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Chapter 29

DOI: 10.4018/978-1-5225-6155-2.ch029

ABSTRACT

This reflective case history illustrates the change process in a USA sports and entertainment’s theatre organization led by its leader in consultation with a human resource development and organizational change professional. Evidence-based organizational change and development informed by the theoretical perspectives on shop floor management and action learning guided the change process conceptualized on the belief that frontline employees should play a major role in driving change in organizations, and their learning and reflection is crucial in this process.

INTRODUCTION

After acquiring full ownership of two movie theatres and conducting an initial environmental and busi- ness scan, a large sports and entertainment organization based in the United States of America (USA) determined that much of the economic viability of the movie theatres was contingent upon the success of the theatres’ concessions where guests purchase popcorn, soda, candy, and other snacks. Data showed that after subtracting film rental from gross box office sales, box office sales represented 49.8% of total revenue while concessions generated 40.5% of the two theatres’ total revenue. Based on the aforemen-

Creating a Business Unit Within a Large Sports and

Entertainment Organization’s Theatre Operation:

Reflections on the Change Process

John Baaki Old Dominion University, USA

Maria Cseh The George Washington University, USA

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tioned data, the environmental and business scan, and the sports and entertainment organizations’ experi- ence from its other venues (e.g., major league baseball stadium, performance theatre, and multi-purpose arena), the organization decided that, in order to maximize concessions revenue potential, the theatres needed a self-contained concessions department. Each venue under the sports and entertainment orga- nization’s umbrella had a self-contained concessions department that included a concessions manager and frontline concessions leaders.

The self-contained concessions department required a significant change in the theatres’ organizational structure and leadership, as the organization had no manager in place to oversee the concessions depart- ment and no day-to-day floor supervisors to directly supervise each concessions location. Structurally, the concessions department, as a potential business unit, did not have direct leadership at the frontline where all customer-employee transactions and interaction occurred. This reorganization of the theatres’ concessions departments was considered unique in the movie theatre industry and caused much anxiety amongst the employees of the theatre organization.

Description of the Theatre Organization

The theatre organization consisted of two different theatre units that were separated by two downtown city blocks in a metropolitan suburb. Refurbished from a one-screen theatre house built in 1926, the first unit, referred to as T1, reopened in 1997 as an eight-screen house. The two-floor 1920’s-style ornate movie house hosts one main concessions stand on the first floor and a smaller concessions stand on the second floor. The second unit, referred to as T2, opened in November 2001 and was built in a multi-tiered style like downtown theaters in New York City, USA, and Toronto, Canada. T2 has three levels with one concessions stand located on the second level and one concessions stand, along with an ice cream and coffee bar, located on the third level. The opening of T2 increased the organization’s revenue by 232.5%. In addition, the theatre organization went from a staff of 50 full-time and part-time employees to a staff of approximately 200 full-time and part-time employees. Once the sports and entertainment organization determined that a self-contained concessions department was needed to ensure economic viability a concessions manager was hired to oversee the concessions operations at both theatres, and concessions procedures and policies (e.g. inventory control, food safety, cash handling, and portion con- trol) were implemented. The sports and entertainment organization expected measurable results within 30 days of the concessions department becoming a self-contained business unit within the day-to-day theatre operations.

Our Partnership and Engagement with the Organization

I (first author) was an 11-year employee with the sports and entertainment organization and had earned credibility as a leader who could lead change in day-to-day operations. The founder of the sports and entertainment organization personally asked me to lead the newly acquired theatre organization.

The partnership between me and my co-author started to develop while I was a graduate student working with the second author, a university faculty member with 15 years of experience in international manage- ment and organizational development and change, and continued after my graduation. While working on another project, I, who at the time was a leader at the organization’s major league baseball stadium, expressed great interest during meetings with my co-author in how frontline supervisor leadership can impact the sports and entertainment facility industry – arenas, stadiums, theatres, convention centres/

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exhibit halls, amusement parks/fairs, and zoos. The continued dialogues between us led to reflections on theoretical perspectives regarding frontline leadership in organizations and how these theoretical perspectives may be applied to practice, on how change happens in organizations, on how people learn in organizations, and how learning organizations develop.

When I took on a leadership role in the theatre organization, my primary responsibility was to oversee the theatre organization’s business operations. With the concessions department change process placed under my leadership and facing a 30-day timetable to show results, I consulted with my co-author, and together started to conceptualize a way to approach the concessions department development process. The partnership process was characterized by regular face-to-face consultations and e-mail communi- cations. Insightful discussions on the application of theory-to-practice and practice-to-theory, on what was happening with the change process, as well as on lessons learned at every step of the process led to continuous reflections and learning for both of us.

THE CHANGE PROCESS

The theatres operated 18 hours a day, seven days a week. In order to effectively educate leaders in an operation that rarely stops, we needed a process that leaders could easily grasp, involved all leaders, and helped them consistently reflect on what was happening day-to-day in their operations. Our belief in the importance of evidence-based practice and the involvement of frontline leaders and employees in change processes led us to shop floor management (Suzaki, 1993) while our belief in the power of social learning in action and of reflection in and on action in making the tacit learning explicit (Schön, 1983, 1987) led us to action learning (Marquardt, 1999).

Shop floor management (SFM) was aligned with the vision, mission and strategies of the theatre organization so theatre leaders could understand it. SFM focuses on the frontline where the action is and is driven by six elements: (a) develop clarity in vision where values are shared with people, (b) develop customer orientation where everyone views the next process as the customer, (c) promote the involve- ment of everyone so improvement is continuous, (d) increase problem-solving capability, (e) provide adequate leadership for continuous improvement, and (f) clarify the management support team that drives the shared values, vision, and objectives, and means to achieve them. The result is a continuous and integrated improvement process that is guided by a Plan-Do-Check-Act (PDCA) cycle (Suzaki, 1993).

According to our interpretation of the PDCA cycle, ‘check’ is the opportunity to reflect on what has happened, why it has happened, and how things affect other things. Before the issue, problem, or gap may be acted on, before an intervention may be planned, and before the plan may be executed, reflection must occur. If reflection or ‘check’ is not practiced, then an organization finds itself practicing firefight- ing where the PDCA cycle turns into a plan-do-plan-do cycle.

Frontline leaders implement, observe, monitor, and evaluate standards and processes. As frontline experts, frontline leaders can best reflect on what has already happened and analyze why it happened. According to Marquardt (1999), action learning is built on six distinct interactive components: (1) a problem, (2) a group, (3) a questioning and reflection process, (4) a commitment to take action, (5) a commitment to learning, and (6) a facilitator. When developing a theory-to-action approach to involve frontline concessions leaders in the change process, all components must be present with a focus on the questioning and reflection process, commitment to take action, and commitment to learning. Action learning is embedded in the SFM process and it was deemed to be effective in developing leaders as change agents in the theater organization.

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Informed by SFM and action learning, I reflected on my interest in Peters’ (1997) “businesspersons of everything” concept and how it applied to frontline leaders. The idea is that every job is a business and every frontline leader is a business unit of one. Through reflection, we concluded that every person in the theatre organization needed to be a businessperson. The difference between businesspersons was the size of their “everything.” For example, as the leader of the entire theatre, the T2 general manager’s (GM) “everything” contained all aspects of the theatre operations. Whereas, a T2 concessions manager’s “everything” contained all aspects of a concessions stand operations. The T2 GM’s everything includes the concessions manager’s everything.

To understand the width and depth of the change process in developing a concessions department and to allow for evidence-based practice, there was an agreement that I would keep a handwritten reflective observation journal, conduct in-depth interviews with seven upper-level managers and five concession leaders, and compile concessions performance reports that included monthly, year-to-date, actual vs. budget, and current year actual vs. previous year actual information based on the following key business performance data: (a) net revenue, (b) per capita spending, (c) concessions leader and team member labor dollars, (d) labor as a percentage of sales, (d) food and beverage cost, and (e) food and beverage cost as a percentage of sales.

THE PROGRESS OF CHANGE

The purpose of this year-long change endeavour was not to test theoretical perspectives, but informed by them, to try to introduce new concepts for the theatres to achieve the desired change. Based on the consultation process, I introduced concepts based on the theoretical perspectives at different stages of the change process, and assisted upper-level managers and concession leaders in understanding situa- tions when they wanted clarifications on what was happening, role modeling all along the way. From the start, I conscientiously created an environment that would allow reflection and learning. In other words, I set the stage for our conceptual model, informed by action learning and SFM, to cycle through the development stages. Although the focus was on the frontline where theatre concessions team members directly interact with customers, in order for this to happen, concession team members’ supervisors – concessions leaders – and theatre upper-level managers were involved so they first could understand and then support the change process.

In order to create a learning and reflective environment, weekly upper-level manager and concessions leader meetings were established where an exchange of ideas and reflective participation were encour- aged. Prior to the change process, such a meeting format had not happened. Meeting communication was always one-way, dictated by upper-level management. At first, in the concessions leader meetings there were little or no reflective participation. Concessions leaders expressed that they did not feel that they were involved in the change process and the concessions department development. Knowing that leaders were critical to the change process, I facilitated meetings by attempting to involve everyone. After three months, the concessions manager and concessions leaders began to rotate meeting facilitator duties. Meetings became a vibrant exchange of ideas, thoughts, and insights. An upper-level manager summarized the long process of getting all participants involved in the improvement and development of a concessions department:

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I think that they [managers and concession leaders] went from feeling that they were being controlled more to, in the course of months and months, people realizing that they actually had a bigger say in things, a bigger hand in things especially concessions leaders. They have been empowered with realizing that they do and affect positive and negative outcomes in what’s going to be happening.

The SFM implementation process goes through four different stages: (1) introduction stage where people become familiar with SFM ideas and how it relates to the organization, (2) promotion stage where ideas are put into place and the PDCA cycle is begun, (3) expansion stage where people’s self-managing activities show positive results, and (4) stabilization stage where everybody in the organization internal- izes the idea and SFM and its benefits are obvious to all. After one-year of developing a self-contained concessions department, the theatre organization had reached the promotion stage. Critical concessions performance standards, reflection during concessions leader meetings, and involvement of all team mem- bers had been put into practice. Upper-level managers and concessions leaders began the PDCA cycling to increase problem-solving capability and impact performance. For the theatre organization, the key to the PDCA cycle became the action learning’s questioning and reflection component. In concessions leader meetings, leaders reflected on their actions, tweaked the actions, and then returned to execute critical concessions performance standards on the frontline. A concessions leader noted:

I feel that our environment as far as when we have leader meetings is very open…I feel comfortable in saying if I have an idea, it’s going to be listened to or even considered as far as, “Okay, that is something that can possibly work, we’ll try that.”

In a two-week span four months into the change process, concessions leaders spent a great deal of time reflecting on food waste and how it affects food cost. After summarizing their reflection, concessions leaders acted on their ideas by cooking chicken strips in increments of five, rotating product between concessions stands, and ensuring team members pump popcorn oil once instead of three times. Learning was a big part of controlling food waste and the development of the concessions department. Learning through experiences and action is how things got done on the frontline.

Upper-level managers understood and supported the concessions leaders’ learning process. As one manager commented, “I think a lot of the current leaders, right now, are interested in growing, interested in learning more, and really kind of throwing ideas in and I think that they (upper-level managers) are very supportive of it”. When describing why concession leaders are allowed to make decisions and be- come businesspersons regarding the development of a concessions department, an upper-level manager explained:

You’re not going to learn to be a leader by listening to me. I can tell you everything to do. I can lay it out for you. This is what I want you to do every single day, but you are just going to be robotic, just do- ing it. You’re not going to know why. You learn what to do, but you got to fall on your face sometimes. I think that’s a big thing in developing a leader in general – to allow them to make a mistake as long as it’s not putting the business in jeopardy.

Seven months into the change process, concessions leaders were learning that they had to support team members on the frontline. Taking on this responsibility meant learning how things affect other

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things and the importance of involving team members in day-to-day concessions operations. An upper- level manager summed up best the concessions leaders’ action learning journey:

I think that some of our leaders are at the point now they’re taking on responsibility and it’s something that they’re looking forward to and they’re doing better because of it. But, they’re not necessarily at the point where they also see that giving other people responsibility is a reflection of how well they are doing that job rather than how well they’re not doing their job.

When the change process began, the sports and entertainment organization’s performance expecta- tions were clear. In 30 days, the concessions department, as a self-contained business unit, would impact the theatre organization’s revenue performance. However, a year later, with the theatre organization at the promotion stage (stage two of Suzaki’s four stages), performance improvement consisted of small victories. A review of concessions performance data revealed small improvements in key concessions business indicators like per capita spending, labor as a percentage of sales, food and beverage cost, and food and beverage cost as a percentage of sales. During the year, per capita spending increased one percent while food and beverage cost as a percentage of sales decreased three percent. Although these increases were small victories, they did indicate an important performance improvement trend, which had not occurred prior to the change process.

Performance improvements resulted from upper-level managers and concessions leaders applying SFM by using the PDCA cycle to tweak critical concessions performance standards. In practice, Plan- Do-Check-Act was one cycle made up of many smaller cycles. Oftentimes, tweaking an action resulted in a check (reflection)-act-check-act cycle that lasted months. Accurate daily key item (items designated to represent a sale like popcorn tubs and soda cups) inventories were a struggle throughout the change process. Using a check-act-check-act cycle, managers and leaders reflected on inventory struggles, acted on tweaked procedures, reflected again, and acted again. Finally, seven months into the change process, T1 concessions leaders began to complete nightly key item inventories that were consistently within the half percent variance stated in the key item inventory procedures. Later that month, the concessions manager and concessions leaders celebrated as the T1 key item inventory had an impressive $1.00 vari- ance. The success at the T1 resulted in developing a new key item inventory plan at the T2. After seven months of continuous tweaking, concessions leaders cycled through Plan-Do-Check-Act. Key item inven- tory procedures were changed from daily inventories for each concessions stand to one daily inventory for the entire T2 concessions department. As a result, T2 concessions leaders began to complete more accurate daily inventories. What was expected in 30 days took 210 days in practice. Financially, it was a small victory for the theatre organization. In practice, getting through the PDCA cycle was a significant accomplishment since it led to participants’ change in attitude that would support the transition into the expansion and stabilization stages of the SFM implementation process.

During the change process, action learning and SFM were intertwined. Action learning was the rope that tied together a SFM process. Upper-level managers and concessions leaders first learned about managing change and then together implemented the development of a concessions department.

Upper-level managers and concessions leaders impacted the theatre organization’s direction by achieving small victories. In a one-year period, concessions performance data reflected improvements in key concessions business indicators and there were documented improvements in critical concessions performance standards like food safety and key item inventory. Although the conceptualization of this change process was embedded in our belief of the importance of involving frontline team members in

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the process, only at the end of a year did frontline leaders realize the importance of involving their team members in the process and learning from each other.

CONCLUDING REFLECTIONS

This reflective case history has resulted in important lessons that we have learned about the use of evi- dence-based practice, lessons about the actual practice and implementation of the organizational change and development effort, and reflections about collaborative partnerships for promoting and facilitating change. The following sections detail these key findings.

Use of Evidence-Based Practice

A key lesson learned from theory to practice was that learning and reflection was needed at every level in the organization in order for the involvement of frontline team members in the change process and all participants’ development into businesspersons. Right from the beginning of this change intervention we recognized the two failings of organizational change and development (OCD) interventions noted by Hamlin (2001) related to managers in organizations not understanding principles of change manage- ment, and not realizing the significance of people issues (e.g., the experience of employees dealing with change). Before upper-level managers and concessions leaders were able to contribute and reflect on what was happening and why it was happening, they needed to go through a cognitive and attitudinal change. Managers and leaders had to first understand the need for learning and reflection to become part of the theatre organization environment. We found that action learning and shop floor management provided a flexible, agile, and easy-to-understand road map for the development of a concessions department. The nature of the PDCA cycle kept concessions leaders moving forward, albeit slowly at times. No doubt, smaller cycling within the PDCA cycle occurred, and sometimes for every two steps forward there was one step backwards. But, by applying action learning principles and cycling through Plan-Do-Check-Act we made certain that upper-level managers and concessions leaders understood principles of change management and stayed on the road to change.

Hamlin’s (2016) described evidence-based organizational change and development (EBOCD) as “… the conscientious, explicit and judicious use of current best evidence and/or of action research to inform, shape, critically reflect upon, and iteratively revise decisions made in relation to the formulation and implementation of OCD interventions and the associated change management processes” (p. 129). Dur- ing this change process, we continuously reflected on the principles of change management and our use of evidence, and by consciously creating an environment in the organization that allowed for reflection and learning, we role modeled our own practice. As a result, as we described earlier, during the whole process, concessions leaders reflected on their procedures and actions, tweaked them, acted upon them, and then reflected on them again, tweaked them again, and acted again, showing the iterative nature of the change process.

Practice and Implementation of the Change Process

A key lesson learned from practice to theory was the frustration and impatience regarding the pace of the change process. Hamlin (2001) noted that one of the failings of change interventions was explained by

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managers’ need to find quick-fix solutions that rarely result in desired results. In this case, the sports and entertainment organization expected measurable results within 30 days of the concessions department becoming a self-contained business unit within the day-to-day theatre operations. The daily stress of a seven-day operation, delays in completing team member concessions training, and delays in hiring and placing the right concessions leaders on the frontline slowed down the process right from the beginning and negatively affected the accurate and complete implementation of critical concessions performance standards like key item inventory. The unrealistic 30-day performance expectation became a year-long journey that ended at stage two of a four-stage SFM process. The smaller cycles within the PDCA and their impact became visible only during the application in practice of the theory. Since we discussed the time needed for any change process, I entered the development of a concessions department knowing that it would not occur overnight. However, it was not until I was in the midst of the change process that I really grasped what is meant by ‘it would not occur overnight.’

The four-stage SFM process was a necessary guide during the organizational change and develop- ment process. We were able to see where we had been, where we were, and where we were going. After one year, the theatre organization was firmly planted in the promotion stage. Upper management and concessions leaders were continuing to grasp the fundamental principles of change management. Concessions operational improvement ideas were in place. The PDCA cycle was in action. The theatre organization began to see where it was going. Albeit small steps, we saw steps towards the expansion stage. Concessions leader were self-managing activities in key item inventory, per capita spending, and food and beverage cost of sales as a percentage of sales that showed positive results.

In practice, Plan-Do-Check-Act is a cyclical framework made up of smaller, oftentimes simultane- ous cycles. Check-act-check-act was a reflective trial and error cycle that occurred when concessions leaders were tweaking key item inventory procedures. Plan-do-plan-do was merely a firefighting cycle that happened during early concessions leader meetings. Since these smaller cycles are always in mo- tion, they are difficult to represent in the PDCA model, nevertheless they should be discussed in the description of the model.

Our experience showed the importance of having one or several road maps (i.e., theoretical perspec- tives) to guide the conceptualization and implementation of a change process. Human resource devel- opment practitioners as well change agents in organizations should invest time to plan for the creation and maintenance of the environment that needs to support their approach to change. Documenting the process of change during the process and reflecting on the findings along the way proved to be very beneficial not just for adjusting continuously the implementation but for reflecting on the application of the theories to practice and thus contributing to the development of theories. This experience also showed that the meaning of ‘time’ in theory could be quite different than in practice, a lesson talked about but not emphasized enough in project management.

Collaborative Partnerships for Promoting and Facilitating Change

A major lesson learned was the need for accountability from me and my co-author and for sustained awareness and reflection on the change process over a long period of time while faced with numerous other tasks and challenges. We agree with Hamlin’s message in Chapter 1 that engagement in profes- sional partnership research will significantly contribute to bridging the scholar-practitioner gap. From the start of our partnership, a clear process of collaboration was discussed and delineated. Timelines were established and regularly met. Regular face-to-face meetings were set up and if the set dates needed to

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be changed (it happened only a few time), meetings were re-scheduled immediately. Regular meetings were crucial for a continuous dialogue. From time-to-time general views of the world were shared dur- ing tangent discussions regarding learning and change processes. Of course, such partnership building requires time, a commodity safely guarded by many in our society. Meeting times were set after ‘working hours’ and although the meetings were bounded by time, the timeframe was set in such a way to allow for meaningful sharing. Our respect and trust in each other grew over the period of this collaboration, learning was insightful and plentiful. Reflecting on our partnership during this change process and on our learning, we cannot emphasize enough the importance of evidence that emanates from what Hamlin called Mode 2 research which is concerned with instrumental knowledge production to solve real-life problems, and in some cases contribute to theory development (see Chapter 1 of this book).

REFERENCES

Hamlin, R. G. (2001). A review and synthesis of context and practice. In B. Hamlin, J. Keep, & K. Ash (Eds.), Organizational change and development: A reflective guide for managers, trainers, and develop- ers (pp. 13–38). Harlow, UK: FT Prentice Hall.

Hamlin, R. G. (2016). Evidence-based organizational change and development: Role of professional partnership and replication research. In C. Hughes & M. W. Gosney (Eds.), Bridging the scholar practi- tioner gap in human resources development (pp. 120–142). Hershey, PA: IGI Global. doi:10.4018/978- 1-4666-9998-4.ch007

Marquardt, M. J. (1999). Action learning in action: Transforming problems and people for world-class organizational learning. Palo Alto, CA: Davies-Black Publishing.

Peters, T. (1997). The circle of innovation you can’t shrink your way to greatness. New York: Vintage Books.

Schön, D. A. (1983). The reflective practitioner: How professional think in action. New York: Basic Books.

Schön, D. A. (1987). Educating the reflective practitioner. New York: Basic Books.

Suzaki, K. (1993). The new shop floor management empowering people for continuous improvement. New York: The Free Press.