This review aims at analysing the change management theory and the implications in the hospitality industry and its based mostly on the bestseller “Leading Change” by John P. Kotter along with few “Change Management” related journal articles.
What is “change management” in hospitality?
With the latest social changes, technical and informational advancements, the tourism and hospitality business has become globalised and interconnected, dealing with continually changing market conditions, new technologies, new customer demands and expectations, rising costs, financial instability. To survive the hospitality organisations must adapt or “die”. They must continually re-evaluate their business tactics, set new goals and find new strategy and ways to reach them. Change management is changing the organisation to adapt and reach the new goals. The problem with the change is that people who have been doing things in a certain way for a very long time usually won’t like to be told they have to do things differently. Change may come with uncertainty and chaos. To avoid the chaos, the hospitality manager should communicate the threat of not changing, if possible involve the team in decision making, minimise uncertainty, set small goals, celebrate the successes and never stop explaining the reasons to change.
The eight-stage change process:
John P. Kotter is one of the biggest change management specialists. He came up with an eight-step model that can aid businesses to implement change effectively in organisation, insisting that skipping any of the steps can be enough for the whole change plan to fail.
1. Create urgency. The managers and leaders must make people understand why change is necessary and inspire people to leave their comfort zone. The idea of change being necessary for the organisation can be very powerful. If the manager can create an environment where the workers are aware of an existing problem and see the possible solution, then most likely they will support the change. Having conversations about the vision and the direction the organisation is going to will help creating such environment. One way of achieving this is to create a communication channel where issues and potential solutions can be discussed. This stage is all about preparation and is very important to be well prepared before starting the change process. It is very important to create the “need” for the change instead of just a “want” for the change to receive support and secure the success of the change.
2. Form a powerful coalition. In a big change project, a single manager can’t do all the work alone and needs to build a team to help him direct the others. The manager will identify key people within the organisation, preferably different departments who can help implementing the change. The change team members can help communicating the message, delegating tasks and ensure there is support for the change within the organisation.
3. Create a vision for change. A change plan often can be complicated and hard to understand specially for workers at the lower end of the management chain. The vision, must be short and clear as we want the vision to be easy understandable and relevant to the people affected by the change.
4. Communicate the change vision. It is not enough to have a plan for change if you don’t communicate. The communication can be verbal or written and the change team created before can help spreading the message. It is very important to continuously communicate the vision.
5. Remove obstacles. During the change, obstacles will be encountered whenever its individuals, traditions, legislations or physical obstacles. This is where the change team must step in and help overcome these obstacles, identifying them as early as possible, listening to people’s fears or concerns and understanding what is working well and what is not working with the change process.
6. Create short term wins. The change project must be divided into small steps as change comes with uncertainty for the people involved, they must be motivated by short term wins, showing them the benefits of change.
7. Build on the change. Keep repeating the previous steps, communicate the vision, remove obstacles and keep delivering benefits.
8. Anchoring the change. Make sure the change is there to stay, implemented in organisations procedures and day to day work.
The hospitality in the future
Alecu (2013) found seven factors implicated in change management in the hospitality industry worldwide. These factors are:
1. Goods and capital. Most times a hospitality business capital is not owned by an individual but by a group of investors, and the investors will always look for the most profitable investment. There will always be a huge pressure on the managers to maximise profits and avoid investors from moving the capital to a more profitable investment. This will always drive change and improvement
2. Health and safety. The globalisation has expanded the food producing and processing market, introduced new forms of tourism and with the latest terror attacks added a new level of safety issues. Overcoming the new challenges will require investment in training customers and employees, managing tighter food supply and encourage cooperation with law enforcement agencies.
3. New management. Currently in Ireland, staff shortage is one of the big challenges of the hospitality management due to other market segments who offer better working conditions and with the age of information, the better informed new worker claims to be better valued and rewarded for his knowledge. Management is having less levels and pressure is put on all members of the staff.
4.Marketing, distribution and control capacity. Montargot and Lahouel (2018) think that hoteliers need to meet the expectations of more connected and informed customers, while regaining control of their online channels as they face disrupters, such as Airbnb. The internet and E-commerce has revolutionised the way customers find, evaluate and pay for accommodation. With websites like booking.com, Expedia or TripAdvisor, is becoming more challenging for managers to be competitive and catch the eye of the customer.
5. Technology. The rate of change business world is not going to slow down any time soon (Kotter, 1996). Whilst technological advances create new opportunities for hoteliers, they also create challenges (Montargot and Lahouel, 2018). With the new technological advancements, internet and smartphones are used more and more in hospitality from the reservation stage until the end of the stay. There are already hotels providing online check in, smart door locks controlled with the mobile phone or tablets in the room to control the environment and personalising the experience (smart lighting, temperature control, ambient music). Combining smart software, powerful hardware and innovative vision, the hotel of the future is only one step away.
6. Development of hospitality industry. The government has a strong influence in hospitality development by regulating planning permissions, laws and regulations, tax or founding. The increased vat for example, will force managers to find ways of offering same or better services for wit less money.
7. Social problems. Hospitality industry being one of the biggest in the world is dealing with many nationalities and with different cultures and personalities involved its becoming more and more challenging to accommodate everyone’s needs expectations and believes. Also, Brexit is another big social problem, with the UK’s decision to leave the European union, the full impact on hospitality industry in Ireland remains uncertain.
In comparison with other businesses, the hospitality in its nature must change all the time. The change is not a simple and quick process, after months or maybe years of work, when the change has been implemented, there is still a lot to do to ensure its successfulness. Kotter (1996) thinks that 70% of change plans are unsuccessful because of poor preparation. Following the eight-step change process will make a change initiative more likely to succeed. A major challenge for the hospitality industry is the appearance of alternative sources of information, leading to a closer competition and increased customer expectations while social and political instability leads to uncertainty.