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A Case Study on the Implementation of Six Sigma within Starwood Hotels & Resorts

Change Management

Forschungsarbeit 2010 22 Seiten

BWL - Unternehmensführung, Management, Organisation

Leseprobe

TABLE OF CONTENTS

Executive Summary

List of Figures and Tables

List of Abbreviations

CHAPTER 1: INTRODUCTION

CHAPTER 2: CHANGE ANALYSIS
2.1 PRESSURE FOR CHANGE
2.2 KEY ROLES FOR CHANGE
2.3 5- P MODEL OF LEADING CHANGE
2.3.1 PURPOSE
2.3.2 PRIORITIES
2.3.3 PEOPLE
2.3.4 PROCESS
2.3.5 PROOF
2.4 SUMMARY

CHAPTER 3: CONCLUSION AND RECOMMENDATIONS

CHAPTER 4: BIBLIOGRAPHY

CHAPTER 5: APPENDICES
A. Brand portfolio SHR (in 2005)
B. Innovation chart

EXECUTIVE SUMMARY

During the last years, quality and consistent service experience has become crucial factor in the hospitality industry; shareholders invest only in reliable products, customers become more demanding and evaluate the received services more critically and the employees drive for training and development. Continuously change and rethinking is required to keep track.

The author will analyze the change strategies used by Starwood Hotels & Resorts to launch the quality management tool Six Sigma in order to reduce the amount of bad service encounters and align the organization into one direction. The 5-P model was chosen, as it gives a simple and logical approach to the purpose for change, priorities during the implementations, involved people, change process as well as the proof of the change outcome.

The analysis shows, that the successful top – down transformational change approach by Starwood Hotels & Resorts Executives led to short – term financial benefits and increased guest satisfaction and employee motivation in the long run.

Keywords:

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LIST OF FIGURES AND TABLES

FIGURE 1 COMMON HOTEL PROCESSES

FIGURE 2 KEY ROLES FOR CHANGE

FIGURE 3 CHANGE MILESTONE

FIGURE 4 PEOPLE’S RETHINKING WITHIN SHR

TABLE 1 IMPLEMENTATION STRATEGY

LIST OF ABBREVIATIONS

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CHAPTER 1: INTRODUCTION

Change became a major issue in the last presidential elections; Obama states 2009 „change we can believe in“, Hillary Clinton offered „ready for change, ready to lead“ and the British Conservatives asked 2010 to „vote for change“ (Cashman, 2009, p. 14; the Conservatives Party, 2010). Change is recognized to be of utmost importance in today’s organisations (Stammer and Such, 2010); new structures, processes and systems should be introduced to drive innovation (Smith, 2010). Still, there is a high rate of failure if senior management fails to collaborate (Aiken and Keller, 2009). The following paper will analyze the top- down driven launch of Six Sigma within Starwood Hotels & Resorts in 2001 and the grounding management visions behind the change implementation.

At first glance, Starwood Hotels & Resorts Worldwide, Inc. (‘SHR’) may not look very different from its main competitors; Marriott International, Inc, Hilton Worldwide, InterContinental or Hyatt Hotels Corporation. Still, SHR is one of the leading hotel and leisure companies in the world with 1000 properties in more than 100 countries and 145,000 employees at its owned and managed properties (Starwood Hotels & Resorts, 2010). SHR is known for several innovations in marketing, management, branding and customer services (Cox, et. al., 2003). Please see appendix A for the detailed brand portfolio and appendix B for the innovation chart.

The company began as a small investment firm and then became a real estate investment trust. In 1998 Starwood merged with ITT Corporation, a company seven times its size and at the time the world's largest lodging and gaming company (Advameg, 2010). SHR managed to beat out the Hilton Hotels Corporation to ITT, characterized as “one of the most dramatic takeover battles of the 1990s” (Lesly and Grover, 1997, p. 80).

Lead by the vision “to grow EBITDA at least 8 - 10% per year, to be the easiest company with which to do business” and with the commitment “to make Starwood a great place to work” Bernlicht, founder and CEO of SHR till 2004, managed to turn the former investment group into a flourishing stock market company (Cox, et. al., 2003, p. 20).

CHAPTER 2: CHANGE ANALYSIS

Despite the growth potential of SHR, internal and external forces made a tremendous change throughout the whole organization necessary. The change will be identified and analysed within this chapter.

2.1 PRESSURE FOR CHANGE

The service characteristics; inseparability, reflecting the interconnection between customer and service provider as well as heterogeneity, describing the variation in consistency from one service transaction to the next underline the importance of standardization and process monitoring within the service environment (Hoffmann and Bateson, 2005). Still, SHR did not manage to eliminate failures in the core processes, which are shown on the figure below.

FIGURE 1 COMMON HOTEL PROCESSES

SOURCE: ADAPTED BY THE AUTHOR FROM SHIAU, 2005

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CHAPTER 2: CHANGE ANALYSIS

The following points by Chuan (2009) and Shiau (2005) underline the pressure for change within Starwood and Hotels and Resorts:

1.) Wide variability of performance to guest expectations in core processes across business.
2.) No common method for sustaining, leveraging and transferring innovation across Starwood was in place.
3.) A lack of robust processes to sustain above average profit growth rates.
4.) The internal view, that Starwood has not systematically supported collaboration, process improvement, employee development as well as best practice sharing across the organization.

Furthermore, September 11 terrorist attacks were a huge setback to the hospitality industry; revenue for Starwood Hotels and Resorts fell in 2001 and 2002 as the global economy remained weak and business travel was less than robust (Bonham, et. al., 2006).

2.2 KEY ROLES FOR CHANGE

Led by the vision underlined in chapter one and the need for change throughout the whole organization, Sternlicht is credited with introducing the quality management system of Six Sigma into SHR; targeting to reduce dissatisfiers in 1million possible service encounter to less than 3.4 (Chuan, 2009). Kotter (1996, p. 30) states, “without competent management, the transformation process can get out of controlz. The former GE executive James Hyman therefore has been named executive vice president Six Sigma for SHR and had the global responsibility for executing the strategy, designing the tools and overseeing the implementation of SHR`s Six Sigma initiative. Additionally, SHR has also enlisted the expertise of renowned Six Sigma specialists Peter S. Pandeto assist with the launch (hospitality.net, 2001).

Senge, et. al. (1999) argues, that little significant change occurs if it’s driven solely from top to down. However, only the top management commitment to change and the initial push for it ensured a successful implementation within SHR (Chuan, 2009). To transmit necessary change into day-to-day operations, a community of interdependent leaders needs to be developed who cover the different leadership roles (Senge, et. al., 1999). Since the program launch in 2001 and 2007, SGH has trained 150 employees as Directors of Innovation and Change and more than 2,700 front line employees as facilitators of innovation and change. Based mostly at the hotels, the specialists are change agents who help devise and oversee the development of projects. Instead of acting on behalf of the executive management, they rather operate like associates who help the hotels to meet their own objectives (Bloomberg Businessweek, 2007). Figure two summarizes the key roles for change within SHR.

Eccles (1994) identified preconditions for a successful change, including pressure for change, clear and shared executive vision, available human resources, identification of necessary implementation steps as well as the capacity for training and development.Based on the analysis so fare, this conditions have been met by SHR. Within the nextstep, the author will analyse the steps SHR choose to implement the change in greater detail.

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Details

Seiten
22
Jahr
2010
ISBN (eBook)
9783640848096
ISBN (Buch)
9783640844357
Dateigröße
2.3 MB
Sprache
Englisch
Katalognummer
v167854
Institution / Hochschule
University of Brighton – School of Service Management
Note
A
Schlagworte
case study implementation sigma starwood hotels resorts change management

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Titel: A Case Study on the Implementation of Six Sigma within Starwood Hotels & Resorts