Communicating the Change
Aaron A. Czupryn aaczupryn@yahoo.com HRM-587 Managing Organizational Change
Professor John Dibenedetto
08/17/2013

Explanation of Spreadsheet Communication Plan. As the goal of this assignment I have set out to develop a realistic communications plan for Starbucks concerning its organizational changes. The goal of the plan is to reach all stakeholders that will be affected by the upcoming changes and make sure that a common language is being used throughout the plan. The stakeholders’ that I have identified through my research includes the following: board of directors, senior management team, district managers, store managers, shift supervisors, baristas (employee), shareholders, vendors, and contractors. The timeline of communication would begin with the initial communication being sent out by the CEO to the board of directors, senior management, and district managers. The district managers would then forward the communication to the store managers and shift supervisors, who would then pass on the information to the baristas (employee). Two separate communications would be sent in conjunction with the first. The first of these communications would originate from the information sent to the board of directors by way of the CEO. The board of directors would forward the communication in its entirety or omit any non-essential information to the shareholders. The communication would inform them of all upcoming organizational changes so they can evaluate the risk of their investment. The second communication would again originate from the information sent to the district managers by way of the CEO. The district managers would forward the communication in its entirety or omit information that would not affect current vendors and contractors servicing the organization. Upon implementation of the organizational changes there will be follow up communications in the form of emails sent to all stakeholders affected updating them on the progress of the changes. The CEO and senior management might exchange inner office memorandums instead of emails to discuss any resistance to change and status updates. In an organization the size of Starbucks there would definitely be follow up face-to-face meetings between district managers and store manages to gauge the progress of change at the coffee house level. According to (Mancini, 2012) a tool of communication used by Starbucks management is a “Skip Level” meeting. These meetings are face-to-face meetings hosted by the district managers and involve human resources and baristas (employees), but excludes the store manager and shift supervisors. The goal of these meetings is to get honest feedback from the front-line employee about what they would like to see started, stopped, or continued concerning changes within the organization. The rationale for the above choses methods of communication is they are very easy to implement in an organization of Starbucks size and throughout the many layers of management. Most of these methods of communication are inexpensive and very fast; making them cost effective tools. Face-to-face meetings can be expensive in reference to travel expenses, but there is no better instrument for management to use when trying to convey the organizations vision, where they are headed, or to answer questions and concerns of stakeholders at any level. The correct voice for these communications messages comes from the CEO who not only needs to convey the spirit of the organization’s strategy, but the methodology for achieving it as well. The message choices featured in these communications where chosen because they would directly impact employees, customers, and service on several levels. The main players involved in this communication strategy are store managers, shift managers, and baristas, who will have to deal with the day-to-day effects these changes, have on the clients.
Communication Piece. For the communication piece example, I chose to create my own email based loosely off an actual memo sent by Starbucks CEO Howard Schultz. An email is short for electronic mail and is best described as a “simple text message sent via a network to a specified individual or group of recipients. In the beginning and even today, e-mail tend to be short pieces of text, although the ability to add files and video can make any message quite long” (Marshall, 2013). Example of email to follow on next page.

August 17, 2013 To: All Starbucks Partners From: CEO Howard Schultz
Subject: The Future of Starbucks
Dear Starbucks Partners,
Due to the disappointing stock performance over the last year the shareholders along with the board of directors has asked me to take over as CEO of the Starbucks organization once more. After a few sleepless nights and long deliberation I have relieved Jim Donald of his position and as of Friday August 16th I resigned as Chairman of the Board and assumed the mantle of CEO. It is my pledge to you that I will communicate any and all steps being taken by my management staff to improve out U.S. Business and reinvigorate our customer loyalty which is the foundation of our business.

It is our goal to renew our focus on the core of what has made Starbucks a premiere coffee house; great customer service and outstanding coffee. To assist getting our focus back on track we will be discontinuing offering warm breakfast sandwiches at all U.S. stores by the end of this fiscal year; all stores will be closed beginning September 2nd for three hours for All Things Coffee Training; free WIFI for both customers and our partners beginning immediately. My hope is that you will all view these few changes as positive ones and if not feel free to contact me or my management team with your concerns. It is my wish that you will work with me in creating the road map for Starbucks future and I appreciate all the hard work and service you have shown over the past year. I promise that I will tirelessly work on Starbucks behalf to once again make our organization the coffee house of choice.

Over this last weekend I reviewed every part of the company’s operations to ensure that we are managing and using our resources as effectively as possible in order to improve the “Starbucks Experience.” I realize that we operate in a highly competitive and challenging environment, but we have failed in being strategic as well as nimble as our business evolves. This lack of organization has caused us to take our eye off the ball and our customers have suffered.

As a result of this review I have come to the conclusion that some organizational changes need to be made. These changes will involve the restructuring of the company from two divisions to four. The new divisions are: Western/Pacific, Northwest/Mountain, Southeast/Plains, and Northeast Atlantic. As a result of these new divisions it is with a heavy heart that I must announce their will be a reduction in our workforce by approximately 600 positions. We will also be eliminating some of our retail locations due to over saturation. These decisions have been made with much thoughtfulness, and respect for those that will be affected. We are committed to treating our departing partners’ with dignity and thank them for their years of service.

The above modifications to the organizational structure are designed to strengthen our focus on servicing customer and increasing U.S. business. These changes will consolidate many of our support systems, reduce redundancies and be the driving force behind functional excellence.

While these decisions were necessary, I am aware of the personal and professional impact these actions will have on individual partners and customers. It is our pledge that we will make these transitions as smoothly as possible.

There will be communications to follow detailing further actions and to update our partners on the progress of current changes. Thank you again for your commitment to the Starbucks organization.

Sincerely,

Howard Schultz

Analysis of Actual Communication Plan Seen By “Public Eye”. It can safely be said that Starbucks is nearing the end of its holistic recovery since CEO Harold Schultz returned to the company in 2008. In a recent shareholders meeting on March 21, 2013; shareholder Tom Strohbar complained that Schultz’s political views were eroding the company’s bottom line. (Smith, 2013) Schultz responded, “If you feel respectfully that you can get a higher return than the 38% you got last year, it's a free country. You could sell your shares at Starbucks and buy shares in other companies. Thank you very much." There are not too many companies that can claim those kinds of numbers after coming out the other side of a corporate transformation. To analyze the company’s commitment to reviving the “Starbucks Experience”, I as the author chose to look at the recent press Starbucks has received to gauge the organizations commitment to their change plan. On February 26, 2008 Starbucks conducted an interesting training experiment by shutting down all U.S. retail locations to train their 135,000 employees. The simple goal of this plan was to re-energize the work force and concentrate their focus on providing a superior cup of coffee. Though these events have little value when it comes to building skills, Starbucks did benefit from this exercise in several areas. A company like Starbucks business model involves with building customer intimacy and the training program was successful in re-engaging the employees with their customer base. The program also offered great PR for the organization and offset much of the negative news out there concerning the firing of employees and closing of retail locations. The radical program also gave Starbucks a boost in marketing. There are not too many people out there that wouldn’t appreciate that their favorite coffee house takes time out to train and embolden their employees. The bottom line according to (Bersin, 2008) Programs such as this can guide remarkable changes in employee focus, commitment and excitement, but one should not consider them a complete training program. Only when such programs are integrated into a complete strategy for onboarding and continuous learning, can they drive tremendous value. During Schultz reign as chairman of the board for Starbucks grew from 5,000 retail locations to over 15,000. The expansion was too much, too fast for the organization and growth soon became an albatross about the company’s neck. Because of this rapid growth, Starbucks’ stock dropped a staggering forty-two percent. In January of 2009, Starbucks closed approximately 600 locations and eliminated 7% of its global workforce. Nearly 70% of the store closings involved locations that were open less than 18 months. By eliminating the poor performing locations along with staff saved the organization $850 million in costs. One change that did not take place as communicated was the elimination of breakfast sandwiches form the Starbucks menu. In 2008 CEO Howard Schultz communicated to all Starbucks partners that the company would be removing breakfast sandwiches from the menu mainly due to their smell overpowering the coffee aroma at retail locations. The plan was to replace the sandwiches with something else by fall or change the products so they could be marketed as entirely different from the originals. This came as a shock not only to customers, but to company stakeholders since the sandwiches accounted for roughly 3% of the company’s revenue or approximately $100 million in sales. In the end Starbucks chose to change the recipe of the sandwiches by reducing the amount of butter used in the eggs and replacing the current cheese used with a less pungent one. This plan will not only control the smell produced by the sandwiches, but will increase the quality of the product because healthier alternatives are being used in the recipe. During my research I was hard pressed to find any negative press concerning the changes that were communicated to the partners of Starbucks. There were some negative customer comments concerning the retail location closures due to the National Training Day, but in the end the service provided concluding the training was viewed as much improved. There was some push back and resistance to the elimination of the breakfast sandwiches, but Howard Schultz has made it his mission to be open to commentary and is committed to listening to employees and customers alike.

References
Mancini, M. (2012, May 1). Employee Communication at Starbucks [Video File]. Retrieved from Canadian HR Reporter video posted to http://www.youtube.com/watch?v=n_GwxN5K7WU
Marshall, B., Crosby, T. (2013). How E-mail Works. Retrieved August 17, 2013 from website http://computer.howstuffworks.com/e-mail-messaging/email.htm
Smith, A. (2013, March 8). Starbucks CEO Holds His Ground on Gay Marriage. CNNMoney. Retrieved August 18, 2013 from website http://money.cnn.com/2013/03/26/news/companies/starbucks-gay-marriage/index.html
Bersin, J. 2008. Starbucks National Training Day: Did it Work? The Business of Talent, [blog] February 27, 2008, Available at: https://www.bersin.com/blog/post.aspx?id=2907de52-6219-4299-9e11-d06df27b3250 [Accessed: August 18, 2013].