a greater stake in the organization’s success. Because of shareholder accountability, ownership is smart to look internally for as many talents as possible. Ownership believed by stream-lining technologies and accounting systems, it could improve the quality of the guest experience and profitability of its organization. Ownership started this process by surveying all existing management to try and determine what each manager actually knew about the existing programs and technologies. A methodical and measured approach to re-designing office systems will enable the organization to become more consistent in gathering data and measuring the performance of both restaurants. Their vision of the future of the organization has been effectively shared with everyone involved. The deadlines for improvements have been followed-up effectively.
A weekly meeting between ownership and upper management takes place. In these meetings, organizational effectiveness is measured by how well goals and objectives are accomplished. At first, goals were very broad and basic. Managers were asked to evaluate their knowledge of existing point of sale programs, invoicing programs, and budgetary knowledge. Once ownership felt it had acquired enough knowledge about existing systems, the project or ‘goal’ chart was updated and tasks became more narrow and specialized in focus. Managers were held accountable to their goals based on their strengths or expertise. For example, one manager is very adept with computers. This has become his area of focus for the remainder of the re-development of the organization. “The collection of data is an important activity providing the organization and the practitioner with a better understanding of client system problems: the diagnosis.” (Brown, D.R., 2011, page 19.)
Ownership has been very diligent about data accuracy. Every number and system has been reviewed for accuracy and consistency. In order for the company to move forward, ownership has to determine what is and what is not vital to the new organizational vision. Ownership has already picked two new sites for additional restaurants. It is important that both restaurants operate in the same way as the business grows. This is why organizational effectiveness has to be optimized and not hap-hazard. “Organizational practitioners need to assess the influence of variables in diagnostic models on organizational outcomes, and effectiveness has often been used as the primary outcome measurement. (Handy, 1985, p. 85; Burke and Litwin, 1992). The new owners have done an excellent job moving the new organization through a surprising change of ownership.
I have enjoyed watching how these new owners have handled the organizational development of the restaurant. Organizational change and development is certainly not easy. Leadership from the owners to the managers has to stay on course with the changes. Total commitment and a positive attitude are necessary. Negativity spreads like wildfire when redeveloping an organization. The owners have worked hard to cope and shape their environments, through the way they organize and operate their organization. The history of organizational development has to be an interesting one. As I watch these new owners re-tool both establishments, I wonder if they are taking the same course in organizational development that I am. The owners have to pass forward their beliefs or values as to what the restaurants should be.
Things that worked before might be tossed. New things are introduced. The style of service and the menu, the technology, are all things the owners have to push forward to current and new employees. All the while, business is ongoing. The doors are open. Customers are hearing of the sale and are passionate about the changes. Some changes are subtle. Some changes are extreme. How does the ownership remain familiar to what the concept once was? The entire process is exhausting. The public’s resistance to change is fierce at times. One very popular item on the menu was discontinued when the new menu was rolled out. Granted, the menu had not changed in four years. Servers and cooks were tired of doing the same thing every day. The item that was discontinued was actually a very bland and tasteless item.
Servers and cooks hated selling it. There was excitement and concern when the new ownership wanted to get rid of it. We all knew we were in for it when the new menu came out. Sure enough, customers have missed not having this item on the menu. Customers have been very vocal about this one item. Ownership feels that quality ingredients, perfect preparation, and impeccable service will build sales. There is a determination that the new regime can move past this one dish and convince the fickle public that there are a lot of other good reasons to dine at our restaurants. We are doing more than trying to keep our existing clientele. We are building a new clientele.
Whatever perceptions the public had of us before does not matter. It is interesting to hear the complaints about some of our changes. All the while, most of the same staff works at the restaurant. The only real changes the public see are dress codes and menu changes. Otherwise, most change is behind the scenes. Because of the intense scrutiny mistakes in service or execution of the shift has to be perfect. We cannot afford to be less than perfect right now. Complacency has no place in the restaurant business. To be successful, we should always be looking ahead and learning from our past mistakes. We should always challenge ourselves to be better than we were yesterday. We are always training and learning. Managers should be acting as coaches and mentors to the staff. Management at all levels should not only ‘talk the talk’, they should ‘walk the walk’.
However, the complaints are not always fair. The new menu is terrific. Quality and service are actually better than ever. The new owners spent a lot of money to help update and fix equipment that was vital to running the restaurant. Ownership has brought in more management and has improved the morale of the restaurant, not to mention the quality of life for all salaried people like myself. There has been a certain camaraderie resulting from moving toward common goals with other people. There is now a belief that we are a better place today because of our efforts. The best interventions from a values point of view are those that help clients prepare their place in the future, whether its creation or adaptation. I am sure as we move forward that we will come in to our own again. The once faithful group of regulars will either go their own way or forgive us.
Organizational development is a change strategy. “OD principles and techniques are experiencing a renaissance, thanks to the growth of the field of change management.” (Worren, N.A.M., Ruddle, K., & Moore, K.,1999, paragraph 3.) Organizational development requires a change in behaviors. These behaviors, good or bad, become the organizational culture. The organizational beliefs and values start at the top of the food chain, the owners. What is important to the owner should be important to the worker in that organization. It is imperative that the owner or any organization find a way to keep his people motivated and passionate about his organization’s products.
Therefore, the leadership of any organization has to ‘connect’ to develop change and organizational success. Leadership has to be viewed as the change master. An organization that wants to remain vital, must be able to deal with change. A restaurant is an excellent example of a business in a constant state of change. For some restaurants the menu can stay the same. Maybe that is what people like about the place. However, what goes on outside the restaurant can cause a need for change inside the restaurant. Roads are closed, the economy is shrinking, parking is now too difficult to bother, these are all worrisome real-life issues that any organization or restaurant might have to deal with. The restaurant cannot afford to maintain the status quo, change is simply that critical.
Kurt Lewin developed the concept of force-field analysis. This philosophy is “deceptively simple and can be used to help plan and manage organizational change.” (Cumming, T.G., & Huse, E.R. 1989, page 3.) Lewin believed that an organizational behavior was affected by the balance of two opposing forces. When these opposing forces are at odds, change happens. According to Lewin, there are driving forces and restraining forces. Driving forces affect and assist in the desired change. Restraining forces do quite the opposite.
Restraining forces represent obstacles to the change. “If the weights of the driving and restraining forces are relatively equal, then the organization will remain static.”(Cumming, T.G., & Huse, E.R. 1989, page 3.) Ownership has to remain aware of the balance of power these two forces represent for the organization. Change has to appear to always be for the good of the whole organization. People are wary of change and must be made to feel a part of its success in order to help embrace the new mindset. Lewin’s force-field analysis works as a method of environmental scanning and as a way for creating an empowering environment to the culture of the organization.
The new owners have done an excellent job moving the organization forward. The efforts made to gather data and technical knowledge have been diligent. The new owners have moved forward by doing their homework. After reviewing all the necessary information, ownership has been able to assimilate all the necessary funds, materials, staff and time. As the organizational development process has moved forward, it has become obvious that the owners plan on giving their newly acquired business the tools it needs to accomplish the shared vision. This, of course, has led to the owners’ final phase of organizational development, the support of their people. At first, ownership had to tread lightly. In the beginning, it was as if the new owners wrapped their arms around us all and said “everything will be alright, just stick with us.” As the new team moved forward, some upper management was asked to leave. Time has been a good indicator of the ownerships’ dedication to the new vision and culture of the organization. Their efforts have been unwavering and very consistent.
In this paper, I have detailed the importance of organizational development as it relates to my own company’s recent sale to a new group of owners. The process of organizational development has been fascinating to watch. Although the constant evaluation of all systems and actions throughout the organization has been exhausting, I believe ownership has succeeded in redeveloping a once tired and inefficient culture. Employees and managers have felt a greater sense of purpose towards the new organization. New ownership has successfully relayed a positive sense of urgency and purpose towards its existing staff and team members. The revamping of the organizational culture has brought forth a better quality employee and better quality experience for the organization’s customers.
The organizational development techniques applied by the new ownership has helped to improve the profitability of both restaurants. New ownership had once touted that two additional restaurants would be opening within twelve months. Because of the success in developing organizational change, new ownership has now determined a new restaurant can be opened in only six months instead of twelve. This fast organizational growth is to be celebrated because it is a direct result of the diligent efforts of ownership and all staff involved after the transfer of ownership became official. Trust, a positive practitioner-client relationship, a successful diagnostic evaluation and change, effective communication between ownership and employees, and the importance of strategy has allowed this organization to become stronger and advance its number of concepts. In short, growth happens if organizational development is applied effectively.
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