little chef change-mba assignment-reference mgt-4
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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- 4 -
2.3 Personal visits, as a customer and resident in the area of Little Chef,
Popham, over a period of three years
3 Abbreviations: When referring to
The Change Agent – it will refer to the Chief Executive (CE) – Mr Ian Pegler
The Consultant – Mr Heston Blumenthal
The Pilot Restaurant or Popham refers to LC Popham Branch, Hampshire on
the A303.
The change management team will refer to:
The Little Chef, Mr Ian Pegler and his team and the Consultant, Mr Heston
Blumenthal and his team.
The Change Team Protagonists
To understand the context of this case study it is important to understand the term
organisational change. Though there is no agreement among academics on the
definition of organisational change an influential definition was given by Carter
McNamara (1997). He refers to organisational change, as “the overall nature of
activities e.g. their extent and rate that occurs during a project that aims to enhance
the overall performance of the organisation. The activities are often led by a change
agent or person responsible to guide the overall change effort. The activities are
Assignment: Managing Change in Organisations, MBA. Student name and number- 5 -
often project orientated (a one time project) and geared to address a current overall
problem or goal in an organisation.” (Management Help 1997:21)
4 Little Chef, the case study
1mage: Sensitive changes to iconic
Little Chef's "Fat Charlie" brand
from www.catersearch.co.uk
4.1 Background
Little Chef, a chain of roadside restaurants, was originally created in 1958 to serve
British motorists along A roads. The much loved iconic British brand with its “Fat
Charlie” logo has undergone many changes of ownership in recent years.
The decline of the chain was however inevitable due to managerial neglect and lack
of re-investment from the height of its operational success in February 2003.(Caterer
2009:1)
The case study: Little Chef 2007 – 2010
The premises throughout the chain were shabby, staff morale was low, customer
service was poor and the reputation of Little Chef was seriously damaged.
The trading environment had changed drastically since the height of the Little Chef’s
success. Motoring trends had changed and healthier food choices are now preferred.
The business had reached a low point. (Wachman R 2008:15)
Complete neglect
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
annexure 3 and guides resistance to change.
1 2 3
12
34
56
78
Pull together the guiding team
Create a sense ofUrgency
Get the desired change vision and Strategy
Communi-cate for understan-ding and buy-in
EmpowerOthers to act
Create short- term wins
Do not let up
Create a new culture/Make it stick
RDI Notes Drivers of change linked to
http://www.dcsf.gov.uk/everychildmatters/strategy/deliveringservices/servicedirectories/models/changemanagementmodels/?#relatedBase
Set the stage
Decide what to do and make it
happen
Make it stick
Kotter and Rathgeber’s 8-Step process of successful change for
LC
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)
Please see annex 6 for further evaluation.
6.4 Communicate for understanding and buy-in
Assignment: Managing Change in Organisations, MBA. Student name and number- 21 -
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)
Assignment: Managing Change in Organisations, MBA. Student name and number- 22 -
(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.
Assignment: Managing Change in Organisations, MBA. Student name and number- 23 -
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.
Assignment: Managing Change in Organisations, MBA. Student name and number- 24 -
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.
Assignment: Managing Change in Organisations, MBA. Student name and number- 25 -
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)
Assignment: Managing Change in Organisations, MBA. Student name and number- 26 -
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
Assignment: Managing Change in Organisations, MBA. Student name and number- 27 -
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)
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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)
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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
Assignment: Managing Change in Organisations, MBA. Student name and number- 30 -
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:
1 Human Resources Policies be developed to deal with the human process
when Little Chef
2 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.
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Assignment: Managing Change in Organisations, MBA. Student name and number- 32 -
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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
Assignment: Managing Change in Organisations, MBA. Student name and number- 37 -
Little Chef infrastructure and intangible assets include:
1. 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.
2. 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
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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
http://www.ln.edu.hk/mgt/staff/robin/Change/EMBA%206%20amended1.ppt
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.
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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
Radical
PeripheralCore
Incremental
High DisturbanceHigh Risk
Moderate DisturbanceLowish Risk
Low DisturbanceLow Risk
Moderate DisturbanceModerate Risk
Proposed ChangePennington (2003)
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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.
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