Abstract
Research has provided the example of competent leadership that has resulted in a well-known product and service organization having a turn around from losing its fair market share in as of 2008. The remarkable story of Starbucks under the leadership of CEO Howard Schultz taking over in 2008 achieving a turn around and becoming one of the top coffee product and service organizations globally has happened because of innovation and people development. The following is a literature review of the research that supports how evidence-based leadership competencies as exemplified by Shultz has proven the underlying reason for business success in the 21st century. The following has provided a synthesis of the findings of the literature review in relation to the Starbucks leadership as well as how the outcome has had personal implications connected to a business leader. The ending result of the following has discussed how one specific research findings has brought about the idea for developing a self-assessment of personal leadership competencies as an ongoing monitoring process.
Leadership Competencies – Starbucks and its Turnaround Success
Introduction
The turnaround success of Starbucks has exemplified how organizational culture has proven a key aspect in establishing competencies in business organizational management, innovation, and people development. These three components of business organizational leadership have underpinned what bringing all other elements of effective business management together. Understanding the importance of an organizational culture influence is a pragmatic approach to understanding effective applications of leadership competencies in these three areas.
Starbucks’ Turnaround
Recognized as the world’s largest coffee retailer, in 2008 Starbucks, had pulled itself out of the financial meltdown of that year by having changed its leadership and its organizational culture to one that had emphasized better management, innovation, and people development (Belludi, 2015; Dudovskiy, 2017; Husain, Khan, & Mirza, 2014).
On January 8, 2008, Howard D. Schultz returned as CEO of Starbucks in January of 2008 after leaving in 2000. It was a combination of teamwork, innovation, and a departure from the conventional that had shown Schultz as an effective leader in turning around Starbucks who was rapidly losing its fair market share by 2008. The leadership had changed the organizational culture to be transparent, technologically oriented, and created a work environment where its employees had been engaged in thinking freely about the company and had become invaluable contributors with both ideas and strategies. This would prove the successful focus on creating an organizational culture where the community it served would be part of the process (contribute in terms of strategies and ideas was fostered. As a result, a community involvement concept was developed (Belludi, 2015; Dudovskiy, 2017; Husain, Khan, & Mirza, 2014).
The following will conduct a review of precedent literature related to and arising from the example of the success of Starbucks’ with analysis of it transformational servant leadership and the accompanying values and ethics. This will include higher ordered thinking framing this analysis. In addition, the following will provide a synthetic summary of best practices learned from evidence-based investigations and problem solving aligned to leadership competency and other activities that have been conducted. The following provides reflection on the implication of the literature review included below and application to personal action that will address knowledge of self, needs of others, and organizational/business objectives, integration of relevant concepts, knowledge learned, and an action plan for future implementation, followed by a personal action plan. The literature review begins this project.
Literature Review
Organizational Culture
Organizational cultures have provided a working example of the expected behavior of the stakeholders beginning with leadership on to the workforce. This has extended to both the organizational and social situations connected to ethical and moral behavior (Hartnell, Ou, Yi, & Kinicki, 2011; Hofstede, 2011; Jones & Lewis, 2003; Trampenaars & Hampden-Turner, 1998). The abstract nature of an organizational culture has shown how it has often operated outside the awareness of the organization’s population, including its leadership roles (Schein, 2004). Consequently, in terms of having a better understanding of the specific dynamics of an organizational culture as a tool for leadership competencies there has existed the need for connecting this to the internal credibility of business organizational management, innovation, and people development for attaining productivity and growth goals (Latham, 2013). The increasingly apparent value of the human resources management (HRM) perspective as linked to the organizational culture has held to how the HRM has facilitated such a concept (Wright and Haggerty (2005). Changing the organizational focus on its leadership management, innovation, and people development had been the formula for the successful turnaround of the Starbucks organization. In terms of how this has applied to the Starbucks’ example of business organizational management, innovation, and people development there have been successful outcomes that have resulted in Starbucks’ turnaround and once again gaining its place in the fair market share globally.
Welch (2012) has provided another example with the AAA Northern California, Nevada & Utah Insurance Exchange success in changing its organizational culture for better inhouse people development. The Welch (2012) example shows how the 21st century leadership competencies as related to the success of the Starbucks’ turnaround that has been about understanding the need for change starting with the organizational culture. This was about having focused on sharpening its competitive edge through leadership, innovation, and people development. In the Welch (2012) article it had described building a high-performance value-based organizational culture just as in the case of Starbucks, there had been the need for a proactive strategy for developing a transparent leadership pipeline.
Transformational Servant Leadership Values and Ethics
Byebierggaard and Yoder (2017) have looked at the transformational servant leadership values and ethics much the same as Schultz had from the perspective of a global service and product organization. It has proven to be about “the potential to develop the ability to collaborate and influence in complex contexts is assessed and, based on the results, the individual designs a path of personal transformation (Byebierggaard & Yoder, 2017, p. 39)”. For any business organization to function in the global market leadership must be aware of the consumer base as a fundamental competency. As a stakeholder, the consumer of the 21st century from a global perspective is diverse so ethically and morally this is part of the knowledge that underpins organizational leadership competencies in its approach to managing a business.
For positive transformation to take place, the individual needs to have certain competencies that enable this process. There are several lists of enabling competencies that create the foundation for assessment. For example, if a Japanese leader can tolerate ambiguity (an enabling competence), then he is less likely to draw quick and inappropriate conclusions about an Indian employee. Instead, the Japanese leader will seek out information about the employee’s challenges or the specific cultural contextual circumstances, which demonstrates another enabling global competency–curiosity or openness. (Byebierggaard & Yoder, 2017, p. 39)
Clearly in the case of Starbucks and Schultz’ success in the turnaround process this was the kind of leadership competency that had proven innovative, and had advanced people development not only within the organization, but in the communities Starbucks serves.
Transformational Servant Leadership Higher Order Thinking
From the perspective of transformational servant leadership and the need for higher order thinking the literature has supported the benefits of engagement that had taken place with Schultz and his success with the turnaround with the Starbucks organization. Wallace and Trinka (2009) have researched this and have explained how the latest studies have indicated that engaging employees has resulted in supercharging “productivity, reduce turnover, and amplify customer focus, possibly by as much as 20 percent (p. 10)”. The Wallace and Trinka (2009) study had determined that within the hierarchy of management it had come down to the engagement of the immediate leadership was the critical variable than any other in the organization. Schultz had effectively engendered this as part of the competencies of every level of leadership in the Starbucks organization. “Great leadership engenders high levels of engagement that drive organizational performance (Wallace & Trinka, 2009, p. 10)”. Further to the Wallace and Trinka (2009) study, they had found that among the U.S. workers 29 percent have shown they are actively engaged in the work, while at the same time, 27 percent are almost. With the right support of competent managers 60 percent of an organization’s workforce have the potential for accelerating their engagement in their work.
Other research that has included Ketter (2010), Decker, Durand, & Ayadi et al (2014), and Brotherton, (2011) have focused on the increasing focus of leadership programs developing competencies that have focused on the three presented in this paper. From a pragmatic perspective these authors have substantiated how such proactive leadership as had been the focus of Schultz therefore, had been about proving his own management competencies as value-based tools for building exemplary leadership and a value-based organizational culture. As previously outlined, this had been aligned to teamwork and people development. The research as described in this next piece of literature has focused on the importance of leadership competencies being an ongoing process of self-assessment.
The work that has been offered by Decker, Durand, and Ayadi et al (2014) that had compared different models of self-assessment as a competency approach for organizational leadership had focused on a holistic approach to testing their theory on their target population that had included business school students. The model the authors had discussed in their research had relied heavily on the belief in the autonomous learner. They had described this model as having been comparable to another where self-assessment also had permeated all levels of the curriculum, the learning process and assessment at institutional level. The authors had also noted how debate had arose about the purpose of self-assessment and its intention to identify areas of both strengths and weaknesses about individual work, so it would be possible to make improvements while promoting learning. This had resulted in revealing how a criteria-referenced self-assessment had promoted achieving the desired changes.
Further to Decker et al (2014), who had described how one examination of a method of self-assessment that had asked participants they knew at the onset of the research, then in the middle, what they had wanted to know, while at the end, what had they learned. The simplicity of this study had revealed the participants had found such an approach having provided important support of their learning as well as self-assessment. In this manner, the participants had found themselves more aware of what they had learned as well as having a better understanding of their thinking processes.
In the Decker et al (2014) findings they had found that other research had suggested that a person’s interest has been a requirement for learning. This had proven especially significant to self-directed learning. In the process of self-assessment to bring about self-change had shown that it has depended on doing the correct action or processes at the right time.
… probably the most obvious and direct implication for this application are 1) contemplation causes preparation which causes action, and 2) there is a need to assess the stage of a one’s readiness for change and to tailor interventions accordingly. Self-assessment of a student’s current competence state may help do that… (Yet,) some individuals appear to rely primarily on change processes most indicated for the contemplation stage-consciousness raising, self-reevaluation-while they are moving into the action stage…. (Consequently) insight alone does not necessarily bring about behavior change. Second, other individuals rely primarily on change processes most indicated for the action stage-reinforcement management, stimulus control, counter conditioning-without the requisite awareness, decision making, and readiness provided in the contemplation and preparation stages. (Decker et al., 2014, p. 129)
In their findings, Decker et al (2014) had argued that both a specific and clear action plan would be a necessary step for change to take place as it had occurred between self-assessment connected to learning and behavior change.
Synthesized Summary
Clearly, in review and analysis of the above literature for best practices in achieving an organizational culture where leadership competencies have proven successful as in the example of Starbucks’ turnaround, effective leadership is about teamwork. Teamwork as revealed in the literature review therefore has meant engaging the stakeholders in a common cause. This has been applied as engaging workers in decision-making and training opportunities. Further, the framework of the leadership competencies in creating teamwork has been about innovative approaches that have brought both the consumer and community into the equation. Creating a value-based organization as has been explained by Husain et al (2014) about the turnaround efforts of Starbucks’ CEO Shultz was about how innovation and teamwork along with people development had meant proving the organization cared about its product, its consumer, its employees. In other words, about its stakeholders. The innovative approach that Schultz had taken therefore, had proven that engaging stakeholders that had included the communities where it does business was a transparent approach to his competencies as a business organization leader
The outcome of the above assessment has provided some invaluable insights in gaining a better understanding of how effective competencies of business leadership have therefore meant best practices in creating effective teamwork, implementing innovative ideas, and working with people development as it fits the goals of all stakeholders aligned to the organization.
Implications for Personal Action
In assessing the above implications as applied for personal action in the field of business management and its connection to competencies the findings have supported the underlying knowledge of self. This has aligned to the personal understanding of the need for competent and effective leaders to understand that teamwork is about engaging the stakeholders. It is about anticipating, recognizing, and addressing the needs of others. From the organizational/business objectives the implications of the above particularly in the case of Starbucks and its turnaround as an example of a successful outcome having the opportunity to examine the application of a competent leader such as Shultz has provided the basis for integrating the literature as relevant concepts. The knowledge that I have personally learned in researching and writing about the above has further solidified previous work on this project of how innovation has constituted coming up with new ways of doing things as has been exemplified with the leadership competency of Schultz. The innovative approach this CEO had taken in engaging the Starbuck employees, and the community in creating a better organization had proven my personal stance on how employees have for a long time had been embedded in the misconception that business innovation is something that should be left to the executives. Schultz engaging the employees in an innovative way by giving them a voice had proven my philosophy that implementing people development programs is invaluable. I have stated in other work in this project how organizational leaders should ensure that managers and their employees have the necessary tools for access to timely and regular opportunities for learning because this is a fundamental aspect of creating new ideas. Learning about the ideas that Schultz had brought to Starbucks that had aligned to the ideology of effective business organizational leadership has been personally gratifying because it fits my personal philosophy on the needed competencies of an effective leader. What has been taken for granted by the typical leadership profiles in the last century about what is a good business leader has proven to be no longer valuable in the fast-paced ever-changing business world of the 21st century.
Consequently, the implications of the above research and analysis in substantiating the leadership, innovativeness, and people development found in the literature review aligned to the turnaround leadership of Starbucks has been an exciting experience. The outcome of this has led to critical thought on creating a personal action plan for developing a competency assessment of my own business leadership philosophy.
The work that has been offered by Decker et al (2014) that had compared different models of self-assessment as a competency approach for organizational leadership has personally attracted me to the concept because it has a holistic approach that fits my personal philosophy as a lifelong learner. By creating self-assessment for leadership competencies that have been outlined, assessed, and discussed in the above, this will provide the potential for personal action by devising learning contracts with myself. In previous work in this course I had stated how the changing nature of the global business world has required an ongoing pursuit of both knowledge and skills in a leadership role and self-efficacy.
Personal Action
Decker et al (2014) has provided an invaluable insight as to creating a personal action plan that will integrate a self-assessment of personal leadership competencies monitored via an ongoing process. The explanation of these authors of how self-efficacy has influence the future performance of individual has proven a personally engaging idea in construction personal actions plan. This self-efficacy strategy as a personal action plan looks at the value of doing so in relation to the difficulty of the leadership tasks that emerge and the extent of the needed effort that is invested. This is directly in relation to the challenges and obstacles that inadvertently arise. As has been suggested in the work of Decker et al (2014), the outcomes of self-efficacy as a positive process of perceptions has led to the possibility of playing an important facilitation for maintaining both confidence and optimism as a business leader. Pragmatically, initiating this type of ongoing competency via self-assessment on a regular basis in a business leadership role adheres to the precepts of the social cognitive theory. This is according to how the outcomes of the self-assessment expectations can influence personal performance as a business leader as well as the choices made in this position. Further, the Decker et al (2014) findings on this self-assessment tool for effective monitoring for identifying needed changes to leadership competencies means that when I have expectations of the positive benefits of such an action plan there is a natural potential for motivation that enhances any needed action to learn.
Conclusion
The above has successfully provided the example of the remarkable turn around of the Starbucks organization directly as the outcome of a leader possessing the necessary competencies to assure teamwork, innovations for organizational change, and people development. The success of the Starbucks’ leadership that had taken place in 2008 has been adequately substantiated by the above literature review that had focused on the different aspects of transformational servant leadership. The implications of the above research, assessment, and discourse had successfully provided the means for addressing the personal significance the material has resulted in my view of the future as a competent business leader. This has been accomplished by critically applying informed understanding on what personal actions would fit my ability to remain a competent business leader. From the example of the Starbucks’ CEO and the specific literature provided by Decker et al (2014) the outcome had provided the means for identifying and tentatively creating an invaluable means for doing so via a self-assessment monitoring system. In this manner the above work has proven a personal success academically, professionally, and personally because of the holistic approach of doing so aligns to my personal philosophy of being a life-long learner.
References
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