Organizational Change ProcessJennifer Booker, Aisha Castro, Virginia Cruz, Jessica Mickey, Michael Reed,

Cristen YanceyAET 560

Professor Gregory Dlabach

The Starbucks Rewards Program

Contents Organization Overview Scenario Starbucks Theories of Change Rationale for Theories How Will the Theories Promote Change Measurement/Assessment of Change Training Program Objectives Strategies to Overcome Resistance Strategies to Create Commitment Incentive Offers Use of Teams During Change Shared Diagnosis in the Change Process Data Collected for Continuous Improvement Monitoring References

Starbucks Organization Overview:

› American coffee company and coffeehouse founded in Seattle, Washington in 1971

› Started as a single store in 1971 now there are 22,591 retail stores in 68 countries

› Starbucks mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.

Starbucks Scenario

› Effective April 12, 2016, Starbucks Rewards program (“Starbucks Rewards")

› Members of Starbucks Rewards are able to earn and accumulate “Stars" that can be redeemed for Starbucks Rewards benefits, also known as “Rewards," at participating Starbucks®, Teavana® and Evolution Fresh™ stores in the U.S., Canada and Puerto Rico.

› Starbucks Rewards "stars" as a type of digital currency, reloadable card, dubbed "Starbucks Rewards Prepaid Card from Chase” (Sharma, A., 2016).

Starbucks JOINING STARBUCKS REWARDS

› 1. Activate a physical Starbucks Card, or Starbucks Card eGift is Five Dollars ($5.00).

› 2. Download the Starbucks mobile app to your Android™ or iPhone® device.

› 3. Purchase a specially marked Starbucks® product from a participating grocery retailer, create an account and select a Starbucks Card.

› 4. Join Starbucks Rewards!

Theories of ChangeBeckhard & Harris's Change Management

Organizational Analysis › Evaluate the need for change by assessing existing organizational state.

Why Change?› Determine the underlying need for change, whether change is a choice, and define a

change vision Gap Analysis

› Assess the gaps between the existing state versus the desired end state. Action Planning

› Develop a plan to accomplish the tasks necessary for the change. Managing the Transition

› Execute the plan and manage resistance (Cawsey, Deszca & Ingols, 2012).

Theories of ChangeLewin’s Change Management Theory

Unfreeze Preparing the organization for upcoming changes.

› Breakdown of existing practices, attitudes, and behavior. Creating motivation for implementing changes.

Change Implementing of changes

› Development of new attitudes and behaviors. › Time and communication are key to change success.

Refreeze Consolidating changes and reinforcement of new changes.

› Ensure changes are being incorporated and used.

(Lewin's Change Management Model: Understanding the Three Stages of Change, n.d.)

Rationale for Theories Customer satisfaction

› Starbucks understood the need for change to help its customers learn and use the rewards system

› They increased the reward to make it more appealing to customers› Increased rewards attracts customers to make more purchases

How Will the Theories Promote Change

After the uncertainty created in the unfreeze process, people begin to change and look for new ways to do things. Communicate often Empower others Involve people in the process Address problems immediately

Measurement/Assessment of Change Set clear definitions Collect data related to the objective Establish a clear target –quantitative data Consistently collect data Highlight success, challenges, and issues Ask questions

Training Program

The Turnaround and Transformation ProgramDay 1: The TurnaroundDay 2: The Transformation

The Turnaround Day 1 - Objectives Employees will understand the necessity behind the changes

to the reward program by: Communicating directly with management concerning the new changes. Directly addressing concerns with management.

Multifunctional teams will be created to provide unbiased opinions and solutions to the new rewards program.

Roles and responsibilities of each employee will be changed to accommodate their position within the pilot team for each store.

The Transformation Day 2 - Objectives Effectively create a plan to advertise and market the new rewards program

to customers. This plan will also include an incentive plan for employees to encourage

participation. Determine the success of the plan by analyzing the usage increased of the

Starbucks App for ordering and payment.

Strategies to Overcome Resistance Use resistance from employees as a learning experience. Encourage participation. Be open, honest, clear about the upcoming changes. Understand the reasons for resistance (Spector, 2013). Use customer feedback on program to help employees develop answers to

possible objections.

Strategies to Create Commitment Explain the ultimate goal of the organization. Allow active involvement throughout the change process. Stress importance of professional growth and development opportunities. Create store goals to be reached

Incentive Offers Create a rewards program for employees that get the most customers to

enroll in a week. Create incentive program for managers of top selling stores Trickle down incentives for employees. Chase has confirmed that the rewards card will be free of some of the fees

often associated with prepaid debit cards, including loading, overdraft, and monthly service fees (Sharma, A., 2016).

Use of Teams During Change Mutual Engagement Teamwork

› Accepting shared purpose and responsibility for interdependent tasks› Enhances coordination› Commitment › Creativity › Supports outstanding performance› Learn from each other

Shared Diagnosis in the Change Process Discover the problem (s) together as a whole. Everyone is involved in the change process from beginning to end Everyone in the organization arrives at the same result – “The Change”.

Data Collected for Continuous Improvement Monitoring

Surveys Observations Quarterly and Annual Sales Reviews Monitor of Starbuck app usage from reward members.

ReferencesCawsey, T., Deszca, G. & Ingols, C. (2012). Organizational Change: An Action-Oriented Toolkit, (2nd ed.). Thousand Oaks, CA: Sage Publications

Lewin's Change Management Model: Understanding the Three Stages of Change. (n.d.). Retrieved June 10, 2016, from

https://www.mindtools.com/pages/article/newPPM_94.htm

Spector, B. (2013). Implementing organizational change: Theory into practice (3rd ed.). Retrieved from The University of Phoenix eBook .Collection database.

Sharma, A. (2016). Why Starbucks Wants You to Load Up Its Prepaid Visa Debit Card. Retrieved from

http://www.fool.com/investing/general/2016/03/28/why-starbucks-wants-you-to-load-up-its-prepaid-vis.aspx

www.starbucks.com. (2016). Starbucks Rewards Terms of Use. Retrieved from

http://www.starbucks.com/card/rewards/rewards-program-ts-and-cs