In today’s business environment change remains a constant, and as such, organizations both large and small must adapt if they want to remain successful. Organizations that respond more effectively to changes are more likely to succeed than those that do not. The success of any change depends on the nature of the business, the change itself, and how well the people involved understands the process of change. The concept of ‘change management” is a concern of most organizations today. Lewin (1943), a German Physicist and Social Scientist, developed one of the cornerstone models of change management, known as The Force Field Analysis. Lewin theorised a three-step approach for implementing any organizational change. This is referred to as, Unfreeze – Change – Refreeze. He used the analogy of changing a rectangular block of ice into the shape of a cone. He theorised that it is much easier to unfreeze or melt a block of ice then mould the water into the desired cone shape before refreezing.
The Force Field Analysis provides management with a tool for understanding, identifying, and analyzing all the factors for and against change. According to Lewin (1943), the perceived status quo in life is created by the perceptions of societies. He reasoned that the systems that exist in organizations (the equilibrium) are not static, but are rather created by a dynamic balance of forces moving in opposing directions. Forces for and against change usually fall in one or more of the following categories: values, attitudes, habits, persons, procedures, customs and policies. Lewin (1943) postulates that for change to occur, the driving forces must exceed the restraining forces. The result is a shift in the equilibrium, or the creation of a new mode of operating within the organization.
The Force Field Analysis has given us a tool to better understand and describe how Red Stripe Jamaica Limited has instituted recent changes in its local operations. In October 2011, Red Stripe Jamaica Limited first announced that it would be downsizing production at its Kingston location and outsource the production of Red Stripe Beer destined for the US market, to City Brewer in Latrobe, Pennsylvania, U.S.A. By acknowledging and communicating the need for change and setting timelines to implement the intended change, Red Stripe has created a sense of urgency and stress (controlled) on the organization. According to Lewin (1943), this is necessary before any change can be implemented.
Lewin proposed that the initial step in any change, “The Unfreezing”, begins when the organization becomes aware of the need for change. This is the most difficult period of the change process because the organization is forced to examine many of its core values and procedures. The unfreezing process began at Red Stripe because there was an apparent motivation for doing so; that is, senior management have identified compelling reasons for changing the current mode of operation in the organization. Management at Red Stripe surveyed the organization and realised that the current status quo was not effective. In an article published on June 4, 2010, “Red Stripe to Undergo Organizational Review”, the chairman of Red Stripe, Alfred Barnes alluded to extreme challenges present in the economic and competitive environments, which has created a need for the organization to restructure.
In the Stock Analysis of Denoes and Geddes Limited (DG)/ Red Stripe, as at December 2011, it was identified that declining sales in the local market, increased competition, increased taxes and increased production cost where major factors affecting the company’s bottom line. For any radical organizational change to occur, it must have significant support from senior management and key members within the organization. The force field analysis gives Red Stripe a tool to show how the driving forces for change compare against restraining forces. By showing how forces for change outweigh those forces against change, Red Stripe can win support from both senior management in the boardroom and from key employees. Below we seek to replicate what we think the Force Field Table for Red Stripe would involve. In using the Force Field Analysis we can make a list of all the driving and restraining forces impacting the change at Red Stripe and rate them on a scale of 1-5 in terms of impact on organizational effectiveness. Driving forces
Senior management saw the need for change – the persons with the expertise in managing and who are entrusted by the shareholders to run a profitable organization believes this is the most appropriate thing to do at this time. (5) Falling bottom line – profits are falling, shareholders returns falling. (5) Unsustainable production cost – the high cost of energy, increased taxes, cost of importing raw materials have all contributed to inefficiencies in production. Shifting production will lead to an estimated 50% decline in production cost. (5) The need to increase market share in the US market- Red Stripe presently owns about 1% of the US beer market, however, there is enormous opportunities for growth and profitability in this market.
The need to remain competitive locally and globally – by allowing individual attention to each market, Red Stripe believes they will be better able to increase service delivery and marketing in each target. (4) Unstable local economic climate- the economy in Jamaica is very unstable with no foreseeable hope. The government has embarked on a mission of either securing international loans or increasing taxes. (3) Declining sales in local market – a saturated home market caused by harsh economic situations, increase competition, changing consumer taste and preferences has led to declining local sales. (5) Part of overall organizational strategy and mission- as part of its mission to become a truly global brand, red stripe wants to give individual attention and targeting to each of its global markets. (5)
Being perceived as unpatriotic – many employees and consumers alike have owned the Red stripe brand as Jamaican. Jamaicans see the US as a major competitor in most aspects of its social life; therefore shifting Jamaican jobs and brand to the US might give the company some negative publicity. (2) Significant job losses and relationships-there has been about 143 job losses at red stripe between 2008 and 2011 and a further 70 staff is expected to be sent home. (4)
Staff resistance to change-some employees believe this to be a step closer to closing down of the total operations. (5)
Cost – what will it cost the company to implement this change, can we afford it and is it feasible. (1) Organisational culture and tradition -Red Stripe was first brewed in Jamaica in 1928 and exported to different markets worldwide. The brand has been owned as a Jamaican brand by employees and local consumers through decades of association. (1) Low staff morale-staff wondering if they might be next. For the same reason production for the US market was shift, will there be a future shift in the production of beer destined for Brazil or Canada? (3)
Communicating the change is also of paramount importance to the management and success of the change process. Red Stripe must communicate the change to employees and other stakeholders. Developing a precise and persuasive message and communicating it to stake holders is necessary to get the organization ready for change. Red Stripe’s message throughout internal and external channels was very consistent during the change process. The message unswervingly focused on WHY Red Stripe needed to change and aimed to show how this change is related to overall organizational vision and strategy.
When implementing the change Red Stripe could chose to either, push the driving forces or reduce the opposing forces. However, Lewin (1943) posited that, developing strategies that carefully reduce the impact of the restraining forces is usually more successful. Red Stripe probably will not be able to reduce all opposing forces against change, but, it is integral that they manage those they can. By attending to the concerns of opposing forces, the company may gain support from persons originally against the change. In an article “Redundancies to hit Red Stripe”, published in the Jamaica Gleaner on June 6 2010, Alan Barnes, the Managing Director at Red Stripe identified how the company was reducing the impact of job loss on its employees.
According to Barnes, job cuts were a last resort and Red Stripe would assist displaced employees in the form of out placement support covering career, financial, and psychological counselling. Employees affected would be given the opportunity to do vocational training and acquire new skills at the company’s expense. “Red Stripe Eyes Redundancies” (2010), Red Stripe Chairman Richard Byles referred to the redundancy decision as regrettable. He stated however that the decision was vital if the company was to remain relevant. Red Stripe must also effectively manage the negative publicity that will be created from this change. In his article, Campbell (2011) stated that the company was being labelled in some quarters as unpatriotic and unfaithful. Bad mouthing of the organization may come from both internal and external customers.
This is of significant importance because the image of the company can be adversely impacted in the local market. Red Stripe, however, boast of its successes and commitments like its Learning for life Programme, where 2486 Jamaicans will graduate in 2016. The company also highlighted its many social partnerships, for example, the sponsorship of the National Premier Football league. The company has also spent big bucks in launching many innovative new products to coincide with the Jamaica 50, between 2011 and 2012, underlining its commitment to the local market. In addition a pronouncement in June 2011 by the then Minister of Industry and Commerce, Karl Samuda, is still very significant.
Samuda was quoted as saying, “It is very encouraging to see that Red Stripe seems to place importance on its workers through continuous training and the arming of the workforce with appropriate technology to increase productivity.” (Campbell, 2011) Following the Unfreezing or melting stage, Red Stripe will now move to mould the new system of operation. The unfreezing process have placed much stress on the organization, and employees are now looking ahead for some state of stability and direction. April 1, 2012 is established as the date for the commencement of the new system of operating.
According to Lewin (1943), at this stage employees must now begin to resolve their uncertainty created during the Unfreeze and start adjusting to the new system/ equilibrium. Lewin stated that the transition is never easy or occur quickly and hence the challenge for managers at red stripe is to assist employees through this new system.
Frequent communication continues to be critical for success through this period of the change at red stripe. Andrew Clarke an employee interviewed at Red Stripe stated that meetings between management and staff increased within this period. Red Stripe continues to communicate the new vision and strategy as well as the expected benefits to be gained. While not evident in our sources, it is very important for management to provide opportunities for employee involvements. This will allow for greater cooperation and buy-in from employees into the new equilibrium. Management at Red Stripe needed to be very open and fair in all matters.
According to Clarke, he observed that it was the least skilled staff and those with the least years to contribute that were terminated. Clarke also stated that some staff were concerned that the company was positioning itself to close operations fully. According to Lewin (1943) these are rumours that should be dispelled swiftly. There were no reported problems at Red stripe during the transition, which seem to indicate that the company was being effective at managing the process. Implementing the change effectively and timely is also an integral step to prevent a long and stressful situation which could impact negatively on the organization. It is reasonable to assume that the general disposition through the organisation would have been sombre as many jobs were expected to be lost. Andrew Clarke stated that the change occurred about 6 months after it was first communicated to them. Red Stripe ceased the production of beer for export to the US on April 1st 2012.
Red Stripe understood the importance of celebrating its short term wins to drive home the change. In an article titled “Diageo Earns big from Regional Business in FY12”, published in the Sunday Observer August 26, 2012, it was stated that Red Stripe had returned to growth, through cutting operational cost and a renewed focus on innovation. It was stated that net profits for the nine months to March 31, 2012 was $757 million, a 70% increase over the same period a year ago. These are very huge successes which will assist to concretise the new equilibrium. REFREEZE
According to Lewin (1943), refreezing occurs when people and the organization have fully institutionalised the new equilibrium. Employees of Red Stripe Limited will begin to proactively embrace the new system and a sense of organizational, group and individual stability become existent. Management must now implement ways of anchoring the new structure and strategy into the status quo. The leadership at Red Stripe Limited has repeatedly stated their intentions of creating an organization that is adaptable and responsive to change. When asked what is being done to assist employees to adjust in the new system, Clarke replied by stating that he had not observed much being done.
However, in sustaining the new equilibrium, Red Stripe should identify and encourage those factors which support the new procedures and simultaneously discourage the factors, which oppose it. Continuous employee development and training, effective support system, and an open communication channel, where information flow in both directions are some measures that could help to solidify the new organizational equilibrium. Employees should be given some level of autonomy to be innovative and manage some aspect of their own teams. The issuing of new employee contracts, performance appraisals, and health and compensation packages equitable to the new job scope is also useful during the refreezing period. Management can also develop a system of rewarding exceptional performances as well as continue to celebrate all successes gained.
References
- Campbell T.A. (2011). Don’t cry over spilt beer “Red Stripe and the cold hard facts of capitalism”. Retrieved from http://www.gleanerjm.com/business
- Gordon, S. (2011). Red Stripe to cut output by 3m Cases At Kingston Plant. Retrieved from http://www.jamaicaobserver.com/business/Red-Stripe-to-cut-output
- Lewin K. (1943). Defining the “Field at a Given Time.” Psychological Review. Republished in Resolving Social Conflicts in Social Science,
- Washington, D.C. American Psychological Association, 1997. Mercer, C (2011).
- JAMAICA/US: Diageo to relocate Red Stripe brewing for US market. Retrieved from http://www.just-drinks.com /news/diageo-to-relocate-red-stripe-brewing-for-us-markey
- Red Stripe eyes redundancies, (2010). Retrieved from http://www.jamaicaobserver.com/business/red-stripe-eyes-redundancies
- Stock Analysis: Denoes and Geddes Limited (DG)/Red Stripe, (2012). Retrieved from http://vmwealth.vmbs.com
- The Jamaica Stock exchange, (2010). Red Stripe to Undergo Organizational Review. Retrieved from http://www.jmmbsecurities.com/highlights.php/dynaweb.dti?page =highlights&id =2351
